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4 Asian Tigers


Submitted By Ramdatian
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Since the end of the second world war, many East Asian economies have seen a “miraculous” growth. And with so many other nations still in poverty, economists and leaders are turning their eyes towards the “East Asian tigers” to see if they can replicate their results. When looking at the facts it is obvious that the the circumstances facing the East Asian nations were quite different than the ones that nations face today. But outside of these differences a loose model of the East Asian miracle can be utilized in Third World nations today and, considering the high success rate of so many of the East Asian economies, would most likely see positive results.
The secret to success of East Asian economies is the hand that the government has had in industrial affairs. Starting in the 1950s nations like china began taking steps towards centralized government through reform. One example of this would be the Chinese land reform of the 50s under the new Mao Zedong's communist regime (Blecher, 2010:p.27). This land reform took away the oligarchic control of the landlords, changing the feudalistic policy of landlordism over to a more capitalistic form of socialism in which the government has the control. This is clearly a very vital part of the industrialization process as many nations that have failed with the agrarian reform continue to find themselves struggling to get out of poverty. A modern example of this would be Brazil, where the rural landlords have stalled any sort of reform that might dismantle their rule over peasants farmers and tenants (Kay, 2002:p.1076). The institution of land reform was a vital part of industrialization in East Asia, unlike other nations it was introduced before the economies had gotten on their feet and was therefore a key ingredient in the subsequent success (Kay, 2002:p.1076).
Across the board in the Eastern nations the emphasis is seen being put on “[not] on emphasizing private profit or state socialization of wealth” but instead on a balance of the two (Woo-Cumings, 1999:p.58). This means that neither the pursuit of private profit for monopoly capitalists, nor the political agendas of big parties get in the way of the economic progress of the nations. This form of policy can only exist under a socialist-type state, where everything is centralized. The antitype of this would be again the Latin American economies where both dominant and lower classes pressure the government leading to a political equilibrium which translates into a stagnant economy (Kay, 2002:p.1086).
As much as can be learned from the East Asian tigers, there are also a few particular factors without which these nations may not be where they are. One major factor to the growth of East Asian economies would be the Cold War and the fight against communism. America's preoccupation with the USSR and the Korean War made it possible for Capitalist Asian countries, specifically Japan, to both promote and camouflage their own growth while manipulating the USA (Woo-Cummings,1999:p.55-56).
Institutions such as the World Bank have attempted at “force-feeding” the same approaches throughout third world nations (Amsden, 1994:p.628). Of course this is more convenient than it is effective as it is simply impossible to expect identical results from a variety of different nations under different circumstances.

In recent years, there have been great claims made particularly by the left-leaning Washington Consensus, which is comprised of: the US government, the IMF and the World Bank, about neoliberalism (Chang and Grabel, 2004:p.15). According to these institutions and other neoliberal thinkers, free-markets are the key to growth in economies and anywhere neoliberalism has been employed it has seen a great return, unfortunately this is but a myth (Chang and Grabel, 2004:p.18). Industrialized nations in the west, knowing this, continue to promote free-market capitalism when in fact, they themselves use highly interventionist and protectionist measures for their own gains. In respect to Western economics the term 'free' is quite misleading.
Our understanding of free-market economy is derived from that of the economic historian Karl Polanyi's. In his book, the Great Transformation he stated that, “market economy implies a self-regulating system of market; in slightly more technical term, it is an economy directed by market prices and nothing but market prices” (Polanyi, 2001:p.43). Many of todays modern economists propose that that nations such as Britain and, more recently the USA, became economically superior due to their “vigorous commitment to free market policies”. This meant promoting a market-led economy over state control of trade and financial flows, leading to less government regulation and more “private ownership of resources, enterprises, and even ideas” (Chang and Grabel, 2004:p.7). These are horrible misrepresentations of both Britain and the USA who, despite their own claims about being ardent proponents of neoliberalism and free trade, have both had a history brimming with staunch interventionist and state-controlled markets (Chang, 2003:10). Britain for example, from the 14th century onward, can be see implementing different forms of state intervention to boost its economy. British monarchs and rulers used different forms of protectionism, such as tariffs on raw wool, to stimulate Britain's own economy (Chang, 2003:19-20). America also in its earlier stages especially can be seen using protectionism and state intervention to stimulate the growth of its economy. Indeed the laws and specifically tariffs became so high that the southern states threatened secession and a civil war broke out not over the abolition of slavery but over the unreasonably high tariffs on both manufactured goods and raw material from Europe (Chang, 2003:26). With this in mind to say that Britain and the USA achieved economic preeminence by using free-market or neoliberal policies is simply fallacious, as Britain itself, the only nation to ever truly practise total free trade, only even opened its borders in the 19th century (Chang, 2003:23).
Despite this, Industrialized nations, with the United States at the forefront, continue to advocate for more 'freedom' in the economies of developing nations, claiming that there is no other way to be free from poverty. By doing this they make themselves out to be hypocrites calling for more market-freedom when in fact nations who practice state intervention, as they did during earlier stages, have seen more economic success. Two great examples would be China and India who both have a high level of state involvement in their respective markets, yet both nations have become the model for developing nations in the 21st century (Chang and Grabel, 2004:13). But for whatever reason the West continues to advocate a policy that they themselves have barely used.

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