Has Kicking Away the Ladder by Ha-Joon Chang been sitting on your reading list? Pick up the key ideas in the book with this quick summary.Nowadays, whenever we open a newspaper or watch the news, we see Western politicians who are trying to teach developing countries what they need to do in order to become peaceful and rich. The great majority of developing countries face a lot of international pressure to change their systems, to democratize their governments, to establish free-market, and improve workers’ rights.Throughout this summary of Kicking Away the Ladder we’ll discuss how Western leaders practice one message of economic development, but preach another. Unsurprisingly, in order to protect their own fragile economies, Western nations have long been exploiting their labor force. Far from the bastions of liberty and free-trade, Westerners have been doing the “wrong” things in order to protect their economies for foreign competitors.Although they are ubiquitous goals, political rights and fair employment are hard-to-achieve standards that can end up having a negative impact on the economies of developing nations. This book explores how political and economic standards can come at the cost of power and wealth, and how did different nations try to close the gap between prosperity and fairness.From our summary of Ha-Joon Chang’s Kicking Away the Ladder you will learn about the following issues:
How child labor has been an issue in Britain and in America much later than we think;
How the United States of America was not a nation that advocated free-trade for a very long time; and
When did the democratic nations of today give women the right to vote?
Kicking Away the Ladder Chapter #1: By protecting its industries, the United States achieved a dominant economy.
Do you know what the United States flag represents?
Some people think it represents democracy and liberty, while others think it’s about the free market and free trade. The United States is known for projecting an image of free economic practices, unaffected by high tariffs or controlling government.Yet, despite America’s famous motto of free trade, the nation’s early history shows that, in fact, what led the country to power and prosperity were a series of strict governmental regulations.After a long struggle to become an independent nation and to topple the British rule, America finally became an independent nation. As any new country would, America faced a wide range of problems, including the fact that their industry was extremely weak and underdeveloped compared to Europe’s.Hence, the newly independent America chose a different path, the path of protectionism. This meant that a five percent customs duty fee would be imposed on every foreign product that would enter the country. By implementing this policy and by keeping the price of US products lower, the American economy began to grow.As the American domestic industry continued to develop, the protectionist strategy continued; in fact, the customs fees became even higher. In the year of 1812, when the US needed money to pay for another war with Britain, the customs fees were increased with no less than 25 percent. By the end of the war, the fees continued to climb and by 1820, they reached a whopping 40 percent.Surprisingly, the policy of protectionism continued for a long time, even after the beginning of the twentieth century. As a result, shortly after the break out of the Second World War, the American economy was considered the second most stable economy in the world, second only to the Russian economy.Long-term protectionism was extremely successful for the United States, despite being in opposition with the modern economic ideals. The customs barriers protected the US economy while its industry had the chance to grow and to become the strongest and most stable one in the world.The important thing to remember is that the US opened its borders to free trade only after the nation had achieved a position of dominance.
Kicking Away the Ladder Chapter #2: Britain achieved its economic dominance by protecting its industries during the industrial revolution.
Throughout the eighteenth and nineteenth century, the waters were dominated by Britain’s naval fleet. This helped the small island become powerful in the world of trade. But how did a cold, little, wet island manage to achieve such an impressive economic standing? Like the United States, Britain found an answer in adopting a protectionist strategy.In order to have a better understanding of Britain’s protectionist strategy, we need to revisit the fifteenth century. At that time, Britain was a nation on the verge of impoverishment. Raw wool was its main export as it was needed by The Low Countries’ sophisticated textile industry (modern-day Holland and Belgium). It’s safe to say that back then, England didn’t have a lot of industry of its own.Henry VII, a reputed English king resolved to change the situation. He decided to build a textile industry in England and realized that the best way to achieve economic growth was by taking a protectionist approach. So, by the end of the fifteenth century, Henry VII had implemented a series of laws meant to protect Britain’s domestic industry.The first step that England made was to poach experienced workers who were skillful from the Low Countries. Then, they banned the export of raw wool to ensure that England had sufficient manufacturing materials to succeed and at the same time, depleting their foreign competitors of their much needed raw materials. The growth of English textiles was effectively spurred by the initiatives that Henry VII took.In fact, Britain’s protectionism worked so well that, in the eighteenth century, they used it again to build their manufacturing industries.By implementing trading fees, Britain’s government encouraged the import of cotton, iron ore, and other raw materials and the export of cloth, steam engines, and manufactured goods. These policies capitalized on the fact that imported materials could be purchased at low prices and there was a great global demand for manufactured items. This is what made Britain the world-leading economy that it is today.
