More on Chang

Alert reader Raghav Krishnapriyan pointed me to James Surowiecki’s review of Ha-Joon Chang’s Bad Samaritans:

Surowiecki (whose “Financial Page” in the New Yorker is a gem) doesn’t defend the neoliberals, but he doesn’t think Chang has made his case.  He brings up some good points— countries that have rejected neoliberalism don’t necessarily prosper; no one has a sure recipe for progress.  He also, I think, misses some of Chang’s historical reasoning; Chang doesn’t maintain that free trade is always bad or that infant industries should be protected forever.  

I think one of Surowiecki’s major criticisms misfires, though: “He simply takes as a given that consumers should be willing to make themselves objectively worse off in the present in the hope that this will translate to greater success in the future, because that’s what’s in the best interests of the nation.”  

That seems like the complaint of someone who just can’t bring himself to question orthodoxy, even in the face of a compelling real-world example– which Chang provides in his narrative of growing up in South Korea.  By following a policy of development rather than free trade, South Korea went in forty years from a per capita income of $84 to one of $13,980.  How is that “making themselves objectively worse off”?  Does he really think Chang’s parents or leaders made the wrong choice?

(He’s on firmer ground noting South Korea’s then dictatorship… but, that also applies to one of Surowiecki’s examples of a successful free trade nation, Singapore, and of course the example of the US and UK shows that a import substitution policy is perfectly compatible with political freedom.)