Why the World Isn't Flat

[quinnrasta]

The Asian countries that he mentions were protectionist countries before capitalism,what is the result now that they have adopted capitalist style policies?Have they become better or worse?The reason for their poverty prior to capitalism is held with the INSTATE protectionism, whats good for the individual is good for society &a country that allows"VOLUNTARY"trade will prosper,BTW how is N Korea doing?Like old china and germany, they would not let people leave their country...why?Protectionism!

[Auraruth8]

@quinnrasta So do you support the idea of anarchism? If so than Chomsky should be fun to watch because he also supports the idea of anarchism, My thought is that anarchism is best achieved through the means of government and democracy and using those to make a transition to anarchism and TRUE democracy. This one could also be good: "Noam Chomsky on the State-Corporate Complex: A Threat to Freedom and Survival" i know its a lot but I think you will agree with a lot in it. =)

[quinnrasta]

@Auraruth8 I DO NOT support anarchism, just the limited roll government should have as prescribed by the constitution. Chomsky is an educated idiot and a marxist, he and this idiot support the destruction of property rights and individual freedom.Nazi Germany,USSR,China,Cuba etc..all subscribed to the very same beliefs that these guys support.Trading nations are peaceful nations,when trade stops crossing borders, soldiers start.Why do we stop trading with countries we are at war with

[quinnrasta]

@Auraruth8 I DO NOT support anarchism, just the limited roll government should have as prescribed by the constitution. Chomsky is an educated idiot and a marxist, he and this idiot support the destruction of property rights and individual freedom.Nazi Germany,USSR,China,Cuba etc.. all subscribed to the very same beliefs that these guys support.Trading nations are peaceful nations,when trade stops crossing borders, soldiers start.Why do we stop trading with countries we are at war with

[quinnrasta]

@quinnrasta stopping trade with other countries, punishes the country we stop trading with. Protectionism destroys economies it does not support them!

[Auraruth8]

@quinnrasta So If you do not support anarchism, you dont support democracy, ok you support the constitutuion but according to the constitution, the government should supply general wealfare, now cant that be interpreted in many ways? And again why do you dismiss chomsky so rapidly. He has pretty good ideas about this free trade subject as well I listened to the lecture you linked and I think he made decent points but he did not deny that the US became rich because of tariffs.

[quinnrasta]

@Auraruth8 “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;”The powers delegated by the proposed Constitution to the federal government are few and defined . . to be exercised principally on external objects, as war, peace, negotiation, and foreign commerce." James Madison

[quinnrasta]

@quinnrasta "This specification of particulars [the 18 enumerated powers of Article I, Section 8] evidently excludes all pretension to a general legislative authority, because an affirmative grant of special powers would be absurd as well as useless if a general authority was intended." - Alexander Hamilton, Federalist 83 This clause if often intentionally misinterpreted by liberals to promote spending on their constituents for their relecetion

[quinnrasta]

@Auraruth8 “Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.” — Thomas Jefferson, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” — James Madison

[Auraruth8]

@quinnrasta But anyway we both know so much and we both want freedome so I think its pretty impossible for the two of us to change our stance on these issues, but I think we also might agree on a lot. But we both know that government created possibilities for people to an extent, right like keaping law and order. That is what makes commerse possible for instance. Continues- =)

[Auraruth8]

@Auraruth8 But we have different ideas is on how we get to the next level but anyhow nice talking to you. that link you gave was an interesting one, hope you achieve what you want I know I will certanly try. Good luck. =)

[quinnrasta]

@Auraruth8 Well said, government is there to enforce contracts and yes protect its citizens from harming one another, but government goes beyond their means and starts creating laws to punish citizens from engaging in socially advantageous acts. the government is there to be the shield not the sword. Government IS there to keep law and order, but should not interject when there is no harm committed. You have been a pleasure to have an intelligent discussion with you, best of luck!!!

[Auraruth8]

@quinnrasta Again that can be interpreted in a few ways... It comes down to how it is interpreted(the constiution) and if you look at the polls the population is greatly in favor of, social security for instance. So the only "crime that is commited against the rich is that the poor take some of their money now you could eliminate this crime by having the government own all the centralbanks if not even all the banks and get rid of taxes. But anyway: Chomsky and Chang =)

[Auraruth8]

@quinnrasta The constitutuion also supported slavery (if Im not mistaken, if so than correct me) so again it depends on where you put your faith. I put my faith in democracy(and that is not what we have today). For instance worker owned buissnisses and we can get there through the government and government policy. And then government owning the banks, thats basically it developing democracy as much as possible. NO ONE in govenments talk about that.

[Auraruth8]

@quinnrasta And again Chomsky does not support, Nazi Germany, USSR, China or Cuba. But let me ask you this Chile is a free market economy right? then why are people not that well of? I would like to hear you take on that. But please watch the Chomsky stuff, it is good, I do not label people, if you want to do it fine, but think about what it entails when you do.

