Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism

behaviour are not an inevitable manifestation of Muslim culture is proven by the rational thinking and tolerance prevalent in many prosperous Muslim empires in the past. It is also corroborated by contemporary examples, like Malaysia, whose economic prosperity has made its Islam tolerant and rational, as all those female central bankers I wrote about earlier will tell you.

Epilogue

1

The 2002 US proposal argued for a radical reduction in industrial tariffs to 5–7% by 2010 and their total abolition by 2015. Since it did not envisage any exception, it is more potent than what happens in my Tallinn Round. The current EU proposal is slightly milder than my Tallinn proposal in that it calls for a reduction to 5–15%. But even that is going to bring tariffs in developing countries to the lowest level since the days of colonialism and unequal treaties – and, more importantly, a level that was not seen in most of today’s developed countries before the 1970s. For further details on the US and EU proposals, see H-J. Chang (2005), Why Developing Countries Need Tariffs – How WTO NAMA Negotiations Could Deny Developing Countries’ Right to a Future (Oxfam, Oxford, and South Centre, Geneva) http://www.southcentre.org/publications/SouthPerspectiveSeries/WhyDevCo untriesNeedTariffsNew.pdf

2

Welles says these lines, which he wrote himself, as Harry Lime, the villain of the movie. This script for The Third Man was written by the famous British novelist, Graham Greene, who later turned it into a novel of the same name, except for these lines.

3

In 2002, manufacturing value-added per capita in 1995 US dollars was $12, 191 in Switzerland. $9, 851 in Japan, $5, 567 in the USA, $359 in China and $78 in India. See UNIDO (2005), Industrial Development Report 2005 (United Nations Industrial Development Organisation, Vienna), Table A2.1.

4

The figure for Korea in 2002 was $4, 589 and that for Singapore was $6, 583. UNIDO (2005), Table A2.1. Thus the Singapore figure is 18 times that of China and 84 times that of India

5

World Bank (1993), The East Asian Miracle – Economic Growth and Public Policy (Oxford University Press, Oxford), p. 102.

6

A. Winters (2003), ‘Trade Policy as Development Policy’ in J. Toye (ed.), Trade and Development – Directions for the Twenty-first Century, (Edward Elgar, Cheltenham). As cited in J. Stiglitz and A. Charlton (2005), Fair Trade for All – How Trade Can Promote Development (Oxford, Oxford University Press), p. 37.

7

For further details on Taiwan, see R. Wade (1990), Governing the Market – Economic Theory and the Role of Government in East Asian Industrialisation (Princeton University Press, Princeton), pp. 219–220. Moreover, the Nationalist Party, which ruled Taiwan during the ‘miracle’ years, was heavily influenced, through its Comintern membership in the 1920s, by the Soviet Communist Party. Its party constitution was apparently a copy of the latter’s. There lies the explanation for the sight of the professional hand-raisers for the geriatric members of the Nationalist Party Politburo that amused the rest of the world so much in the 1980s. Taiwan’s second president, Chiang Ching-Kuo, who succeeded his father, Chiang Kai-Shek, as the leader of the party and the head of the state, was a communist as a young man and studied in Moscow with future leaders of the Chinese Communist Party, including Deng Xiao-ping. He met his Russian wife when he was studying in Moscow.

8

Korea also had its share of Marxist influence. General Park Chung-Hee, who masterminded the Korean economic miracle, was a communist in his young days, not least because of the influence of his brother, who was an influential local communist leader in their native province. In 1949, he was sentenced to death for his involvement in a communist mutiny in the South Korean army, but earned an amnesty by publicly denouncing communism. Many of his lieutenants were also communist in their young days.

9

Some left-wing development campaigners have unwittingly contributed to legitimizing the notion of the ‘level playing field’ by throwing the argument back at the developed countries. They point out that the playing field is tilted the other way when it comes to areas where developing countries are often (although not always) stronger (e.g., agriculture, textiles). If we are going to have free competition, they argue, we have to have it everywhere, and not just where the more powerful countries find it more convenient.

10

The plain fact is that poor countries have low energy efficiency and thus emit much more carbon for each unit of output than do rich countries. For example, in 2003, China produced $1, 471 billion worth of output while emitting 1, 131 million tonnes of CO₂. This means that, for every tonne of CO₂, it produced $1, 253. Japan produced $4, 390 billion, while emitting 336 million tonnes of CO₂, which translates into $13, 065 per tonne of CO₂. This means that Japan produced more than 10 times the Chinese output per each tonne of CO₂. Admittedly, Japan is one of the most energy efficient economies, but even the notoriously energy-inefficient (for a rich country) US produced more than five times the Chinese output per tonne of CO₂ – it produced $6, 928 for every tonne of CO₂ that it emitted (it produced $10, 946 billion worth of output and emitted 1, 580 tonnes of CO₂). The carbon emission data are from the US government source. G. Marland, T. Boden, and R. Andres (2006) Global, Regional, and National CO₂ Emissions. In Trends: A Compendium of Data on Global Change, Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. Department of Energy (available online at http://cdiac.esd.ornl.gov/trends/emis/tre_tp20.htm). The output figures are from World Bank (2005), World Development Report 2005 (World Bank, Washington, DC).

11

Some people argue that this Good Samaritanism was partly motivated by the Cold War, which demanded that rich capitalist countries behave nicely to poor countries lest the latter should ‘go over to the other side’. But