The Pennsylvania State University
The Graduate School
College of Communications
EDUCATING PUBLIC OPINION:
UNDERSTANDING U.S. DOLLAR HEGEMONY IN THE AGE OF GLOBAL
NEWS MEDIA
A Thesis in
Mass Communications
By
Sung-Hae Kim
Copyright 2005 Sung-Hae Kim
Submitted in Partial Fulfillment
of the Requirements
for the Degree of
Doctor of Philosophy
December 2005
The thesis of Sung-Hae Kim was reviewed and approved* by the following:
Ronald V. Bettig Associate Professor of Communications Thesis Advisor Chair of Committee
Krishna Jayakar Associate Professor of Communications
Jeremy Packer Assistant Professor of Communications
Steven L. Thorne Assistant Professor of Applied Linguistics
John S. Nichols Professor of Communications Associate Dean Graduate Studies
* Signatures are on file in the Graduate School
iii
ABSTRACT
U.S. economic leadership has been studied in adopting the hegemon’s intellectual leadership model. The primary purpose of this study is to unravel the symbolic mechanism by which the U.S., a hegemon, brings forth weak states’ cooptation. The applicability of the model is thus evaluated by selecting South Korea’s cooperation with U.S. dollar based international financial order through the Asian crisis in 1997. Since the model presupposes the hegemon’s necessity of winning supportive public opinion in weak states, not only hegemon’s building up intellectual leadership but also weak states’ subscription to the leadership is investigated. The author claims that the hegemon is able to persuade South Koreans “intellectually” “not necessarily morally” by utilizing its affiliations such as the International Monetary Fund, residing U.S. intellectuals and U.S. based news media. Also the author finds that Koreans’ buying into the leadership was possible because the symbolic elite of Korea in particular U.S. trained intellectuals and news media actively supported the hegemon. Specifically, this study reveals that not only did Korean intellectuals develop an intellectual apprenticeship with the hegemon’s intellectuals, but Korean media also prioritized hegemonic affiliations over Korean power elite. The author thus argues that the national interest of Korea in coping with the Korean crisis of 1997 was socially constructed in line with satisfying the hegemon’s structural agenda and strategically chosen foreign policies. Yet given that the hegemon abused its legitimacy and credibility, the author suggests ways of improving the hegemon’s international accountability. Hence, a truer sense of democratic international information order supported by international “check and balance” system is outlined. Since weak states failed to develop their own analytic frameworks fit into their national interests, the author also urges them to establish think tanks focused on policy analysis and educate professional communicators.
Index words: U.S. dollar hegemony, public knowledge, public opinion, intellectual leadership model, state’s organic intellectuals, professional political communicators, international public sphere and democratic international information order.
iv
Table of Contents
List of Tables ……………………………………………………………………………vi
List of Figures...………………………………………………………………………...viii
Acknowledgements……………………………………………………………………….ix
Chapter 1. Introduction to Study ………………………………………………………...1
1-1: The intellectual leadership model of U.S. hegemony ……………………………….3 1-2: South Korea’s cooptation into the international monetary order ………………….12 1-3: Purposes of the dissertation ……………..…………………………………………16 1-4: Research questions ………………………………………...... 17 1-5: The value of this study ……………………………………………………………..20 1-6: The organization of the dissertation ……………………………………………….21
Chapter 2. U. S. hegemony and global financial architecture …………………………..25
2-1: Theoretical framework of U.S. hegemony …………………………………………25 2-2: U.S. dollar policy and the international financial architecture ……………………..31
