Ha-Joon Chang Quotes

History is on the side of the regulators.

In manufacturing, where mechanization and the use of chemical processes are much easier, it is easier to raise productivity than in services. In contrast, by their very nature, many service activities are inherently impervious to productivity increase without diluting the quality of the product.

It is time that we dispensed with the myth that the market is a force of nature that should not be meddled with. Markets are social creations that can be, and have been, modified for social purposes.

If we are really serious about preventing another crisis like the 2008 meltdown, we should simply ban complex financial instruments unless they can be unambiguously shown to benefit society in the long run.

Financial markets need to become less, not more, efficient.

It is impossible to objectively define how free a market is. This is a political definition. Government is always involved, and those free marketers are as politically motivated as anyone.

As a consumer, I don't create art, but I think whatever the message is, art has to touch you.

The welfare state is the bankruptcy law for workers

When we assess the impact of technological changes, we tend to downplay things that happened a while ago.

It is a law of competition that people who can do difficult things which others cannot will earn more profit.

Above a certain level of income, the relative value of material consumption vis-a-vis leisure time is diminished, so earning a higher income at the cost of working longer hours may reduce the quality of your life. More importantly, the fact that the citizens of a country work longer than others in comparable countries does not necessarily mean that they like working longer hours. They may be compelled to work long hours, even if they actually want to take longer holidays.

Charities are now working to give people in poor countries access to the Internet. But shouldn't we spend that money on providing health clinics and safe water? Aren't these things more relevant? I have no intention of downplaying the importance of the Internet, but its impact has been exaggerated.

It is hard to believe, but the phrase 'workshop of the world' was originally coined for Britain, which today, according to Nicolas Sarkozy, the French president, has 'no industry'. Having successfully launched the Industrial Revolution before other countries, Britain became such a dominant industrial power by the mid nineteenth century that it felt confident enough to completely liberalize its trade (see Thing 7). In 1860, it produced 20 per cent of world manufacturing output. In 1870, it accounted for 46 per cent of world trade in manufactured goods. The current Chinese share in world exports is only around 17 per cent (as of 2007), even though 'everything' seems to be made in China, so you can imagine the extent of British dominance then.

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

I've read quite a few readers' reviews of my book on Amazon, saying, 'Ah, he criticises the free market, he advocates central planning.' I don't do that for a minute! But this is our black and white, dichotomous way of thinking - which has really been harmful.

Harry S. Truman, in his typical no-nonsense style, once said that 'An expert is someone who doesn't want to learn anything new, because then he would not be an expert.' Expert knowledge is absolutely necessary, but

The data are not easy to come by, but a mid 1940s study by the US Rural Electrification Authority reports that, with the introduction of the electric washing machine and electric iron, the time required for washing a 38 lb load of laundry was reduced by a factor of nearly 6 (from 4 hours to 41 minutes) and the time taken to iron it by a factor of more than 2.5 (from 4.5 hours to 1.75 hours).2 Piped water has meant that women do not have to spend hours fetching water (for which, according to the United Nations Development Program, up to two hours per day are spent in some developing countries). Vacuum cleaners have enabled us to clean our houses more thoroughly in a fraction of the time that was needed in the old days, when we had to do it with broom and rags.

What free-market economists are not telling us is that the politics they want to get rid of are none other than those of democracy itself. When they say we need to insulate economic policies from politics, they are in effect advocating the castration of democracy.

Britain also banned exports from its colonies that competed with its own products, home and abroad. It banned cotton textile imports from India ('calicoes'), which were then superior to the British ones. In 1699 it banned the export of woolen cloth from its colonies to other countries (the Wool Act), destroying the Irish woolen industry and stifling the emergence of woollen manufacture in America.

Gone are the days when the upper classes were terrified of the angry mob wanting to smash their skulls and confiscate their properties. Now their biggest enemy is the army of lazy bums, whose lifestyle of indolence and hedonism, financed by crippling taxes on the rich, is sucking the lifeblood out of the economy.

Since the 1980s, we have given the rich a bigger slice of our pie in the belief that they would create more wealth, making the pie bigger than otherwise possible in the long run. The rich got the bigger slice of the pie all right, but they have actually reduced the pace at which the pie is growing.

In no country does the average income give the right picture of how people live but in a country with higher inequality it is likely to be particularly misleading. Given that the US has by far the most unequal distribution of income among the rich countries, we can safely guess that the US per capita income overstates the actual living standards of more of its citizens than in other countries ... The much higher crime rate than in Europe or Japan
in per capita terms, the US has eight times more people in prison than Europe and twelve times more than Japan
shows that there is a far bigger underclass in the US.

Overcoming the myth that there is such a thing as an objectively defined 'free market' is the first step towards understanding capitalism.

