Ha-Joon Chang at the Institute for Public Policy Research on 10 October 2011
|Born|| 7 October 1963 |
|Institution||University of Cambridge|
|Awards||Gunnar Myrdal Prize 2003, Wassily Leontief Prize 2005|
|Information at IDEAS / RePEc|
|Revised Romanization||Jang Hajun|
|Korean pronunciation: [tɕaŋɦadʑun]|
Ha-Joon Chang ( // ; Korean : 장하준; Hanja : 張夏准; born 7 October 1963) is a South Korean institutional economist, specialising in development economics. Currently he is a reader in the Political Economy of Development at the University of Cambridge. Chang is the author of several widely discussed policy books, most notably Kicking Away the Ladder: Development Strategy in Historical Perspective (2002). In 2013 Prospect magazine ranked Chang as one of the top 20 World Thinkers.
He has served as a consultant to the World Bank, the Asian Development Bank, the European Investment Bank, as well as to Oxfamand various United Nations agencies. He is also a fellow at the Center for Economic and Policy Research in Washington, D.C. In addition, Chang serves on the advisory board of Academics Stand Against Poverty (ASAP).
After graduating from Seoul National University's Department of Economics, he studied at the University of Cambridge, earning an MPhil and a PhD for his thesis entitled The Political Economy of Industrial Policy – Reflections on the Role of State Intervention in 1991. Chang's contribution to heterodox economics started while studying under Robert Rowthorn, a leading British Marxist economist,with whom he worked on the elaboration of the theory of industrial policy, which he described as a middle way between central planning and unrestrained free market. His work in this area is part of a broader approach to economics known as institutionalist political economy which places economic history and socio-political factors at the centre of the evolution of economic practices.
In his book Kicking Away the Ladder (which won the European Association for Evolutionary Political Economy's 2003 Gunnar Myrdal Prize), Chang argued that all major developed countries used interventionist economic policies in order to get rich and then tried to forbid other countries from doing the same. The World Trade Organization, World Bank, and International Monetary Fund come in for strong criticism from Chang for "ladder-kicking" of this type which, he argues, is the fundamental obstacle to poverty alleviation in the developing world. This and other work led to his being awarded the 2005 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought from the Global Development and Environment Institute (previous prize-winners include Amartya Sen, John Kenneth Galbraith, Herman Daly, Alice Amsden and Robert Wade).
The book's methodology was criticized by Douglas Irwin, Professor of Economics at Dartmouth College and author of a 2011 study of the Smoot–Hawley tariff,writing on the website of the Economic History Association:
Chang only looks at countries that developed during the nineteenth century and a small number of the policies they pursued. He did not examine countries that failed to develop in the nineteenth century and see if they pursued the same heterodox policies only more intensively. This is a poor scientific and historical method. Suppose a doctor studied people with long lives and found that some smoked tobacco, but did not study people with shorter lives to see if smoking was even more prevalent. Any conclusions drawn only from the observed relationship would be quite misleading.
In contrast, Stanley Engerman, Professor of Economic History at Rochester University praised Chang's approach:
Ha-Joon Chang has examined a large body of historical material to reach some very interesting and important conclusions about institutions and economic development. Not only is the historical picture re-examined, but Chang uses this to argue the need for a changing attitude to the institutions desired in today's developing nations. Both as historical reinterpretation and policy advocacy, Kicking Away the Ladder deserves a wide audience among economists, historians, and members of the policy establishment.
Following up on the ideas of Kicking Away the Ladder, Chang published Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism in December 2008.Chang countered Irwin's criticisms by arguing that countries that had failed to develop had generally followed free market policies. Chang also argued that while state interventionism sometimes produced economic failures, it had a better record than unregulated free market economies which, he maintained, very rarely succeeded in producing economic development. He cited evidence that GDP growth in developing countries had been higher prior to external pressures recommending deregulation and extended his analysis to the failures of free trade to induce growth through privatisation and anti-inflationary policies. Chang's book won plaudits from Nobel Prize–winning economist Joseph Stiglitz for its fresh insight and effective blend of contemporary and historical cases but was criticised by former World Bank economist William Easterly, who said that Chang used selective evidence in his book. Chang responded to Easterly's criticisms, asserting that Easterly misread his argument. Easterly in turn provided a counter-reply.