Chapter 3. Symbolic elite and intellectual leadership …………………………………...44
3-1: News media and foreign policy……………………………………………………..45 3-2: The international information order in the age of U.S. hegemony …………………61
Chapter 4. Methodology and data collection ...…………………………………………78
4-1: Methodological reasoning ………………………………………………………….78 4-2: The emergence of research frame: power and knowledge ……………………..79 4-3: Research frame, media frame and public knowledge ……………………………....82 4-4: Concepts explication …………………………………………………………...... 87 4-5: Data collection ……………………………………………………………………..90
Chapter 5. U.S. hegemon’s exertion of intellectual leadership ………………………….94
5-1: Putting Asia crisis into a historical and political perspective ………………………95 5-2: U.S. structural agenda and the emergence of technical frame ……………………107 5-3: Hegemonic state’s organic intellectuals and academic authority … ……………...134 5-4: Professional communicators and political authority ……………………………...150
Chapter 6. South Koreans’ buying into the leadership ………………………………...172
6-1: The evolution of South Korean government’s cooptation ……………………….173
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6-2: Inculcated intellectuals and intellectual apprenticeship ………………………….187 6-3: Disputed national symbolic stage and semi-professional communicators ……….200
Chapter 7. Conclusion and envisioning ………………………………………………..217
7-1: Research summary ………………………………………………………………..218 7-2: Discussion and implications………………………………………………………233 7-3: Limitations ………………………………………………………………………..240
References ……………………………………………………………………………...242
Appendices …………………………………………………………………………….268
Appendix A: Coding examples of news articles (overall)……………………………268 Appendix B: Coding examples of news articles (divided by news organizations)……270 Appendix C: East Asians’ financing U.S. deficits…………………………………….278 Appendix D: Economic recovery of East Asian countries……………………………278 Appendix E: Chronicle of the Asian crisis……………………………………………279 Appendix F: Chronicle of the Asian Monetary Fund…………………………………281 Appendix G: Malaysia’s alternative approach………………………………………...282 Appendix H: U.S.-led orthodox approach to the NIFA……………………………….283 Appendix I: Unorthodox approach to the NIFA……………………………………….284 Appendix J: Chronicle of South Korean crisis in 1997………………………………...285 Appendix K: Key index for Korean economic fundamentals………………………….286 Appendix L: Korean cue-givers and Ph.D. degree institution (#56)…………………287 Appendix M: Cue-givers in Korean media (total)……………………………………288
vi
List of Tables
Table Page
2:1: Key assumptions of this dissertation ………………………………………………31
3:1: Media’s relationship with state/ruling class (models) ……………………………..55
3:2: World-views in conflict …………………………………………………………... 69
3:3: Recommended strategies (divided for analytic purpose) ………………………….73
4:1: The emergence of research frame ………………………………………………….81
4:2: Media frame and public knowledge ……………………………………………… 86
5:1: U.S. departmental view and policy consensus …………………………………... 126
5:2: State officials’ symbiotic relationship with intellectual community ……………..137
5:3: Hegemonic state’s organic intellectuals (defenders on technical frame)
………….…………………………..……………………………………………139
5:4: Involved think thanks (intellectuals) and their adopted frame ……………………142
5:5: U.S. critics and their association with hegemonic state (political frame supporters)
…………………………………………………………………………………………..148
5:6: Media frames (hegemonic media)…………………………………………152
5:7: Attitude to the Asian Monetary Fund (hegemonic media)………………...154
5:8: Attitude to Dr. Mahathir (hegemonic media)………………………………156
5:9: Attitude to the New (unorthodox) International Financial Architecture
(hegemonic media)…………………………………………………………………….159
5:10: Distribution of media frames (divided by nationality)……………………162
5:11: Attitude to the Asian Monetary Fund (divided by nationality)……………163
