Reader’s Shelf 2/8/2012
I’ve some comments on Carter J. Eckert’s Offspring of Empire: The Koch’ang Kims and the Colonial Origins of Korean Capitalism 1876-1945, which I just finished, and a concept I learned of while at the POSCO museum in Pohang, South Korea (포항). This in addition to some other musings on articles and books I’ve read over the last week.
Ideology and Eckert’s Offspring of Empire
Pohang is where POSCO, one of the world’s largest steel producers, was founded in 1968 with the help of the Japanese government. I toured around the steel plant itself and took a self-guided tour at the POSCO museum located next the steel plant. While walking through the museum and reading the abridged history of POSCO written on the murals, podiums and displays throughout the museum one thing stood out: the concept of “steel patriotism” (제철 보국). It reminded me of the concept of “Kokutai no hongi,” the Japanese idea of putting public interests over private and a key tenet of a view of capitalism from the standpoint of “national economy.” In other words, capitalism ought to be used as a means to advance state ends — an explicit form of economic nationalism. I came across this term while reading Eckert’s Offspring of Empire. I’ll quote part of the passage quoted in Eckert:
Our national economy is a great enterprise based on His Majesty’s great august Will to have the Empire go on developing for ever and ever, and is a thing on which the subjects’ felicity depends; so that it is not a disconnected series of activities aimed at fulfilling the material desires of individual persons, a doctrine expounded by Western economists. It is a thing in which the entire nation joins the Way of musubi, each person fulfilling his duties according to the part he has been assigned to play… The attitude of mind which is based on the spirit of musubi and puts public interest before private ones, paying full attention to one’s allotted duties and to being in harmony with others, has been an attitude toward industrial enterprises in our nation; and it is a basic reason for the rise of a strong impetus in the world of industry, for encouraging initiative, stimulating cooperation, greatly heightening industrial efficiency, bringing about the prosperity of all industries, and for contributing toward the increase of national wealth.
Although I haven’t made any in-depth inquiry into the similarities, from my tour of the POSCO museum and what I already know about the political economy of Korean economic development, there is a link between the Japanese concept of Kokutai no hongi and “steel patriotism.” Consider this quote from a Chung-a Ilbo article (중아 일보) about industrial management ideology following the death of POSCO founder and industrial giant Pak Tae-joon (박대준):
On June 9, 1973 at 7:30 a.m., workers cheered after molten metal poured out of a furnace at Korea’s first steel mill POSCO. When a yellow flash coming out of an iron notch rose higher than a human`s height, POSCO founder Park Tae-joon clenched his fists. This was the moment Korea’s first blast furnace produced molten metal, called the “rice of industry.” Korean-made steel boasting high quality and affordability laid the foundation for Korea to be a leading player in shipbuilding and manufacturing of cars and electronics.
When Park began construction of the still mill in 1970, he advocated the “spirit of facing right,” saying, “If we fail to build a steel mill, all of us shall jump to our deaths into Yeongil Bay on the right side.” He built a 200-square meter, two-story wooden building on the coast of Yeongil Bay for use as a control center for the construction. At night, workers slept in the building and called it “Rommel House” since it looked like a field army command post operated by Nazi field marshal Erwin Rommel in World War II.
Park, who built the world`s fourth-largest steelmaker in operating capacity on a sandy plain, passed away Tuesday at the age of 84. He was the symbol of Korea’s rapid economic growth and the epitome of the indomitable entrepreneurial spirit. Korea was a poor agricultural country whose per-capita income was 254 dollars in 1970. For the country to be transformed into an advanced industrial nation, steel production was a must. Equipped with patriotism and a military spirit, Park fulfilled his task of building a comprehensive steel mill assigned by then President Park Chung-hee.
From a political economy, and modern Korean history point-of-view, the similarities between Japanese and Korean development ideology, which, according to Eckert’s historical analysis, is a result of colonial economic development in Korea between the years 1910-1945. The two quotes are slightly different, one being more philosophical, the other editorial. However, I think the similarities can be seen: development for the sake of the state at the sacrifice and hard work of the people. The notion that economic development is not done in order to make individual profit but to make the state prosperous and wealthy is a rather general, unspecific tenet of Korea as a “late industrializing” state, but still an important one to note. The militaristic theme is also found throughout both Japan (pre-War) and Korea (one can read about the “blitzkrieg war” that Pak Tae-joon decarled in order to complete phase one of POSCO construction; also, to my knowledge, compared to Japan, the pervasiveness of military culture pervades Korean society to this day). The German theme at POSCO (the Rommel House, “Blitzkrieg” construction) strikes me as very strange; I have not explanation for it at the moment.
Eckert’s book also does well to show the opportunistic behavior of the Korean bourgeoisie (land owners and early industrialists) during the colonial period and their preference for profit over cultural and political identity. I don’t know how, exactly, this book was received by Korean scholars (I’ll find out this semester), but I think I can safely assume that the conservatives (at least) didn’t find Eckert’s research and conclusions regarding the origins of capitalism in Korea and early industrialization to be in line with their own. I’ll quote a few passages to show what I mean:
Without condoning Japanese imperialism, one may say that the forty years of Japanese occupation left both halves of postwar Korea with a substantial material base for subsequent industrial development….
[C]olonialism was the setting in which Korean capitalism experienced its first real surge of growth. Although this was certainly unfortunate, and is perhaps embarrassing or distasteful for many Koreans to admit, it is nevertheless a fact…. Korean capitalism had been spawned within the matrix of Japanese colonialism.