Unfortunately, a lot of economists wanted to make their subject a science. So the more what you do resembles physics or chemistry, the more credible you become.

The issue of false consciousness is a genuinely difficult problem that has no definite solution. We should not approve of an unequal and brutal society because surveys show that people are happy. But who has the right to tell those oppressed women or starving landless peasants that they shouldn't be happy, if they think they are? Does anyone have the right to make those people feel miserable by telling them the 'truth'? There are no easy answers to these questions, but they definitely tell us that we cannot rely on 'subjective' happiness surveys to decide how well people are doing.

Equality of opportunity is meaningless for those who do not have the capabilities to take advantage of it.

There are different ways to organise capitalism. Free-market capitalism is only one of them-and not a very good one at that.

People 'over-produce' pollution because they are not paying for the costs of dealing with it.

As these contrasts show, capitalism has undergone enormous changes in the last two and a half centuries. While some of Smith's basic principles remain valid, they do so only at very general levels.
For example, competition among profit-seeking firms may still be the key driving force of capitalism, as in Smith's scheme. But it is not between small, anonymous firms which, accepting consumer tastes, fight it out by increasing the efficiency in the use of given technology. Today, competition is among huge multinational companies, with the ability not only to influence prices but to redefine technologies in a short span of time (think about the battle between Apple and Samsung) and to manipulate consumer tastes through brand-image building and advertising.

During the past quarter of a century, most developing countries have liberalized trade to a huge degree. They were first pushed by the IMF and the World Bank in the aftermath of the Third World debt crisis of 1982. There was a further decisive impetus towards trade liberalization following the launch of the WTO in 1995. During the last decade or so, bilateral and regional free trade agreements (FTAs) have also proliferated.Unfortunately, during this period, developing countries have not done well at all, despite (or because of, in my view) massive trade liberalization,

Economics should be defined in terms of what it is about. It should be about how people produce things, how people exchange them, how people earn income, how they pay taxes, how the government provides infrastructure with tax revenue, and how it conducts monetary policy. The subject has to be defined in terms of the object of inquiry.

Very often, the judgments by ordinary citizens may be better than those by professional economists, being more rooted in reality and less narrowly focused.

Unless South Africa is

The days are over when technology can be advanced in laboratories by individual scientists alone. Now you need an army of lawyers to negotiate the hazardous terrain of interlocking patents. Unless we find a solution to the problem of interlocking patents, the patent system may actually impede the very innovation it was designed to encourage.

95 percent of economics is common sense made complicated, and even for the remaining 5 percent, the essential reasoning, if not all the technical details, can be explained in plain terms.

A well-designed welfare state can actually encourage people to take chances with their jobs and be more, not less, open to changes.

When I was growing up in South Korea in the '70s and early '80s, the country was too poor to buy original records. Everything was bootlegged.

95% of Economics is common sense deliberately made complicated.

It is one thing to tell the citizens of some faraway country to go to hell, but it is another to do the same to your own citizens, who are supposedly your ultimate sovereigns.

Equality of opportunity is not enough. Unless we create an environment where everyone is guaranteed some minimum capabilities through some guarantee of minimum income, education, and healthcare, we cannot say that we have fair competition. When some people have to run a 100 metre race with sandbags on their legs, the fact that no one is allowed to have a head start does not make the race fair. Equality of opportunity is absolutely necessary but not sufficient in building a genuinely fair and efficient society.

Instead of reading a paper, we now read the news online. Instead of buying books at a store, we buy them on-line. What's so revolutionary? The Internet has mainly affected our leisure life.

A lot of things that we cannot buy and sell in markets used to be totally legal objects of market exchange - human beings when we had slavery, child labour, human organs, and so on. So there is no economic theory that actually says that you shouldn't have slavery or child labour because all these are political, ethical judgments.

Corruption exists because there is too much, not too little, market.

George W. Bush, the former US president, is reputed to have complained that the problem with the French is that they do not have a word for entrepreneurship in their language.

I like all kinds of music - classical, pop, rock, electronic.

Manufacturing is the most important ... route to prosperity.

Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them.

To put it bluntly, there isn't one economic theory that can single-handedly explain Singapore's success; its economy combines extreme features of capitalism and socialism. All theories are partial; reality is complex.

As the saying goes, 'he who has a hammer sees everything as a nail'. If you approach a problem from a particular theoretical point of view, you will end up asking only certain questions and answering them in particular ways. You might be lucky, and the problem you are facing might be a 'nail' for which your 'hammer' is the most appropriate tool. But, more often than not, you will need to have an array of tools available to you.
You are bound to have your favourite theory. There is nothing wrong with using one or two more than others - we all do. But please don't be a man (or a woman) with a hammer - still less someone unaware that there are other tools available. To extend the analogy, use a Swiss army knife instead, with different tools for different tasks.­

Low inflation and government prudence may be harmful for economic development.

