The Miracle: The Epic Story Of Asia's Quest For Wealth (Book Review)

The Washington Post ^ | 4 September, 2009 | Steven Mufson

[OldSpice]

What makes an economy tick? What makes it grow?

In 1890, Japan's average income was only somewhat higher than Mexico's and lower than Argentina's. Yet a century later -- despite the devastation left by World War II -- Japan's average income was nearly three times as great as Mexico's, more than twice as great as Argentina's and only modestly lower than that of the United States. From the late 19th century to the end of the 20th, Japan's economy managed to grow twice as fast as Britain's. How does a nation do that?

Japan is not alone. In the early 1960s, South Korea was poorer than Liberia; 35 years later it was a member of the club of rich industrial nations, the Organization for Economic Cooperation and Development. Why did one nation transform itself while the other fell deeper into poverty and disarray?

...

One important point Schuman makes is that even though the Asian tigers are often lumped together in the minds of Americans, those nations took different routes to prosperity. Japan and South Korea protected their home markets, while Hong Kong and Singapore welcomed foreign investment and companies. South Korea nurtured its own unwieldy conglomerates, or chaebols, while multinationals took the lead in Singapore. India infused energy into its economy by controlling and shrinking its bureaucracy. And China's government under Deng interfered less in the economy, while Korea and Japan's governments interfered more.

[colorado tanker]

In 1890, Japan's average income was only somewhat higher than Mexico's and lower than Argentina's. Yet a century later -- despite the devastation left by World War II -- Japan's average income was nearly three times as great as Mexico's, more than twice as great as Argentina's and only modestly lower than that of the United States. From the late 19th century to the end of the 20th, Japan's economy managed to grow twice as fast as Britain's. How does a nation do that?

Because they all had market economies instead of the socialism tried in post-WWII Britain or the socialism-lite tried in Mexico and Argentina? Just a guess.

[RayChuang88]

Also, both Japan and South Korea had nothing to lose after wars ravaged both countries. People forget that thanks to Curtis LeMay's firebombing campaign, just about every major Japanese city within range of the B-29 Superfortress was destroyed--the only major exception being Kyoto and Nara, both cities because of their historical importance. (Indeed, in the Kansai region of Japan, it's only Kyoto and Nara where you can find historic buildings that predate World War II.)

As such, Japan and South Korea could literally rebuild its industrial infrastructure literally from scratch, with the result that by the late 1960's Japan had vastly more modern factories than most factories in the USA.