sign in sign up
<<
Home , Free trade

ENCUENTROS ISSN 1692-5858. No. 1. Junio de 2011 • P. 69-82 Is Free a Culture-Bound Ideal? The Philosophy of Free Trade and Its Applicability in East Asia ¿Está ligada la cultura al pensamiento de libre comercio?: su filosofía y aplicabilidad en el Este de Asia

Tae Jin Park [email protected] West Virgina State University

Abstract

Proponents of free trade, especially theorists known as “neo-liberals,” preach free trade as a global ethic and emphasize four great benefits from it: 1) reciprocal ; 2) individual ; 3) political ; 4) international peace. This review article will examine the validity of these assumptions in East Asia. Although many East Asian states are great beneficiaries of the liberal system that has developed since the end of II, their political and economic developments generally do not conform to Western expectations because their cultural values are still “Confucian” and their political relied heavily on state leadership. The philosophy of free trade is largely incompatible with East Asian historical experiences. The credibility of the free trade doctrine in East Asia comes from the power and influence of the U.S. rather than from the usefulness of the free trade doctrine.

Key words: Free trade, neo-, East Asia, Confucianism, , democracy.

Resumen

Los defensores del libre comercio, especialmente los teóricos se conocen como “neo-liberales,” predicar el libre comercio como una ética global y hacer hincapié en cuatro grandes beneficios: 1) crecimiento económico recíproco, 2) la libertad individual, 3) la democracia política, y 4) la paz internacional. En este artículo de revisión se examinará la validez de estos supuestos en el Este de Asia. Aunque muchos países de Asia Oriental son los grandes beneficiarios del sistema de comercio internacional liberal que se ha desarrollado desde el final de la Segunda Guerra Mundial, su evolución política y económica en general, no se ajustan a las expectativas de Occidente debido a sus valores culturales, siguen siendo “Con- fusas”, y su economía política basada en gran medida en el liderazgo del Estado. La filosofía del libre comercio es en gran parte incompatible con estas experiencias en Asia. La credibilidad de la doctrina de libre comercio en Asia del Este viene del poder y la influencia de los EE.UU. en lugar de la utilidad de la doctrina de libre comercio.

Palabras clave: libre comercio, el neoliberalismo, Asia Oriental, el confucionismo, el capitalismo, la democracia

Fecha de recepción: 15 de febrero de 2011. Fecha de aceptación: 16 de mayo de 2011. 69 ENCUENTROS Introduction Unfortunately, free trade remains as a methods (Lavoie, 1994). The standard theory and no nation-state practices a Western assumptions and conceptual The philosophical rationalization of “free pure form of free trade with another. In tools are often inadequate in offering trade” was a characteristic element of a sense, free trade is a retroactive and useful analyses and advices to a non- classical economic thoughts that ori- anachronistic belief because it is against western state, because the implicit values ginated in 18th century Europe. Vocal the increasing role of the state which has relevant to capitalism, as defined in the defenders of capitalism today, especia- been one of the most salient trends in West, are not conductive to many non- lly theorists known as “neo-liberals,” modern history. Harvey tells that one Western cultures. This is particularly advocate free trade as a global ethic by of the most characteristic attitudes of true in East Asia where “Confucianism” emphasizing four great benefits from free neo-liberals is that they take “all forms had reigned for centuries as the stan- trade: 1) Reciprocal economic growth; of state intervention” as threats (Harvey, dard code of ethics on the individual, 2) individual freedom; 3) political de- 2007, p. 5). , an iconic the family, the state, and the world. mocracy; 4) international peace. But neo-liberal theorist, indeed emphasized Although Confucianism has developed these benefits are not conspicuous in that “ is an end in in each country as a distinctive form of view of empirical evidence outside the itself” and also “an indispensable means national tradition, it still remains as the Western world, especially in the Latin toward the achievement of political free- common and most powerful cultural American and African cases. East Asia is dom” (Friedman, 2002, p. 9). As Plehwe resource that conditions a set of moral a region contended by both proponents (2009) points out, this neo-liberal belief in values for East Asian elites. It serves no and opponents of the neo-liberal theory. personal freedom, free- capitalism, longer as a formal but as an Such East Asian countries as , South and is fairly well implicit cultural context for East Asians Korea, Taiwan, , and China are supported in the European continent as in varying degrees. Therefore, in order to indeed great beneficiaries of the liberal well as in the Anglo-American world. assess the applicability of the free trade international trade system since the end However, this widely acclaimed theory theory in East Asia, it is necessary to of World War II. Yet, their developments on free trade in the West is subjected to examine the compatibility between the do not necessarily conform to the expecta- severe criticisms in many developing Western liberal assumptions on free tra- tions of Western theorists. Why did Hong countries. One reason is, as Neff (1990) de and the Confucian cultural values in Kong, the ’s showcase pointed out, that almost all of successful East Asia. This approach can help clarify for free trade, remain without political national economic developments had why a liberal economic theory cannot be representation until the British left in been “economic nationalist” in character made sound in East Asia and elsewhere 1997? Why does Singapore, arguably and, therefore, developing countries without serious reservations on cultural a most successful modern state on free usually suspected the logic of develo- and historical differences. trade policy, remain so authoritarian po- pment based on free trade and private litically? Why does the People’s Republic investments from developed nations. The Economic Rationale of Free of China, the world’s biggest one-party Trade and East Asia’s Economic communist state, maintain an economy Furthermore, is one of social Growth more open to foreign capitalists than most sciences least sensitive to the question other East Asian states, including such of cultural values and diversity, partly According to the classical economic view, U.S.