Ha-Joon Chang
Appearances
Planet Money
Tariffs: What are they good for?
Hi, I'm Hajun Chang. I'm professor of economics at the University of London.
Planet Money
Tariffs: What are they good for?
Yeah, the second movie, there's this scene of battle at the Helm's Deep. You're a band of, I don't know, 120 super capable guys, yeah? But then there are like half a million orcs in front of you. What are you going to do, yeah?
Planet Money
Tariffs: What are they good for?
My favorite example is Hyundai, the automobile company.
Planet Money
Tariffs: What are they good for?
Hyundai originally was a construction company, but sometime in the late 60s, this company decided that they want to build an automobile manufacturing business.
Planet Money
Tariffs: What are they good for?
They assembled two. Around 3,000 of those cars in the late 60s. And then in the mid-70s, South Korean government said, we are going to cancel the license for automobile manufacturers unless they come up with their own design.
Planet Money
Tariffs: What are they good for?
In the same year, Ford produced 1.9 million cars. General Motors produced 4.8 million cars.
Planet Money
Tariffs: What are they good for?
Initially, this company had to be hugely subsidized both by the government and by its own existing business, especially construction. Because there was no way this company was going to be able to make money without that.
Planet Money
Tariffs: What are they good for?
Even then, it had to be protected from foreign competition. Because who's going to buy this two-bit car when you could import a Cadillac or, you know, Mustang, you know? No way. So import of foreign cars were completely banned.
Planet Money
Tariffs: What are they good for?
So this is an idea that the government of a developing nation should protect and nurture the country's young industries until they grow up and can compete with more advanced industries from more advanced nations. In the same way that we protect and nurture children until they grow up and then can compete in the other labor market.
Planet Money
Tariffs: What are they good for?
In the same way that you don't want to make your kid work when he's six years old, you don't want to subsidize your kid until he's 45. So at some point, you have to push the guy into the real world.
Planet Money
Tariffs: What are they good for?
This idea was actually invented by an American, and not just any American. It was invented by Alexander Hamilton, the guy on the $10 bill, your first treasury secretary, yeah?
Planet Money
Tariffs: What are they good for?
Now things are, yeah, I wouldn't say it's going in the opposite direction, but more complicated.