Kicking Away the Ladder Chapter #3: Rich countries have always exploited poor ones, as we can see from Britain’s historical dominance over their colonies.
Have you ever wondered why some countries become so rich and others can’t escape poverty?According to many experts, the main reason is that powerful and wealthy nations take advantage of their position to impoverish and exploit the ones who are poor.Is this true? If we take a quick look at the historical evidence, it sure seems like it is.Here is a perfect example from the past that illustrates an unfair relationship between wealthy and poor.During the seventeenth and eighteenth centuries, Britain started to assert dominance over numerous colonies on the Eastern coast of North America. The main goal of the British government was to use the resources that these colonies had in order to become richer. North America had plenty of raw materials such as tobacco, furs, and timber that British manufacturers could use.At the same time, by taking their resources, the colonists themselves were unable to grow their industries and become powerful themselves. For instance, Britain passed laws that made it illegal for steel and rolling mills to be built in America. As a result, the colonies had to specialize in less profitable and more primitive types of industry such as pig iron, instead of the more valuable steel. These laws were highly beneficial for Britain, as their steel manufacturers had no competition in the global market.Thus, the North American colonies were kept poor deliberately in order for the British economy to thrive.Another British strategy that was just as reprehensible as exploiting the colonies was to force other nation-states to sign unfair and humiliating treaties in order to dominate them.For instance, after the Opium was that took place between 1839 and 1842, Britain forced China to give up their control of customs duties. Consequently, the British government set the duties at cheap rates, stifling China’s domestic industry and allowing Britain to flood China with British goods.We now know that many Western nations became wealthy and powerful by exploiting other nations and by implementing protectionist laws. In the next chapter, we’ll see how these already powerful nations teach developing nations to grow through completely different methods.
Kicking Away the Ladder Chapter #4: The idea that western economic power was achieved through democracy is false.
How does a country become wealthy?A lot of people will argue that countries become rich through democracy. This answer seems obvious as the great majority of successful economies are now democratic. Hence, democracy must be the most important factor, right? But by looking at the history of these nations we notice that the link between economic development and democracy is unclear.For starters, when most NDCs (Now Developed Countries) such as the United Kingdom and the United States of America became economically powerful, they didn’t have an expressly democratic government. For instance, between 1815 and 1830, when France saw a lot of economic growth, the only people who were allowed to vote were males over 30, who paid a minimum of 300 francs in taxes. That is only 0,25 percent of France’s population. In 1848, voting rights were expanded to all male citizens.We mustn’t forget that the lack of women’s suffrage was extremely common in most developed countries until very recently. In Australia, women were given the right to vote in 1903, in 1928 in the United Kingdom, and in 1971 in Switzerland.Yet, even if the majority of citizens could vote, the democratic process in the NDCs was hardly transparent or open.Take secret balloting for example. Keeping people’s votes a secret seems fair and we now take this for granted, but voting wasn’t secret at all in the past. For instance, in 1919, in Prussia, voters were at risk of intimidation and bribery due to a lack of secret ballot. In France, voting started to be protected by an envelope in 1913, before that, votes were quite public, therefore, risky.So what can we learn from this? That nations who are struggling to grow their economies should stop being democratic in order to achieve their goals? No, of course not, but being aware that powerful nations used questionable methods to achieve economic growth is extremely important. By understanding these aspects we can judge a nation’s progress more fairily.The following chapters offer valuable examples of how democratic nations used undemocratic methods to build wealth and power.
Kicking Away the Ladder Chapter #5: Property rights violation has an important place in the history of western economic development.
How would you feel if the government suddenly claimed a business that you’ve spent your whole life building up?If something like that happens to us, we’d probably lose our entrepreneurial spirit completely and we would never try to build another business knowing that we might lose it again.In order to avoid this situation in our current socio-economic climate, Western governments are fighting for strong property rights. These property rights can protect someone’s property legally from being seized by the state. Property rights are extremely important as they promote a nation’s entrepreneurial spirit. Knowing that what they gain from their enterprises will never be stolen from them incentivizes entrepreneurs to work hard. However, if we take a closer look at the ways in which NDCs developed their economies, we notice that strong property rights are not essential for a country’s economic development.For instance, take Britain in the eighteenth century. Back then, Britan had a great advantage due to the quick expansion of their textile industry. Interestingly enough, this development was made possible by a series of property rights violations done by the British government. Britain’s leaders seized the common land, transformed it into the public domain, and then gave it to private landowners, who filled the land with sheep. This act of governmental “theft” is what fuelled Britain’s textile boom as it led to a huge increase in the nation’s supply of wool.And this violation of physical property rights is not the only nondemocratic thing that can fuel a nation’s economic development. The violation of people’s intellectual property rights and stealing their ideas can have a similar effect.When the Now Developed Countries saw economic growth, the theft of inventions and ideas was very common. For instance, before 1852 if you were a British citizen you could easily steal an invention from a German citizen, manufacture it, and sell it on British territory legally. In other words, British laws allowed citizens to patent any foreign ideas even when those ideas were owned by inventors from other countries.So, property rights are not as important for economic growth as we thought, it’s quite the opposite.
