Varieties of capitalism in Asia : beyond the developmental state

293 Pages·2017·3.143 MB·English

by  Hundt, David, Uttam, Jitendra

fi
Critical Studies of the Asia-Paci c
“I’vebeen waitingforaworkthatcould fillthegapbetweentheriotousreality
of Asian capitalism and our spotty understanding of it. With Varieties of
Capitalism in Asia, the wait has ended. The canvas of the book, like Asia itself,
is expansive, and its argument nuanced and layered. By bringing society back
into the study of capitalism, Hundt and Uttam offer an analysis that is as
sweeping as it is revealing. This is required reading.”
—A. Aneesh, Associate Professor of Sociology,
University of Wisconsin-Milwaukee, USA
CriticalStudiesoftheAsiaPacificshowcasesnewresearchandscholarship
onwhatisarguablythemostimportantregionintheworldinthetwenty-
firstcentury.TheriseofChinaandthecontinuingstrategicimportanceof
this dynamic economic area to the United States mean that the Asia-
Pacific will remain crucially important to policymakers and scholars alike.
The unifying theme of the series is a desire to publish the best theoreti-
cally-informed, original research on the region. Titles in the series cover
thepolitics,economicsandsecurityoftheregion,aswellasfocusingonits
institutional processes,individualcountries,issuesandleaders.
More information aboutthisseries at
http://www.springer.com/series/14940
DavidHundt(cid:129)JitendraUttam
Varieties of
Capitalism in Asia
Beyond the Developmental State
DavidHundt JitendraUttam
FacultyofArtsandEducation SchoolofInternationalStudies
DeakinUniversity JawaharlalNehruUniversity
Burwood3125,Australia NewDelhi,India
CriticalStudiesoftheAsia-Pacific
ISBN978-0-230-24031-5 ISBN978-1-349-58974-6(eBook)
DOI10.1057/978-1-349-58974-6
LibraryofCongressControlNumber:2017938882
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A
CKNOWLEDGEMENTS
David Hundt: Many people played a part in bringing this project to
successfulcompletion.IwouldfirstliketothankMarkBeeson(University
ofWestern Australia),the commissioningeditor ofthe CriticalStudiesin
the Asia–Pacific series at Palgrave, for his encouragement and support at
several points over the past few years. Baogang He (Deakin University)
provided insightful comments on the manuscript as it neared completion
and helped to strengthen its key arguments. Matthew Clarke (Head of
School, Humanities and Social Sciences, Deakin University) granted me
enough time in the second half of 2016 so that the book could be
completed. Michael Hatherell, Belinda Townsend, and Vanessa Smith
(all Deakin University) helped to bring the book together through their
outstanding research assistance and helpful feedback on some of the
chapters. KC Suri and other colleagues at a conference and workshop
held in Hyderabad in 2012 and 2013 offered input at the earliest stages
of this manuscript, and helped to shape the direction of the argument.
Finally,Iamgratefultomyfamilyfortheirsupportduringthecompletion
ofthisbook.Finishingaprojectofthisscalerequiresalotofeffortaswell
astime,andfartoooftenthattimewastakenawayfromthosenearestand
dearest tome.
Jitendra Uttam: I would like to sincerely appreciate the contribution
madebythreeacademicinstitutions–JawaharlalNehruUniversityinNew
Delhi, India; Seoul National University in Seoul, Korea; and Moscow
State University, Moscow, Russia – in shaping of my views about capital-
ism, socialism and the understanding of qualitative differences in the
v
vi ACKNOWLEDGEMENTS
economic development of diverse and vast Asian region. A series of
discussions with H.E. Mr Cho Hyun, Korean Ambassador in New
Delhi, focused on the rise of capitalism in Korea and India’s tumultuous
journeyfromsocialismtocapitalismhelpedmeformulateideasaboutthe
importance of social embeddedness in the process of economic develop-
ment. A preparatory workshop jointly organised by the University of
Hyderabad,IndiaandAustralia’sDeakinUniversityon‘varietiesofcapit-
alism’offeredmanyusefulsuggestionsthathelpedinthewideningofmy
understanding regarding socioeconomic forces causing diversity in the
capitalistmode of production.I would like to personally thankYogendra
