Advisory Statement

1. Advisory Statement Professor Lim’s PowerPoint presentations are optimized for the Mac (OS X). Windows-based PC users may find some or all of the slides unviewable due to formatting incompatibilities. These slides have not been tested on Vista. This presentation is the intellectual property of Professor Timothy C. Lim • Most images, pictures and charts are from third party sources

2. POLS 459 Politics of East Asia The Late Developers: South Korea and Taiwan Structural Approaches November 1, 2007 Timothy C. Lim, Ph.D. California State University, Los Angeles Contact: tclim@calstatela.edu

3. The Late Developers and JapanA World-Systems’ View Note: Some of you may remember the first part of this lecture from a previous class (POLS 373 or POLS 425). I apologize for the repetition. Still, it is useful and sometimes necessary to review basic material A Basic Observation and Starting Point • It is a fundamentalmistake 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 “bigger picture” into which the East Asian countries fit Put on your “global glasses”!

4. The Late Developers and JapanA World-Systems’ View A Global Perspective: First Step • Identify the “big picture” The big picture of East Asian development is the system of ________________________. Struturalists tell us that the system-wide dynamics of global capitalism are far more determinative of national economic success than culture, strong states, regime dynamics, institutional arrangements, or a “rational” domestic economic environment global capitalism

5. The Late Developers and JapanA World-Systems’ View 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 globally and Japan regionally • 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)

6. The Late Developers and JapanA World-Systems’ View 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. The Late Developers and JapanA World-Systems’ View World-Systems Theory and East Asian Development Importance of Hegemony Under certain conditions, the hegemon’s actions allow, even demand, 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. “Falling Dominoes” Speech, Dwight Eisenhower, April 7, 1954 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 (…)

9. “Falling Dominoes” Speech [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.

10. The Late Developers and JapanA World-Systems’ View The Origins and Development of the Northeast Asian Political Economy: Cumings A Question … Does Cumings agree--with Kohli, Amsden and others--that “history matters”? More specifically, does he agreethat colonialism mattered to the subsequent development of the East Asian economies? The colonial state replaced an old weak state, holding society at bay, so to speak; this experience goes a long way toward explaining the subsequent (post 1945) pronounced centralization of Taiwan and both Koreas, and has provided a model for state-directed development in all three.

11. The Late Developers and JapanA World-Systems’ View Origins and Development … “ … an understanding of the Northeast Asian political economy can only emerge from an approach that posits the systemic interaction of each country [Japan, South Korea, and Taiwan] with the others, and of the region with the world at large. Rapid upward mobility in the world economy has occurred, through the product cycle and other means, within the context of two hegemonic systems: the Japanese imperium to 1945, and intense, if diffuse, American hegemony since the late 1940s.”

12. The Late Developers and JapanA World-Systems’ View Origins and Development … In Cumings’ framework, colonialism’s most important impact was in how it created an integrated regional economy led by Japan and based on a particular pattern of industrialization, called the product-cycle • What is the product-cycle industrialization pattern? • When did it begin in Northeast Asia? • How did it actually play out in Northeast Asia?

13. The Late Developers and JapanA World-Systems’ View Origins and Development … • Product-cycle in East Asia • Began in the 1880s, with textiles as the leading sector • In the 1930s, a second heavy phase began based on steel, chemicals, armaments, and automobiles (began to end in the 1960s~1980s) • Third phase, beginning in the 1970s, emphasizes high-technology “knowledge” industries

14. The Late Developers and JapanA World-Systems’ View Origins and Development … • 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 Consider how rapid industrialization on a hitherto agrarian society makes that society dependent upon technology and capital from more industrialized countries

15. The Late Developers and JapanA World-Systems’ View Origins and Development … The Logic of Cumings’ argument leads to a simple, yet powerful equation: Product Cycle + Integration = Dependent Development In sum, Cumings argues 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 …

16. The Late Developers and JapanA World-Systems’ View 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

17. The Late Developers and JapanA World-Systems’ View Japan Post-war As quickly as possible Asia The United States, your new friend and ally P.S. You can invite a few friends, too, but only a couple.

18. The Late Developers and JapanA World-Systems’ View 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 disinvited) • 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)

19. The Late Developers and JapanA World-Systems’ View Problems? Are there any obvious problems with Cumings’ analysis? (Recall he wrote his article in the early 1980s) • Cumings asserted that Korea and Taiwan would be unable to “break into the system of economic exchange at a point other than comparative advantage in labor: to a significant extent, both have done so • He posited that both would suffer from overcapacity: again, this problem has been generally avoided • Cumings argued, “rising competition from poorer states” would undermine both countries: Yes, but only to a limited extent • Core country protectionism would pose a future problem: Yes and no