-sponsored capitalist because it mainly seeks to find gene- free trade would promote a fair share as Japan and ? ral theories and focus on quantitative of economic benefits for each trading 70 ENCUENTROS partner in accordance with the laws of the other American republics was due protectionist, because they maintained the division of labor and comparative not to an but primarily relatively low rates compared to the advantage. But historical evidence of- to its well-managed . This other developing nations, employed a ten defies this assumption. Therefore, view is supported by Chang (2008) who unilateral policy to promote both modern advocates of free trade rather effectively argues that all the large, advan- and , and played a major role insist that, though some countries may ced nations with relatively liberal trade in promoting the current fail in free competition, freer trade cau- policies today, including the U.K. and the (Irwin, 2009; Sally, 2008). But, according ses at least a net benefit for the world’s U.S., had carefully protected their infant to Shafaeddin (2005), East Asia was rather economy (Irwin, 2009). Or they argue industries until their industries became an exceptional case in that industrial that countries with liberal trade poli- competitive enough to take advantages growth was clearly linked to the growth cies grew faster than countries with of foreign trade. His conclusion is that of trade. In most Latin American and Afri- protectionist policies (Sally, 2008). It is rich countries’ liberal trade policy is not can states, trade proliferation itself did generally recognized that efforts for trade the cause of their economic growth but not cause a sustained industrial growth. since the end of World War the effect of it. This conclusion helps What particularly distinguished East Asia II have contributed greatly to the econo- validate a widely shared belief among from the other developing regions was a mic growth of many nations (Findlay & critics of globalization that international strong state supervision of industry and O’Rourke, 2007). The current U.S. trade mechanisms like the IMF, the World trade from the early stages of , despite protectionist elements in Bank, and the WTO are in effect tools of development. In their developing stages, it, pursues free trade in the sense that it multinational of rich coun- none of East Asian states diminished state defends a trade system favored not by tries to prey on less developed markets power through budget cuts, economic nationalists but by low-cost in the name of free trade. Stiglitz (2002), or , though they usually producers in and out of the country. The a former economist, agreed complied with U.S. demands for tariff and economic growth of East Asian states in that the Western hypocrisy of requiring monetary adjustments. Japan was the first the past six decades cannot be separated poor countries to remove trade barriers notable case for this. Referring to Japan’s from this liberal trade policy of the U.S. while maintaining their own barriers postwar bureaucratic guidance for heavy through various political measures was industries, some observers recognized However, the extreme diversities and a main reason why most poor countries Japan as a distinctive form of capitalist discrepancies in economic development did not get the promised benefits of state (Murakami, 1987; Bernstein, 1997). in this world tend to defy any sweeping globalization. Similarly, South Korea’s economic success conclusion. The Latin American cases was attributed to the five-year-plans generally do not support the neo-liberal The debate on free trade and protec- which were pushed by Korean bureau- logic of economic benefits from free trade tionism gets more complicated when crats against U.S. advices for economic (Grandin, 2006; Barboza & Trejos, 2010). it comes to the question of whether or (Brazinsky, 2007; Kim What is often obscured in the neo-liberal not the rapid economic growth of East & Leipziger, 1997; Cho & Kim, 1991). discussion is that the U.S. had maintained Asian countries like Japan, South Korea, Taiwan also pursued a state-led economic a most protectionist policy among large Taiwan (ROC), Singapore, and China development (Dahlman & Sananikone, countries for a long period. As Galeano (PRC) was due primarily to trade libe- 1997; Aberbach et al., 1994). A liberal (1973) indicated, the U.S.’s economic ralization. Advocates of free trade argue attitude toward trade emerged in these success from the 19th century relative to that these Asian were not states as their industrial growth reached a 71 ENCUENTROS certain level of confidence and maturity. and ideologically biased.” He characte- and China after Mao have emulated the Trade was certainly a major factor that rized the American problems as follows: authoritarian model of Japan in which the facilitated East Asian industrial growth state on economic decisions for but was not the prime cause of it. Needless to say, there is a great deal long-term national development in fact of self-deception and ideology in obstructed the development of a genuine However, instead of fully recognizing the American lack of attention to the civil society. Japan and its emulators in the central role of the state in East Asia’s nature and power of the state. … Not East Asia are mercantilist states fueled economic growth, the World Bank has all American academic economics by an , not capi- given obscure assessments on it. The and political science is ideological, talist states in the American definition. World Bank has published several special but the stress on theory rather than But Americans, according to Johnson, studies on East Asia’s economy since induction tends to give preference to identified Japan as a same kind of liberal 1993. The first study in 1993 maintai- ideology masquerading as theory. A society as theirs because they needed ned that “it is very difficult to establish good example is the fad in political to defend the orthodoxy of free-market statistical links between growth and a science called “rational choice” theory. capitalism and win the in specific [state] intervention and even Its roots are economic determinism, East Asia against the more formidable more difficult to establish causality [of a belief in the withering away of the ideological enemies. According to this East Asian developments]” (World Bank, state, and other recently refurbished