Economics is often sold as a hard science, like physics or chemistry. We’re told there are "laws" of the market that simply cannot be broken without causing a total catastrophe. But then you meet someone like Ha-Joon Chang, and he basically kicks the legs out from under the entire table.
He’s a Cambridge-educated institutional economist who doesn’t sound like a textbook. He’s spent decades arguing that the "free market" is actually a myth and that the way rich countries got rich is the exact opposite of what they tell poor countries to do today. It’s provocative. It’s messy. And honestly, it’s why a lot of mainstream neoliberal economists find him incredibly annoying.
Chang isn't just some contrarian shouting from the sidelines; he’s a massive figure in development economics. If you’ve ever picked up 23 Things They Don't Tell You About Capitalism or Kicking Away the Ladder, you’ve seen his brand of "heresy" in action. He uses history—real, gritty, documented history—to show that the global economic system is basically rigged in favor of those who already won the game.
The Myth of the Free Market
Most people think "free market" means a space without government interference. Chang says that’s nonsense. Every market has rules. You can't sell your kids into labor anymore. You can't sell certain drugs. You can't just set up a factory that spews toxic sludge into a primary school’s playground. These are all "interferences" with the market, but we accept them as part of a civilized society.
Therefore, the "freedom" of a market is a political definition, not a scientific one. When someone says "we should let the market decide," what they’re usually saying is "I like the current rules because they benefit me." Chang argues that the very boundary of the market is drawn by political decisions. There is no such thing as a "natural" market.
Think about the 2008 financial crisis. For years, banks begged for less regulation, claiming the market could police itself. When it all went south, they were the first in line for government bailouts. Ha-Joon Chang points to this hypocrisy constantly. He thinks we need to stop pretending that economics is a value-free zone. It’s deeply personal, deeply political, and deeply influenced by who holds the biggest stick.
Kicking Away the Ladder: The Historical Reality
This is probably his most famous concept. It’s the idea that wealthy nations like the UK and the US used heavy government intervention, protectionism, and subsidies to build their industries. Then, once they reached the top, they turned around and told developing nations, "Hey, you guys need to use free trade and stop protecting your industries."
It’s like a guy who uses a ladder to climb over a wall and then kicks the ladder away so nobody else can follow him.
Take 19th-century America. We think of it as the home of rugged individualism and free enterprise. In reality, the US was the most protected economy in the world for most of that century. Alexander Hamilton—yeah, the guy from the musical—was a huge fan of "infant industry" protection. He knew that if the US didn't protect its young manufacturers from British competition, America would just stay a farm for the UK forever. Chang loves bringing this up because it flies in the face of the "Washington Consensus" that pushes for immediate liberalization in developing countries.
Why 23 Things Matters Now
The book 23 Things They Don't Tell You About Capitalism remains a staple because it addresses the stuff we take for granted. For example, Thing 4: "The washing machine has changed the world more than the internet has."
It sounds like a joke, right? It isn't.
Chang explains that by automating domestic labor, the washing machine (and other appliances) allowed women to enter the workforce and fundamentally restructured the social fabric of the entire world. The internet? It changed how we spend our leisure time and how quickly we can send emails, but it hasn't—yet—flipped the domestic social order on its head the way the humble appliance did.
This is classic Chang. He forces you to look at the physical reality of how we live rather than the shiny, digital abstractions economists love to play with. He’s obsessed with production. He thinks we've spent too much time worrying about finance and not enough time worrying about how we actually make things.
The Problem with "Productivity"
We hear it every day: "We need to be more productive." But what does that mean? Chang notes that in many developing nations, people work incredibly hard. They are productive in terms of effort. But they lack the "productive capabilities"—the machines, the infrastructure, the organized systems—that make that labor valuable on a global scale.
You can't just tell a country to "get better" at the market. You have to build the capacity to compete. This involves what he calls "industrial policy." It's a dirty word in some circles, but he argues it’s how South Korea (his home country) went from a war-torn wasteland to a global tech giant. They didn't just wait for the market to give them Samsung; the government actively steered resources to make it happen.
Criticisms and the "Institutional" Label
Is he always right? Of course not. Critics, especially from the more traditional Chicago School style of thinking, argue that Chang underestimates the "government failure" side of things. Just because a market fails doesn't mean a government bureaucrat will do a better job. There’s a risk of corruption, inefficiency, and just plain bad decision-making when the state gets involved in picking "winners."
Chang acknowledges this, sort of. He’s an institutionalist. He believes that the quality of a country’s institutions—its legal system, its civil service, its culture of accountability—determines whether government intervention works or fails. You can't just copy-paste South Korea’s model into another country and expect it to work if that country doesn't have the same institutional backbone.
He’s also been criticized for being a bit too dismissive of the benefits that trade liberalization has brought to millions of people in places like China and India. While he’s right about the "ladder," there’s no denying that some level of market opening has pulled a lot of people out of extreme poverty. The debate isn't whether markets are "bad," but rather how much they should be steered.
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The Cultural Aspect of Economics
One of the coolest things about Chang’s work is how he weaves in food and culture. In his recent book, Edible Economics, he uses stories about chocolate, anchovies, and garlic to explain complex economic theories. It makes the subject approachable. It reminds us that economics isn't about numbers on a screen; it’s about what we eat, where we live, and how we treat each other.
He argues that we need to stop being "monolingual" in our economic thinking. Most people only speak "Neoclassical." He wants us to learn the languages of Marxism, Keynesianism, Institutionalism, and Schumpeterianism. No single school of thought has all the answers. If you only have a hammer, everything looks like a nail. If you only have one economic theory, every problem looks like a market inefficiency.
How to Apply Ha-Joon Chang’s Logic
If you’re a business owner, a student, or just someone trying to make sense of the news, Ha-Joon Chang offers a different lens. He suggests we should be skeptical of anyone who says there is "no alternative" to a specific policy. There are always alternatives.
When you see a country struggling, don't just assume they’re "lazy" or "corrupt." Look at their productive capabilities. Look at the rules of the global trade system that might be keeping them in a specific box. Chang’s work encourages a kind of intellectual empathy. It asks us to look at the history of how we actually got here before we start lecturing others on how they should behave.
Economics is too important to be left to the "experts" alone. We all participate in it. We all suffer when it breaks. Reading Chang is a way of reclaiming your right to have an opinion on how the world is run.
Actionable Insights for Navigating Economic Reality:
- Question the "Naturalness" of Markets: Whenever you hear that a policy is "interfering with the market," ask yourself who the current market rules actually serve. Recognize that all markets are constructed by human laws.
- Look at Productive Capability, Not Just GDP: If you are analyzing a business or a national economy, don't just look at the bottom line. Look at the underlying technology, skills, and infrastructure. That is where long-term value lives.
- Read Diverse Economic Schools: Don't get stuck in one way of thinking. Pick up a book on Behavioral Economics, then read something on Institutional Economics. Expanding your "economic vocabulary" allows you to spot biases in mainstream reporting.
- Acknowledge History: When evaluating a trade deal or a new regulation, look at what successful players did at a similar stage of their development. History is often a better guide than abstract mathematical models.
- Focus on "Real" Production: In an era of financialization, pay attention to the sectors that actually create physical goods or essential services. These are the foundations that support the rest of the economic "house."