Aim: What made Korea and the Asian Tigers models of economic growth?

Britain ’ s industrialization Protection of infant industries from more efficient Asians Cheap labor Investment capital from looting the Americas Export-driven economy of high technology goods Forced others to buy from them (India, China) Surplus capital invested abroad

US industrialization Victory of northern industrialists in Civil War led to high tariffs Foreign capital (loans) to build up national economy Cheap immigrant labor Share of manufactured goods in U.S. exports rose from less than 30% in 1840 to 60% in 1913 Became an exporter of financial capital beginning in the late 1890s. Moral: If you borrow money, you must use it productively

Japanese and Soviet industrialization State direction of the economy Cheap labor Calls for national sacrifice

Japanese industrialization Borrowed money to transform economy Protection of infant industry; development of zaibatsu Post-war Japan: –Minimal military expenditures –Support from US –Modernized industry –Homogeneous population: no nation-building necessary

Free market advocates say that open markets are the solution to everything and, if left alone, the “ invisible hand ” will solve all problems. Sadly, the reason the invisible hand often appears invisible is that, quite often, it is not there. -- Joseph Stiglitz, Nobel Prize winning economist

Legacies of Imperialism Leaders only interested in enriching themselves and plunder – no interest in national development No connections between the leaders and the people All or most of the industry in the nation is owned and controlled by foreign companies No economic or cultural cohesion One product economies – no diversification, generally low technology raw materials All technical knowledge and expertise stays in hands of foreigners

What about South Korea, Singapore and Taiwan?