view, the American theory on free trade 1993, p. 6). A World Bank report in 2007 neo-Marxist propositions. Its popu- is more an ideological doctrine than an admitted that the concern about East Asia larity reflects the desire to see an intellectual method. in the 1993 study was “whether the results idealized conception of the United yielded by government intervention are States as a universal model for other Until the Asian Financial Crisis of 1997, better than those provided by unfettered countries—an aspect of American most analysts had agreed on a realist markets.” Yet this report also held that “it hegemonism—and to ward off the view that the key to East Asia’s econo- remains difficult to draw general policy challenge of Japan and its emulators as mic growth was the state rather than the implications,” although “small policy different and perhaps more effective market (Cohn, 2005). A study sponsored interventions may have large effects” forms of . Enormous by the World Bank had concluded in 1997 (Gill & Kharas, 2007, p. 48). This attitude efforts have been made to try to force that “the core of development success echoed with the neo-liberal trade theory Japan to fit the categories of rational in East Asia has been pragmatic policy championed by the “Chicago School” choice theory and to define the Japa- making—meaning, most importantly, economists who elevated free trade as nese state out of existence (Johnson, the relative absence of ideology and the an American political ideology. Thus, 1995, pp. 100-101). willingness to repudiate failed policies” Herman once criticized the Chicago (Leipziger & Thomas, 1997, p. 3) Some School for “the corrupting influence of In Johnson’s opinion, the politico-econo- preferred to characterize East Asia’s ideology and the abuse of traditional mic developments of East Asian states system as a new paradigm (Boyd & Ngo, scientific method” (Herman, 1995, p. 34). in the postwar era followed either the 2005; Rowen, 1998; Wade, 1990). Howe- According to Johnson (1995), Americans Leninist-Stalinist totalitarian model or the ver, analyses after witnessing the Asian in general failed to grasp the nature of Bismarckian-Meiji authoritarian model Financial Crisis and Japan’s long-drawn East Asia’s developments because “their rather than the Anglo-American liberal recession propose a compromised view social science is parochial, acontextual, model. South Korea, Taiwan, Singapore, that East Asia’s state-sponsored capita- 72 ENCUENTROS lism was effective mainly in a develop- to link economic growth to Confucia- or not, it from the West. The theory that mental stage. Overholt (2008) therefore nism almost disappeared after the Asian rationalized commerce as an autonomous holds a view that, although East Asian Financial Crisis of 1997, many in the entity and profit-making as a value in nations are indeed characterized by a West still cherish their theory on culture itself is historically a very recent and strong state leadership, they also have and growth. This cultural discourse in peculiar idea (Heilbroner, 1972; Cox, respectively moved toward democracy the West serves as an alternative to the 1964; Polany, 1957). Although such wri- after a period of developmental autho- orthodox view that portrays capitalism ters as Hugo Grotius and Emmerich de ritarianism. Free-market theorists yet as a universal force cutting cross all cul- Vattel had recognized the freedom of tend to equate East Asia’s bureaucratic tural boundaries. Both views tell the two trade as a natural right or of all interventions to ad hoc measures for sides of the same coin, as they attempt nations, the glorification of free trade as a rapid growth and continue to downplay to glorify free- either transcending international principle was the central role of the state in East Asian as a universal system or at least as a a British invention since development in the hope that East Asia’s superior culture. One view validates it (Irwin, 1996). ultimate path would converge into the in absolute terms and the other does the established Western model. same in relative terms. The liberal notion of free trade in British moral philosophy has no corresponding Free Trade as a “Universal” W. R. Mead (2007), a historian in line of elements in Confucianism that governed Concept and Confucian Values the neo-liberal thinking, mixes both views the moral thinking of East Asian elites in East Asia in an obscure manner. According to him, for much of their history. China’s ancient the idea of an invisible hand had been Daoism can be linked to the notion of Both the neo-liberal defenders of free- a pervading cultural norm in English laissez-faire but its influence on state market capitalism and their critics tend societies for centuries before the idea affairs in East Asia was marginal. For to dismiss culture as a minor factor for was applied to any concrete economic years, the zealous ideologues in the West economic development, as the focus of thinking. Thus, the philosophy of free who identified themselves as human their debate is usually on the roles of the trade and liberal capitalism is a cultural activists vainly attempted to find state and private institutions. Those in product of the Anglo-American world, some relevant concepts and practices in the U.S. and Europe who view culture which was also implied in the larger Confucianism that might support their as a key factor of economic development cultural context of the West as a whole. claim of the universality of Western liberal tend to relish questions like how the He yet holds a view that free-market concepts. Their desire was to discredit the inferior cultural values of many non- capitalism is a universal force in hu- communist rulers in China and convert Western societies conditioned them to man history and Anglo-Americans have the Chinese people to the Western libe- fail in establishing such a wonderful been more culturally and intellectually ral political ideology by equating some system as liberal capitalism in the West adaptable to this universal force than elements in the Chinese tradition to the (Harrison, 2006; Harrison & Huntington, the others. But this kind of attempt to articles of the Western faith. Unfortu- 2000; Landes, 1999; Jones, 1981). Their line up human affairs of the world along nately Confucianism, although it was Asian counterparts once advanced a a single ideology obscures the simple one of the most sophisticated systems of theory that Confucianism was a key historical fact that capitalism, as defined ethics in