5:12: Attitude to Dr. Mahathir (divided by nationality)…………………………164
vii
5:13: Attitude to New (unorthodox) International Financial Architecture
(divided by nationality)…………………………………………………………………165
5:14: Cue-givers in the hegemonic media……………………………………..167
5:15: High profiling institutional cue-givers (hegemonic media)……………...168
5:16: High profiling individual cue-givers (hegemonic media)………………..169
6:1: South Korean officials and technical frame ……………………………………… 183
6:2: Distribution of Korean intellectuals by Ph.D. earned countries (#56)..…..……… 189
6:3: Distribution of Korean intellectuals by major (#59)...... …………...190
6:4: South Korea’s inculcated intellectuals (advocates of technical frame)………….. 192
6:5: Korean intellectuals (advocates of political frame) ……………………………... 197
6:6: South Korean media’s adopted frames (# 112)……………………………………201
6:7: Korean media’s attitude to Asian Monetary Fund (# 36)………………………….204
6:8: Korean media’s attitude to Dr. Mohamad Mahathir (# 59) ……………………..206
6:9: Korean media’s attitude to NIFA (# 28) ……………………………………….. 208
6:10: Cue-givers in South Korean Media……………………………………………..210
6:11: High profiling cue-givers in Korean media (institutions)………………………212
6:12: High profiling cue-givers in Korean media (individuals) ………………………213
7:1: Hegemon’s intellectual leadership ……………………………………………….. 229
7:2: Unfolded leadership in South Korea ………………………………………………232
viii
List of Figures
Figure Page
1:1:U.S. dollar hegemony ……………………………………………………………….5
1:2: Positive (coordinating) politics model ……………………………………………...7
1:3: Intellectual leadership ………………………………………………………………..8
1:4: Public knowledge for politics...……………………………………………………..10
1:5: Model of international information flow …………………………………………..11
2:1: International reserve assets ………………………………………………………...37
2:2: Debt service in non-oiling developing countries (1973-84)………………………..39
4:1: Hegemonic frame, research frames and public knowledge ………………………..88
5:1: Technical frame (definition and diagnosis) ………………………………………121
5:2: Technical frame (solutions and lessons)…………………………………………...123
5:3: Political frame (definition and diagnosis) ……………………………………….128
5:4: Political frame (solutions and lessons)…………………………………………….129
5:5: Counter-hegemonic frame (definition and diagnosis)……………………………..132
5:6: Counter-hegemonic frame (solutions and lessons) ……………………………..133
ix
Acknowledgements
I would like to deliver the best appreciation to Dr. Ronald Bettig, my intellectual mentor, to Dr. Krishna Jayakar, Dr. Jeremy Packer and Dr. Steven Thorne. Certainly, this study cannot be done without their crucial assistance and sincere encouragement. Also I express my gratitude to Dr. Shang Shik Lee who willingly shared his precious academic expertise with me in finalizing this humble study. His insightful comments and heart-felt assistance shall be remembered as an amazing present in my heart. My particular thanks further go to Chang-Kook Yune, Chong-Dae Park, Duk-Bin Cho, Geon-Suk Kim, June-
Ho Hwang, Sang-Kee Lee, Dr. Si-Ho Nam, Sung-Wook Kim and Young-Shin Cho. Not only did they help me develop a truer sense of intellectual friendship, but they proved to be one of the best assets in my graduate study at Penn State University. Choon-Ki Kim,
Choon-Bong Lee, Soon-Wook Bae and Yong-Kyun Rho also deserve my sincere appreciation. Obviously, it was less plausible for me to stand on this stage without their critical supports of my family at the outset. In addition, I wish to thank my mother-in-law,
Young-Ja Kim, for her taking care of my kids and staying with my family in this crucial time. Finally, I am obliged to deliver my gratitude to the late Hyeon-Hwa Lee and Djung
-Yune Tchoi. I hope they will take a comfortable rest in the heaven and look after their beloved family in the earth.
In memory of my parents Yong-Ho Kim and Jung-Soo Kim, I dedicate this humble study
to my wife Kyong-Won Choi and my kids Tongkyu and Yumin.