Kicking Away the Ladder Chapter #6: Before regulations were established in the NDCs, worker abuse was extremely common.
Child labor and forced 15-hour work-days are two examples of practices that seem cruel and inhumane nowadays.Consequently, NGOs, charities, and, governments are doing constant work in order to free the world of these inhumane working practices. But although exploiting the working class is illegal now, that wasn’t the case in the past.In fact, a lot of NDCs used inhumane practices in order to grow their economy.In Britain, one of the first global industrial powers, during the late 1700s and early 1800s, the government was highly reliant on the employment of children in coal mines, factories, and in the textile industry.Children who were used by the British government to fuel their constant need for cheap labor would work very long hours in horrible conditions. Around the 1820s, for instance, it was extremely common to find children who worked 12 to 16 hours daily in mines and factories.Another example of using child labor for economic growth can be found by looking at the early history of the United States. In the 1820s, in America, half the labor in the cotton industry was represented by children younger than 16. It is worth mentioning that by the end of the nineteenth century, there were over 1.5 million people working in the cotton industry, which means that at least 750,000 of workers were children. Even throughout the twentieth century, in many Western societies, child labor was extremely prevalent. Denmark established more humane laws for the working class in 1925, so we can imagine that up until then, child labor was still fuelling Denmark’s industry.But, why would these historic details be important to our current socio-economic and political climate?The answer is simple. If we want to help developing nations reach the same levels of wealth as the NDCs, then we must understand that their options are limited. Compared to how the West build their industries and economic wealth, developing nations of today need to make additional efforts to escape the poverty trap. They cannot exploit, steal, cheat, and lie in order to accumulate wealth in such an unregulated fashion as the West did during the eighteenth and nineteenth centuries.
Kicking Away the Ladder Chapter #7: Countries that are developing now go through a must faster process than the now-developed countries did at similar stages.
What we should now realize is that nations who are going through a development process, have a completely different approach than NDCs did.So, instead of complaining about the difficulties faced by developing nations, we should view their challenges as examples of positive change. In fact, the great majority of nations who are currently growing are much more advanced than their Western counterparts ever were during the same stages of development.Take a look at the institutions that are essential for building a prosperous and fair society: the institutions of democracy, welfare, and bureaucracy. In currently developing nations, all of these institutions are functioning much better than they did in the historical NDCs.For instance, in nineteenth-century Britan, the income per capita was twice that of modern-day India (adjusted in accordance with inflation), but the Indian institutions are way more developed than Britain’s at that time: India has strong labor regulations, a central bank, and universal suffrage, none of which existed in 1800s Britain.But why did the NDCs have such poor institutional development?Poor institutional development was owed partly to those who benefitted from an unfair system and who had control over the government.That is exactly why it took so long for these nations to ban horrible practices such as child labor. Rich men who owned factories and mines dominated The House of Lords profited from having children workers. If they were to ban these workers, they would have lost a precious supply of docile and cheap labor.Yet in developing countries who have universal suffrage, this type of people have less control, therefore change happens faster and the nations can see greater economic development.The fact that modern developing nations are growing within the bounds of democracy and modern regulations indicates that they are far more advanced than the already-developed nations that took advantage of unjust practices. A lot of people living in developing countries have rights that people living in eighteenth-century Britan or America could only dream of.
IN REVIEW: KICKING AWAY THE LADDER BOOK SUMMARY
What is the key message of Ha-Joon Chang’s Kicking Away the Ladder?When offering advice to developing nations, more often than not, NDCs forget to tell them about the unjust practices that brought them to their current positions. Yet, in part, because nations who are currently developing cannot exploit their citizens and other countries in order to grow, they are much more advanced than NDCs ever were during the same stages.What to read next: 23 Things They Don’t Tell You About Capitalism by Ha-Joon ChangFrom Ha-Joon Chang’s 23ThingsTheyDon’tTellYouAboutCapitalism we learn about the most important myths behind our current economic approach. Throughout the book, Chang explains how there are still many problems regarding the current free-market capitalism, despite what most economists believe. As well as discussing these problems, the author also offers possible solutions that could be applied in order to build a world that is fairer and better.