pre-modern history, has only source of East Asia’s economic growth. in the West, did not exist in non-Western few elements corresponding to those of Although this seemingly absurd attempt societies before they learned, willingly Western liberalism. Both Confucianism 73 ENCUENTROS and liberalism are humanitarian, secu- Secondly, Confucianism degraded bakufu – had maintained a very restricted lar, and political-oriented in nature, but mercantile classes as social parasites trade policy until they were forced to the concept of the “right” as a ground of low morality. Confucianism was a open trade relations by Western powers principle of the individual’s freedom and conservative philosophy of an agra- in the 19th century. entitlement is absent in Confucianism rian society where the self-sufficiency of (Chang, 1998; Peerenboom, 1998; Henkin, farm communities was a norm and the Fourthly, the Confucian view of internatio- 1998). Therefore, the concept of free trade, commercial interdependency among di- nal relationship was entirely different from as defined in the West, cannot be found fferent countries was considered neither the Western view of it. Reflecting the Con- in the Confucian tradition. Furthermore, essential nor desirable. Thus, all three fucian rule of hierarchical interpersonal in terms of ethical implications, free trade major East Asian countries – China, Ko- relationships, Confucian states had taken a belongs to the less attractive Western con- rea, and Japan – honored the Confucian hierarchically-structured interstate system cepts from a Confucian point of view. A social hierarchy that placed for granted. In this system, China was brief review of the traditional Confucian at the bottom of society below scholars, the “central state” or “middle kingdom” attitudes on political and economic affairs farmers, and artisans. In this Confucian and peripheral states remained as China’s will help demonstrate how culture-specific world, although large cities existed and “vassal states.” China was supposed to the idea of free trade is. commerce prospered, the European-style be economically self-sufficient and trade “bourgeoisie” class did not emerge as with vassal states or lesser foreign states First of all, Confucianism supports a powerful social force. This deliberate was legitimized in terms of the Son of neither the logic of nor degradation of the mercantile forces Heaven’s boon to them rather than of any profit-making by commerce as a legi- characterized the economic nature of economic ground. Officially, trade in East timate way of personal advancement. the Confucian Civilization (Needham Asia was not an economic act for mutual More than any other ancient philoso- et al., 1986; Gernet, 1962). benefits among equals but an exchange phies, Confucianism emphasized social of gifts as a part of diplomatic “rituals” duties over personal rights and social Thirdly, Confucianism promoted an iso- in East Asia known in the West as the harmony over personal freedom. The lationist worldview. The divide between Chinese tributary system (Fairbank, 1942, state in this culture was considered not an the “civilized” and “barbarian” regions 1968). This system was a stark contrast arbiter or balancer of competing groups was certainly not a unique view held in to the Western international system that but a center of extended families. Even China. However, unlike the Christian developed on the principle of the formal , who has been considered the and Muslim views of the world, the Con- equality among states, which reflected the most “liberal-minded” of all Confucian fucian view did not promote activities ideal of egalitarian relationships among thinkers, explicitly rejected the notion abroad for cultural assimilation of the individuals. Accordingly, the concepts that one should run the state on the basis “barbarians.” Throughout history, the like the balance of power, alliance, com- of utilitarian calculations of benefit and Confucian states fought against foreign petition, and progress were practically harm (Graham, 1989). The liberal poli- systems brought by steppe nomads and absent in the traditional Confucian view tical thinking that accepts competition maritime traders who preached the be- of the world (Li, 2002). driven by self-interests as a ground rule nefits of open trade. Not surprisingly, all of human behavior and institutional three major last Confucian dynasties in Confucian values are almost opposed function has little or no relevance to the East Asia – China’s , Korea’s to the values implicated by Western Confucian thinking. Joseon dynasty, and Japan’s Tokugawa liberals. This does not necessarily mean that Confucianism itself is hostile to ideas can be adjusted to generate some political democracy, and international liberalism. Rather, it simply tells that distinctive attitudes and possibly diffe- peace. Their assumption is that free trade, the way of thinking and prioritizing rent perceptions of the reality. As one a form of personal freedom from arbitrary moral values could be so different in observer points out, “the Chinese do not state intervention, is good in itself, and a different culture or civilization. One understand the terms of Western libe- a society of free individuals will lead to may then question whether or not the ralism in the same way that Westerners political democracy, and democracies practically extinct Confucianism still understand them” and, therefore, “[g] will in turn promote as affects East Asian elites’ political and lobalization in the neoliberal sense is not economic interdependence of nations will economic thinking. No country takes something envisioned by the Chinese, neutralize interstate conflicts. This view Confucianism as a formal ideology and who view it differently” (Tian, 2009, has its roots in a host of great thinkers few Asians today read Confucian classics. pp. 519-520). It is increasingly recogni- like , Adam Smith, David Even if Confucian values still affect many zed that the Confucian culture is what Ricardo, , , East Asians in the realms of familial and makes East Asians perceive the realities and . Neo-liberals also interpersonal relations and matters like somewhat differently from Westerners added a theory that democracies based education, they almost ceased to function (Nisbett, 2003; Sorrentino et al., 2009). on liberal trade policy are more peaceful as practical guides on political economy. Culture as such not only shapes the than autocracies and less likely to go to As K. D. Kim concluded, “Confucianism