In “Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism”, Ha-Joon Chang challenges the conventional wisdom that free trade and globalization are the keys to prosperity for developing countries. By reexamining the history of capitalism, Chang argues that the very countries that now champion free markets once relied on protectionist policies to build their economies. With compelling anecdotes and historical examples, he makes the case that today’s “Bad Samaritans” — wealthier nations and global institutions like the International Monetary Fund (IMF) and the World Trade Organization (WTO) — are undermining the economic development of poorer nations through the imposition of free-market ideology.

Chang starts by addressing the common perception that globalization and free trade will naturally lead to economic success. He disputes the idea that there is a one-size-fits-all economic model, using historical examples to show that countries like the United States and the United Kingdom, now proponents of free trade, once thrived on protectionism.

One notable anecdote is how the U.S., in the 19th century, protected its infant industries from European competition through high tariffs. This protection allowed the nation to nurture its industries, which later became globally competitive. Chang highlights how Alexander Hamilton, a founding father of the U.S., proposed policies that defy modern free-market principles, emphasizing protectionism and government intervention.

“Virtually all of today’s rich countries used tariff protection and subsidies to develop their economies, yet they advise developing countries to do the opposite,” Chang writes, pointing out the hypocrisy in today’s free trade evangelism.

In this section, Chang delves deeper into the industrial history of Western nations. He explains how these countries, despite their current advocacy for free trade, were far from following these principles when they were building their wealth.

The United Kingdom’s rise during the Industrial Revolution was not the result of free markets but rather a heavily protectionist environment. The British government nurtured key industries such as textiles by imposing tariffs and banning imports of competitive products. Chang contrasts this with Britain’s later role in forcing free trade policies on its colonies, particularly India, which suffered deindustrialization as a result.

“The truth is that the free market does not exist. Every market has some rules and boundaries that restrict freedom of choice.” This memorable quote from Chang encapsulates his broader argument — the free market is not the natural state of things but a construct shaped by those in power.

Chang then critiques the modern trend of enforcing free-market policies in developing nations. He focuses on how developing economies are often pressured to adopt neoliberal policies, such as deregulation and privatization, by international organizations like the World Bank and IMF. He argues that these policies prevent poorer countries from building the strong industries they need to compete internationally.

One of the most powerful examples in the book is the story of South Korea. Chang, himself from South Korea, explains how his country used tariffs, subsidies, and government intervention to grow from one of the world’s poorest nations in the 1960s to a global economic power. Contrary to the advice now given to developing countries, South Korea did not open its markets but protected them aggressively while building up its industries, particularly in electronics and automobiles.

“Had South Korea followed the free-market policies recommended by the Bad Samaritans, it would not have become the economic powerhouse it is today,” Chang asserts, using his home country as living proof of the benefits of protectionism.

In this section, Chang critiques the modern intellectual property rights (IPR) regime, especially as enforced by wealthier nations. He argues that strict IPRs disproportionately harm developing countries by preventing them from accessing and adapting technologies that are crucial for their development. He points out that many advanced economies initially thrived by copying and reverse-engineering technologies, a practice that is now criminalized by strict intellectual property laws.

Chang cites the example of Switzerland and Germany, which were once known for weak intellectual property protections, allowing them to catch up with more advanced nations like Britain and France. Now, these countries impose stringent IPRs on developing economies, creating yet another barrier to their industrialization.

Another significant theme in Bad Samaritans is the discussion around corruption and culture in developing countries. Chang critiques the common argument that cultural factors, such as corruption or laziness, are responsible for poverty in these nations. He argues that corruption exists in all countries but is exacerbated in poorer nations because of weak institutions. Chang emphasizes that blaming culture oversimplifies the complex economic realities facing these countries.

“If culture were the cause of economic backwardness, then countries like South Korea and Japan should have never developed, as they were once considered ‘hopeless’ cases,” he writes, pointing to the dynamism of once underdeveloped Asian nations.

In the concluding sections, Chang proposes that developing countries should adopt a pragmatic mix of policies that suit their specific contexts, rather than blindly following the free-market model pushed by Western nations. He calls for more flexibility in global trade rules and for wealthier nations to allow poorer countries the space to develop their industries through protectionist measures when needed.

Chang’s Bad Samaritans remains highly relevant in today’s globalized economy. His critique of free trade as a one-size-fits-all solution offers an essential perspective on the challenges facing developing nations. By highlighting the historical protectionism of today’s rich nations and offering examples of successful industrial policies in countries like South Korea, he questions the wisdom of current global economic policies.

Since its publication, Bad Samaritans has sparked widespread debate about the role of free trade in economic development. Chang’s perspective is often praised for its contrarian view on globalization, with many economists and policymakers recognizing the importance of nuanced trade policies. However, some critics argue that Chang underestimates the benefits of free markets and overstates the viability of protectionism in today’s interconnected global economy.

In a world grappling with economic inequality, Bad Samaritans offers an important critique of the global economic system, emphasizing that true development often requires a different path than what is advocated by wealthier nations and global institutions.