Category: Politics, Economics & Current Affairs

About six months ago, when I was in Japan, I made the observation that Japan seemed much less “depressed” than one would expect of a country that was in the throes of a two-decades-long economic downturn. I suggested we look at it as a “sustainable recession.”

Now, The Atlantic‘s James Fallows is on board. He seems to agree with me: not that he knows what I wrote. But I know what he’s writing, and in broad terms, he seems to back up what I was observing. He says that if Japan is a failure, it may be the sort of failure we should envy.

Japan may represent a future: where a society can come to terms with – and finally end – the fetishization of never-ending economic growth.

Someone named William J Holstein (to whom I was directed by Fallows) blogs about Asia extensively. He takes on The Economist‘s editors love affair with a doom-and-gloom analysis of the Japanese economy, head on. He begins: “It is positively surreal to read what the Economist is writing about Japan while actually visiting the country. There is a major disconnect.” Definitely – I’ve noticed this too, in my loyal consumption of the magazine’s content.

His conclusion identifies an ideological engine driving the magazine’s mis-analysis. I’m not sure I completely agree, but I do think it’s worth quoting at length, because, again, it recognizes that there are alternatives to a no-holds-barred, economic-growth-at-all-costs “free market” ideology.

Why is the Economist, a normally respected publication, so wrong about Japan? I think it’s because the Economist sees itself as the bearer of the free market orthodoxy. If Japan is facing “grim” conditions amid overall “gloom,” then the Economist’s ideology is correct. No nation can be advanced and sophisticated without embracing “the market.” But if Japan is, as I argue, a country that is managing itself very well without accepting the Anglo-Saxon version of capitalism, then the Economist’s ideology is faulty. The reform of embracing market reforms does not work for everyone. It is not universal. That very simple idea is what the lads at the Economist cannot allow to take root because it undermines their intellectual legitimacy. So they persist in their doom-and-gloom analysis of Japan–even if it does not even begin to square with the reality on the ground.

A final note, pertaining to South Korea: I personally think that Korea’s economic leadership is watching Japan very closely, and always has been. And I think the Koreans may recognize that Japan, more than, say, Europe or the US, represents South Korea’s “most probable future.” I don’t think that would be a bad thing, either. The main point: Japan is not the cultural or economic basket-case that the Western media likes to portray.

Hwang Jang-yeop (황장엽) recently died, I read in the news.  This man was the highest ranking member of the North Korean government ever to have defected, having done so in 1997.  He was notable as having been both Kim Il-sung's and later Kim Jeong-il's "ideology advisor."  In the 1970's, he was chairman of the North Korean parliament.

In fact, he was basically the key author of the Juche concept, which is North Korea's official state ideology (in opposition to Marxist-Leninism, Stalinism, or Communism, which are inaccurate terms often applied to the regime in the West).  Hwang Jang-yeop defected not because he'd become disillusioned with the Juche concept that he'd authored, but rather because he felt the North Korean regime was only paying lip service to it, and that the Kims (father and son) were in essence guilty of having implemented feudalism rather than any type of communism, Juche or otherwise. 

He was originally embraced by the South Koreans when he came over, but during the presidencies of Kim Dae-jung and Roh Mu-hyeon, with their "sunshine policy" toward the North, he was marginalized, as those governments made efforts to avoid antagonizing Kim Jeong-il.

South Korea is unique, and complicated.

Pentecostal: 30% evangelical Christian, with a strong pentecostal character to the evangelical churches.

Buddhist: 30~40% Buddhist, with at least 1000 years’ tradition of resistance to authority.

Confucian: that was the state “religion” for over 500 years, to the suppression/repression of all others.

Fascist: which of the Asian “tiger” economies isn’t at core, a remarkable – and somewhat depressing – realization of the fascist fantasy: state capitalism with majority-consensus-driven (and minority-oppressing) politics?

Republic: yes, the democracy seems to sort of work, here, although I’m personally convinced it’s a lot more fragile than many analysts seem to believe.

With a title like that, you will think I'm writing about Afghanistan, or Iraq.

But I'm not.  The U.S. has had a significant, continuous military presence in South Korea since 1950 – 60 years.  That makes our time in the middle east, so far, seem pretty minor.  Admittedly, once the cease-fire was signed with the North in 1953, Korea didn't have the kind low-grade, sustained civil war that U.S. troops have been having to cope with in those other countries.

Perhaps if we could have installed a cozily sympathetic, hard-ass dictator like Syngman Rhee was in South Korea in Iraq or Afghanistan, we could have reached a point where the U.S. troops were out of harm's way and a very long-term occupation would have been more feasible.  It's been more than clear, among the "nation builder" neocons, that Bush and company believed that they could achieve some kind of sustainable situation of this sort. 

But in today's geopolitical context, installing cozy, pro-U.S. dictators ain't what it used to be.  Witness how precarious Karzai's position is in Afghanistan.  He'd have been getting our unequivocal support if this were still the cold war.  

Actually, though, I don't mean to be writing about the these Bushian adventures.  I'm thinking about South Korea, and its love-hate, push-pull affair with the U.S.  I'm particularly disturbed by a recent spat that has erupted over the issue of nuclear power, nuclear fuel reprocessing, and related issues.  I was reading about it in the New York Times (q.v.).

Particularly relevant and important in that article is when it quotes someone named Mr Pomper:  “It is understandable why Seoul would be frustrated that India, a non-N.P.T. state, would be given this deal while South Korea, a loyal U.S. ally and N.P.T. member now in good standing, would face resistance from Washington.”  [NPT means "non-proliferation treaty"]

Why, indeed?  If the U.S. trusts South Korea enough to keep 30-40 thousand troops on the ground in the country, after 60 years, and under nominal unified South Korean command, at that, why not trust them to reprocess their own nuclear fuel? 

I'm not even sure the end of the article is entirely relevant – whether or not Seoul wants to build nuclear weapons isn't, and shouldn't be the issue.  Given the North's transgressions, it seems hard to justify – in terms of sovereignty and peninsular security – making a carte-blanche judgment against the South pursuing its own nuclear security, either via a U.S. "umbrella" (as it currently has), or via its own program (as it once briefly pursued in the 1970's).

I mean, if India and Pakistan and Israel get to keep their bombs, and Iran and North Korea can't be stopped from making theirs… that's a dangerous world.  Why not South Korea, too?  Let's all have bombs, together.  We'll all be super-safe, right?

But… seriously:  how do we stop this?  How do we take control of it?  Shouldn't we at least treat each other as adults capable of rational decisions?  That's all that South Korea is asking that the U.S do for them, I think, with respect to the nuclear fuel issue. 

I read in The Economist that the Samsung chaebol (business conglomerate) represents 20% of South Korea's GDP.  This is utterly stunning, if true.  But I find it plausible.  And if you add in the other major chaebol – groups like Hyundai, LG, etc., it must mean that the South Korean economy is essentially in the hands of a half dozen dynastic families.

I always instinctively knew this, but I think it's important to keep the fact in mind, when trying to make comparisons between Korea and other Asian economies like Japan, China, etc.  None of these other countries has a similar economic system, when looked at in this light.  South Korea's current chaebol-based economy most resembles Japan's pre-War system, with its giant zaibatsu.

Whether it's good or bad, I can't judge.  Certainly, right now, when it comes to "conventional" measures of economic growth and prosperity, it's "working."  The way in which South Korea has weathered the recent global downturn is a veritable miracle, given its reliance on exports.  But I can't see that it's going to keep working indefinitely – such concentrated power strikes me as dangerous.  Especially since nowadays, the chaebol have one of their own, Lee Myung-bak (former Hyundai exec), in the Blue House.