mode of thinking but also affects the war against one another (Irwin, 2009; of any kind, whether orthodox or reform- styles of management, leadership, le- Graeff & Mehlkop, 2008; Weede, 2006). minded, historically was not the spiritual gitimation, institutional organization, This moral justification of free-market or ideological in the initial stage of East decision-making and problem-solving capitalism as an underlying force for Asian modernization” (Kim, 1994, p. (Lewis, 2007; House, 2004; Hofstede, democracy and world peace is not yet 98). Some observers of China’s economic 2001). The administrative style in East fully tested by historical evidence, though performances in recent years (Herrmann- Asia, for example, is a Confucian legacy the proponents of this theory frequently Pillath, 2010; Little, 2009; Chen, 2007) (Chau, 1996). Both Confucianism and highlight the danger of economic nationa- attempt to identify the possible com- liberalism are particular cultures in this lism and regionalism by referring to the patibility of Confucian thoughts with sense. But every domineering culture rise of the totalitarian states in the 1930s. modern economic principles. But this with great transnational influence tended kind of attempt may simply encourage to claim a universal authority over the The liberal logic that links free trade to rather a nonsensical historical imagi- world beyond its cultural boundaries. If personal freedom may be an odd rationa- nation. Whether Confucian sages over Confucianism was such a culture to East le in East Asia where there is no tradition two thousand years ago may have loved Asians in the past, liberalism is such a of Western-style individualism. Most of a makes little sense. “foreign” culture to them at the present. political and social institutions in East Asia are designed for the promotion of It is, however, possible to assume the The Moral Rationale of Free social harmony over personal freedom. Confucian impact on the cognitive styles Trade and Its Applicability in Japan, the most well developed country or cultural contexts of East Asian thought. East Asia in Asia, is the most often-cited example Confucian values indeed function in of how the seemingly Western-style po- East Asian societies as the implicit cul- Neo-liberal theorists spread a view that litical and legal institutions function in a tural contexts to which foreign and new free trade promotes individual freedom, different cultural realm. Japan’s consti- 75 ENCUENTROS tution, written by Americans over sixty tern liberal societies” and thus “America end or an ideal. If Singapore was a case years ago, is a package of Western liberal should not foist its system indiscrimina- that free trade could flourish under an concepts and has often been considered tely on other societies where it would authoritarian political system, British more liberal than those of many Western not work” (Lee, 2000, p. 491). He was was a case that free trade did states. However, individualism and self- particularly offended by the ignorance not even require political representation. expression continued to be implicitly of “American liberal academics” who China (PRC) is another clear example equated to selfishness and immaturity in criticized Asian countries on “human that trade liberalization has little to do Japan (Reischauer & Jansen, 1995). If the rights” issues. Although he was the archi- with political liberalization or any other exposure to Western values for decades tect of Singapore’s free trade policy, Lee serious in East Asia. What in almost every level of Japanese society expressed a rather unorthodox opinion motivated Chinese leaders’ decision to did not bring any significant change to on free-market capitalism as follows: join the WTO in the late was a Japan’s social values, trade had much desire to strengthen the Chinese state less impact, if any, on them. Japanese We believed in , in fair shares through economic incentives, not a belief social values, which are basically Con- for all. Later we learned that personal in market liberalism (Pearson, 2001). fucian, do not presume an adversarial motivation and personal rewards were relationship between the state and the essential for a productive economy. Does free trade lead to international peace individual. This communal attitude is However, because people are une- because it equalizes playing fields for more pronounced in China and Korea qual in their abilities, if performance various countries and also necessitates where Confucian heritages are deeper. and rewards are determined by the international cooperation required to marketplace, there will be a few big preserve the mutual economic interde- The logical extension of liberal assump- winners, many medium winners, and pendency? After the collapse of the Soviet tion that free trade or trade liberalization a considerable number of losers. That bloc, some scholars offered quantitative would lead to democracy or political would make for social tensions becau- data to support their “liberal peace” liberalization has little empirical evidence se a society’s sense of fairness is offen- theory that democracy and free trade in East Asia. Singapore is perhaps the best ded. A competitive, winner-takes-all served to promote international peace example for this discussion, because it society, like colonial Hong Kong in (Oneal & Russett, 1997; Bremer, 1993). identifies itself as a “Confucian” society the 1960s, would not be acceptable In response to criticisms of their skewed and yet has pursued the policy of free in Singapore (Lee, 2000, p. 95). data, they later conceded that liberal de- trade more successfully than any other mocracy does not necessarily guarantee country in the world. For years Singapore According to the above statements, the peace. After reassessing this liberal peace has been at the top of the World Bank’s founder of a most successful free-trade theory, Hegre (2004) argues that advan- rankings on the “ease of doing business” state in modern times did not share the ced democracies do not fight among and “trading across ” (World orthodox view on free trade with Wes- themselves but they may be belligerent Bank, 2010). But Singapore categorically tern disciples of Adam Smith. To Lee, to non-democracies and thus no more rejected liberal concepts on political and the goal of Singapore was to promote peaceful overall than non-democracies. civil rights. , the father of social harmony with ethical principles Underdeveloped countries, whether or modern Singapore, argued