Chang's next book was released in 2011 23 Things They Don't Tell You About Capitalism which offers a twenty-three point rebuttal to aspects of neo-liberal capitalism. This includes assertions such as "Making rich people richer doesn't make the rest of us richer", "Companies should not be run in the interests of their owners", and "The washing machine has changed the world more than the internet has." This book questions the assumptions behind the dogma of neo-liberal capitalism and offers a vision of how we can shape capitalism to humane ends. This marks a broadening of Chang's focus from his previous books that were mainly critiques of neo-liberal capitalism as it related to developing countries. In this book, Chang begins to discuss the issues of the current neo-liberal system across all countries.
Chang's 2014 book, Economics: The User's Guide, is an introduction to economics, written for the general public.
He is the son of former minister of industry and resources, Chang Jae-sik, brother of historian and philosopher of science, Hasok Chang, and cousin of prominent economist and professor at Korea University, Chang Ha-Seong. He lives in Cambridge with wife, Hee-Jeong Kim, and two children, Yuna, and Jin-Gyu.
In economics, a free market is a system in which the prices for goods and services are self-regulated by the open market and by consumers. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority and from all forms of economic privilege, monopolies and artificial scarcities. Proponents of the concept of free market contrast it with a regulated market in which a government intervenes in supply and demand through various methods such as tariffs used to restrict trade and to protect the local economy. In an idealized free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy.
Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold liberal economic positions while economically left-wing and nationalist political parties generally support protectionism, the opposite of free trade.
Neoliberalism or neo-liberalism is the 20th-century resurgence of 19th-century ideas associated with laissez-faire economic liberalism and free market capitalism, which constituted a paradigm shift away from the post-war Keynesian consensus that had lasted from 1945 to 1980. Neoliberalism is generally associated with policies of economic liberalization, including privatization, deregulation, free trade, austerity, and reductions in government spending in order to increase the role of the private sector in the economy and society. However, the defining features of neoliberalism in both thought and practice have been the subject of substantial scholarly debate.
Import substitution industrialization (ISI) is a trade and economic policy which advocates replacing foreign imports with domestic production. ISI is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products. The term primarily refers to 20th-century development economics policies, although it has been advocated since the 18th century by economists such as Friedrich List and Alexander Hamilton.
An industrial policy of a country, sometimes denoted IP, sometimes industrial strategy, is its official strategic effort to encourage the development and growth of all or part of the economy, often focused on all or part of the manufacturing sector. The government takes measures "aimed at improving the competitiveness and capabilities of domestic firms and promoting structural transformation." A country's infrastructure is a major enabler of the wider economy and so often has a key role in IP.
Development economics is a branch of economics which deals with economic aspects of the development process in low income countries. Its focus is not only on methods of promoting economic development, economic growth and structural change but also on improving the potential for the mass of the population, for example, through health, education and workplace conditions, whether through public or private channels.
The historical school of economics was an approach to academic economics and to public administration that emerged in the 19th century in Germany, and held sway there until well into the 20th century. The professors involved compiled massive economic histories of Germany and Europe. Numerous Americans were their students. The school was opposed by theoretical economists. Prominent leaders included Gustav von Schmoller (1838–1917), and Max Weber (1864–1920) in Germany, and Joseph Schumpeter (1883–1950) in Austria and the United States.
Georg Friedrich List was a German economist with dual American citizenship who developed the "National System", also known as the National System of Innovation. He was a forefather of the German historical school of economics, and argued for the German Customs Union from a Nationalist standpoint. He advocated imposing tariffs on imported goods while supporting free trade of domestic goods, and stated the cost of a tariff should be seen as an investment in a nation's future productivity.
