Friedman wrote that it was a visit to a Toyota Lexus factory in Japan that got him thinking about the importance of weaning the undeveloped world from arguing "over who owns which olive tree" (which is how he characterized matters in the Middle East), and onto a path that might one day allow them to produce luxury cars. He concluded that these countries will need to fit themselves into the "Golden Straitjacket," a regimen of privatization, free trade and low government spending otherwise known as the "Washington Consensus." The path is "not always pretty or gentle or comfortable. But it's here and it's the only model on the rack this historical season."
The irony, the South Korean-born economist Chang notes, is that "the Japanese government kicked out General Motors and Ford in 1939," subsequently bailed out Toyota with public money, and even then, the company failed badly with its first U.S. export attempts in 1958. Yet Japan persevered in its support of the industry, with the result that "today, Japanese cars are considered as 'natural' as Scottish salmon or French wine," but "[h]ad the country donned Friedman's Golden Straitjacket early on, Japan would have remained the third-rate industrial power that it was in the 1960s, with its income on a par with Chile, Argentina and South Africa. ... In other words ... the Japanese would now not be exporting the Lexus but still be fighting over who owns which mulberry tree."
As Chang describes the way it really was, you realize how amazing it is that free market ideologues have been able to shoehorn Great Britain into a free-trade version of world history, given that it rose to economic dominance while building a world empire.
