First published 1999 by Ashgate Publishing
Reissued 2018 by Routledge
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Copyright Ingyu Oh 1999
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ISBN 13: 978-1-138-32493-0 (hbk)
ISBN 13: 978-0-429-45063-1 (ebk)
The East Asian political economy has been very volatile. The dynamic images of production, growth, and success did not come without all its negative portrayals of corruption, dictatorship, popular dissents, military coups, and militant labour movements. Recently, the shackle of corporate bankruptcies amid affluence dominated global mass media that seemed intent on trying to cash in on someones sufferings.
At the end of the millennium, East Asia is ailing, confused, and even chaotic. Untiring spirits of growth and innovation, hardworking workers, peoples victory over dictatorship, and endless intellectual debates of real democracy and good society seem all but disappeared. The discourse of free market reform crept in peoples mind so quickly that even housewives are now talking about their banks BIS rates. Where did the chaebol and the keiretsu go, the agents of the past 40 years of continued success?
This book is by no means a lamentation of good old days when the agents of economic growth in East Asia, notably, the chaebol and the keiretsu, prided themselves in the unprecedented records of growth, profiteering, and exploitation. Rather, I am interested in explaining why growth and failure have occurred without major failures of the state policy regarding the chaebol or the keiretsu.
I posit that problems have been there from the heydays of development. Scholars seldom delivered the problematic side of it to the public, only talking highly of the economic success. Indeed, they called it a miracle. When the catharsis-engendering miracles turned out to be flimsy comedies, these statists began chanting Quo vadis? Or where did the strong state go?
The state is still there. Moreover, I contend that the strong state was certainly an important source of the ills of development. Pro-democracy movements in South Korea and pro-reform groups in Japan tried to highlight the problems of the strong state, not because they believed in the free market ideology but purely out of their sense of justice, a word that has been grossly elided and deliberately suppressed by the very strong state.
This book maps out the structure of the political economy of growth in South Korea and Japan. In so doing, I stress the state-business interaction. I call the developmental states in the two countries, the mafioso state.
The mafioso state is a central concept throughout this book. The concept is to capture the dynamics of the system that we know of as the East Asian model of economic growth. Dynamism comes from interactions between actors, and neither the state nor corporate actors are lame ducks in their vying for power in the political economy of each country. The result of the interaction was the chaebol and the keiretsu, two very different forms of interfirm relations that, nonetheless, achieved a single purpose political viability and economic success in a hostile political economic environment. It was the moment of Schumpeterian victory, the mafioso state conducing innovation.
However, the concept also explains, as I argue throughout the book, the process of the faltering of the keiretsu and the chaebol. I wanted to make it clear that these inter-firm relations continue to retain and utilize organizational flexibility as a way of coping with either internal or external sources of uncertainties. Organizational flexibility, indeed, is the strongest weapon with which the chaebol and the keiretsu will steer their ships through the hefty waves and storms. It is the moment of Marxian victory, the faltering of the mafioso state conducing capitalist domination.
An important caveat in reading this book is not to confuse Mafia or any other mob organizations with the mafioso state. Were living in a capitalist world where the informal economy still accounts for a substantial amount of the total gross domestic product. More appalling, however, is the deeper linkage between the informal sector and the state. The state is often involved in the economy as mafioso. The two countries in this book both have a state that has constantly assumed the role of the mafioso. Not only in these two countries, but also in many third world countries and former socialist countries the fondness of the mafioso state seems to be on the rise.
My first trial and error with the concept of the mafioso state dates back to 1995 when I was writing my PhD dissertation at the University of Oregon. Since then I made numerous trips to South Korea and Japan to further sophisticate the concept and model. Conference attendance and personal discussions with my colleagues substantially strengthened my points that I tried to convey in this book. It is they that made this book possible. Unfortunately, it is almost impossible to remember and record here all the names that have been significant in my intellectual journey to the mafioso states during the past five years.
In Chicago, USA, Burton Kendle and Jane Stedman were critical in helping me pursue my academic career. Young Hwan Kim and his wife provided me with shelter and food whenever I had to revisit the windy city. In Eugene Donald Van Houten served as my mentor and thankfully made me revise this manuscript more than three times. John Foster, Greg McLauchlan, and Paul Goldman read the entire manuscript and gave crucial comments. At the University of Oregon, Michael Dawson, Ho-Ill Lee, Recep Varcin, Josh Gold, and JB Zheng were (and still are) lifetime friends without whom I could not have even imagined writing a book on the East Asian political economy. Recep, who is now teaching at the University of Ankara, Turkey, kindly took up the project of gathering data on the Turkish mafioso state, and he coped with my stay at his place during my trip to his country. Josh on the other hand spent four years in South Korea, karma of ever meeting me. But he was always glad to see and host me in Pusan. Also, Id like to thank my Oregon students in the political sociology seminar, especially, Kevin ODonnell now at Bristol University and John Darland, who helped me clarify the mafioso state concept. In Champaign-Urbana John Lie has been a source of encouragement and valuable information for my project over the last nine years. He read the manuscript and kindly wrote endorsements along with pivotal comments. Johns priceless advice and pep talk during my ups and downs in completing this project deserves way more than my lip service. Ho-Won Jeongs camaraderie must be recognized. Busy teaching peace studies and editing a journal at George Mason, Ho-Won kindly replied to all of my academic queries.