Assume the worst about people and you get the worst.

The washing machine changed the world more than the Internet.

Ricardo's theory is absolutely right-within its narrow confines. His theory correctly says that, accepting their current levels of technology as given, it is better for countries to specialize in things that they are relatively better at. One cannot argue with that.

His theory fails when a country wants to acquire more advanced technologies so that it can do more difficult things that few others can do- that is, when it wants to develop its economy. It takes time and experience to absorb new technologies, so technologically backward producers need a period of protection from international competition during this period of learning. Such protection is costly, because the country is giving up the chance to import better and cheaper products. However, it is a price that has to be paid if it wants to develop advanced industries. Ricardo's theory is, thus seen, for those who accept the status quo but not for those who want to change it.

Imagine if all those kings and dukes hadn't commissioned those crazy cathedrals, paintings and music ... we'd still be living in sticks and mud. Because none of those things made any economic sense. Human beings' capacity to 'waste time' is a miracle - but that's exactly what art is for.

Democracy is acceptable to neo-liberals only in so far as it does not contradict the free market.

Self-interest, to be sure, is one of the most important, but we have many other motives - honesty, self-respect, altruism, love, sympathy, faith, sense of duty, solidarity, loyalty, public-spiritedness, patriotism, and so on - that are sometimes even more important than self-seeking as the driver of our behaviors.

Between the Great Depression and the 1970s, private business was viewed with suspicion even in most capitalist economies.
Businesses were, so the story goes, seen as anti-social agents whose profit-seeking needed to be restrained for other, supposedly loftier, goals, such as justice, social harmony, protection of the weak and even national glory.

I would go one step further and say that the willingness to challenge professional economists - and other experts - should be the foundation of democracy. When you think about it, if all we have to do is to listen to the experts, what is the point of having a democracy at all? Unless we want our societies to be run by a body of self-elected experts, we all have to learn economics and challenge professional economists

Economists like to strike the pose of a scientist. I know, because I often do it myself. When I teach undergraduates, I very consciously describe the field of economics as a science, so no student would start the course thinking he was embarking on some squishy academic endeavor.'1

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.

The truth is that the free movement of goods, people, and money that developed under British hegemony between 1870 and 1913 - the first episode of globalization - was made possible, in large part, by military might rather than market forces.

The Korean economic miracle was the result of a clever and pragmatic mixture of market incentives and state direction.

Culture changes with economic development.

I used to joke that I came to England - not to the U.S. where most Koreans go - because I like Arthur Conan Doyle and Agatha Christie.

We are not smart enough to leave things to the market.

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 free market doesn't exist. Every market has some rules and boundaries that restrict the freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How 'free' a market is cannot be objectively defined. It is a political definition.

I am one of the most successful economists, according to what markets tell us, though most of my professional colleagues, who are much keener to accept market outcomes than I am, would dismiss me as a crank or - the worst of all abuses among economists - a 'sociologist.'

We need to accept that consumption is not the end goal of our life and stop measuring our well-being simply on the basis of earnings. We need to explicitly take the quality of our work-related life into account in judging our well-being.

The Roman politician and philosopher Cicero once said: 'Not to know what has been transacted in former times is to be always a child. If no use is made of the labours of past ages, the world must remain always in the infancy of knowledge.

Running the company for the shareholders often reduces its long-term growth potential.

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).

Contrary to what professional economists will typically tell you, economics is not a science. All economic theories have underlying political and ethical assumptions, which make it impossible to prove them right or wrong in the way we can with theories in physics or chemistry.

All the alleged key causes of SOE [State-Owned Enterprise] inefficiency the principal-agent problem, the free-rider problem and the soft budget constraint are, while real, not unique to state-owned enterprises. Large private-sector firms with dispersed ownership also suffer from the principal-agent problem and the free-rider problem. So, in these two areas, forms of ownership do matter, but the critical divide is not between state and private ownership it is between concentrated and dispersed ownerships.

Economics is (almost) about Life, the Universe and Everything.

I think this notion that public enterprises do not work and therefore nationalization will be a disaster, I mean, it's not supported by evidence.

Without there being some national strategy, it is difficult for educators to know what kinds of engineers or technicians to produce and for potential students to know what professions to study for.

Markets weed out inefficient practices, but only when no one has sufficient power to manipulate them.

The history of capitalism has been so totally re-written that many people in the rich world do not perceive the historical double standards involved in recommending free trade and free market to developing countries.

Democracy and markets are both fundamental building blocks for a decent society. But they clash at a fundamental level. We need to balance them.

All technical professionals have an incentive to make themselves look more complicated than they are so that they can justify the high fees their members charge them for their services.