In response to Martin Hart-Landsberg's comment
>
>> Countries like Korea were able, for a variety of reasons, to get funds
>> which they could direct through state channels to further
>> industrialization. The money often went directly to the state for use in
>> advancing an industrial policy. Both Taiwan and South Korea, having
>> state controlled banking systems were able to direct the funds as they
>> wanted. They also controlled outflows of money. They also make sure that
>> the foreign capital was not used up in an orgy of luxury imports. etc.
Doug inquired
>
>This seems to be the crucial point. Why is Korea different? Why was it
>development strategy pretty successful, where other countries have
>screwed up disastrously when trying regulated, protectionist policies?
>How was Korea able to allow a rapid increase in real wages and accumulate
>enough internally generated capital so as to avoid a debt crisis and
>avoid pricing itself out of world markets? And how did it get away with
>this in the political sense? Why didn't the US pry them open earlier?
>
Some uncomplicated factors that made S.Korea different are: (1) she began
with an aggressive import-substitution policy that initially targetted
consumer gods and relatively unsophisticated capital equipment that
subsequently fostered a gradual development of technological expertise.
Nations like Brazil, Argentina, and mexico on the other hand attempted to
target relatively capital-intensive captial goods but the lack of an
adequate skills-base, need for imported capital and technology, and scant
local demand prevented this policy from ever taking off. (2) By the time S.
Korea began a full-fledged industrialization campaign, she had already
undergone a serious land reform in which the ownership of farm land had
been made drastically equitable. (3) Also, there was a strong cadre of
educated workers in the economy (just like Taiwan).
Arvind Jaggi
[EMAIL PROTECTED]
(717) 291-3920