Also
I wish this work to console those who suffered from the Asian crisis in 1997. 1
Chapter One
Introduction to Study
American power is most effective when it is seen as legitimate, and when other societies believe it is being used to serve their interests as well as America’s. … (Yet for this to happen) the United States should launch a broad-based and sustained public information campaign, using every instrument and channel at its disposal. … (Also) It should be noted that any public diplomacy effort, to be effective, needs a good product to sell. Defending the legitimacy of American primacy is not primarily a question of ‘spin’ or propaganda or even cultural exchange (Stephen Walt, 2005).
The intellectuals of the hegemonic class must produce a philosophy, political economy and economics which together constitute a coherent world-view, the principles of which can be translated from one discipline to another. As actors in the ideological struggle, the intellectuals of the dominant class must prevail over the intellectuals of other classes by developing more convincing and sophisticated theories, inculcating other intellectuals with the dominant world-view and assimilating them to the hegemon’s cause (Antonio Gramsci, 1971).
This dissertation can be traced back to the time when I just started to launch onto
the Asian crisis in 1997 that was followed by such a land-sliding change across the region.
Yet in delving into the crisis, my attention was paid more to understanding herd
behaviors than to identifying internal problems of East Asian countries supposed to be
nurtured by Asian economic model. Certainly, as claimed by the majority of Westerners,
those inflicted countries were not immune from chronic problems such as political
corruption, lack of transparency both in government and business, as well as frangible
financial system. However, my direct experience as a stock dealer prompted me to take
into more account market panic sparked off by the media. My first master’s thesis was
thus started with looking into how such prestigious Western media as the New York
Time, Financial Times and Wall Street Journal reported on the crisis. Then, I attempted to associate their performance with sudden capital exodus from the region. Discovering
2 that not only did they spotlight negative aspects of, but also promoted skepticism about those impaired economies, I insisted that investors’ sudden lost of confidence might be associated with media performance.
Yet as soon as I subscribed to such a panic view, there emerged at least three questions that drew further attention. First, I had to ask why those inflicted countries such as Thailand, Indonesia and South Korea liberalized their capital markets before the crisis.
Interestingly, many other countries including China and India maintained capital control and so were not suffered from it. Since capital liberalization was relentlessly supported by transnational financial corporations such as Morgan Stanley and Citigroup, I thus have cast doubt on their role in opening up the markets. Second, I believed, were the primary problem market panic, such policies as structural reform, which aimed at dismantling
Asian model, and speeding up financial liberalization would be mistakes. Given that the
International Monetary Fund (IMF) with the U.S. Treasury urged the region to adopt the policies, my next suspicion was therefore given to untangling their connection with the global business class. I also noticed finally that there happened more currency crisis particularly related to market panic after the U.S. government launched a free-floating foreign exchange regime in the early 1970s. Accordingly, I started to associate U.S. dollar policy with the ongoing currency crises around the globe. My second master’s thesis was thus to apprehend how the contemporary international monetary order saturated with repeated currency crises has been sustained by the dollar policy.
However, my primary purpose of the study was to identify how the U.S. bullied weak states to first liberalize their markets, then to accept IMF guardianship and ultimately to prevent them from challenging U.S. leadership. Thus although I could find
3
sufficient evidences of U.S. coercion, I ended up with few clues to why they notably
South Korea and Indonesia appeared to voluntarily assist the U.S. in managing the
present system. Not only did South Koreans put structural reforms into firm practice, in a
typical example, but they were also willing to finance U.S. deficits by accumulating U.S.
dollars as foreign reserves.1 It could be argued, of course, that East Asians actually began to challenge U.S. leadership by setting up regional cooperative mechanisms such as
ASEAN +3 and Asian Bellagio Group.2 Yet a notable point was that they largely missed
a critical momentum provided by strong resentment over U.S. power shortly after the
crisis. My dissertation is therefore devoted to untangling the mechanism by which the
U.S., a hegemonic state, was and still is able to induce them to play an active role in
sustaining the dollar hegemony. For this purpose, after presupposing the hegemon’s
intellectual leadership model, I apply it to South Korea’s cooptation into U.S. dollar
hegemony through the Asian crisis.