in his memoir derived from Confucianism. In this case, not they pursued democracy and libe- that “there are fundamental differences free trade was a means of the state to ral trade, tend to succumb to conflicts. between East Asian Confucian and Wes- strengthen national economy, not an He therefore concludes that “economic 76 ENCUENTROS development is a crucial precondition and vassals. The value of trade itself had tanschauung worldview” (Scott, 2008, p. for a liberal peace” (Hegre, 2004, p. 4). never been an organizing principle of this 3). To them, both the British-led Western This conclusion does not seem to help Confucian interstate system until the 19th intrusions in China in the 19th century validate the usefulness of neo-liberal century. In European history, trade may and the Japanese moves to fill out the theories for the Third World. have been reckoned as an alternative to regional power vacuum in the first half of interstate conflicts. In East Asian history, the 20th century were merely imperialist In reality, history shows that the “ope- however, trade had little or nothing to aggressions. Free trade indeed has often ning” of new overseas markets was do with international peace. served as an ideological arm of Western usually done by means and most since the 19th century. of societies resisted the opening in order The breakdown of the Sino-centric in- to preserve domestic orders. It was once ternational system in East Asia began Western ideas and institutions today ori- a common assumption that unregulated with the “ War” in China in 1839- ginated from Europe’s unique historical commerce among nations would create 42, after which Britain forced China to circumstances. Such Western experiences a cause for interstate conflicts. From the accept British rights to have free access cannot be exactly replicated elsewhere. 15th century until the mid-20th century, to Chinese markets with extraterritorial In his study on the formation of Euro- Europe was indeed a region of the cons- privileges and minimal tariffs on their pean states, Tilly (1992) warned of the tant rivalries and conflicts among various . Free trade was a force behind this futility of Western attempts to apply their states. By contrast, East Asia prior to the Opium War (Fairbank, 1992; Beeching, state-building models for non-Western mid-19th century had a less dynamic but 1975). For nearly a century since then, societies. Emphasizing the fact that mo- more stable international system in which China had been technically an open trade dern Europe’s relative homogeneity was China assumed the role of the overlord zone for great powers under the so-called a result of the wars and annexations in in the region and its neighbors remained “unequal treaties.” But this open trade a single geographical region for a mi- as its supposed vassals. As Henry Kis- system did not bring economic growth llennium, he predicted the much greater singer aptly characterized, “China was or democracy or international peace diversity of state systems worldwide in not then concerned with the equilibrium to China. It instead drove China to a the future: “Given the diversity of state in Asia, for it was the equilibrium itself” state of perennial economic bankruptcy formation within Europe, we have no (Kissinger, 2001, p. 125). Whereas some and political instability exploited by fo- reason to anticipate a single trajectory five hundred states in Europe around reign powers. The Chinese state restored of change” (Tilly, 1992, p. 196). But the 1500 were reduced to about twenty by its fully sovereign status only under a U.S. has advocated, in line of the neo- 1900, the key states in East Asia remained communist system after the so-called liberal logic, the uniform institutional essentially same during the same period “century of humiliation.” In view of development and the liberal peace more (Kang, 2003). This Sino-centric interna- this, it is absurd to expect that Chinese assertively than any other country in the tional order was a political organization leaders may associate the notion of free world (Quinn & Cox, 2009). The East of economically self-reliant states with trade with peace and prosperity in their Asian response to this superpower advo- no expanding trade system compatible collective memories. Rather, as one his- cacy has been courteous and deceptive, with that of Europe. If there was any torian points out, Chinese memories of as one observer implies: overarching principle of this interstate the century of humiliation “cast a long system, it was the Confucian notion of shadow that continues to affect Chinese Democracy, the , individual harmony and reciprocity between lords foreign policy, strategic culture, and wel- freedom, laissez-faire economies and 77 ENCUENTROS other central rhetorical principles of Conclusion oversight is often found particularly the past two hundred years of Anglo- in the U.S. where the general attitude American order have seemed to win In East Asia, free trade or trade liberalism toward non-Western nations is charac- acceptance throughout much of East is considered practically no more than terized by an overly ideological line of Asia. It is possible, however, to see an optional economic strategy to streng- thinking. In practice, the neo-liberal this as token deference to American then national power. This is because the theory of free trade serves more often power and pressure, while Confucian region’s moral and social foundations as an American missionary ideology to administrations perform largely ac- have little to do with the culture that the world than as an intellectual device. cording to traditional values (Little, generated the logic of free-trade capi- Its credibility comes from the political 2009, p. 68). talism. Although the ultimate impact and economic power of the U.S. rather of capitalism and trade liberalism on than from the usefulness of its views. The admiration of American ideals societies in East Asia is only a matter of East Asian allies of the U.S. thus extol among many East Asians is an attitude speculation, the Western liberal thinking American ideals and tend to identify shaped by international relations rather appears to be an inadequate tool for themselves as ideologically liberal ca- than a reflection of their social desires. explaining the underlying forces in East pitalist democracies in order to enjoy One may wonder how this rather cere- Asia’s development. The neo-liberal phi- benefits from the American power and monial conformity to the ideals of a great losophy does not take a lineal approach prestige. In view of this, the doctrine of power across the Pacific can last long that separates economics from , free trade is likely to be honored in East without historical or cultural imperatives but it often becomes oblivious to the Asia, at least nominally, as long as the to sustain it. deeper aspects of human conditions that U.S. exercises great power in the region are rooted in culture and history. This as a proponent of the doctrine.