[quinnrasta]

@Auraruth8 Chile's economy is far better off than the rest of Latin America and they are partially a free market, but more so than any other in Latin America. Chile ranks 7th for economic freedom and they are trending upward with President Sebastian Piñera and his center-right Alianza coalition assumed power in 2010. They have a median income of $15,000 and growth of 5.3%, but like the United States they have a top tax rate of 40%,a VAT and gov spening 24.1% of GDP, but debt under 10%

[Auraruth8]

@quinnrasta Chile Protests: Al Jazeera's Fault Lines Follows Student Movement

Watch it. =)

[quinnrasta]

@Auraruth8 "Democracy is two wolves and a sheep voting on what to have for dinner" Ben Franklin

"A democracy is nothing more than mob rule, where 51 percent of the people may take away the rights of the other 49." Thomas Jefferson

[quinnrasta]

After Smoot-Hawley US exports declined and were in the red until the tariff was lifted, after our economy began to grow again, if I remember correctly. This guys argument is total BS, China grew going against Russian capitalism?Well there is all kinds of capitalism, I guess. Wasn't china one of the biggest protectionist nations before turning to capitalism? What was their economy like?Didnt they practice centuries of isolationism?This guy is off his rocker, greece is a huge protectionist country

[quinnrasta]

So Singapore is 80% private sector and 20% government? The government in the USA hires 27% of the population, which is service based and not production based, meaning they are takers not makers. The 20% of Singapore that is government is PAID by the people of Singapore, their 20% runs off of the TAX imposed on their private sector.Protectionsim and price fixing is what caused unemployment to stay in double digits for a decade,before gov intervention,unemployment dropped to 6% before skyrocketing

[quinnrasta]

@quinnrasta with regard to the great depression.

[quinnrasta]

As the US has become more and more socialist with regard to being government the largest landowner, employer, healthcare provider etc..we have seen our economy and median income decline,where as Singapore has seen there income and wealth increase "CHANGING" from their previous forms of trade.Greece has done real well with their protectionists & union policies haven't they?Protectionism does not protect society, but "certain" industries in a country.This guy tells half of the story "lets move on"

[blobbins87]

if you're gonna interrupt, at least get it right- Smoot-Hawley was June 1930!!

[dynastus100]

trade barriers and subsidies to farmers.They will never be able to compete.

Especially if you crush them under debts.

Second subsidies do also harm to the nature in some cases.

In Spain 1/3 of all fish is paid directly through tax money.

To keep the fishers afloat now with the declining fish population they have to keep giving them subsidies which harms the fish population and us in the long term even more.

Very big problem in the EU.

[dynastus100]

There was/is free trade between the States in America without protectionism.

The USA was around 1870 already nearly as big as the German empire (population) and free trade between 38,5 million people is a lot.

Bigger nations don't get hurt by protectionism as much as smaller nations because their own population still has a lot of trade going on in the nation itself.

Second, protectionism is unfair to poor countries.

Look at Africa, their farmers can't do anything because of Eu and USA (cont)

[esesolox3]

I never liked Friedman, he was trying extremely hard to prove the world was flat but as someone, who I unfortunately don't remember the name of once said; "Not because more Koreans have access to the internet means they are talking to others outside Korea."

[jonnygouda1]

Mildly interesting and humorous. When was this shot? Still using a projector instead of one of those lame PowerPoint presentations on the megatron? I bet the original was on a VHS cassette. :)

[countupir]

@wilhelmdrake i didn't refer to the biggest lobbyist because i don't know them by rank. i can't post links here but twyman-whitney and opensecrets has a list to give you an idea of some interest groups. besides that use google. they are everywhere. the free market isn't as complicated as you make it sound but if you think Chang makes any sense in the above discussion there are interests that keep the free market an illusion.

[polymath7]

Resume @ 25:00

[Air420]

Ha-Joon Chang mops the floor with Thomas Friedman!

[Auraruth8]

@Air420 And Milton Friedman. =)

[quinnrasta]

@Auraruth8 This guy is full of it, as soon as I heard the word "fair" I pegged him for what he is a socialist. China "WAS" a protectionist, still is, but not to the same extent it was. Singapore is "NOW" 80% private market according to him and yet they have prospered and continue to. Cuba has instate protectionism, where the poor cannot own capitalist goods like computers and cell phones, travel is restricted to protect their aristocracy. What does this have to do with Milton Friedman?

[Auraruth8]

@quinnrasta Did you watch all of it?I think he basically shows that it is because of state policies like protectionism some of us in the west have a good life. The US and Britain got rich because of it.But anyway there is a big differnce between the US and North-korea. I am not saying that all protectionism is good. It depends on the policies. The US had good protectionist policies and still has to a large extent. Try another vid: Noam Chomsky: "Free Markets?"Give it a try please =(

[countupir]

@michaeltickledick i think you are making a parallel argument since i did not mention or advocate for a free market. my observation was that Chang doesn't talk about how bad the free market is. he seems to make the point that the free market doesn't exist and as i mentioned to @resodan below i am hard pressed to find a pure free market situation. i will be thinking about it and i hope to find it.

[WilhelmDrake]

@countupir

The whole problem is that the term "free market" is used in so many different ways by so many different people that it has almost ceased to have meaning.

