“Bad Samaritans”- The “Myth” of Free Trade?

I first became aware of Ha-joon Chang’s latest book, Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism in a critique written by Edward Glaeser , a prominent economist at Harvard University, and published in the daily paper, the New York Sun. I read this review with great interest. Professor Chang, currently with Cambridge University, is also an economist and a leading expert on development economics, which focuses on issues related to economic growth in low-income countries.

While Professor Glaeser regards this book as being “well written and far more serious” than others which share similar views, he disputes a number of points such as this idea that “there is anything secret about this history of American protectionism.” Professor Glaeser notes for instance, that the “Tariff of Abominations and the Smoot-Hawley Tariff are often taught in high school history classes.

Professor Chang insists that historically, high tariffs were largely responsible for the economic success of both the United States and Britain. Professor Glaeser disagrees, citing “insufficient evidence” based on his own findings and the work of other researchers. Meanwhile, Dartmouth economist Douglas Irwin has provided documentation that also disputes Professor Chang’s argument. For example, in response to the question,“Were high import tariffs somehow related to the strong U.S. economic growth during the late nineteenth century?”, Professor Irwin states his answer in a paper entitled “Historical Aspects of U.S. Trade Policy,” published in the non-partisan National Bureau of Economic Research (NBER), in which he cites a number of factors such as “population expansion and capital accumulation as playing a greater role in late nineteenth-century economic growth than improved productivity.” In fact, he observes that tariffs may have had a “detrimental affect by raising the prices for imported capital goods and discouraging capital accumulation.” Surprisingly, Professor Irwin has found that the “greatest productivity growth was in non-trade sectors (such as utilities and services) not directly affected by tariffs.”

Professor Irwin is barely mentioned in “Bad Samaritans” perhaps because he had expressed similar observations in his critique of Kicking Away the Ladder: Development Strategy in Historical Perspective, which was a previous work authored by Professor Chang.

Professor Glaeser similarly pointed out that “Bad Samaritans” could have been more effective if it had “delved deeper into understanding the broader historical impact of trade protectionism in the United States and Britain in relation to other economic factors.”

Having read the book, I believe that Professor Chang’s focus on high tariffs as being key to economic growth above most everything else is a fundamental flaw in his position along with the argument that “American and British free trade advocates are guilty of hypocrisy” because historically, their countries have not always practiced what they have preached.

Perhaps Professor Glaeser said it best when he mentioned that there is “alternative view that economists shouldn’t be required to endorse the worst policies of their own countries.”

2 comments to “Bad Samaritans”- The “Myth” of Free Trade?

  • I haven’t read Chang’s book, but I think you have made some very good points.

  • Edmunds Sulzanoks

    I am confused. Isn’t “import tariff” something enforced by legislation? How come there is “insufficient evidence”?? Something smells fishy :)

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