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Chalmers Johnson on the Myth of Free Trade

Posted on Jan 24, 2008
book cover

By Chalmers Johnson

(Page 2)

Turning to the United States, Chang focuses on Alexander Hamilton, the first American secretary of the treasury and the man who coined the term “infant industry.” Although he did not live to see it, by 1820 Hamilton’s 40 percent tariff on manufactured imports into the United States was an established fact. Hamilton provided the blueprint for U.S. economic policy until the end of the Second World War. The 19th and early 20th century U.S. tariffs of 40 to 50 percent were then the highest of any country in the world. Throughout this same period, it was also the world’s fastest growing economy. Much like contemporary China, whose average tariff was over 30 percent right up to the 1990s, neither American nor Chinese protectionism inhibited foreign direct investment but rather seemed to stimulate it. With the U.S. abandonment of overt protectionism after it became the world’s richest nation, it still found measures to advance its economic fortunes beyond what market forces could have achieved. For example, the U.S. government actually paid for 50 to 70 percent of the country’s total expenditures on research and development from the 1950s through the mid-1990s, usually under the cover of defense spending.

The Third World was not always poor and economically stagnant. Throughout the golden age of capitalism, from the Marshall Plan (1947) to the first oil shock (1973), the United States was a Good Samaritan and helped developing countries by allowing them to protect and subsidize their nascent industries. The developing world has never done better, before or since. But then, in the 1970s, scared that its position as global hegemon was being undermined, the United States turned decisively toward neoliberalism. It ordered the unholy trinity to bring the developing countries to heel. Through draconian interventions into the most intimate details of the lives of their clients, including birth control, ethnic integration, and gender equality as well as tariffs, foreign investment, privatization decisions, national budgets, and intellectual property protection, the IMF, World Bank, and WTO managed drastically to slow down economic growth in the Third World. Forced to adopt neoliberal policies and to open their economies to much more powerful foreign competitors on unequal terms, their growth rate fell to less than half of that recorded in the 1960s (1.7 percent instead of 4.5 percent).

Since the 1980s, Africa has actually experienced a fall in living standards—which should be a damning indictment of neoliberal orthodoxy because most African economies have been virtually run by the IMF and the World Bank over the past quarter-century. The disaster has been so complete that it has helped expose the hidden governance structures that allow the IMF and the World Bank to foist Bad Samaritan policies on helpless nations. The United States has a de facto veto in both organizations, where rich countries control 60 percent of the voting shares. The WTO has a democratic structure (it had to accept one in order to enact its founding treaty) but is actually run by an oligarchy. Votes are never taken.

Because of the shortcomings of neoliberalism, the main international development bureaucracies as well as much of the academic economics establishment have been busy trying to find plausible scapegoats or excuses. One of the most transparent was Paul Wolfowitz’s emphasis on poor-country corruption during his short tenure as president of the World Bank. He propounded the increasingly popular view that the World Bank gave good advice that failed because Third World leaders were corrupt and subverted its implementation. The problem with this idea is, as Chang puts it, “Most of today’s rich countries successfully industrialized despite the fact that their own public life was spectacularly corrupt.” He has in mind places like the late 19th century United States and post-World War II East Asia, about which Chang as a South Korean speaks with insights from the inside, and China today.

Among the conundrums encountered in trying to argue that corruption has subverted neoliberalism are the cases of Zaire (yesterday, the Congo) under Gen. Mobutu and Indonesia under Gen. Suharto. Both Mobutu and Suharto were flagrantly corrupt, murderous military dictators of the sort often preferred by the United States, but with one major difference—whereas Zaire’s living standards fell threefold during Mobutu’s rule, Indonesia’s rose by more than the same amount during Suharto’s rule. The explanation seems to be that in Indonesia, the money from corruption mostly stayed inside the country in the hands of Suharto’s numerous relatives, who used some of it to create jobs and incomes. In Zaire, the proceeds from corruption went straight into Swiss banks and other hidden foreign accounts. Corruption is, of course, a problem, but to say that it is the reason for the spectacular failures of neoliberal economic programs is unconvincing.

Rather than acknowledging that free trade, privatization, and the rest of their policies are ahistorical, self-serving economic nonsense, apologists for neoliberalism have also revived an old 19th century and neo-Nazi explanation for developmental failure—namely, culture. Chang believes that this reflects the popularity of Samuel Huntington’s thesis that we are experiencing a “clash of civilizations” or Francis Fukuyama’s contention that trust extending beyond family members critically affects economic development. Fukuyama argues, astonishingly, that the absence of such trust in the cultures of China (the fastest growing economy on Earth today), France, Italy, and (to some extent) Korea makes it difficult for them to run large firms, which are key to modern economic development. This is not so different from the 19th century German economist and sociologist Max Weber, who in 1904 identified the Confucian/Buddhist countries of China and Japan as economically backward because they did not have the Protestant ethic.

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By Outraged, February 1, 2008 at 1:11 am Link to this comment

Alright goddamn it!  We’re on the same side are we not?  Here is Obama’s and Clinton’s speech to AIPAC.



Well it certainly “appears” we’re on the same side anyway…..

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By thebeerdoctor, January 30, 2008 at 10:17 am Link to this comment

No, I do not think citizens are learning, in fact I do not think there are even aware. The recent secret deal to sell nuclear technology to Turkey belies the government’s concern about proliferation. Chalmers Johnson I think would be aware of this. Nuclear energy and weapons is just another example of multi-national corporate collusion to move more product, despite its deadly implications, Individuals made millions selling nuclear technology to Pakistan, and the same is true for Turkey. Have you noticed how the press has basically silent about this?

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By jackpine savage, January 30, 2008 at 9:40 am Link to this comment

I recently picked up a book at a used book sale called “The Suicidal Corporation” by Paul Weaver.  It’s dated and strange because he admits early on to being a neoconservative…before the movement was well known.  He discusses the role of corporations in American political life, and he lays bare the idea that corporations have always been against government interference.  In fact, they have, from the beginning worked hard to go hand in glove with policy…even during the New Deal years.