Personally, I prefer the classical definition of a market free from fraud, free from monopoly rents, (& economic rent in general) free from unearned privilege, free from external debt, free from the vestiges of feudalism, free from the taking of a free lunch, one could also say free from the perverse effects a Gresham's dynamic.

[countupir]

@resodan i agree with you about the relevant regulatory benefits of government and how Chang brings out the hypocrisy of the free market people/companies. in most cases there isn't pure free market in any case because of the politics that get played by the either the special interest lobby or the already powerful big company lobbyist. even lemonade stands are shutdown by loitering/idle cops. i will be looking for a good example of free market to use in an argument.

[WilhelmDrake]

@countupir

What do you mean by "special interest lobby"? Who are they? It was my understanding that the most powerful "special interest lobby" was the corporate lobby.

[LouieArrighi]

PROTECTIONISM FTW! bring our jobs back home, and abolish NAFTA

[LouieArrighi]

PROTECTIONISM FTW! bring our jobs back home.

[radomu1]

Very interesting and intelligent guy, one of the best economists of today, and a VERY shy man. :)

[countupir]

I think a lot of people misunderstood what this discussion was about. I don't hear much about how bad a free economy is as much as I hear that we really don't have now or ever had a free market environment.

[ResoDan]

@countupir True, but he also lays out pretty clearly the positive roles that governments have played in economic growth (which is a heterodox view with regard to the 'Chicago School' and other laissez-faire economists). I think what he's trying to show is that the real world operates in more complex ways than most theorists and lay observers give it credit for, that simple, elegant ideas don't necessarily reflect reality.

[Michaeltickledick]

@countupir Then I think you are hearing what you want to hear. If the “free market” were allowed to operate there wouldn’t be a Lexus, because Toyota would have went out of business thanks to much stronger foreign competition. If the US HAD followed Adam Smith’s advice, if they didn’t have the highest tariffs in the world for centuries, they would have been overtaken by the much more powerful British industry. THAT is the whole point of the discussion. EVERY country that has developed did this

[GecSword]

When and where was this speech given? I'd like to cite it but I'm afraid I don't have the information to do so.

[neonaction]

Milton Friedman just got owned.

[raotejas]

Interesting, well-presented, contrarian and often witty video. While Dr. Chang makes a good case for some form of protectionism in the developing world, it looks like the majority of the American establishment also believes in free-trade for the US, and are oblivious to the concomitant hollowing out of the middle class and extreme concentration of wealth in the hands of a few (something Andy Grove has been alluding to for a while now).

[royalplaylist102]

He is right about protectionism but he tend to forget that protectionism was just one part of the development of the occidental civilization the other was colonization which gave us the much needed material for a continuous growth. That's the whole problem with our current system you can not grow indefinitely at one point you run out of resource and you need to go to war or face the shrinking of your society , all basic politics explained by Plato 2300 years ago.

[royalplaylist102]

I'm currently reading an english version of the Iliad and the names of the gods are all latin , the kings give corn to their horses and all that kind of non sens but still it is a 18th century acclaimed version. Rewriting of history is everywhere his example with the england monarchy is good but I would add that Guillaume the conqueror was a scandinavian speaking french but the troops were mostly french because he didn't want to lose his domain while he was gone invading england.

[neonaction]

must see for milton friedman's fanboys on youtube. Fanboys love friedman so much it's almost like religion. always questions assumptions. Maybe chang is wrong on some parts too. It's a mistake to agree just because the argument sounds good.

[freedplanet]

Yes i watched the whole video, inclusive the Q&A starting ca. 47th minute. Quite interesting to hear some not well-known backgrounds and connections which led to the situation of today. Alas could not find anything about the American W. Edwards Deming. He was initial in the success of Japanese and Asian manufacturers. By rigorous quality control and exact specifications, he could establish high quality products that were superior to the competition. For this, he was highly honoured in Japan.

[Deaob]

thumbs up if you watched the whole video 

[mujaku]

Many economists are so ensconced on the hare brain paradigm of free-trade that a shift will only occur when all the bastards die off.

[Bellantoni]

@mujaku damn! How long did it take you to word that?

[andrey91pireu]

how the fuck you can even think such crap "hmm the world is flat stay off the edge don't fall into space " :))))))

[pillypopper]

Lets face it...the money system was great for a period of time in the history of mankind....Unfortunately, the ones in power donnot want to share. So we need to revamp our moral fundamentals otherwise history will just keep repeating itself.

[archelonprime]

Thomas Friedman's "Flat Earth Economy" is NOT conventional wisdom, but BULLSHIT that has resulted in American companies that make almost everything in countries OTHER than America, which results in massive job losses/transfers, utterly insane trade policies that mostly (if not only) benefit those that were ALREADY rich, which makes America LESS wealthy as a whole. May Friedman and all of his followers burn in the hell they've created for us!

[successfulbuild]

Austrian economics is not based on "sound science" - no science works off mythical axioms. It's also been proven in mathematics that there CANNOT be a single axiom that an entire complex (defined as having and the ability to perform arithmetical calculations) and complete system. Mises was neither a mathematician and a logician and in fact knew absolutely NOTHING about either field. In addition to the non-existence of axiomatic science, there is no such thing as non-mathematical science.