Engaging North Korea
I recently had a in-depth discussion with professor Park Young-chun (박영준), a professor at Korean National Defense University. His recent editorial in the Chungahn Ilbo (Korean) talks about various ways in which to engage Kim Chong-un and the DPRK leadership in order to mitigate the “provocative tendency of North Korea.” He suggests that South Korea enlist the help of Russia and China for diplomatic assistance, since China and Russia are the two major power allies of the DPRK (China an official guarantor of the DPRK; Russia a de facto ally). He thinks the US’s role, regarding ROK-DPRK relations is strictly military in nature (deterrence).
I’ll have more substantial analysis of our discussion in the next day or so.
Zakaria – Japan and (American) Industrial Policy
Fareed Zakaria analyzes the recent reports indicating that Japan has registered its first annual deficit since 1980. His analysis is very different from that of Eamon Fingleton’s. Fingleton disagrees with analysts who focus on only the visible trade balance. Part of his critique:
The proper way to measure a nation’s performance is not by the visible trade balance alone but by the current account, which is the widest and most meaningful measure of a nation’s trade. The current account includes financial flows such as interest payments, dividends, insurance premiums, and patent royalties. The balance in such items has been positive for Japan since the 1960s and the net invisible surplus has grown astoundingly in the last two decades. This reflects not only the fact that the underlying economic performance in true invisibles has been strong but because of so-called transfer pricing, which is now rampant in Japanese industry and results in massive understatement of exports. (In a typical maneuver, goods might be shipped to China via Hong Kong. The goods are exported from Japan at heavily discounted prices and a Hong Kong subsidiary takes a huge profit in selling to China. Such profits constitute hidden export revenues that are not caught in the visible trade numbers. The maneuver makes sense because Japan’s corporate tax rate is one of the world’s highest.)
Zakaria also chimes in on the (emerging?) debate surrounding this age-old question: does America needs an industrial policy? A summary of his answer: it may be “inefficient” and contrary to conventional economic wisdom (whatever that is), but it seems to work. So, it appears he answers in the affirmative.
The Unipolar Era
I’m finally getting on board with the “Unipolar Era” debate (following links in Walt’s article; also see here and here — yes, it is Walt-heavy in analysis; I’ll diversify later). I got around to reading Michael Beckley’s article (chapter from his dissertation) “The Unipolar Era: Why American Power Persists and China’s Rise Is Limited” this morning. Definitely engaging and worthy of a read and several critiques. Perhaps I’ll have more on this later; for now, these passages from to beginning of his article stand out to me:
[Globalization works in favor of American industry because] globally networked production — in which goods are produced in multiple stages in a number of locations. This system helps American firms preserve their competitive advantages by specializing in high-value activities, exploiting innovations created abroad, and attracting high-quality human capital.
The dollar’s global role … forces the U.S. to run persistent balance-of-payments deficits to supply the world with liquidity, a policy which diminishes the competitiveness of U.S. exports as well as the confidence of markets and central banks in the dollar.
The U.S. … manipulates international trade and investment flows to benefit itself and its allies while excluding potential adversaries.
Beckley paints a relatively brighter future for America, compared to the “declinists” he critiques throughout his article. Most important for IR theory and foreign policy is the notion that the unipolar world order the world has come to know since the end of World War-II isn’t going anywhere. If Beckley’s analysis of the future America’s military prowess is anywhere near accurate, neither is America’s defense-biased outlook on world affairs (for better or worse).
To Hell With the Establishment
James Fallows’ follow-up piece to Robert Kaplan’s “sympathetic Atlantic profile of John Mearsheimer” (to quote Jeffery Goldberg) shows establishment scholars (e.g. Mearsheimer, Waltz and Kaplan — but definitely people like Walt, too, and probably Beckley in due time) at their worst. Fallows states:
(Kaplan) also explains why Mearsheimer believes a strategic/military confrontation between the US and China truly is inevitable — and why he, Kaplan, mainly shares this view. I mainly disagree with both of them, and the basis of our disagreement touches on another important theme of the article.
In an article of my own in next month’s issue, and in my forthcoming book, I argue that China has too many things going on, and going wrong, within its own borders to have the time, energy, skill, or ambition for much of an “expansionist” world effort. From the outside, it looks like an unstoppable juggernaut. From inside, especially from the perspective of those trying to run it, it looks like a rambling wreck that narrowly avoids one disaster after another. The thrust of Mearsheimer’s argument is that such internal complications simply don’t matter: the sheer increase in China’s power will bring disruption with it. I am saying: if you knew more about China, you would be less worried, especially about military confrontations. He is saying: “knowing” about China is a distraction. What matters are the implacable forces.
Why really “know” about the other culture? To quote Beckley, who is summarizing Waltz: Because of anarchy, uncertainty and all that jazz, “states become ‘like-units,’ taking on similar characteristics as they compete for superiority across a full spectrum of capabilities. Waltz calls this dynamic the ‘sameness effect.’”
Yes, I know I am oversimplifying Waltz, Measheimer and others. But, it also occurred to me living as an ex-pat in Asia, studying about Asia that, despite the wonderfully systematic theories and air-tight logic of the big-shot establishment scholars, Asia is different — very different at times. To understand this requires one to know about the other culture, its institutions, language, history (especially modern history) and so on. Mearsheimer, Waltz, et al. sometimes come across as polite ivory tower know-it-alls with little practical knowledge about what’s really going on in these monoliths (aka: nation-state) they talk so much about.