2. POLS 373 Foundations of Comparative Politics Lecture: Why is East Asia Rich? Part 3, Structural Approach (World Systems Theory) Professor Timothy C. Lim California State University, Los Angeles tclim@calstatela.edu

3. The Structural Perspective

4. 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”; that is, we must consider the “big picture” into which the East Asian countries fit Starting point

5. 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

6. 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”) This tells us that “strong states” or culture may matter, but only as a secondary factor(s)

7. 6 Why is East Asia Rich? The Explanations: Structural Perspective A Global Perspective: WST One structural theory, World Systems Theory (WST), 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

8. 7 Why is East Asia Rich? The Explanations: Structural Perspective A Global Perspective: WST 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)

9. 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 (…) 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. “Falling Dominoes” Speech Dwight Eisenhower, April 7, 1954

10. [CON’T] …. 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, April 7, 1954

11. 10 A Global Perspective: WST Hegemony and Japanese Economic Development 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

12. Japan Post-war As quickly as possible Asia The United States, your new friend and ally To put very simply, Japan was invited to develop by the system’s hegemonic power, the U.S.

13. 12 A Global Perspective: WST Japan’s economic rise also explains the rise of South Korea and Taiwan Basic Logic: Just as Japan was “invited to develop,” 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 too ! To: Korea and Taiwan

14. 13 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 This is known as the “Flying Geese” model of economic development; it is also referred to as “Product Cycle Industrialization” Why is East Asia Rich? The Explanations: Structural Perspective

15. 14 A Global Perspective: A Special Note In the WST view, Korea and Taiwan initial (product cycle) links to Japan were established well before the end of the World War II Key linkage was first established during colonial period; the 1930s was a particularly important period: This was a time when Japan attempted to withdraw from the world system by creating a self-reliant, go-it-alone path to development based on the complete integration of East and Southeast Asia  This strategy entailed much greater economic integration and a more sophisticated division of labor between Japan and its colonial possessions than might otherwise been the case  One result of this was an extreme distortion of colonial economies and an equally extreme dependence on the Japanese economy, which did not disappear with the end of colonialism Why is East Asia Rich? The Explanations: Structural Perspective

16. 15 A Global Perspective: Summing Up The Logic of the WST argument leads to a simple, yet powerful equation: Product Cycle + Integration = Dependent Development Why is East Asia Rich? The Explanations: Structural Perspective In sum, WST asserts that Korean and Taiwanese development is largely a function of Japanese development, while Japanese development is, at least to a considerable degree, a function of American hegemony

17. 16 Why is East Asia Rich? The Explanations: Structural Perspective Summing Up Both pre and postwar periods reflect push and pull of both regional-level and global forces. Japan's political economy was shaped as a response to global forces, while it, in turn, shaped Korea's and Taiwan's economy The US and other core nations needed to expand markets, and Japan was “invited” to come along (in large part because China has succeeded in getting itself dis-invited) Japan, in turn, invited Korea and Taiwan to ride on its coattails, not out of altruism, but because they were viewed as essential elements of Japan's economic revival (it is interesting to note that neither country was originally supposed to fulfill this role)