78 ENCUENTROS References

Aberbach, J. D., Dollar, D., & Sokoloff, K. L. (Eds.). (1994). The role of the state in Taiwan’s development. New York, NY: M. E. Sharpe. Barboza, G., & Trejos, S. (2010). Economic growth creation or diversion?: The record of trade agreements in . Retrieved on March 22, 2011, from http://www.shsu.edu/~eco_hkn/conference2008/SHSUConference2008_Barboza.pdf Bates, R. (2009). Prosperity & violence: The political economy of development. New York, NY: W.W. Norton. Beeching, J. (1975). The Chinese opium wars. New York: Harcourst Brace Jovanovich. Bell, D. A. (2003). Confucian constraints on property rights. In D. A. Bell & C. Hahm (Eds.), Confucianism for the modern world (pp. 218-235). New York, NY: Cambridge University Press. Bernstein, J. R. (1997). Japanese capitalism. In T. K. McCraw (Ed.), Creating modern capitalism (pp. 441-489). Cambridge, MA: Harvard University Press. Boyd, R., & Ngo, T. W. (Eds.). (2005). Asian states: Beyond the developmental perspectives. New York, NY: RoutledgeCurzon. Brazinsky, G. (2007). Nation building in South Korea: Koreans, Americans, and the making of democracy. Chapel Hill, NC: Uni- versity of North Carolina Press. Bremer, S. A. (1993). Democracy and militarial interstate conflict, 1816-1965. International Interactions, 18, 231-249. Chang, H. J. (2008). Bad samaritans: The myth of free trade and the secret . New York, NY: Bloomsbury Press. Chang, W. (1998). Confucian theory of norms and . In T. de Bary and W. Tu (Eds.), Confucianism and human rights (pp. 117-141). New York, NY: Columbia University Press. Chau, D. M. (1996). Administrative concepts in confucianism and their influence on development in confucian countries. Asian Journal of Public Administration, 18, 45-69. Retrieved on March 22, 2011, from http://sunzi.lib.hku.hk Chen, J. R. (2007). Economics of Confucius: what do original sources say? Retrieved on March 20, 2011, from http://www. uibk.ac.at/csi/symposium/2007/economics-of-confucius_chen.pdf Cho, L. J., & Kim, Y. H. (Eds.). (1991). Economic development in the republic of Korea. Honolulu, HI: The East-West Center. Cohen, W. I. (2000). East Asia at the center. New York, NY: Columbia University Press. Cohn, T. H. (2005). Global political economy (3rd Ed.). New York, NY: Pearson Education. Cox, O. C. (1964). Capitalism as a system. New York, NY: Simon & Shuster. Dahlman, C. J., & Sananikone, O. (1997). Taiwan, China: policies and institutions for rapid growth. In D. M. Leipziger (Ed.), Lessons from East Asia (pp. 83-153). Ann Arbor, MI: University of Michigan Press. Fairbank, J. K. (1992). China: A new history. Cambridge, MA: Harvard University Press. Fairbank, J. K. (Ed.). (1968). The Chinese world order. Cambridge, MA: Harvard University Press. 79 ENCUENTROS Fairbank, J. K. (1942). Tributary trade and China’s relations with the west. The Far Eastern Quarterly, 1, 129-149. Findlay, R., & O’Rourke, K. H. (2007). Power and plenty: Trade, war, and the world economy in the second millennium. Princeton, NJ: Princeton University Press. Friedman, M. (2002). Capitalism and freedom: Fortieth anniversary edition. Chicago, IL: University of Chicago Press. Galeanor, E. (1973). Open veins of Latin America: 25th anniversary edition. New York, NY: Monthly Review. Gernet, J. (1962). Daily life in China on the eve of the Mongol invasion, 1250-1276. Stanford, CA: Stanford University Press. Gill, I., & Kharas, H. (2007). An East Asian renaissance: Ideas for economic growth. Washington, DC: The World Bank Press. Graeff, P., & Mehlkop, G. (Eds.). (2008). Capitalism, democracy, and the prevention of war and . New York, NY: Routledge. Graham, A. C. (1989). Disputers of the tao: Philosophical argument in ancient China. Chicago, IL: Open Court. Grandin, G. (2006). Empire’s workshop: Latin America, the , and the rise of the new imperialism. New York, NY: Holt Paperbacks. Harrison, L. E., (n.f) The central liberal truth: How politics can change a culture and save it from itself. New York, NY: Oxford University Press. Harrison, L. E., & Huntington, S. P. (Eds.). (2000). Culture matters: How values shape human progress. New York, NY: Basic Books. Harvey, D. (2007). A brief history of . New York, NY: Oxford University Press. Hearth, D. (2009). The discourse of development: has it reached maturity? Third World Quarterly, 30, 1449-1464. Heilbroner, R. L. (1972). The worldly philosophers: The lives, times, and ideas of the great economic thinkers. New York, NY: Simon & Shuster. Henkin, L. (1998). Epilogue: Confucianism, human rights, and cultural relativism. In T. de Bary and W. Tu (Eds.), Confucia- nism and human rights, (pp. 308-314). New York, NY: Columbia University Press. Herge, H. (2004). The limits of the liberal peace. Ph.D. dissertation (University of Oslo). Retrieved on Jan. 7, 2011, from http://www.prio.no/files/file45955_dissertationfinal.pdf Herman, E. S. (1995). Triumph of the market: Essays on economics, politics, and the media. Boston, MA: South End Press. Herrmann-Pillath, C. (2010). A ‘third culture’ in economics?: An essay on Smith, Confucius, and the rise of China. Frankfurt School Working Paper No. 159. Retrieved on March 23, 2011, from www.frankfurt-school.de/dms/Arbeitsbe Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions and organizations across nations. Thousand Oaks, CA: Sage Publications. House, R. J. (2004). Culture, leadership, and organizations: The GLOBE study of 62 societies. Thousand Oaks, CA: Sage Publications. Irwin, D. A. (1996). Against the tide: An intellectual history of free trade. Princeton, NJ: Princeton University Press. Irwin, D. A. (2009). Free trade under fire (3rd ed.). Princeton, NJ: Princeton University Press. Johnson, C. (1995). Japan: Who governs? New York, NY: W.W. Norton. Jones, E. L. (1981). The European miracle: Environments, economies, and geopolitics in the history of Europe and Asia. Cambridge, 80 England: Cambridge University Press. ENCUENTROS Jun, S. I. (1999). No (logical) place for Asian values in East Asia’s economic development. Development and Society, 28, 191- 