Examples like NAFTA prove his point.  They have nothing to do with “free trade” and everything to do with advancing the interests of cartels.  Really, i have nothing against the idea of free trade, if it was actually free and concerned trade…which i’m fairly sure means exchanging things. 

I’m from a state that used to be one of the world’s manufacturing powerhouses.  We have freeways named after Communist labor leaders.  Those jobs are gone in the name of “free trade”.  Nobody wins except the multi-nationals, and because they control the levers of political power there is little debate.

Benjamin Franklin once said, “Experience is a dear school, but a fool will learn in no other.”  Which begs the question: Is your citizens learning?  Too rarely is that question asked.

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By Gregorio, January 29, 2008 at 8:32 pm Link to this comment

Joe, federalism is a form of social organization, and contrasts with confederalism in that the former is, as you note, marked by strong, central control, while the latter is less structured and more spontaneous, like the invisible hand of the market.  Those who chirp mightily about the benefits of the market are to be found in positions of power requiring very centralized control.  What they wield and play with is the wealth of individuals who have been taxed by a federal government to finance the empire Chalmers Johnson speaks of.  Excused from this rapine are legal fictions called corporations that have all of the rights of humans, including freedom of speech, where their money influences the tide of the electorate.  Feebly addressing this are people like Ron Paul, who is impeded by the antinomy of the libertarian that drives him to think that life itself is federal at the lowest level, it’s every man for himself, that the division of labor upon which all society is based can be based upon individualism.  The basal unit of society is the couple, not the individual.  Otherwise there is no division of labor.

This is the federal free market of individuals rather than the confederal free market of couples in which the central government oversees that each state enforce the standards of the constitution, and does not distort the economy with military keynsianism, but instead enforces wage minimum.  The Justice Department receives the money rather than the Defense Department, there is no unitary executive who can override the constitution and involve the federation in entangling alliances and imperial adventures that are beneficial to the corporate fictions and their officers.

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By thebeerdoctor, January 29, 2008 at 5:46 pm Link to this comment

Gregorio, this is part of the reason Rep. Ron Paul used to explain why the civil war is not something to be proud about. But of course he was ridiculed for even questioning the alleged wisdom of father Abraham. It makes you wonder why war, which has been called a total failure of the human spirit, is still held in such high and stupid regard.

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By thebeerdoctor, January 29, 2008 at 5:38 pm Link to this comment

jackpine savage, tonight I just tuned into C-SPAN 2 and heard a dialog between Sen. Sherrod Brown and Sen. Byron Dorgan on the disastrous effects of the North American Free Trade Agreement, not only to Mexico, but to the economy of the people of the United States. Brown, who was in congress at the time, was fully aware of what a rotten deal this was even then. How sad it is that intelligent conversation about this terrible policy is largely ignored by a news media that nearly always sides with the corrupt, venal interests of a multi-national corporate state. I guess it is difficult for many voters to realize, that despite all the jabber about
free markets and opportunities, those who set this agenda don’t give a damn about them, or what happens to their lives.

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By Gregorio, January 29, 2008 at 4:36 pm Link to this comment
(Unregistered commenter)

Joe, Federalism is a form of social organization based upon strong central control, as you note.  Free market individualism has long been thought to be antipathetic to federalism.  Now look at history.  The states’ rights Republicans, the party of Lincoln, have usurped confederalism (states’ rights) in favor of federalism every time, with individuals now including corporate persons; the small federal government getting bigger under Republican presidents than under Democratic presidents; strong federal control over the economy occurring as wage and price controls under Nixon; the pursuit of the dictatorial unitary executive by Republican neocons like Cheney and Wolfowitz whose Department of Homeland Security and Justice Department encroaches upon individual liberties otherwise guaranteed by the constitution; a Defense Department driven by military-industrial pressures and thriving on no-bid contracts - all the trappings of federalism from the states’ rights people.  Confederalism, on the other hand, gives precedence to the constitution where the federal government oversees the states to insure they stay within the bounds of the bill of rights that protects individuals.  It just so happens that the alleged states’ rights free marketeers push for strong central control, not out of concern for the individual free market of Adam Smith, but to perpetuate and intensify the oligopoly that Lincoln made possible.  A confederation would not and could not have a large standing army, a federation can, by resorting to individual income tax over and above anything the individual has to give to the state he lives in.
There probably would never have been two world wars, a cold war, a never-ending war on terror, and a war on drugs, if the Confederacy had won the Civil War.  For what was spent on that war, all the slaves of the south could have had their freedom bought.  Individualism is the rallying cry of the federalist because the federalist places himself above society, and hopes to shape it to his own benefit.

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By jackpine savage, January 29, 2008 at 3:40 pm Link to this comment


I had never heard of James Goldsmith until your quote on this thread earlier.  I meant to look him up today, but found myself busy with other things.

I like the above quote just as well, and i have a growing feeling that i need to find out what else this man said and did.

Personally, i’ve never liked Al Gore one bit.  I have always found his environmentalism to be self-serving.  To that end, i’ve taking some flak on comment threads for refusing to see him as the messianic leader he likes to thought of as.  I’m of the opinion that Global Warming is the symptom, not the disease.  And i cannot bring his current message into line with his previous message…the one which you made clear.

These free trade agreements and neo-liberal globalization have benefited the agri-businesses, in many cases, most of all.  What is left of Mexican, et al. land, is invariably put to use growing export crops that put them squarely into the input/price bind.

And i’m not surprised that St. Al has never acknowledged the ecological disaster in Mexico; he never acknowledges the ecological disasters that he’s made a buck or two off of.

Thanks for pointing me towards Sr. James Goldsmith

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By Douglas Chalmers, January 29, 2008 at 9:38 am Link to this comment

Re: Americans Listen - By Douglas Chalmers, January 29: “Such apparent bias that it begs further investigation….’

***Oops, sorry, wrong post!

(“preview” in a cartoon topic didn’t work so I used this topic’s preview function - and then….arrgh!)

