Tom Friedman's Folly: The Lies Behind 'Free Trade' - By Chalmers Johnson

Ha-Joon Chang's life is conterminous with his country's advance from being one of the poorest on Earth -- with a 1961 yearly income of $82 per person, less than half the $179 per capital income in Ghana at that time -- to the manufacturing powerhouse of today, with a 2004 per capita income of $13,980. South Korea did not get there by following the advice of the Bad Samaritans. Chang's prologue contains a wonderful account of how post-Korean War trade restrictions and governmental supervision fostered such projects as POSCO (Pohang Iron and Steel Co.), which began life as a state-owned enterprise that was refused support from the World Bank in a country without any iron ore or coking coal and with a prohibition on trade with China. Now privatized, POSCO is the world's third largest steel company. This was also the period in which Samsung subsidized its infant electronics subsidiaries for over a decade with money made in textiles and sugar refining. Today Samsung dominates flat-panel TVs and cell phones in much of East Asia and the world.

Chang remembers quite clearly that as a student "We learned that it was our patriotic duty to report anyone seen smoking foreign cigarettes. The country needed to use every bit of foreign exchange earned from its exports in order to import machines and other inputs to develop better industries." He is frankly contemptuous of New York Times columnist Thomas Friedman's best-seller The Lexus and the Olive Tree (2000) and its argument that Toyota's Lexus automobile represents the rich world brought about by neoliberal economics whereas the olive tree stands for the static world of no or low economic growth. The fact is that had the Japanese government followed the free-trade economists back in the early 1960s, there would have been no Lexus. Toyota today would be, at best, a junior partner to some Western car manufacturer or, worse, have been wiped out.