204. Retrieved on March 22, 2011, from http://isdpr.org/isdpr/publication/journal/28-2/2Sang-In%20Jun.pdf Kang, D. (2003). Hierarchy and stability in Asian international relations. In G. J. Ikenberry & M. Mastanduno (Eds.), Inter- national relations theory and the Asia-Pacific. New York, NY: Columbia University Press. Kim, K., & Leipziger, D. M. (1997). Korea: A case of government-led development. In D. M. Leipziger (Ed.), Lessons from East Asia (pp. 155- 212). Ann Arbor, MI: University of Michigan Press. Kim, K. D. (1994). Confucianism and capitalist development in East Asia. In L. Sklair (Ed.), Capitalism and democracy (pp. 87-106). New York, NY: Routledge. Kissinger, H. (2001). Does America need a foreign policy? New York, NY: Simon & Shuster. Lam, K. C. J. (2002). Confucian business ethics and the economy. Retrieved on March 22, 2011, from http://net2.hkbu.edu. hk/~ied/publications/wp/WP200205.pdf Landes, D. S. (1999). The wealth and poverty of nations: Why some are so rich and some so poor. New York, NY: W.W. Norton. Lavoie, D. (1994). Cultural studies and the conditions for entrepreneurship. In T. W. Boxx & G. M. Quinlivan (Eds.), The cultural context of economics and politics (pp. 51-69). New York, NY: University Press of America. Lee, K. Y. (2000). From third world to first: The Singapore story, 1965-2000. New York, NY: HarperCollins. Leipziger, D. M., & Thomas, V. (1997). An overview of East Asian experiences. In D. M. Leipziger (Ed.), Lessons from east asia (pp. 155-212). Ann Arbor, MI: University of Michigan Press. Lewis, R. D. (2004). When cultures collide: Leading across cultures (3rd ed.). Boston, MA: Nicholas Brealey. Li, Z. (2002). Traditional Chinese world order. Journal of International Law, 1, 20-58. Little, R. (2009). Confucian reconstruction of global economics and finance. Culture Mandala: Bulletin of the Center for East- West Cultural & Economic Studies, 8, 62-73. Retrieved on March 22, 2011, from http://www.international-relations.com/ CM8-2/Confucian-Reconstruction.pdf Mead, W. R. (2007). God and gold: Britain, America, and the making of the modern world. New York, NY: Vintage Books. Murakami, Y. (1987). The Japanese model of political economy. In K. Yamamura & Y. Yasuba (Eds.), The political economy of Japan (pp. 33-90). Stanford, CA: Stanford University Press. Needham, J., Robinson, K. G., Elvin, M., & Huang R. (1986). Science and civilisation in China (vol. 7). New York, NY: Cam- bridge University Press, 1986. Neff, S. C. (1990). Friends but no allies: and the laws of nations. New York, NY: Columbia University Press. Nisbett, R. E. (2003). The geography of thought: How Asians and Westerners think differently … and why. New York, NY: Free Press. Oneal, J. R., & Russett, B. R. (1997). The classical liberals were right: Democracy, interdependence, and conflict, 1950-85. International Studies Quarterly, 41, 267-294. Overholt, W. H. (2008). Asia, America, and the transformation of geopolitics. New York, NY: Oxford University Press. Pearson, M. M. (2001). The case of China’s accession to GATT/WTO. In D. M. Lampton (Ed.), The making of Chinese foreign and security policy in the era of reform, 1978-2000. Stanford, CA: Stanford University Press. 81 ENCUENTROS Peerenboom, R. (1998). Confucian harmony and freedom of thought: The right to think versus the right thinking. In T. de Bary and W. Tu (Eds.), Confucianism and human rights, (pp. 234-260). New York, NY: Columbia University Press. Plehwe, D. (2009). Introduction. In P. Mirowski and D. Plehwe (Eds.), The road from mont pelerin: The making of the neoliberal thought (pp. 1-42). Cambridge, MA: Harvard University Press. Polany, K. (1957). The great transformation: The political and economic origins of our time. Boston, MA: Beacon Hill. Quinn, A., & Cox, M. (2007). For better, for worse: How America’s foreign policy became wedded to liberal universalism. Global Society, 21, 499-519. Reischauer, E. O., & Jansen, M. B. (1995). The Japanese today: Change and continuity. Cambridge, MA: Harvard University Press. Rosser, J. B., & Rosser, M. V. (1998). Islamic and neo-confucian perspectives on the new traditional economy. Eastern Eco- nomic Journal, 24, 217-227. Retrieved on March 22, 2011, from http://college.holycross.edu/RePEc/eej/Archive/Volu- me24/V24N2P217_227.pdf Rowen, H. S. (Ed.). (1998). Behind East Asian growth: The political and social foundations of prosperity. New York, NY: Routledge. Sally, R. (2008). New frontiers in free trade. Washington, DC: CATO Institute. Scott, D. (2008). China and the international system, 1840-1949. Albany, NY: State University of New York Press. Shafaeddin, S. M. (2005). Trade liberalization and economic reform in developing countries: Structural change or de-indus- trialization. UNCTAD Paper. Retrieved on March 22, 2011, from http://www.unctad.org/en/docs/osgdp20053_en.pdf Siah, K. L., Choong, C. K., & Yusop, Z. (2009). AFTA and the intra-trade patterns among ASEAN-5 economies: trade-en- hancing or trade-inhibiting? International Journal of Economics and Finance, 1, 117-126. Retrieved on March 22, 2011, from http://www.ccsenet.org/journal/index.php/ijef/article/view/201/198 Sorrentino, R. M., Cohen, D., Olson, J. M., & Zanna, M. P. (Eds.). (2009). Culture and social behavior: The ontario symposium volume 10. Mahwah, NJ: Lawrence Eribaum Associates. Stiglitz, J. E. (2002). Globalization and its discontents. New York, NY: W.W. Norton. Tian, C. (2009). The ideological development of Confucianism in the global age. New Political Science, 31, 515-527. Tilly, C. (1992). Coercion, , and European states, AD 990-1992. Malden, MA: Blackwell Publishing. Tu, W. M. (Ed.). (1996). Confucian traditions in East Asian modernity: Moral education and economic culture in Japan and the four mini-dragons. Cambridge, MA: Harvard University Press. Wade, R. (1990). Governing the markets: Economic theory and the role of government in East Asian industrialization. Princeton, NJ: Princeton University Press. Weede, E. (2006). Balance of power, globalization, and the capitalist peace. Retrieved on Jan. 8, 2011, from http://www.fnf. org.ph/downloadables/Balance%20of%20Power,%20Globalization%20 and%20Capitalist%20Peace.pdf. World Bank. (1993). The East Asian miracle: Economic growth and public policy. Washington, DC: The World Bank Press. World Bank. (2010). The world bank’s doing business 2010 report. Retrieved on Jan. 8, 2011, from http://doingingbusiness. org/economyrankings. Yao, X. (2000). An introduction to confucianism. New York, NY: Cambridge University Press. 82 ENCUENTROS