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By thebeerdoctor, January 29, 2008 at 8:51 am Link to this comment

Here is something else to consider jackpine savage, in light of last night’s State of The Onion:

“The economy is a tool to serve us. It is not a demi-god to be served by society.”
Sir James Goldsmith

Goldsmith, a billionaire who died in 1997, was a fierce opponent of NAFTA and the WTO. It really made the well heeled orthodoxy uncomfortable that one of their own could be courageous enough to speak truth, as they say, to power.
I remember when Al Gore went on the Larry King Show to put down Ross Perot, who rightfully pointed out that NAFTA was an abuse of the Mexican people. But ofcourse Al Gore and his boss Bill Clinton would hear nothing of it… not even when congressional members of their own party; Marcy Kaptur and David Bonior, to name just two, tried to tell them what a fundamentally flawed policy this so-called free trade agreement was.
Of course Al Gore has been reconfigured as a champion of the environment, never once acknowledging the human ecological disaster visited upon the small Mexican farmers who saw themselves driven to the economic wall by agribusiness products that they would never be able to match in price. Thus, and this is no exaggeration, farmers saw their land devoured by the Jolly Green Giant Corporation. I do not think it is a coincidence that since the enacting of the North American Free Trade Agreement, illegal immigration into the United States has increased by at least 350%.

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By Douglas Chalmers, January 29, 2008 at 8:36 am Link to this comment

Re: Americans Listen ! - #By truthdweller, January 29: Obama is NOT Zionist inclined… from what I DO have to go on, I would say not… Hillary…NO…very Zionist…”

Such apparent bias that it begs further investigation….

Alarm bells sound over “Jewish state”

CAIRO, 28 January (IPS) - Within recent months, several Israeli and US officials have stressed Israel’s unique character as a “Jewish state.” But according to many Arab observers, the designation negates the right of Palestinian refugees to return to Israel, and leaves the door open to expulsion of Israel’s Arab citizens.

How Barack Obama learned to love Israel

Reviewing the speech, Ha’aretz Washington correspondent Shmuel Rosner concluded that Obama “sounded as strong as Clinton, as supportive as Bush, as friendly as Giuliani. At least rhetorically, Obama passed any test anyone might have wanted him to pass. So, he is pro-Israel. Period.”

Israel is “our strongest ally in the region and its only established democracy,” Obama said, assuring his audience that “we must preserve our total commitment to our unique defense relationship with Israel by fully funding military assistance and continuing work on the Arrow and related missile defense programs.”

Obama and the Jews

One of the many paradoxes of contemporary American politics involves the Democratic Party’s two most loyal constituency groups: African Americans and Jews. They have managed to stay under the same political tent even as their historic relationship has continued the long descent from the heights reached when the Rev. Martin Luther King Jr. and Rabbi Abraham Joshua Heschel marched side-by-side in Selma, Ala.

Questions for Candidate Obama

Compounding this odd situation, the Senator seems to want to be a “hawk” when it comes to Iran, describing that country as a threat to Israel and the USA. Here again I remain perplexed. Iran does not have the military capability to hit the USA. There is absolutely no proof of Iran advancing military nuclear ambitions. It is a signatory to the Nuclear Non-Proliferation Treaty. Everything else is speculation. Israel, on the other hand, has not signed the treaty; possesses nuclear weapons but will not acknowledge that fact…..

US Jews tilt rightwards on Israel

WASHINGTON, December 12 (IPS) - US Jews appear to have become more opposed both to Israel’s making key concessions in renewed peace talks with Palestinians and to the US carrying out a military attack against Iran’s nuclear facilities, according to the latest in an annual series of surveys of Jewish opinion released here this week by the American Jewish Committee (AJC)........

Moreover, a growing majority of Jews identify themselves as Democrats—58 percent compared to 54 percent in October 2006—while only 15 percent said they considered themselves Republicans, the same percentage as 14 months ago, on the eve of the Democratic sweep of the mid-term elections.

Fifty-three percent said they had a favorable opinion of Sen. Hillary Clinton, the frontrunner in the 2008 race for the Democratic presidential nomination, compared to 38 percent of respondents who said they held positive views of the two other leading contenders, Sen. Barack Obama and former Sen. John Edwards…..

AIPAC Alternative?

“There is a growing realization that the more hawkish elements of the pro-Israel community—I’m picking my words because it’s a minefield—have too much of an influence within that community,” says Ori Nir of Americans for Peace Now….

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By jackpine savage, January 29, 2008 at 8:20 am Link to this comment

Free trade is pushed by the big, publicly traded, multi-nationals.  They also profit the most.  But we should also consider how many people plan to fund their retirement by investing in those companies.  In some cases, the investors do not even know what their money is doing…they only know that the agriculture sector (or whatever) looks promising because their broker told them so.

The limited liability status of the corporations and their stockholders is a problem that should, in my opinion, be addressed.

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By jackpine savage, January 29, 2008 at 8:00 am Link to this comment

Excellent quote, beerdoctor, excellent quote.  I’ve always found it odd that we set ourselves up as the binary opposite of Marxism, when in fact, the underlying assumptions are the same…capitalism just happens to be better at supplying crap to the consumer.  Which means that instead of being buried with inefficiency, we’ll be buried in our own waste…still buried.

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By jackpine savage, January 29, 2008 at 7:57 am Link to this comment

No, Expat, it is not too far fetched.  But it is really hard to get your average Whole Foods Market shopper to realize this.  They like the happy fuzzy stories printed on the packaging and that’s enough.  They choose not to think about how much of the work done by chemicals on a regular farm is done by Mexican, starvation level, labor on a big organic farm.

Here’s a good example, the imported, “organic” asparagus that you find at Whole Foods has actually been fumigated with fungicide at the Miami international airport…it still says organic.

You’re spot on about the Myth of Free Trade reaching its slimy tentacles into “organic” farming…same shit, better advertising.

This doesn’t apply to you in Thailand, but for those who read this and live stateside. will give you a list of real farms in your area.

