Aim: What made Korea and the Asian
Tigers models of economic growth?
Britain’s industrialization
• Protection of infant industries from more efficient Asians
• Cheap labor • Investment capital from looting the Americas• Export-driven economy of high technology goods• Forced others to buy from them (India, China)• Surplus capital invested abroad
US industrialization • Victory of northern industrialists in Civil War led to high
tariffs• Foreign capital (loans) to build up national economy• Cheap immigrant labor• Share of manufactured goods in U.S. exports rose from
less than 30% in 1840 to 60% in 1913• Became an exporter of financial capital beginning in the
late 1890s.
Moral: If you borrow money, you must use it productively
Japanese and Soviet industrialization
• State direction of the economy• Cheap labor • Calls for national sacrifice
Japanese industrialization
• Borrowed money to transform economy• Protection of infant industry; development of
zaibatsu• Post-war Japan:
– Minimal military expenditures
– Support from US
– Modernized industry
– Homogeneous population: no nation-building necessary
Free market advocates say that open markets are the solution to everything and, if left alone, the “invisible hand” will solve all problems. Sadly, the reason the invisible hand often appears invisible is that, quite often, it is not there.
-- Joseph Stiglitz, Nobel Prize winning economist
Legacies of Imperialism• Leaders only interested in enriching themselves
and plunder – no interest in national development• No connections between the leaders and the
people• All or most of the industry in the nation is owned
and controlled by foreign companies• No economic or cultural cohesion• One product economies – no diversification,
generally low technology raw materials • All technical knowledge and expertise stays in
hands of foreigners
What about South Korea, Singapore and Taiwan?
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