Ha-Joon Chang

This is Planet Money from NPR.

This is Planet Money from NPR.

This is Planet Money from NPR.

Hi, I'm Hajun Chang. I'm professor of economics at the University of London.

Hi, I'm Hajun Chang. I'm professor of economics at the University of London.

Hi, I'm Hajun Chang. I'm professor of economics at the University of London.

Are you a fan of the Lord of the Rings?

Are you a fan of the Lord of the Rings?

Are you a fan of the Lord of the Rings?

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?

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?

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?

My favorite example is Hyundai, the automobile company.

My favorite example is Hyundai, the automobile company.

My favorite example is Hyundai, the automobile company.

Hyundai originally was a construction company, but sometime in the late 60s, this company decided that they want to build an automobile manufacturing business.

Hyundai originally was a construction company, but sometime in the late 60s, this company decided that they want to build an automobile manufacturing business.

Hyundai originally was a construction company, but sometime in the late 60s, this company decided that they want to build an automobile manufacturing business.

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.

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.

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.

In the same year, Ford produced 1.9 million cars. General Motors produced 4.8 million cars.

In the same year, Ford produced 1.9 million cars. General Motors produced 4.8 million cars.

In the same year, Ford produced 1.9 million cars. General Motors produced 4.8 million cars.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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?

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?

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?

Now things are, yeah, I wouldn't say it's going in the opposite direction, but more complicated.

Now things are, yeah, I wouldn't say it's going in the opposite direction, but more complicated.

Now things are, yeah, I wouldn't say it's going in the opposite direction, but more complicated.