The only people with the power to get rid of this multi-national free trade swindle is us, the consumers, by making the right choices.

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By jackpine savage, January 29, 2008 at 7:50 am Link to this comment

You’re spot on, Ms. Churchill.  Well tended, the average 1/4 acre suburban lot is enough to keep the average family of four in the majority of their produce needs for a year.

I think of all those Maple trees used to line streets in America.  If they were apple trees, the neighborhoods would be selling apples in the fall.

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By thebeerdoctor, January 29, 2008 at 6:49 am Link to this comment

“Those of us who believe in free enterprise must understand that although in many nations and in many ways our beliefs remain eminently valid, on their own they are not sufficient. They must be integrated into the overriding imperatives of the biosphere as well as of human societies. Market forces must be harnessed to the needs of stable communities. Otherwise, like Marxists, we will be rejected as mechanistic relics of the past.”
Sir James Goldsmith

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By Expat, January 29, 2008 at 6:09 am Link to this comment

By jackpine savage, January 28 at 7:37 am #
(87 comments total)

Given our criminal capitalistic system of rape, pillage and burn; industrial organic farming could become the next enterprise to crush the small independent farmers.  Is this too far fetched?  Our brand of capitalism certainly doesn’t like honest competition and interestingly enough it brings us full circle to the Myth of Free Trade.  Whoa!  How about that?

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By Expat, January 29, 2008 at 5:56 am Link to this comment

Your point is well taken.  Organic may just become the crap mega farms of the future.  Small and local, fresh and nutritious, yes.  Local farmers markets; Hillsboro, Oregon; Beaverton, Oregon; Oregon City, Oregon; etc., etc., everywhere in the states.  Break up the huge ruinous mega farms.  At that level; organic looses it’s meaning.  You continue to keep the dialogue going and thoughtful.
Thanks a bunch.

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By thebeerdoctor, January 29, 2008 at 4:02 am Link to this comment

Look up Gresham’s Law.

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By allanR, January 29, 2008 at 12:11 am Link to this comment
(Unregistered commenter)

“I’ve always been amazed at how much better the food outside the US is…(they use local ingredients when the price is competitive with shipping factory ingredients)...”

I think you support Johnson’s argument for the use of subsidies. The Europeans have subsidized small farmers for a long time, as have the Japanese their small rice farmers, thus allowing those consumers the luxury of fresh, unadultered produce.  What the Europeans and Japanese dont do is subsidize gigantic agribusiness. For their subsidies the U.S. taxpayers get plastic food. And there seems to be not end in sight.

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By Joe, January 28, 2008 at 7:39 pm Link to this comment
(Unregistered commenter)

Gregorio post-
“..federalist free market of individuals.”

Gregorio-  In its broad Western sense, “federalist” suggests strong central control. Can you clarify?

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By thebeerdoctor, January 28, 2008 at 6:01 pm Link to this comment

It is good to read stuff by Chalmers Johnson, he makes you use your brain. I was struck by the term “neo-liberalism” a phrase I first heard from Arundhati Roy. From third world speakers this is a term they are quite familiar with. Here in the West, we hardly ever hear it being uttered.
Of course we do get traces of this policy at times. I remember reading in The Wall Street Journal a few years back, about the desperate plight of thousands of farmers who could not afford the agribusiness chemicals required to maintain “new world” farming. Faced with overwhelming debt, many committed suicide. Such observations brought me back to Wendel Berry, who is linked here:

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By Anna Churchill, January 28, 2008 at 5:36 pm Link to this comment
(Unregistered commenter)

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By Anna Churchill, January 28, 2008 at 5:12 pm Link to this comment
(Unregistered commenter)

Anyone remember EF Schumacher? Buddhist Economics?

It is interesting to see that by default the idea of regionalism and all that implies will come home to roost—after the fall, of course.

I keep waiting for when it will be proposed that neighborhoods create home kitchen garden clubs utilizing all that unused land that surrounds even the most modest home in the US. In Europe, where land is scarce every scrap of dirt in one’s back garden is often used to grow parsely or a tomato—here it all goes to waste.

What does this have to do with the issues in the article? Everything.

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By jackpine savage, January 28, 2008 at 8:47 am Link to this comment

Ah, Mr. Chalmers, you caught an innocent mistake.  I did mean Mr. Johnson.  On the other hand, i more often than not agree with you too; furthermore, in my mind respect is more important than total agreement, and you most certainly have my respect.

I also agree that the whole world needs to be out from under the WorldBank and the IMF.  I have yet to find an example where they have done more good than harm.  And while i may not agree with some of the leaders who have sought to remove their countries from the fetters of those organizations (Russia being an example), i must admit respect for the action.

No, i was not in the military in Korea.  After passing the DoS’s foreign service entry exam and having to decline the job offer for moral reasons, i knew that i needed to be far from this country during its irrational march to war.  I taught English in Korea. 

Frankly, i’m surprised that we are heard, but it heartens me to hear it.

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By jackpine savage, January 28, 2008 at 8:37 am Link to this comment

Hah, i thought for sure that post was going to disappear into the ether!

I like organic farming, and i know a fair number of organic farmers.  But sometimes i worry that the organic push is muddying the waters.  What’s more important is local and small.  Local because you get to eat food that is actually ripe (as opposed to picked three weeks early and subjected to controlled rot in transport).  Small because no small farmer will apply chemicals without real need.  They see the plants individually and can feed/treat them as needed.  A big farm doesn’t say, “oh shit, that one tomato plant has an early whitefly infestation, i’ll treat it and the ones around it first.”  They simply pile on the pesticides in an act of preventative war.

And unfortunately, the word ‘organic’ is much abused because of how the USDA defined it.  Much organic produce in the States goes through the same factory processing and early picking regime.  And the big organic farmers often lather on ‘organic’ pesticides like Bt the same as they would use chemical pesticides.  But to be sure, it is better to buy organic than not. (especially in your situation)

I’ve always been amazed at how much better the food outside the US is…even McDonald’s in many countries is obviously far superior food to what we get here. (they use local ingredients when the price is competitive with shipping factory ingredients)

You’re lucky, i miss Asian eating more than just about anything.  And you’re right about connecting all the dots too.  As the Buddhists like to say, there’s no such thing as independent origination.