1-1: The intellectual leadership model of U.S. hegemony
The notion of U.S. hegemony in the sense that U.S. leadership was based more on
“right” than “might” drew substantial academic attention. For example, in the early 1980s,
Robert Keohane suggested that the U.S. was able to induce other states’ cooperation
because both U.S. and junior partners shared the sense of common interests.3 Similarly,
Joseph Nye noticed that U.S. soft power represented by the independent media,
1 East Asians’ financing of U.S. deficits can be found in Appendix C. 2 It includes Brunei, Cambodia, Indonesia, Laos and Myanmar, Malaysia, the Philippines, Singapore, Thailand and Viet Nam, as well as China, Japan, and South Korea. 3 Robert Keohane, After hegemony : cooperation and discord in the world political economy, Princeton University, 1984.
4
democratic political system and cultural diversity played a critical role in bringing forth
international cooperation.4 Hence, in their point of view, the weakening of U.S. leadership was largely ascribed either to conflict of interests between hegemon and junior partners or to unilateral U.S. foreign policy such as Iraq war in 2003 that provoked global resentment. However, I sensed that not only could the junior partners’ perception of common interests be shaped by the hegemon, but such common interests are “social constructions” rather than some “discoverable realities.” I also noticed that even though hegemon’s soft power appeared to be tainted by ignoring international public opinion, weak states went along with the U.S. in spite of their resentment. Accordingly, I believed that the hegemonic order could be better understood by taking into account “intellectual
power” underpinned by its organic intellectuals and professional political communicators.
I thus start by presenting the Figure 1:1 below so as to articulate how such an intellectual
leadership unfolds in the contemporary world.
4 Joseph Nye, The paradox of American power: Why the world’s only superpower can’t go it alone? Oxford University, 2002
5
Figure 1:1: U.S. dollar hegemony5
U.S. dollar hegemony (U.S. economic leadership)
Physical supremacy Intellectual leadership: Cultural attractiveness (hard power): Technical and social (soft power): Military power, material knowledge supported by Individualism, diversity, wealth, credit/finance, state’s organic freedom of speech, and institutionalized veto intellectuals and means human rights and liberal power at U.N. & IMF of communication democracy
The intellectual leadership model begins to recognize the growing importance of
“publicly disposable knowledge for political purposes.” Since public opinion constitutes a key element in liberal democratic societies, I first reason that there may be a pre- established structure of public knowledge. It is thus anticipated that the hegemon takes an active part not only in producing such public knowledge, but also in disseminating it to weak states. Then, in emphasizing political purposes, I also suggest that modern politics can be far more successful by bringing forth “conscious, reasonable and active” involvement of their citizens. Hence I notice that the U.S. hegemony is willing to provide foreign students with higher educational training in order to “promote their creativity” in line with satisfying its political and economic objectives.
5 The solid black line indicates more powerful and efficient than the dot line; Two-way arrows refer to an interacting relationship between powers.
6
Clearly, I agree with Nye’s point that training foreign students can help them
develop positive relationships with the U.S., as well as absorb mainstream views in the
U.S. Yet I intend to articulate his point in the sense that such intellectual training also
means to inculcate them to put the priorities of their countries into the hegemon’s
perspective that tended to prioritize global market efficiency over national development
strategies. Those foreign students schooled in the U.S. may thus prefer market efficiency
and consumer benefit to government leadership and public goods. Accordingly, this
model can be similar to “legitimacy model” in that “the right to lead emanates less from
economic and military power as such and more from the willingness of smaller countries
to buy into and internalize norms and principles set forth by the hegemon.”6 I emphasize
though that weak states should learn “instrumental and practical knowledge” interwoven
with political ideologies in order to put such normative orders into practice.