[successfulbuild]

What's wrong with having a degree in finance? Finance is more "real world" based than modern neoclassical economics (not neo-Keynesian), which took equations from physics and mathematics in spite of the derision of mathematicians and physicists! Obviously, it is more grounded in reality than the discredited Austrian school of economics.

[MrTrueMedia]

@successfulbuild Finance is a ponsy scheme. Money is made by lending. Each time a loan is made there is an interest rate charged. The only way pay the interest back is borrow more money with more interest to pay back. As a whole the debt in the system must grow hence all the talk about "growth" by economists. Debt = Money + Interest. therefore Finance = Ponsy scheme.

[successfulbuild]

It's been proven in economics that ANY capitalist economy leads to centralization. That means that firms who are lucky enough to be at the right place at the right time, have good political connections, are able to acquire a large share of the equity of profitable enterprises will succeed, at the expense of the people who did the work. This is what capitalism protects.

[nicholas56789]

if only this guy stopped making his ridiculous jokes. They really ruin the talk. Like how he says "huh.." all the time.

[mmeister7]

Excellent lecture. Big fan of economic history, its a veritifiable gold mine for policy if looked at properly like Chang has. If you think about it, protectionsim is failry intuitive for developing nations when you think about it as like raising a kid.

[Nintendomanwill]

@mmeister7

The problem with protectionism is that yes, it will allow a nation to develop industry that it would not otherwise have developed but this is just an example of the broken window fallacy. You do not consider the SUSTAINABLE industrial development that is prevented

Treating a nation like a child, preventing it from being honed by competition and directed by international division of labour to seek comparative advantage, will harm those people in that nation and prevent their advance

[mmeister7]

@Nintendomanwill

You don't make a child do what and adult would. Unlike business which can faila and dissappear if they get it wrong, whole countries can't be subject to that sort of turbulence without riots on the streets. You speak about countries as if they have no people living in them! If you said what South Korea's compartivie advantage was in the 50s it would be something like making sackcloths, now they're producing samsung camcorders and mobiles.

[Nintendomanwill]

So South Korea, a territory and not an individual entity, was a child was it? So it needed some protectionism because it was an undeveloped economy...what does 'developed' even mean? The wealth of Koreans will be determined by their incomes. Whether they produce sackcloths or mobiles, they need to produce something that is marketable and they need to MUTUALLY ADJUST so as to be of greater marginal utility to their customers. That you don't understand this proves that you're an ignoramus.

[Nintendomanwill]

@mmeister7

Let's analyse the nonsense you've spouted a little more. Why is it necessary to produce industry? It's NOT. It is necessary to seek profit, not to have a certain sort of production. If Koreans can make higher profits producing sackcloths then they'll do that. The profit signals imputed by market purchase can be distorted by subsidy for export companies if the government is mercantilist, and imports can be tariffed. But buying things where they are made efficiently is key, NOT autarky.

[mmeister7]

@Nintendomanwill Youre foaming at the mouth there buddy, its generally agreed what a developed country is... I must say your grasp of basic economics is more informed by American foreign policy than real world solutions. Comparitive advanatge is a thoery from 17th century ie its for children. You tell me how much economics has moved on since then.

[Nintendomanwill]

@mmeister7

It's generally agreed what a developed country is? Well I must therefore disagree with the general view because damn me if the wealthy people of Monaco are poorer than the relatively industrialised north of England. But sod the incomes of Koreans! it's important that we ensure that only people of Korean blood produce their products otherwise they OBVIOUSLY couldn't be employed! How dare the west employ them and develop their incomes! Economic growth should be secondary to autarky!

[BenkaiDebussy]

@Nintendomanwill You don't seem to realize the difference between short and long-term gain. You also don't seem to understand how economies develop. The point being made by Chang is that free trade prevents a developing country from being able to develop more sophisticated, capital-intensive industries that will help it become rich in the long-term. Chang explains why this is so;  I'm not going to waste time repeating him.

You sound like someone who just finished taking Econ 101.

[Nintendomanwill]

And you sound like someone who's never read a page of sound economic theory in his life. Sod 'economics 101,' common sense prevails, and you CANNOT allow a nation to develop by inducing its exchange to be arbitrarily internalised within its political borders.

And are you really so thick that you don't realise that even if a nation had no factories within its borders, it could enjoy all the fruits of the world's factories by producing for a larger market and RECEIVING capital investment from it?

[BenkaiDebussy]

@Nintendomanwill If economics was all "common sense" then it wouldn't be an academic field that people have to study many years to receive a PhD in.

I'm not arguing against all free trade at all. But to think that things like subsidies, tariffs, etc are never beneficial is an extremely simplistic world-view that has been shown false multiple times throughout history. My point is that due to the world being a complicated place with market failures, government involvement is sometimes beneficial.

[Nintendomanwill]

@BenkaiDebussy

And that is the point which is most wrong. It's not an extremely simplistic view to understand what true historians and any half-decent economist knows full well; that 'market failure' is a situation which is exacerbated by abrogation of property rights and coercive control. Government involvement is NEVER beneficial, it always involves some opportunity costs. You are clearly not a person who has spent time thinking about this; I am so I challenge you to give me sound examples.