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By Expat, January 28, 2008 at 4:58 am Link to this comment

By jackpine savage, January 27 at 9:11 am #
(83 comments total)

agri thoughts…...

You didn’t get deleted but there was no “reply” ‘button”, LOL!!!

Yes, I agree with you and while I don’t have knowledge to that degree of technicality, I know we are doing ourselves in agriculturally (poisoning the soil).  Thank god for the organic farmers.  Your comment about Asia is correct.  However there is a very slow awakening to organic farming here, but, as I said its slow.  Some of the vendors at our local markets (trust me I don’t mean Safeway) make a point to say they don’t use chemicals.  This is in the boonies where I live.  Off topic, hell no it isn’t!  That’s part of the problem; we fail utterly to make all of life’s connections that are so critical to our survival.  Keep em coming!  Thanks, very informative.

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By Joe, January 27, 2008 at 11:43 pm Link to this comment
(Unregistered commenter)

You guys are breaking my heart. jackpine savage—for your amusement, here is one duty assigned the Philippines Bureau of the Treasury:

Under Republic Act No. 6657:
*Manage the Agrarian Reform Fund

quote from DC’s post:
“It may be rather late as Wolfowitz has been reborn as the nemesis termite in control of security and nuclear weapons - chairman of the International Security Advisory Board.”

Douglas—you have once again scared the living fuck out of me. I’m too big to fit under my desk. What to do.

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By Douglas Chalmers, January 27, 2008 at 10:50 pm Link to this comment

#By jackpine savage, January 26: “I have yet to find something that Mr. Chalmers wrote that i don’t like or disagree with…this review being no exception…”

Huh??? Did you mean me ot Chalmers Johnson, savage jackpine? By the way, when you talk about living in Korea, did you mean residing there or stationed there (military)?

You can be assured though, that it is NOT true that no one is listening to us here. You would be surprised how far our words reach. Interesting what you say about Russia but the whole world needs to “to get out from under the IMF and WorldBank”.

It may be rather late as Wolfowitz has been reborn as the nemesis termite in control of security and nuclear weapons - chairman of the International Security Advisory Board

#By Joe, January 27: ”...I just don’t understand the statement, “Commentators who denigrate the Philippines as East Asia’s only Catholic and therefore Latin American-type culture forget that only a half-century ago it was the second richest country in Asia (after Japan)...”

That was an era just after WW2, Joe. I guess every country in East Asia/SE Asia was relatively poor then so it wouldn’t have been hard to have been the “second richest”, not that it would have meant anything really.

Perhaps Chalmers Johnson had somehow deliriously assumed that being “rescued” from Japan in 1945 was something wonderful? I hardly think so considering that the Philippines was under the heel of the USA after the Spanish-American war right up until the Japaneses invaded.

Who, then, was really the liberator? After 300 years of Spanish colonization, things could only get better - or could they??? That was the time of the Magsaysay and Macapagal presidencies and it would seem that only glowing tributes remain to their rule (as you know, the current president, Ms. Gloria Macapagal-Arroyo is the daughter of former president Diosdado Macapagal).

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By Joe, January 27, 2008 at 5:43 pm Link to this comment
(Unregistered commenter)

Chalmers Johnson has a grasp of the connectedness of events and policy, a reality few US economists or lawmakers have incorporated into their thinking. Just by example, imagine Johnson signing legislation he has not even read..a common practice, I believe, in Washington. Pride in the usefulness of his mind would prevent my example, Johnson, from ever committing such a sin. HJ Chang, whose approach is the focus of this article, is one of a rare breed and is a blessing to this world.

I have some problems with a few of the notions promoted here, though, mostly by author Johnson. Unless I am misunderstanding his argument, he encourages the heavy old-school hand of protectionism with such devices as tariffs on imports, this as one means of handling one’s economic problems. The problem with this is that manufacturing is never coming back to the US, so why burden consumers with more expense? Simply controlling spending and going back to a currency based on tangible commodities, say metals, would be far more effective and simpler to administer. It would also avoid the reprisals other nations would feel compelled to impose if only because they already feel the US is an overbearing member of the world community.

As for his disdain for the patent process, simply improve it. Have it protect individuals only, not corporations.

The 50-70% of R&D;research funded by the federals here is money wasted because, simply, our kids are stupid. They generally know nothing about history, math or writing. Our schools are, due to incompetent teachers, disasters overall. They demand conformity K-12 but offer no compelling reason for learning, no enthusiasm.

The choked flow of technical and industrial knowledge to Africa, the example above, is not due to the patent system. It is due to individuals unwilling to share wealth or influence. Chalmers Johnson calls this class of individuals “neoliberals.”  This is a confusing term for anyone trying to figure out the situation described. I feel easier calling it what it is: racist elitism.

Finally, I just don’t understand the statement, “Commentators who denigrate the Philippines as East Asia’s only Catholic and therefore Latin American-type culture forget that only a half-century ago it was the second richest country in Asia (after Japan).” This is baffling to me on several levels, since I lived there for a time. The Philippines was occupied for maybe 300 years by the Spanish, then Terrorized by Pres. McKinley and his nutty hatchet man, Teddy Roosevelt (yes, the guy up on Mount Rushmore).
Japan took a crack at the islands mid-century, after which we used them as a no-pay supermarket for our military, making whores of their women for good measure. As for Catholics running the country, all of the priblems in the south, mostly on (Muslim and Indian) Mindanao, were the result of landgrabbing and an uncaring attitude on the part of the “Catholic” government in the north.

Even with my reservations, this article was fabulous, a real eye-opener. Thank you, Chalmers.

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By jackpine savage, January 27, 2008 at 10:11 am Link to this comment


I’m a horticulturist by trade, so i tend to keep a close eye on those issues.  That trade is also why i have so much time to spend at the computer; there’s not much to do at 47’ N in January beyond continuing my experiments with indoor food production.

