Statism, the Korea-US FTA and Ha-joon Chang, not necessarily in that order posted by Owen

Korea's favourite Neo-Keynesian economist/Cambridge professor Ha-joon Chang spoke at SOAS a couple of days ago and while I had problems with a lot of what he said, I must admit that he is a very entertaining speaker. The subject of his talk was 'Lazy Japanese and thieving Germans - does culture matter for economic development?', and was apparently based on a chapter in his forthcoming book, the title of which I can't remember. Actually, the first part of his talk was the best - he put up on the OHP a battery of quotations from British travel writers of the nineteenth and early twentieth centuries going on about how terribly lazy, untrustworthy, unproductive, irrational, emotional and bad at timekeeping the Germans and Japanese were. His point was to (quite rightly) rubbish the currently resurgent ideas in mainstream economics about the importance of 'culture' to development. He didn't deny the possible importance of 'culture' but tried to show that the ideas that cultures were fixed or that certain cultures were inferior to others were wrong. He made rather a good, lighthearted comparison of Confucianism and Islam to show, conclusively, that Islam provided a far better culture for development, in fact, quite definitely the best culture possible for capitalist development (I think his argument rested largely on the fact that the Prophet was a merchant).

My problem with his talk was that he just needed to be much harsher on all this stuff and call it what it is: racism. As one contributor in the Q&A pointed out, he gave far too much away and ignored the fact that sociologists and people in a number of other disciplines long ago dispensed with the catch-all and ultimately meaningless term 'culture' (well, meaningless other than as an ideological-rhetorical device used largely to disguise good old-fashioned racism). Perhaps even worse than this was the fact that Chang never even came near mentioning what might be some of the actual reasons for the differences in development around the world. I must admit that I haven't read any of his books, so it is quite possible that he does deal with this sort of stuff, but the idea that you could give a talk critiquing all this rightwing 'culture' nonsense without ever mentioning things like imperialism, historical and geopolitical conditions or the international division of labour just seems very odd to me.

Chang is perhaps the leading figure of what Martin Hart-Landsberg, Jeong Seongjin and Richard Westra call the "Left Keynesian/statists" in the introduction to their new book Marxist Perspectives on South Korea in the Global Economy. Although I've only got as far as the introduction, I can't recommend this book highly enough for anyone interested in South Korea, East Asia or development more generally (I'm afraid it's one to get from the library, considering the cover price of 55 nuggets). The introduction does a great job of demolishing not only the neoliberal response to the Asian Crisis of 1997, but also the statist response, which, as a near perfect mirror image of the former, blames liberalisation and financialisation in the 1990s rather than the inherent structural problems of capitalist accumulation.

One rather salient point that the authors make reflects on the way in which the statists, in their eagerness to return to the 'good old days' of state planning/state capitalism allow the boosters of the old authoritarian torture-happy regimes (called the 'New Right' in South Korea) in by the back door:

Left Keynesian/statists tend to blame neoliberal financialisation for Korea's growing social "polarization" (now a buzz word in Korea), thereby identifying the problem with a particular state strategy rather than capitalism itself. Chang and Jung (2005) even go so far as to deny that the rapid growth achieved during the Park Chung Hee regime was underpinned by extreme worker exploitation and generated its own significant structural polarization through its promotion of a chaebol-driven, export-led growth process. Crotty and Lee (2005) advance a similar argument, claiming for example that "what is needed now are... policies... designed to modernize the state-guided system that achieved the thirty five year Korean economic 'miracle'." Although unintended, this perspective plays directly into the hands of an increasingly popular "New Right" movement that is aggressively promoting the virtues of the viciously anti-democratic, anti-left, Park dictatorship.[p16]

This brings me round to the negotiations for an Free Trade Area between the US and South Korea, which must officially end by April 2, constrained by a rather hasty timetable determined by the desire of the US government to get the resulting agreement ratified by congress in good time. Of course, Chang and a number of other Korean economists with statist leanings have criticised the proposed FTA on various quite sensible grounds (largely that it makes loads of concessions to US capital without getting too much in return), but the real opposition to the FTA has been on the streets, as I've tried to document before here and here.

The response of Roh Moo-hyun's supposedly left-liberal, mildly anti-American (in reality anything but, but that's another story) government has been to give its riot police something of a free hand to deal with the protests led by unionists and farmers that have accompanied the trade negotiations wherever they have gone. In the protests last weekend against the most recent round of negotiations, taking place in Seoul, the brutality finally seems to have garnered some attention, perhaps because, (horror of horrors) the police started beating journalists. Apart from the random beatings beloved of riot babylon the world over, another favourite tactic has just been to deny all requests for demonstration permits and thus outlaw protest altogether.

Police beating journalists and obstructing legitimate protest... of course this isn't the bad old days of Park or Chun's authoritarian, developmental state, oh no, this is the technocratic neoliberal state at work, using every means it can to push through an unpopular trade deal and stifle all dissent, and all in the most democratic way imaginable. Funny, though, how it looks suspiciously similar up close.

The good news is that the FTA has become a major political issue in what is a presidential election year in South Korea, and Roh is starting to wobble a bit (vacillation is his speciality). But it seems almost certain that the deal will go through, since the Korean state bureaucracy, big capital and all the major presidential candidates are committed to it, for their own reasons. One such reason must be the potential such a deal offers for further disciplining the South Korean working class, already partially on the defensive after a troublesome couple of years for the main union federation (the KCTU). Despite the protestations of people like Ha-joon Chang, the statist model has been consigned to the dustbin and workers should feel no nostalgia for a system that made them the sacrificial offerings for rapid industrialisation. The task in hand is to fight against neoliberalism for something that's really better, and who knows, perhaps twenty years on, another hot summer like that of 1987 will be on the cards this year.