[mmeister7]

@Nintendomanwill You must really think thugs in lionclothes run government. Maybe the American one, but the SOuth Korean, Singaporean, Taiwanese and Japanese governments have proven adept at implementing strategic vision for their countries. They rose above the right wing 'stay in your place and make sackclothes for us' junk you so believe in as good economic policy. Your ideas are so puerile its alomst a caricature post Credit Crunch. FOPs are goegraphically limited, strategy can rise above it.

[mmeister7]

@Nintendomanwill My final point on this is that adjustment in a world of market failure, war, famine, pestilence (yes a country that focues on crops will find specialising in agriculture pretty shitty a times) and a world where other countries have governments tha even more actively intervene in economies means govermen economic policy HAS to be a bit more inteleectualy demanding than sitting back and hoping loca

[mmeister7]

@Nintendomanwill ...hoping local entrepreneurs somehow get peasents working to make digitla camcorders and blu ray players. This aint going to happen by itself, the market is jsut a price mechanism, nothing more. And defintely not something to runa country by. Space travel, the internet...government can make somethings happen the market simply cannot. Modernisatio as SE Asia has shown is one of these things.

[BenkaiDebussy]

@Nintendomanwill Many regulations are very necessary; some simple regulation of derivatives and banking capital requirements would have prevented the brunt of this crisis. The SEC is vital to the financial markets. Regulation against things like lead in childrens' toys is also helpful.

A great example is Japan's restriction on foreign car companies during the 20th century. Without the government's actions, Japanese companies wouldn't have had the opportunity to develop.

[Nintendomanwill]

Regulation of the capital requirement of banks is acceptable IF you have a central bank that prevents the evolution of a sound banking sector that does not expect a lender of last resort nor expects that its competitors will not offer full reserve banking. Legal tender laws prevent sound money and enforce fiat money which fiduciary media allows financial crashes by financing gluts which must clear. Govt MAKES the problems that such regulation could defer. Preventing innovation harms consumers.

[Nintendomanwill]

As for Japan's protectionism, you're just being a fool. Why don't we boost ALL of our productive industries by banning ALL imports? It's the same principle. Any restriction of trade to help a particular sector in the division of labour is not just tyrannous particularism but is also economic warfare. The principle of co-operation exhorts us to profit from producing that which is marketable in return for gaining greater purchasing powers to exploit others. Protected industry=Broken Window

[BenkaiDebussy]

@Nintendomanwill The problem with your analysis is that you're assuming that government regulation is always bad and are only paying attention to individual cases which support your position and immediately ignoring those that don't. Anyone who makes the claim that all government involvement is bad would be laughed out of an econ classroom past 101.

I majored in finance at NYU, so this is something I've thought about and discussed in a lot. Derivatives regulation in particular was a big topic.

[Nintendomanwill]

@BenkaiDebussy

Yes, I suspected that you might have studied something as useless for knowledge of economics as 'finance.' I think that Irish protectionist troll is schooled in some similarly impoverished field. Government involvement is not only bad, but is oxymoronical to economics as a science of the WHY of exchange. 'Social justice' is a ludicrous concept invented to make us denigrate profit and deify that which the government CAN make: 'altruistic' loss and waste.

[Nintendomanwill]

No you idiot, American industry is inefficient because of the underproduction it has suffered for a decade and continues to suffer because of the inflation driving the housing and financial markets and their super-gluts. Impressively, the market nearly brought the central-banking system down under the sheer weight of the false profits it had created by its fractional reserve index-pumping inflation. But govt regulation maintained it, unsurprisingly since similar laws aided such moral hazards.

[mmeister7]

@Nintendomanwill I think you're plain mad my friend. Its like arguing with an computer algorithm, it has a logic of its own and can't argue based on facts. Tell me 1 country with no economic activity inside its borders that has 'garnedered the fruits of the world'. In a Disney story, maybe, in real life, Korea, Japan and Taiwan as Chang points out don't make rice or other low margin, low linkage, low EXTERNALITY (please, please look this word up, Im begging you for you rown sake here) goods.

[Nintendomanwill]

@mmeister7

YOU can't argue based on facts because you don't know them. 'No economic activity' can exist in nations that have too much protectionism, quite to the contrary of what you seem to be saying in your largely irrelevant arguments. If you think protectionism is like raising a child then you must think that the best way to raise a child is to lock him in a basement to avoid adjustment in society. Protectionism prevents foreign investment and thereby prevents export markets from developing.

[mmeister7]

@Nintendomanwill I mean if you were right and a country just focused on what factors of production it had at a cerian pioint in time to decide what it should produce...we'd literally all still all be living in caves (becuase naturally trees and rocks mean we'll always be agicultural). Factors of production change and smart economic policy can force it to. Laissez faire economics has been out for 200 years buddy. Toyota, Smasung and Acer dont make rice, they implement visions.

[Nintendomanwill]

@mmeister7

"I mean if you were right and a country just focused on what factors of production it had at a cerian point in time"

Wow, you are going above and beyond on the retard factor here. *Protectionism* is what causes nations to focus on only that which they can gain from within a certain geographical area since it places tariffs on imports and encourages ersatz production of that which could, freely, be more cheaply gained elsewhere. That you think the free market does this blows my mind.