Those agri-businesses are also busy destroying Asia at the moment.  And in a bitter twist of irony, the epidemic of farmer suicides in India is most often achieved by drinking the pesticides made by Monsanto et al..

But while these businesses do get some negative press for their worldwide actions, a greater threat is being overlooked at home.  US food production is teetering on the brink of collapse.  Massive applications of fertilizer are losing their efficiency at the same time that fertilizer costs are going up because they are tied to oil/gas prices.

The biggest proponents of ethanol are actually the agri-businesses, because ethanol inflates the cost of grains (plus subsidies) to the point where industrial farming is once again profitable.  Don’t let the farm subsidy argument fool you; many American farmers are still going broke, even with those subsidies.  The profits all go to the multi-nationals.  They sell the seed, the fertilizers, the herbicides, and the pesticides; when the product is harvested, they control the processing, distribution, “food science”, and - increasingly - the retail market.

Top soil depletion does not just harm crop yield; when plants breathe CO2, they transmit it to the soil through their roots (which actually need oxygen).  Soil microbes digest CO2 and sequester it.  Industrial agriculture disrupts the soil ecosystem, so the plant/soil interaction is no longer capable of sequestering everybody’s least favorite greenhouse gas.  Top soil depletion also negatively affects water retention, making farmland more prone to drought. 

When you add current drought conditions to top soil depletion and then factor in the rising cost of fertilizer and pesticides (which are necessary in monocropping), and then finally factor in an alarming plunge in the bee population, you find that we are facing a perfect storm.  (Not to mention increased transportation costs.)  Many farmers are seriously worried about massive crop failures as early as this year.

Not only has globalization done its bit to make sure that the world (especially the developing world) cannot feed itself, it has also made sure that America cannot feed itself unless everything continues to go just right.  Long term planning based on best case scenarios again…

There are other ways to feed ourselves, but i won’t take up space going into them.

(I know that the moderators will delete this because it is “off topic”, except that it isn’t.)

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By GW=MCHammered, January 27, 2008 at 10:05 am Link to this comment
(Unregistered commenter)

This reckless greed of the few harms the future of the many
Will Hutton
Sunday January 27, 2008
The Observer

Never in human affairs have so few been allowed to make so much money by so many for so little wider benefit. Across the globe, societies and governments have been hoodwinked by a collection of self-confident chancers in the guise of investment bankers, hedge and private equity fund partners and bankers who, in the cause of their monumental self-enrichment, have taken the world to the brink of a major recession. It has been economic history’s most one-sided bargain.

Last week’s financial panic was further evidence of the extreme foolhardiness with which global finance has been organised and managed.

The staples of a settled life - jobs, pensions and house prices - are all under threat.

The remuneration structure is a disaster.

Hence the casino character of many new financial markets, which essentially operate as bookmakers accepting differing bets on future prices. Underneath their technical names - monoline insurance, derivatives, debt securitisation - lies little more than bookie principles and practice.

Thirteen years ago, I tried to blow the whistle on financial market liberalisation in my book The State We’re In. It was obvious then what is even more obvious now: financial market freedom embeds short-termism, guarantees lower investment, works against business building and innovation, generates booms and busts, inflates house prices, creates system-wide risk and excessively rewards those who work in them.

We need the financiers to serve business and the economy rather than be its master.,,2247731,00.html

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By Expat, January 27, 2008 at 4:31 am Link to this comment

jackpine savage; Wowie Zowie, you are right on and I can’t believe I missed that.  Example of the thing you say: A farmer in Mexico was sued by Monsanto because his corn crop was cross pollinated by a neighbors Monsanto GM corn crop because of the wind.  The Mexican farmer lost the law suit!  American companies are going into the Amazon rain forest and patenting the medicines from the indiginous plants so now the natives could be barred from using their traditional medicines… this sick or what?

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By al734, January 26, 2008 at 8:59 pm Link to this comment
(Unregistered commenter)

Marx is smiling: “...suggest that Protestant-work-ethic-type cultures are the results of economic development, not their cause…”

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By jackpine savage, January 26, 2008 at 9:34 am Link to this comment

I have yet to find something that Mr. Chalmers wrote that i don’t like or disagree with…this review being no exception.  Living in the small town that i do, i’ll probably have to order the book (through my local independent bookseller i might add), but order it i will.

Mr. Johnson makes one error.  There is a fourth industry that patent right are increasingly important in: agriculture.  The agri-business multi-nationals are currently on a world wide blitzkrieg to replace seed saving with patent crops.  In the name of “free-trade” they are quickly making the rest of the world utterly dependent on American agri-business to even feed itself.

I think the example of Korea is a good one.  When i was living there, the tariff on an imported automobile was close to 100% (at least that’s what i was told by Koreans).  Nobody seemed to complain, because they wanted their industries to succeed.  Cell phones were subsidized by the government.  If you bought a new one, you got a nice check back; the money was used to make sure that Korea would be a leader in phone technology.  And when i returned to the states, i laughed out loud when people showed me their new, coolest thing yet phone. 

The Russia that i knew forms a counter-example to Korea.  They got sold the golden straitjacket and paid dearly.  The difference being that during the 90’s they were only economically third world.  It required losing everything, but they did wake up.  And with a little help from high oil prices, they’ve managed to shake the straitjacket.  That’s the real reason why V.V. Putin gets such flak from the Western press.  It is also the real reason why he enjoys such popularity in Russia.  And to his credit, he used the oil revenue to get out from under the IMF and WorldBank first.

I think that the majority of the US population has remained unconcerned about the negative impact that Chang Ha-Joon describes because we’ve benefited so much from it.  You still hear people talking about how great the years of Clintonian neo-liberalism were, and there’s the fundamental disconnect that those riches were, in fact, transfers of someone else’s wealth.  We’ll see, though, the shoe may be on the other foot soon enough.

