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1 Perspectives, Arguments and the Structure Notes 1 Perspectives, Arguments and the Structure 1 . William Elliot Griffis’s book (1882) Corea: The Hermit Nation , is the first docu- mented source that used the term ‘Hermit Kingdom.’ Many Koreans also use this term to refer to pre-modern Korea. 2 . The term Yangban finds its origin in the civil service examination conducted under Munkwa (civilian) and Mukwa (military) categories during the Koryo Dynasty (935–1392). However, during the Joseon Dynasty the entire land- holding class was known as Yangbans, who for obvious reasons controlled various privileges offered by the state, including the exclusive right to give civil service exams, large tracts of land and other stipends, etc. In the absence of any socio-political contest, the Yangban-dominated status quo continued even during the colonial period. Only comprehensive land reforms post- independence were able to finally end Yangban domination. For further details about this tiny aristocracy, see Martina Deuchler (1995) The Confucian Transformation of Korea: A Study of Society and Ideology , Harvard-Yenching Institute Monograph Series, Cambridge, MA: Harvard University Asia Center; Young-Chan Ro (1989) The Korean Neo-Confucianism of Yi Yulgok , Suny Series in Philosophy, Albany, N.Y.: State University of New York Press; Carter J. Eckert, Ki-Baik Lee, Young Lew, Michael Robinson and Edward W. Wagner (1991) Korea Old and New: A History , Cambridge, MA: Harvard Korea Institute; Ki-Baik Lee, Edward J. Schultz and Edward W. Wagner (trans.) (2005) A New History of Korea , Harvard-Yenching Institute Publications: Harvard University Press. 3 . In the 1960s, Korea’s real GDP registered an average 9 percent growth rate; in the 1970s, it moved to 9.3 percent and touched 10 percent in the 1980s. Similarly, Korea’s industrial transformation was equally remarkable, as by 1996 Korea became the world’s No. 1 manufacturer of memory chips, the No. 2 shipbuilder, No. 3 supplier of semiconductors, No. 4 in elec- tronics and No. 5 in automobiles. For details see, Alice H. Amsden (1992) Asia’s Next Giant: South Korea and Late Industrialization , New York: Oxford University Press; John Lie (1998) Han Unbound: The Political Economy of South Korea , Stanford, CA: Stanford University Press; Jung-en Woo (1991) Race to Swift: State and Finance in the Korean Industrialization , New York: Columbia University Press. 4 . The quantum leap from the ‘feudal agrarian economy’ with per capita GNI US$60 in 1960 to one of the ‘advanced industrialized economies’ crossing per capita GNI US$11,385 in 1996 and touching US$24,000 in 2013 has been achieved within a generation. For the details of this remarkable transformation, see L. Jones and I. SaKong (1980) Government, Business, and Entrepreneurship in Economic Development: The Korean Case, Studies in the Modernization of Korea: 1945–75 , Harvard East Asian monographs, vol. 91, Cambridge, MA: Harvard 210 Notes 211 University Press; I. SaKong (1993) Korea in the World Economy , Washington, DC: Institute for International Economics; B. N. Song (1997) The Rise of the Korean Economy , 2nd edn., New York: Oxford University Press; H. K. Lee (1996) The Korean Economy: Perspectives for the Twenty-First Century , Suny Series in Korean Studies, Albany, N.Y.: State University of New York Press; C. F. Bergsten and I. Choe, (eds) (2003) Korean Diaspora in the World Economy , Washington, DC: Institute for International Economics; J. Kim (2002) The South Korean Economy: Towards a New Explanation of an Economic Miracle , Aldershot, Hampshire: Ashgate Publishing Co. 5 . Books carrying such titles provided convincing explanations regarding Korea’s first successful transition from the agrarian to the industrial era. For details, see Alice H. Amsden (1992) Asia’s Next Giant: South Korea and Late Industrialization, – New York: Oxford University Press; John Lie (1998) Han Unbound: The Political Economy of South Korea , Stanford, CA: Stanford University Press. 6 . Literature on the Korean financial crisis is divided into two perspectives; first, a systemic crisis perspective that blames macroeconomic imbalances, moral hazard in banking and external shocks as a major cause of the crisis; second, a financial liberalization and structural weaknesses perspective that cites unpro- ductive credit in the banking system, financial liberalization that created scope for currency and maturity mismatches, and a self-fulfilling loss of market confidence, manifested in the refusal of foreign lenders to roll over short-term loans to banks, forcing illiquid borrowers into bankruptcy. For further details regarding literature on the financial crisis, see G. G. Kaufman, T. H. Krueger, W. C. Hunter (1999) The Asian Financial Crisis: Origins, Implications and Solutions , New York: Springer; J. D. Sachs and S. Radelet (1998) ‘The East Asian Financial Crisis: Diagnosis, Remedies, Prospects,’ Brookings Papers on Economic Activity , Vol. 1: 1–74; Helen Hughes (1999) ‘Crony Capitalism and the East Asian Currency Financial “Crises”,’ Policy, 15(3):3–9; Ha-Joon Chang, Hong Jae Park, Chul Gyue Yoo (1998) ‘Interpreting Korean Crisis: Financial Liberalization, Industrial Policy and Corporate Governance,’ Cambridge Journal of Economics , 22(6): 735–746. 