[mmeister7]

@Nintendomanwill Finally adjustabolity in Nintendomanwill's world (btw I find Nintendo in your name really fucking ironic considering 50 years ago you would have laughed and even hostily refuted the notion Japanese could make video game consoles) is static. As in this is the system today and you play by its rules. It ignores quite simply how prices are dynamic, American consumers buy Japanese cars more than American cars now, and now they specialise in agriculture more..comp adv isnt forever.

[Nintendomanwill]

So I'm the one with contempt for South East Asians? I think its you who argues that they mustn't be allowed to buy what others produce and mustn't be allowed to sell their stuff to us but must buy (and therefore sell) within their own political borders . And you've espoused a theory which is ABSOLUTELY lacking in any intuitive basis: certain persons need to have the power to internalise our purchases or else society will collapse? Why don't you practice what you preach and buy only local goods?

[mmeister7]

@Nintendomanwill Ha, I must say your posting on a video that clealry, clearly (even in terms a Southern hillbilly could undertand) outlines the case for managed adjustment is hilarious. I never mentioned limiting yourself to a geogrpahical area's FOPs, you did with your theory back when people were still using horses to get around. Government economic policy has to be proactive not passive. Japan would never make cars today if wasn't for government intervention. Please argue this coherently.

[mmeister7]

@Nintendomanwill

Thanks toright wing weirdos like you we keep goign back to disneyland stuff sadly. Making sackclothes doesnt create what MODERN economists like to call 'externalities'. Micheal Porter calls them linkages. Think about why Korean chaebols exist. If I specialised as a binman could I adapt in later years, well if I cant read, probably not. Specialisngin higher end stuf requires more skills-thats where the flex comes in.

[Nintendomanwill]

@mmeister

Right wing weirdoes? It's weirder IMO to think that we should use tariffs to prevent people from buying what goods they would like and to prevent mutual adjustment of Koreans to the purchases of others so that they can co-operate and thereby profit. It is in fact like saying that it matters whether factory A is in Tokyo or Seoul which is tantamount to saying that it matters if a factory is in your village or indeed in your house-why does it need to be in your sovereign jurisdiction?

[mmeister7]

@Nintendomanwill Sadly behind every right wing theory is another excuse to keep people down..in this case keeping the Koreans making sackclothes. I can just imagine the world class educational and scientific standard of a country that specialised in making commodity goods with low margins and high labour demands.

[Nintendomanwill]

@mmeister7

What the statist left wing see (as opposed to the statist right wing) that they dislike so much in the truly liberal philosophy is that it apparently does not care about preventing the poverty that is apparent to all. What children like you need to realise (you will one day see this sort of ranting of yours as childish babble) is that volitional exchange assuages poverty, not redistributionism.

[Nintendomanwill]

Another fault with your supposition that certain types of industry must be locally had regardless of adjustability with the produce of people in other nations (or indeed exploitation of other nations in a mutually beneficial sense) is that you ignore the social unrest that will be created by preventing the cheap purchase of a certain good that people enjoy, in order to promote the welfare of domestic producers *at the expense of others* AND other industry.

Let labour divide and income increase!

[DonVoghano]

@Nintendomanwill Let me ask you some questions.

Are free markets intrinsically resilient to manipulation and monopoly formation?

Adam Smith did not believe in self-regulating markets if not in conditions of "perfect liberty." Do you think we can have perfect liberty or do you think he was wrong?

Which large industrial country grew according to neoclassical paradigms?

[Nintendomanwill]

@DonVoghano

Free markets are intrinsically resilient to 'manipulation' and monopoly formation and therefore force is required to uphold them because the further suppliers of a certain good or service, the more they diverge from fulfilling the needs and wants of the market *without good reason,* the more they enable competitors to undercut them by filling the gap in provision eg stocking food with allergy labels bringing custom to retailers. And for your last question, LEARN BRITISH HISTORY. 1846

[DonVoghano]

@Nintendomanwill Ok, thanks for the answers. May I continue?

What prevents monopolies from forming by force?

What about that "perfect liberty" and free movement of labor that Smith talked about, do we, can we have that? He does posit it as a pre-requisite.

Wasn't the UK in a privileged position by being the first nation to industrialize and by having a large colonial basin and a vast military? Do the latter 2 not violate any principle of free trade?

[Nintendomanwill]

What prevents monopolies forming by force can be answered in the same way as the query about 'perfect liberty.' The free market is not formed by any positive creation. It's formed by people buying or abstaining from buying in a division of labour so as to therein enable greater efficiency be selection of occupation and overall ordination of production according to needs and wants. Therefore if people have volitional property rights, extortionate prices facilitates undercutting. Tariffs are 4 war

[DonVoghano]

@Nintendomanwill Thanks again. I will continue, if I do not aggravate you.

What happens when one party does not respect the volitional property rights of another? How are misappropriation and dishonesty dealt with?

Are you aware of Adam Smith's fears about division of labour taken too far, or his case for public education and progressive taxation?