Thank you to the posters on this thread, especially for the links.  It is true that no one is listening to us, and while that does frustrate me, i’ve come to the conclusion that this is at least a form of therapy.  And here i can reassure myself that i’m not the only frustrated individual.

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By Expat, January 26, 2008 at 4:44 am Link to this comment

M Henri Day,
I missed the reference to Tomdispatch, which I agree is indispensable.  I remember Rumsfeld’s chastising the Chinese for their lack of transparency; it struck me as absurdist rhetoric, as does all of the things uttered by this fascist regime.  By the way, the Asia Times is an amazing news source; top flight editorials and reporting.  I have little use for most American news sources.

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By M Henri Day, January 26, 2008 at 3:03 am Link to this comment

Expat, the original source for Professor Johnson’s article is Tom Engelhardt’s indispensable (pace Marie Jana Korbelová, aka Madeleine Korbel Albright !) TomDispatch ( Besides the article itself, one also finds here brief introduction, which includes a link ( to a video interview with Johnson. Upon reading the article I couldn’t but be reminded of a certain Donald Henry Rumsfeld’s visit to China, during which he took the opportunity to berate Chinese officials on the lack of transparency in that country’s military budget. As I remarked in a letter to Tom, as children we used to say : «Take’s one to know one !»....


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By Expat, January 25, 2008 at 9:49 pm Link to this comment

As previously stated, this is an excellent “review” of the book “Bad Samaritans”, the link below is an article written by Chalmers Johnson in the Asia Times.  A nice additions to his review.

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By Expat, January 25, 2008 at 6:29 pm Link to this comment

Thanks for the link.  Asia Times is one of my favorite news sources.  I’m sad to see “we” are so involved here.  The US is like the worst cancer that has already metastisized.

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By P. T., January 25, 2008 at 6:23 pm Link to this comment

I might add that CEPR has suggestions for ways in which to change intellectual property law.

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By P. T., January 25, 2008 at 6:15 pm Link to this comment

Given the history of British protectionism early in the Industrial Revolution, I always get a laugh out of the British magazine The Economist talking up free trade the way it does.

The Center for Economic and Policy Research (CEPR) in Washinton, D.C. has researched third world economic growth from 1960-1980 and from 1980-2000 and found it far better in the earlier period (that is, preceeding Reagan, Thatcher, and neo-liberalism).

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By Gregorio, January 25, 2008 at 3:34 pm Link to this comment
(Unregistered commenter)

The intellectual atmosphere is incrementally changed by ‘little articles on blogs’ that tell people like you and me there are those in the rarified atmosphere of academia who question what is taken for common wisdom.  These people should be celebrated.  The nineteenth century notion of social Darwinism upon which libertarian, free market thinking alleges to be based, a notion that has endured for over a century and is part of neoliberalism, is increasingly discredited by biologists as both un-Darwinian, but also conflicting with nature and evolution as they are increasingly understood.  Stephen J. Gould tried to point this out in the 1990s, that the predominant ethic in nature is symbiosis in the struggle with the physical world by nature’s creatures.  Parasites and microbes that kill their hosts imperil their own future.
In the field of mathematical biology is a key equation, called Kleiber’s Law (see Wikipedia), that models the use of energy by biomass.  This equation clearly shows that the functioning longevity of any biomass, be it a bacterium, a cell, a multi-cellular organism, or a society of such organisms, is longest when the energy is distributed from the organism level to the basal level of its cells.  In other words, socialism is a more biologically-sound form of social organization than a federalist free market of individuals, when it comes to the healthy and prolonged life of the social organization.  Ayn Rand, Alan Greenspan, Murray Rothbard, and all the leading lights of individualistic free market thinking, all who are neoliberals, have no idea about biology and evolution, and how these things imperil the pseudo-scholarship they once championed as in keeping with nature’s way.

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By Pathman25, January 25, 2008 at 2:03 pm Link to this comment
(Unregistered commenter)

Expat: Did you see this article? Very sad.

US and Thailand: Allies in torture

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By Alex, January 25, 2008 at 1:16 pm Link to this comment
(Unregistered commenter)

I agree with Chang and Johnson, that the “protectionism” of the early US economy helped foster and develop the business community within US borders.  I don’t agree that the change is a function of imperialism as much as a function of multi-national corporations (MNC).  Free trade is a boondogle promoted by the MNCs for the benefit of MNCs. 
US companies that thrived under the “protectionist” practices, find they have to become MNCs in order to maintain their economic status.
Many of these MNCs have no allegiance to any country, thrive in corrupt government situations where they can easily bribe to get their way, and have friends in powerful countries that will help them overthrow uncooperative politicians.  The development of mercenary companies is scary in light of MNC control.  If we want to regain control of our economy (from MNCs) and allow other countries to develop their own we should not bow to the MNC wishes, by reinstating tarrifs.  We also must halt our support of mercenary forces.

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By M Henri Day, January 25, 2008 at 10:50 am Link to this comment

I posted the following brief comment to my StumbleUpon page ( :

As could be expected, a brilliant review by Chalmers Johnson of what seems to be a brilliant book by Ha-Joon Chang. Happy reading !...


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By GW=MCHammered, January 25, 2008 at 10:21 am Link to this comment
(Unregistered commenter)

Dire Straits nailed today’s headlines 25 years ago:

Warning lights are flashing down at quality control
Somebody threw a spanner and they threw him in the hole
There’s rumors in the loading bay and anger in the town
Somebody blew the whistle and the walls came down
There’s a meeting in the boardroom they’re trying to trace the smell
There’s leaking in the washroom there’s a sneak in personnel
Somewhere in the corridors someone was heard to sneeze
’goodness me could this be industrial disease?

