POLS 373 Foundations of Comparative Politics Lecture: Why is East Asia Rich? Part 2, Explanations

2 Why is East Asia Rich? The Structural Perspective

3 Why is East Asia Rich? The Explanations: Structural Perspective A Basic Observation and Starting Point It is a mistake to explain East Asia’s wealth purely or mainly by focusing on internal or domestic factors, such as a “developmental state” or a particular type of culture Instead the explanation must be found by adopting a “global perspective”; we must consider the “big picture” into which the East Asian countries fit

4 Why is East Asia Rich? The Explanations: Structural Perspective A Global Perspective: First Step Identify the “big picture” The big picture of East Asian development is the system of ________________________. global capitalism Struturalists tell us that the system-wide dynamics of global capitalism are far more determinative of national economic success than culture, strong states, or a “rational” domestic economic environment

5 Why is East Asia Rich? The Explanations: Structural Perspective A Global Perspective: Additional Steps Identify the dynamics, logic, and “needs” of global capitalism Identify the position and role of the various units (i.e., countries, such as Japan, South Korea, and Taiwan) in the system as a whole Identify the position and role of the various units in relation to the dominant unit or units, namely, the United States Finally, consider the attributes of individual units (for example, consider whether the individual units have “strong states”)

6 Why is East Asia Rich? The Explanations: Structural Perspective World-Systems Theory and East Asian Development One structural theory, World-Systems, provides answers to many of the questions posed on the preceding slide … Basic logic: Capitalism is driven by the constant need for accumulation and expansion; to do this, capitalism requires strong centers throughout the globe Role of Units in System: Hegemon required to police and stabilize system; certain “core” units are needed to serve as regional centers of capitalism, and each core requires subordinate units to maximize capital accumulation; these subordinate units are part of the semi-periphery or periphery Role of Units in Relation to Dominant Unit: Close relationship to dominant unit (the hegemon) ensures economic stability and growth; if subordinate units occupy favorable position in global system, this relationship may be key Individual (State-level) Attributes: Can play a marginally important role in developmental path as system occasionally “allows” subordinate units to take advantage of opportunities for upward mobility

7 Why is East Asia Rich? The Explanations: Structural Perspective World-Systems Theory and East Asian Development Importance of Hegemony Under certain conditions, the hegemon’s actions allow otherwise subordinate units to move up: this was the case with Japan, as the emergence of the Cold War compelled the United States to build a center of capitalism in Asia After the “loss” of China, in short, Japan was “selected” by the United States to be the regional center of capitalism in Asia The importance of Japan as a regional center of capitalism was highlighted in Dwight Eisenhower’s famous “falling dominoes” speech (1954)

8 Q. Robert Richards, Copley Press: Mr. President, would you mind commenting on the strategic importance of Indochina to the free world? I think there has been, across the country, some lack of understanding on just what it means to us. A: You have, of course, both the specific and the general when you talk about such things. First of all, you have the specific value of a locality in its production of materials that the world needs. Then you have the possibility that many human beings pass under a dictatorship that is inimical to the free world. Finally, you have broader considerations that might follow what you would call the "falling domino" principle. You have a row of dominoes set up, you knock over the first one, and what will happen to the last one is the certainty that it will go over very quickly. So you could have a beginning of a disintegration that would have the most profound influences (…) “Falling Dominoes” Speech, Dwight Eisenhower, April 7, 1954

9 [CON’T] Now, with respect to the first one, two of the items from this particular area that the world uses are tin and tungsten. They are very important. …. Then with respect to more people passing under this domination, Asia, after all, has already lost some 450 million of its peoples to the Communist dictatorship, and we simply can't afford greater losses. But when we come to the possible sequence of events, the loss of Indochina, of Burma, of Thailand, of the Peninsula, and Indonesia following, now you begin to talk about areas that not only multiply the disadvantages that you would suffer through loss of materials, sources of materials, but now you are talking really about millions and millions and millions of people. Finally, the geographical position achieved thereby does many things. It turns the so-called island defensive chain of Japan, Formosa, of the Philippines and to the southward; it moves in to threaten Australia and New Zealand. It takes away, in its economic aspects, that region that Japan must have as a trading area or Japan, in turn, will have only one place in the world to go -- that is, toward the Communist areas in order to live. “Falling Dominoes” Speech, Dwight Eisenhower

10 Key points: Japan’s Economic Rise Japanese postwar development was premised on the need to establish a strong foundation for capitalism in Asia At first, Japan was not meant to play this role--the original designee was China--but the communist victory in China gave Japan a new lease on life The general threat of communism in Asia, moreover, made Japan an even more important regional center: helps explain why Japan was given unprecedented and largely one- directional access to American markets Japan also received military aid from the U.S and guaranteed protection, which allowed Japan to focus its capital on civilian goods, thus leading the way toward domination of a wide range of consumer markets Why is East Asia Rich? The Explanations: Structural Perspective

11 World-System: South Korea and Taiwan Japan’s economic rise also explains the rise of South Korea and Taiwan Basic Logic: Just as Japan was “chosen for development,” so too were South Korea and Taiwan, but they were chosen to serve the needs and demands of Japanese development first and foremost Because both countries also became important bastions of anti- communism in their own right, moreover, they were singled out by the global hegemon (the U.S.) for even more special privileges Why is East Asia Rich? The Explanations: Structural Perspective

12 The Flying Geese Model of Industrial Development The dynamics of economic development in South Korea and Taiwan were different from Japan’s development South Korea and Taiwan were selected to serve as “receptacles” for declining industries in Japan and as receptacles for Japanese goods Neither Korea nor Taiwan were the preferred choice, but they proved to be the most practical choices in the context of the Cold War In short, South Korea and Taiwan were “invited” to develop Why is East Asia Rich? The Explanations: Structural Perspective

13 World-Systems Theory: Issues and Questions While very similar in some respects, the economic development of the three East Asian economies is also very divergent: Does World- Systems explain this? World-systems may explain why Japan, South Korea and Taiwan were “chosen” for development, but it does not tell us, except in a very general manner, how each developed into economic rivals of the United States in major industrial sectors World-systems cannot easily explain the ability of South Korea and Taiwan to break free of the product cycle or “flying geese” model Why is East Asia Rich? The Explanations: Structural Perspective