[Nintendomanwill]

As Ricardo noted if one nation imposes tariffs it doesn't befit other nations to impose reciprocal restrictions on trade but it must allow the Mercantilist nation to suffer under its delusions of 'protectionism' while profiting by buying where as cheap as possible, thus commanding more capital if purchases remain equal (due to savings on cheaper goods) which can be spent on employment, benefiting both parties as the division of labour benefits all-so coercive Mercantilist thieves must be stopped

[Bellantoni]

@Nintendomanwill But without some protectionism there would never be any emergence of capital in the first place

[studentofsmith]

@Bellantoni Ha-Joon Chang himself admits that Holland, Switzerland and Hong Kong developed capital without protectionism. The question is not whether there will be capital development without protectionism, clearly it will happen either way, the question is whether protectionism hurts or helps this development.

[Bellantoni]

@studentofsmith They didn't have high tariffs is what you mean. But in the case of Hong Kong after the handover, and Holland in particular in the late 16th century, the state took the leading part in developing the nation's industry as is also the case with Switzerland and every other develped country in history.

[studentofsmith]

@Bellantoni Two points:

First, protectionism is largely defined as high tariffs on imports. Talking about other forms of state intervention is changing the subject somewhat.

Second, while I am not as familiar with Holland or Switzerland I do know something about the economic history of Hong Kong and I see no evidence the British government did anything to promote economic development there. Could you direct me to a source that describes the role of the state in Hong Kongs economic development?

[Bellantoni]

@studentofsmith You're quite right in saying that the colonial government did nothing in protecting industry in Hong Kong but check out Anthony B.L Chang "New Interventionism in the Making" about the HK development plan after the handover.

Well protectionism is just any form of protecting infant-industry, the guy who coined the term was Hamilton, you should check out his Report on Manufactures, it's a bit slow but still brilliant.

[studentofsmith]

@Bellantoni I can accept that as a legitimate definition of protectionism. That being the case arguing for or against "protectionism" is too broad. Any debate must focus on a particular form of protectionism rather than the concept as a whole. Just because one method of protectionism is good/bad doesn't mean all methods of protectionism are good/bad.

Thank you for the book recommendation, perhaps I'll drop by the library today and pick it up. Cheers.

[imre1000]

@DonVoghano,

I've watched the whole hour and saw plenty of evidence that free markets were never fully in place, but no evidence where Protectionism helped anyone.

He did not properly address the question about what caused & prolonged the great depression, which is a real shame.

If you stop thinking in terms on money, but rather in terms of the exchange of goods & services between countries - it's much easier to see the harm in tariffs.

[lmxu]

Dr. Chang was correct, the SmootHawley Tariff Act happened in1930.

I wonder how the guy who tried to correct him felt afterward? Haha!

[dilbertgeg]

British Empire, at the height of it's glory, pushed "Free Trade" to force colony markets to accept Brit exports.

Since the USA stopped creating stuff, and shifted to banks creating dollars, late 90s idea of free trade is (a) free flow of capital in and out of banks, funding wild speculative investments (b) letting US-based corps use subject nation to acquire cheap resources sans taxes, or hire cheap workers to create "American products" bypassing US labor, to CRIPPLE uppity US workers.

[rickbar123]

Sooner or later the uppity US workers are going to CRIPPLE the scum that put us on this path. Sooner the better.

[Cosbibi]

I would like to recommend all people who liked Chang's book, to read Erik S. Reinert, How rich countries got rich and why poor countries stay poor. It's not as readable as Ha-Joon Chang's book but it's well worth it, it explains clearly WHY infant industry protection works. I mailed Chang and asked what he thought about Reinert's book, he responded: "I am very good friends with Erik and he has influenced my thinking a lot. I essentially agree with Erik's understanding of the growth process."

[bamainatlanta]

Obama,

Please fire Geithner and Summers, and the rest, and hire this MAN! Damn

[EvanLHarper]

@bamainatlanta, in all fairness, Chang is a development economist, and wouldn't be our best bet for treasury secretary. In our progressive fantasy-America, he's chief economist at the World Bank (following in the footsteps of his mentor Joe Stiglitz, who was forced out for being heretical) or of the IMF.

[DonVoghano]

If he does Goldman Sachs won't hire him after he's done selling off what's left of America!

[itsgoogletime]

Enjoyed his book. After reading Lexus and the Olive tree that explained Globalism, I still thought Freedman's book was a snow job. He opened my eyes about Lazy Japanese and thieving Germans , how many use hindsight that economics is just what people do with raw materials.

[Aiden057]

An excellent lecture, I recommend it to people all the time and thank the Foundation for posting this and keeping it available. Dr. Chang should be invited to be on the Obama economic team, with a mind like his working on the economy, we'd be way more likely to see real change come about that would benefit the vast majority of the population, rather than the small sliver of it Obama is beholden to and catering to..

[demiankms]

brilliant.

[mightysywrule]

This guy is simply amazing! His book is a must read!

[kmarinas86]

Inequality of economic health motivates lust, gluttony, greed, sloth, wrath, envy, and pride.