Yadav, Surajit Mazumdar and Balveer Arora for their ideas and sugges-
tions.Thisworkwassupportedbytheuniversitywithpotentialforexcel-
lence (UPE II) scheme. I acknowledge time and space provided by my
lovingfamilythatenabledmetospareenormoustimeinthisbookwriting
endeavour. I am indebted to my wife Elena’s explanation based on her
Russian experiences about having capitalism without capitalist class, and
the politicsof creating anentrepreneurial-industrial class.
C
ONTENTS
1 AsiaAmid the Varietiesof CapitalismDebate 1
1.1 Capitalism in AsiaAfter WWII 5
1.2 A NewApproach to Analysing AsianCapitalism 10
1.3 Understanding Embeddedness 12
1.4 Structure ofthe Book 17
Notes 21
2 StateandSocietyin AsianCapitalism 23
2.1 The Developmental State inRetrospect 25
2.2 The Varietiesof Capitalism andAsia 29
2.3 The Social OriginsofAsian Capitalism 31
2.3.1 TheSocioeconomic Base of Capitalism 31
2.3.2 CapitalistInstitutions andSocial Embeddedness 34
2.3.3 ThePolitics ofEconomic Regimes 36
3 Japan’sCollectiveCapitalismand the Origins
ofthe Asian Model 39
3.1 The Transformationof Capitalismin Japan 41
3.1.1 TheNotion of Collective Capitalism 41
3.1.2 How MuchTransformation? 44
3.2 The Socioeconomic Base ofCollective Capitalism 48
3.2.1 TheRise ofMercantilism 50
3.3 Capitalist Institutionsin Japan 51
3.3.1 TheSignificance ofLand Reforms 52
vii
viii CONTENTS
3.3.2 BigBusiness and theFinancialSector 54
3.3.3 TheRuling Partyand theBureaucracy 56
3.3.4 TheRole of Labour 57
3.3.5 TheEmbeddedness of Collective Capitalism 59
3.4 Economic Policy and Strategy 64
3.4.1 OpeningUp? 64
3.4.2 IndustrialPolicy 66
3.4.3 Monetaryand FiscalPolicy 68
3.4.4 Financial-Sector Policy 69
3.4.5 Scienceand TechnologyPolicy 71
3.4.6 LabourMarket Policy 73
3.5 Conclusion 75
Note 76
4 ConfucianCapitalism:‘Organisedfromthe Top’ in Korea
and‘Reorganisedfromthe Bottom’ in Taiwan 77
4.1 Shared Historical Contextand the Development
of Capitalism 79
4.1.1 Impactof ChineseCulturalFlows 79
4.1.2 Colonialism, LandReform,
and theColdWar 81
4.2 The Makingof ConfucianCapitalism 84
4.3 Structural–Institutional Dynamics 85
4.3.1 Societal Institutions 85
4.3.2 State Institutions 87
4.3.3 Bureaucratic–Technocratic Institutions 90
4.3.4 FinancialInstitutions 93
4.3.5 LabourInstitutions 96
4.4 Economic Policy and Strategyin Korea 99
4.4.1 Exchange Rate andTrade Policies 101
4.4.2 FinancialRepression and Deregulation 104
4.4.3 Scienceand TechnologyPolicy 106
4.5 Taiwan’sEconomic Policy and Strategy 107
4.5.1 Exchange Rate andTrade Policies 110
4.5.2 Savings, FinancialRepression,and FDI 111
4.5.3 Scienceand TechnologyPolicy 112
4.6 Conclusion 114
Notes 115
CONTENTS ix
5 EntrepôtCapitalismin HongKong andSingapore 117
5.1 The Developmentof EntrepôtCapitalism 119
5.1.1 Qualityof Governance 120
5.1.2 Coexistenceof State andMarket 123
5.2 The Socioeconomic Base ofEntrepôt Capitalism 125
5.2.1 Embedding EntrepôtCapitalism in Society 125
5.2.2 A ConservativeStyle of EmbeddedCapitalism 128
5.3 Two Variants ofEntrepôt Capitalism 131
5.3.1 State Capitalism inSingapore 132
5.3.2 Hong Kong’sLiberalCapitalism 134
5.3.3 Social Responsesto Entrepôt Capitalism 135
5.4 Economic Policy and Strategyin Singapore
and Hong Kong 138
5.4.1 IndustrialPolicy 139
5.4.2 Scienceand TechnologyPolicy 142
5.4.3 Free TradeAgreementsand Increasing
Interdependence 143
5.5 Conclusion 145
6 Malaysia’s ‘StateCapitalism’ andThailand’s‘Alliance
Capitalism’ 149
6.1 The Evolution ofCapitalism in SoutheastAsia 151
6.1.1 EarlyCapitalistAccumulation 152
6.1.2 Colonialism, Class,and Capital 154
6.1.3 ThePost-colonial Period 156
6.2 Ideas, Ideologies,and the Shapingof Capitalism 158
6.2.1 Neomercantilism andKeynesianism 158
6.2.2 Nationalism,the Developmental State,
and theColdWar 160
6.2.3 Crony Capitalism, Neoliberalism,
and State–MarketRebalancing 161
6.3 The Socioeconomic Base ofSoutheastAsian Capitalism 163
6.3.1 Socioeconomic Divisions 164
6.3.2 State andSociety 167
6.3.3 TheDevelopmental State in Thailand 168
6.3.4 Malaysia’sDevelopmental State 171
6.4 Economic Policy and Strategy 172
6.4.1 Corporate Governance 173