7 . The prime indicator of corporate control is a nation’s stock market, which in the case of Korea permitted only 13 percent foreign ownership in 1996 and increased to 50 percent in 1997. More specifically, 58.1 percent Samsung Electronics, 55.3 percent Hyundai Motors, and 70.1 percent POSCO equity moved to foreign hands. Similarly, foreign ownership in the Korean banking sector in mid-2005 was 74 percent for the Korea Exchange Bank, 100 percent for Korea-America Bank, owned by Citibank, 100 percent for Korea First Bank, owned by Standard Chartered, 76 percent for Hana, 84 percent for Kookmin, and 63 percent for Shinhan Bank. For further analysis on this matter, see J. Crotty and K. Lee (2005) ‘The Effects of Neoliberal “Reform” on the Post-Crisis Korean Economy,’ PERI Working Paper Series , 111: 1–21. 8 . ‘People’s Committee’ has been referred to as local self-governing body that was leaning left but was open to other ideologies as well. In the wake of liberation, these committees sprang up on the entire peninsula, involved in restoring basic services after the sudden departure of the Japanese colonial government; however their close proximity to the left movement was seen with a degree of skepticism by the U.S. government, which finally acted firmly to demolish them. For details about these committees, see Martin Hart-Landsberg (1998) 212 Notes Korea: Division, Reunification, and U.S. Foreign Policy , New York: Monthly Review Press; G. Handerson (1968) Korea: The Politics of Vortex , Cambridge, MA: Harvard University Press. 9 . For details of the critique provided to the Chaebol-dominated political economy, see Seung-Rok Park and Ky-Hyang Yuhn (2012), ‘Has the Korean Model of Chaebol Succeeded?’ Journal of Economic Studies 39(2): 260–74; Yuji Akaba, Florian Budde and Jungkiu Choi (1998) ‘Restructuring South Korea’s Chaebol,’ McKinsey Quarterly, (4): 68–79; Un-chan Chung (2007) Cool Head, Warm Heart , Seoul: Humandom Corp.; Duck-Koo Chung and Barry Eichengreen (eds) (2004) The Korean Economy beyond the Crisis , Cheltenham: Edward Elgar; Sunhyuk Kim (2001) Politics of Democratization in Korea: The Role of Civil Society , Pittsburgh: University of Pittsburgh Press; Jang-Sup Shin and Ha-Joon Chang (2003) Restructuring Korea Inc ., London & New York: Routledge-Curzon. 10 . Martin Hart-Landsberg (1993) The Rush to Development: Economic Change and Political Struggle in South Korea , New York: Monthly Review Press, 99. 11 . Bruce Cumings (1981) The Origins of the Korean War: Liberation and the Emergence of Separate Regimes, 1945–47 , Princeton, NJ: Princeton University Press, 10. 12 . A biological theory, ‘punctuated equilibrium’ has been used extensively to explain nature and quantum of change in social sciences as well (Gersick, 1991; Gould and Eldredge, 2001). This theory has also been used by political scientists to explain changes in policy making. It emphasizes the building-up of incremental pressures, over a period of time that can slowly tilt the balance against the forces of status quo. It maintains that short bursts of quantum change are interspersed between long periods of stability. 13 . Based on Andre Gunder Frank’s (1998) non-Eurocentric analysis and drawing upon Giovanni Arrighi et al. (2003) and Immanuel Wallerstein’s frameworks (2005), an attempt has been made to trace the historical development of East Asia in relation to the transformation of the world system. World system analysis goes beyond nation-state and looks into world system dynamics and regional geo-politics. It examines such processes as incorporation into the world system, regionalization, the Cold War, the Japanese flying geese model, and China’s national reunification project, etc. For details, see Andre Gunder Frank (1998) ReOrient . Berkeley: University of California Press. This study traces the historical development of East Asia in relations to the transforma- tion of the world system. Giovanni Arrighi, Po-Leung Hui, Ho-Fung Hung and Mark Selden (2003) ‘Historical Capitalism, East and West,’ 259–334 in Giovanni Arrighi et al. (eds) (2003) The Resurgence of East Asia , London & New York: Routledge. This study traces the connection between capitalism in the West and capitalism in the East. Immanuel Wallerstein (1991) Geopolitics and Geoculture: Essays on the Changing World-System , Cambridge: Cambridge University Press. 14 . The existence of dynamic economies of scale and positive external effects of production in certain industries prompted the governments to actively stimu- late the development of these industries, since the private sector was thought to be incapable of assessing the long-term economic benefits of investing in these industries. According to this model of industrialization, governments would stimulate the development of infant industries by means of subsidies Notes 213 and protective measures until they were sufficiently developed to produce without government support. 15 . For further details about Williamson’s ‘internal organization model,’ see Oliver E.
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