Quotes from Ha-Joon Chang

The view that the world has now entered a new era of the 'knowledge economy', in which making things does not confer much value, is based upon a fundamental misreading of history. We have always lived in a knowledge economy.

Thus, in addition to his double life as a spy, Defoe also led a dounle life as an economist- without realizing it, he created the central character in free market economics in his fictional work, umyet his own economic analysis clearly illustrated the limits of free market and free trade.

Today, Korea is one of the most 'inventive' nations in the world-it ranks among the top five nations in terms of the number of patents granted annually by the US Patent Office.

This is known as the Pareto criterion and forms the basis for all judgements on social improvements in Neoclassical economics today.

It was only after the Second World War, when the US became top dog and liberalized its trade, that countries like France came to look protectionist.

So the two champions of free trade, Britain and the US, were not only only not free trade economies, but had been the two most protectionist economies among rich countries-that is, until they each in succession became the world's dominant industrial power.

It shows that the living standards of the huge majority of people in rich countries critically depend on the existence of the most draconian control over their labour markets – immigration control. Despite this, immigration control is invisible to many and deliberately ignored by others, when they talk about the virtues of the free market.

Once we learn that different economic theories say different things partly because they are based on different ethical and political values, we will have the confidence to discuss economics for what it really is - a political argument - and not a 'science' in which there is clear right and wrong.

Free trade economists have to explain how free trade can be an explanation for the economic success of today's rich countries, when it simply had not been practised very much before they became rich.

I personally think that society is responsible for a very significant percentage of what I've earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you'll find out how much this talent is going to produce in the wrong kind of soil. I will be struggling thirty years later. I work in a market system that happens to reward what I do very well – disproportionately well.

However great an economic theory ma be, it is specific to its time and space. To apply it fruitfully, we require a good knowledge of the technological and institutional forces that characterize the particular markets, industries and countries that we are trying to analyze with the help of the theory.

A História é útil para destacar os limites da teoria económica.

This approach has enabled Japanese firms to achieve such production efficiency and quality that now many non-Japanese companies are imitating them. By not assuming the worst about their workers, the Japanese companies have got the best out of them.

The Korean economic miracle was the result of a clever and pragmatic mixture of market incentives and state direction. The Korean government did not vanquish the market as the communist states did. However, it did not have blind faith in the free market either. While it took markets seriously, the Korean strategy recognized that they often need to be corrected through policy intervention.

It was only after the Second World War that the US – with its industrial supremacy now unchallenged – liberalized its trade and started championing the cause of free trade.

Now, if it was only Korea that became rich through such 'heretical' policies, the free-market gurus might be able to dismiss it as merely the exception that proves the rule. However, Korea is no exception. As I shall show later, practically all of today's developed countries, including Britain and the US, the supposed homes of the free market and free trade, have become rich on the basis of policy recipes that go against the orthodoxy of neo-liberal economics.

Sometimes the foreign direct investor may even actively destroy the existing productive capabilities of the company bought by engaging in 'asset stripping'. For example, when the Spanish airline Iberia bought some Latin American airlines in the 1990s, it swapped its own old planes for the new ones owned by the Latin American airlines, eventually driving some of the latter into bankruptcy due to a poor service record and high maintenance costs.

El mercado libre no existe. Todos los mercados tienen reglas y límites que acotan la libertad de elección. Si un mercado parece libre, solo es porque aceptamos tan incondicionalmente sus restricciones de base que ya no las vemos. No se puede definir con objetividad lo «libre» que es un mercado.

Unless South Africa is

government of an economically backward nation, such as the US, needs to protect and nurture 'industries in their infancy' against superior foreign competitors until they grow up; this is known as the infant industry argument.

algunos mercados parecen libres, solo es porque aceptamos tanto las regulaciones en las que se apoya que se vuelven invisibles.

De-industrialization also has a negative effect on a country's balance of payments because services are inherently more difficult to export than manufactured goods. A balance of payments deficit means that the country cannot 'pay its way' in the world. Of course, a country can plug the hole through foreign borrowing for a while, but eventually it will have to lower the value of its currency, thereby reducing its ability to import and thus its living standard.

the chance of an average developing-country person being an entrepreneur is more than twice that for a developed-country person (30 per cent vs. 12.8 per cent).

Moreover, even if they are eventually weeded out, one-sided managerial compensation packages impose huge costs on the rest of the economy while they last. The workers have to be constantly squeezed through downward pressure on wages, casualization of employment and permanent downsizing, so that the managers can generate enough extra profits to distribute to the shareholders and keep them from raising issues with high executive pay (for more on this, see Thing 2).