The inequality of economic health is caused by limited access to comfortable standards of living. Access to better standards of living is only supportable by having appropriate distributability of energy and natural resources.

Today's inconveniences in accessing energy and natural resources, which today is largely controlled by geopolitical factors, is the primary threat to world economic health.

[plastof]

huh......?

[nintendowns]

i cant stand the world is flat, not because of its theories ( although i disagree with them) but because of its style. i.e., the author never shuts the hell up. every damn point has to be a freaking anecdote. another writer could probably get the book cut to 300 pages and include all the info. i have to read it for a reseearch essay and its 630 freaking pages of endless anecdotes. i picked up another economy book as a support for my thesis, and you wouldnt believe how clear and concise it is.

[csacta]

Very eye opening. What are the chances he'll get airtime on ABC, CBS,CNN or NBC?

[emcga150]

what are the chances you will send this email to your friends and family and to make sure you're grandchildren are not tatooed like my neighbour, 86 year old man in Auswitz

[TonyWikrent]

This is probably the best economics presentation you are going to hear and watch in many years. And it is particularly gut-wrenching to have to watch a South Korean use gentle humor to remind us Americans of our own economic history!

[IrrigatedPancake]

At least he knows enough to realize he's pushing Hamilton's terrible ideas, that we're reaping the benefits of now.

[dk418]

About a question on the great depression, during the talk, Smoot-hawley tariff act was in 1930, who was that dork that interrupted Chang and said it was 1931?!! Chang was like "it was 1930, but whatever you say"

[ferretassasin]

wow thats long...

[o0xst]

Horrible times we are living in.

[IndyDoug]

This video is a must see for free market cheerleaders and fans of the University of Chicago School of Economics.

[o0xst]

Yah like they'd watch it!

[emcga150]

you all better watch it... or your children will be tatooed like my neighbour who was tatooed in Auswitz 50 years ago... its been 50 years time for new world enslavement through economic bankruptcy and health system murder; SARS in Toronto and the discovery of MadCow disease in Alberta is not coincidence. It was an attach by the CIA on Canadians

[csacta]

BLAME CANADA. BLAME CANADA!

[Air420]

And that bitch Anne Murray, too!!!!!!!!!!!!!!!!

[RealPolyester]

@IndyDoug

Nu uh! Take that back! All of the years the academics spend at Chicago toiling over their work and the diplomas they receive prove that they are right. (Please insert sarcasm.)

[bach2berylium]

Chang is simply amazing. Since neoclassical economics is so ridiculous, he refutes it with the most effective weapon--humor (along with indisputable logic and data).

[o0xst]

A cross between Chomsky and Long Duck Dong.  Can't possibly beat that. Chang is the man!

[peterfdrucker]

One of the particularly funny comments: if it's true that countries close to the equator don't develop, what are the policy implications? - Uganda should invade and colonize Norway.

I hope more people watch this talk.

[tigerone1970]

"Those were wild times. The Vice President shoots the Finance Minister and no one goes to jail."

Sounds familiar, doesn't it?

[adventurousvictor]

LOL.

[ashkan128]

I saw him at London School of Economics, the most down to earth academic I have ever met. his book is so easy to read and once u start it you won't be able to put it town.

[beavisisgood87]

soviet union /= life of marxism

marxism was around before and is around after

[JonWRowe]

11/09/89. Marxism is dead. Get on with the program.

[bach2berylium]

Wow, you have no idea, do you? So anyone who doesn't follow neoclassical economic "logic" is a Marxist? (Plus, the USSR was hardly following Marx's tenets...) Did you actually watch this? I'm guessing not, because you don't want to see that your baseless hyperstylized economic views don't fit with what's actually happening in the real world.  Hurry for post-Keynesian heterodox economics!

[bach2berylium]

oops! *Hurray, not hurry!

[sarjil]

The difference between reality and therory is that in reality mercantalism and economic nationalism has always trumped theoritical free trade throughout history. Free trade looks good with adam smith but his way has not been copied by countries that achieved economic might.

[Nolimit75]

Mercantilism implies neo-colonialism, so no mercantilism is garbage. Now protectionism for industrializing nations is understandable in order to avoid loss of domestic industry and national debt, but once industrialized it is flat out foolish to not open up to free trade.

[abram730]

America is loosing its industry and the national debt is exploding. Would it be foolish to do something?

[kmarinas86]

"America is loosing its industry and the national debt is exploding."

America can only recover its industrial capacity by producing its own stuff through increasing the use of technology in the design, production, and distribution of more and more inexpensive items (e.g. clothes, toys, etc.) traditionally produced by human hands.

Relative to America's current economic (read: balance of payment) problems, exporting products of automation is indispensable in reducing America's trade debt.

[RedPandaBoy]

i can finally give an example why the free market idelogy is bad... Japan!

[Nintendomanwill]

@RedPandaBoy

I presume you're being sarcastic, since Japan is utterly Keynesian.

[tarnopol]

Hard to do better than this; real economics, not some Chicago-boy (let alone that moron/mouthpiece-of-power Thomas Friedman) fantasy world.

[samdonuge]

thank youuuuuuuuuuuuuuuuuuu

[yabdelra]

waw...............finally I understand something about economy