The caretaker was crucified for sleeping at his post
They’re refusing to be pacified it’s him they blame the most
The watchdog’s got rabies the foreman’s got fleas
And everyone’s concerned about industrial disease
There’s panic on the switchboard tongues are ties in knots
Some come out in sympathy some come out in spots
Some blame the management some the employees
And everybody knows it’s the industrial disease

The work force is disgusted downs tools and walks
Innocence is injured experience just talks
Everyone seeks damages and everyone agrees
That these are ’classic symptoms of a monetary squeeze’
On itv and bbc they talk about the curse
Philosophy is useless theology is worse
History boils over there’s an economics freeze
Sociologists invent words that mean ’industrial disease’

Doctor parkinson declared ’I’m not surprised to see you here
You’ve got smokers cough from smoking, brewer’s droop from drinking beer
I don’t know how you came to get the betty davis knees
But worst of all young man you’ve got industrial disease’
He wrote me a prescription he said ’you are depressed
But I’m glad you came to see me to get this off your chest
Come back and see me later - next patient please
Send in another victim of industrial disease’

I go down to speaker’s corner I’m thunderstruck
They got free speech, tourists, police in trucks
Two men say they’re jesus one of them must be wrong
There’s a protest singer singing a protest song - he says
’They wanna have a war to keep us on our knees
They wanna have a war to keep their factories
They wanna have a war to stop us buying japanese
They wanna have a war to stop industrial disease
They’re pointing out the enemy to keep you deaf and blind
They wanna sap your energy incarcerate your mind
They give you rule brittania, gassy beer, page three
Two weeks in espana and sunday striptease’
Meanwhile the first jesus says ‘I’d cure it soon
Abolish monday mornings and friday afternoons’
The other one’s on a hunger strike he’s dying by degrees
How come jesus gets industrial disease

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By Bubba, January 25, 2008 at 9:10 am Link to this comment

Excellent. Books like Mr. Chang’s give me hope that the rediscovery of the world’s greatest economist, Henry George, will happen sooner than later.

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By GW=MCHammered, January 25, 2008 at 8:10 am Link to this comment
(Unregistered commenter)

The smell, taste and cost are appalling. But neither proud history nor generous posterity motivates the American people to LOOK at what they’re drinking. Like decades of foul nicotine abuse, our ego Kool-Aid is blindly malignant.

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By Expat, January 25, 2008 at 4:45 am Link to this comment

Yes, so true, so true.  Watch your angst, some of the posters here don’t like it….PC you know.  Mine comes to the fore every so often…good for the soul.  How to motivate; that is the question.  Hopeless, I say!

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By Expat, January 25, 2008 at 3:56 am Link to this comment

This is one excellent review of a very important book.  It highlights the despotism of western capitalism, which I think is criminal at best.

Here in Thailand; the US and Thailand have been negotiating an FTA for the last three years (it was supposed to be signed off 1 ½ years ago).  Thailand is resisting and won’t sign it off yet.  Thailand is smart enough to know the US will get in its shorts.

I particularly liked this part: “It ordered the unholy trinity to bring the developing countries to heel. Through draconian interventions into the most intimate details of the lives of their clients, including birth control, ethnic integration, and gender equality as well as tariffs, foreign investment, privatization decisions, national budgets, and intellectual property protection, the IMF, World Bank, and WTO managed drastically to slow down economic growth in the Third World. Forced to adopt neoliberal policies and to open their economies to much more powerful foreign competitors on unequal terms, their growth rate fell to less than half of that recorded in the 1960s (1.7 percent instead of 4.5 percent).”  Thailand has maintained about 4.5% because it has not yet signed on to an FTA with the US.

It would be wonderful if this rampant abuse of human rights were brought to the fore and acted upon.

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By Douglas Chalmers, January 25, 2008 at 3:37 am Link to this comment

I suppose that if Ha-Joon Chang was a “Korean economist” instead of a “Cambridge economist”, no-one would ever have noticed him.

It was nice of Chalmers Johnson to take him seriously as a Korean as well, though.

(Page 2):-

Paul Wolfowitz… propounded the increasingly popular view that the World Bank gave good advice that failed because Third World leaders were corrupt and subverted its implementation. The problem with this idea is, as Chang puts it, “Most of today’s rich countries successfully industrialized despite the fact that their own public life was spectacularly corrupt.” He has in mind places like the late 19th century United States and post-World War II East Asia, about which Chang as a South Korean speaks with insights from the inside, and China today.

(Page 3):-

Chang argues that culture simply does not work as an explanation for economic success. Extremely broad categories such as “civilization,” “Christian,” or “Muslim” obscure more than they reveal, and the modern histories of Germany, Japan, China, and many other countries suggest that Protestant-work-ethic-type cultures are the results of economic development, not their cause.

It is time to recognize, particularly in the English-language economic press, that a “level playing field” leads to unfair competition when the players are unequal…....

One of the strengths of Chang’s new book lies in the half-dozen lucid chapters on particular, often rather technical aspects of development and international trade. These add up to a jargon-free primer on contemporary economic thought leavened with a sound knowledge of history. The best of these are on trade liberalization, foreign investment, public versus private enterprises, patents and copyrights, and macroeconomics. The most interesting of these are on trade liberalization and what today are rather ostentatiously called “intellectual property rights.”

By the way, Ha-Joon Chang is scheduled to give an address at Harvard, Monday, 28 January

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By writen, January 25, 2008 at 3:37 am Link to this comment
(Unregistered commenter)

I enjoyed this article, but then I enjoy most of what Chalmers Johnson writes.

For the life of me I don’t understand how otherwise intelligent people believe that there’s a ‘free market’ out there, when there is so much evidence to the contrary. Examine the European Union’s agricultural policy, or that of the United States, and then tell me about a ‘free market’!

Of course most current mainstream economic theory is just that, ‘theoretical’. It’s deductive, not empirical at its core. It’s basically political ideology dressed-up as science, and deeply connected to the distribution of wealth and power in society. It’s actually surprising how little we talk about the distribution of wealth and power in society, or perhaps it isn’t!

Our current economic paradigm, that we have ‘freedom’, also reminds one of our leading political dogma, that we have political freedom too, that we live in a ‘democratic society’. Is this really true? Is what characterizes our society that it’s ‘democratic’? I don’t believe this is an accurate discription at all.  But this is rather a large and complex subject to get into, sorry.

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