Market fundamentalism is a term applied to a strong belief in the ability of unregulated laissez-faire or free market policies to solve most economic and social problems. The expression "market fundamentalism" was popularized by business magnate and philanthropist George Soros in his book The Crisis of Global Capitalism (1998), in which he writes: "This idea was called laissez faire in the nineteenth century ... I have found a better name for it: market fundamentalism". P. Sainath believes Jeremy Seabrook, a journalist and campaigner, first used the term. The term was used by John Langmore and John Quiggin in their 1994 book Work for All. See also Jonathan Benthall, Anthropology Today editorial, 1991.
Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the other. Its name and core elements trace back to a 1919 American Economic Review article by Walton H. Hamilton. Institutional economics emphasizes a broader study of institutions and views markets as a result of the complex interaction of these various institutions. The earlier tradition continues today as a leading heterodox approach to economics.
Daniel Raymond (1786–1849) was the first important political economist to appear in the United States. He authored Thoughts on Political Economy (1820) and The Elements of Political Economy (1823).
The infant industry argument is an economic rationale for trade protectionism. The core of the argument is that nascent industries often do not have the economies of scale that their older competitors from other countries may have, and thus need to be protected until they can attain similar economies of scale.
William Russell Easterly is an American economist, specializing in economic development. He is a Professor of Economics at New York University, joint with Africa House, and Co-Director of NYU’s Development Research Institute. He is a Research Associate of NBER, senior fellow at the Bureau for Research and Economic Analysis of Development (BREAD) of Duke University, and a nonresident senior fellow at the Brookings Institution in Washington DC. Easterly is an associate editor of the Journal of Economic Growth.
Li Kwoh-ting was a Chinese economist and politician best known as the "Father of Taiwan's Economic Miracle" and referred to by the New York Times as the "Godfather of Technology" in Taiwan for his work in transforming Taiwan's economy from an agrarian-based system into one of the world's leading producers of information and telecommunications technology.
In the history of economic thought, a school of economic thought is a group of economic thinkers who share or shared a common perspective on the way economies work. While economists do not always fit into particular schools, particularly in modern times, classifying economists into schools of thought is common. Economic thought may be roughly divided into three phases: premodern, early modern and modern. Systematic economic theory has been developed mainly since the beginning of what is termed the modern era.
Institutionalist political economy, also known as institutional political economy or IPE, refers to a body of political economy, thought to stem from the works of institutionalists such as Thorstein Veblen, John Commons, Wesley Mitchell and John Dewey. It emphasizes the impact of historical and socio-political factors on the evolution of economic practices, often opposing more rational approaches. In the political sense, this implies the influences actors like the state have on socio-economic practices and the shaping of institutions via political decision-making.
An economic ideology distinguishes itself from economic theory in being normative rather than just explanatory in its approach. Economic ideologies express perspectives on the way an economy should run and to what end, whereas the aim of economic theories is to create accurate explanatory models to describe how an economy currently functions. However, the two are closely interrelated, as underlying economic ideology influences the methodology and theory employed in analysis. The diverse ideology and methodology of the 74 Nobel laureates in economics speaks to such interrelation.
Throughout modern history, a variety of perspectives on capitalism have evolved based on different schools of thought.
Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism is a book about economics written by Ha-Joon Chang, a South Korean institutional economist specializing in development economics. It criticizes mainstream economics and neo-liberalism. Chang claims that developed countries want developing countries to change their economic policy and open their markets. Rich and powerful governments and institutions are actually "Bad Samaritans"; their intentions may be worthy but their simplistic, free-market ideology and poor understanding of history leads them into policy errors.
23 Things They Don't Tell You About Capitalism is a non-fiction book by economist Ha-Joon Chang. It was published on 1 September 2011 by Penguin. The book offers a 23-point rebuttal of aspects of neo-liberal capitalism.
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