Economics Book review: Bad Samaritans by Ha-Joon Chang – Reality vs hearsay – Similar in Infosec?

I am convinced that Information Security professionals can benefit from reading, not only Information Security books like this one or that one, but also books that would shed some light on key business areas. Areas to which, ultimately, Information Security and IT Security provides services to. This is why I propose a series of book reviews outside the Information Security realm. Economics is certainly one of those. Understanding key points on Economics would enable security professionals to understand and assess system and data criticality and to better aim at providing added value to their customers.
 
In this occasion I present some learning points extracted from the book titled Bad Samaritans by Ha-Joon Chang. Certainly this list does not replace the reading of the book. I do recommend its careful reading.

However, for those with little time, maybe these points can be of help to you:

In two thoughts:

– There is a tendency in rich countries to request developing countries to follow economic policies that are, in many occasions, the opposite of what the rich countries did to reach where they are in economic terms.
– Care, reflection, attention to detail and a sense of fairness should be applied in this politically-driven field named economics.

In more than two thoughts:

On Chapter 0

– South Korea as a country greatly improved in about 50 years. Similarly to Haiti becoming Switzerland. This happened thanks to a mix of economic policies that, during most of those years, from the 1960s to today, by no means could be considered free-trade based.
– This economic development was not only linked to periods of democracy.
– The Korean government was extra careful controlling imports and their influence in their national economy.
– Intellectual property piracy has played an important role in countries that did protect their industries.
– This chapter argues clearly against neo-liberal economics.
–  It is interesting to see that today’s rich countries used protectionism and subsidies to reach their current state.
– All this has been summarised as “climbing and kicking away the ladder”.
– So, it seems that a careful, selective and gradual opening of countries’ economies is key to make progress in this matter.

On Chapter 1

– Fewer than 50 years ago, it was unthinkable to see Japan as a high-quality car maker country.
– Democracy in Hong-Kong only started in 1994. Three years before the handover to China. And 152 years after the start of the British ruling.
– Before free trade, there was protectionism.
– Globalisation was not always hand in hand with free trade.
– Interesting thought: Something purely driven by politics is evitable.
– The role of the IMF, the World Bank and the WTO is biased towards the benefit of the rich countries.

On Chapter 2

– How did rich countries become rich? In a nutshell, by protecting their markets.
– How did rich countries protect their markets? Basically by:

  • Applying tariff rates.
  • Keeping industries in their local markets
  • Supporting local industries via governmental decisions (and budget).
  • Keeping primary commodities production in the colonies.

In a way, while reading this chapter, one can grasp the confusion that, throughout History, economic theories had between limiting parameters during a specific period of time and new limiting parameters after having applied a specific economic policy in terms of development or industrialisation, or even after benefiting from a specific technological breakthrough.

On Chapter 3

Very succinctly, this chapter suggests the need to find the right pace and timeline for a country to adopt free trade or, even, the right balance between protected and free trade. Done very quickly, it could mean a lack of growth. Done very slowly, it could mean losing growth opportunities.

On Chapter 4

Today’s rich countries regulated foreign direct investment when they were at the receiving end. Foreign direct investment needs to be regulated.

On Chapter 5

There is a fine line defining which (and whether) some specific enterprises need to be owned by the State and when they need to be sold and to whom.
 

On Chapter 6

Equally, it is also very complex to get the right balance on Intellectual Property Rights and when ideas need to be protected by patents.

On Chapter 7

Economics is driven by politics. This is the reason why a balanced and prudent government is so decisive.

On Chapter 8

The trouble of corruption and how it damages the economy.  Interestingly, economic prosperity and democracy are not so compulsorily linked.



On Chapter 9

Culture in all countries can evolve with the right political measures.


On a Final Chapter      

There was at least an example in History when the “Bad Samaritans” (as so called by this book) behaved as “Good Samaritans”: The Marshall Plan.

Enjoy the reading!

Enjoy the future!

This is a Security Bloggers Network syndicated blog post authored by itsecuriteer. Read the original post at: Security and risk