Taking the point into account, I combine the notion of “organic intellectuals” and
hegemon’s necessity of launching “public information campaign” that aimed at educating
public opinion in weak states.7 It means in the one way that the hegemon can utilize its intellectuals in order to “[produce] a philosophy, political economy and economics which together constitute a coherent world-view.”8 In the other way, it also implies that the hegemon’s intellectuals need to prevail over those of other states not only by developing
“more convincing and sophisticated theories” but also by “transforming them into public knowledge.”
Similarly, this model barely disputes the continuity of physical-hard power represented by military supremacy, market size, and institutionalized veto power in
6 John Ikenberry, in Rapkin, D. P. World leadership and hegemony. Boulder, L. Rienner, 1990, p. 49. 7 Gramsci Antonio, Letters from prison (1st ed.). New York,: Harper & Row.1971, p. 7. 8 Steven Walt, “In the national interest,” Boston Review, Feb/Mar., 2005.
7 multinational institutions including the IMF.9 That is, I intend to put “strategic knowledge” on focal point because it provides practical assistance in efficiently organizing physical and cultural power. Hence it is helpful to consider Figure 1:2 that places the intellectual leadership above hard-coercive and soft-cooptive power. My point here is to suggest that weak states put their resentment over the hegemon aside insofar as it can “intellectually not necessarily morally” persuade them how to achieve their national interests.
Figure 1:2: Positive (coordinating) politics model10
Positive (coordinating) politics
Intellectual leadership
Hard-coercive power as means of Soft-cooptive power as means of “threats and incentives” by using military “credibility and reliability” by promoting power, credit (finance) and economic admirable values or norms wealth
Even before their subscribing to such blueprints, however, the hegemonic state requires to first produce them, then adapt them to legitimate and credible forms of
9 Nye, p. 67. 10 Positive politics, via-a-vis negative politics, refers to hegemon’s ability to induce weak states to actively involve in achieving common goals; Negative politics means hegemon’s exerting power in order to prevent weak states from rebelling against the establishment or initiating unsupportive actions.
8
knowledge, and finally disseminate them via the means of communications. Figure 1:3
specifies how the hegemon maximizes its intellectual power by utilizing its organic
intellectuals along with the mass communicators.
Figure 1:3: Intellectual leadership11
Intellectual leadership
Pre-eminence over ‘public knowledge’
Academic authority (academic integrity Political authority (publicity and and political independency) legitimacy)
Hegemon’s organic intellectuals Hegemon’s means of communication including international institutions (i.e., including U.S. Information Agency IMF), think tanks (i.e., CFR), elite (USIA) and U.S. headquartered news schools and private research centers media
Figure 1:3 reveals that the hegemon’s leadership, first of all, needs to be supported by authority. Yet a notable point is that academic authority itself lacks political authority backed up by publicity and legitimacy. The prevalence of the notion of Asian
11 The two-way arrow means interacting relationships between factors.
9
crony capitalism over a financial panic view shows it clearly. Since the panic view was
endorsed by such distinguished economists as Jeffrey Sachs and Joseph Stiglitz, the view
was not academically inferior to that of crony capitalism. But the panic perspective failed
to obtain political authority because hegemon’s media tended to define it as having
political biases that intended to delay required reforms. Similarly, although East Asians
attempted to present their own analyses of the crisis, they fall short of contemplating a
wide range of viewpoints. Accordingly, these alternative interpretations were largely
marginalized as lacking not only academic authority but also political authority. By
placing authority building on emphasis, this model thus goes along with Stephen Walt
who urges the U.S. to pay more attention for “media outreach, broadcasting, scholarships
and cultural exchange” in order to win “the struggle of ideas.”12
The hegemon’s engagement in producing such knowledge also cannot be fully comprehended without considering its structural agenda and strategically chosen foreign policies. I thus present Figure 1:4 to show in particular how the hegemon’s organic intellectuals and professional communicators work together to incorporate political objectives into public knowledge.
12 Stephen Walt, “In the national interest,” Boston Review, 2005.
10
Figure 1:4: Public knowledge for politics
Structure of references
Public knowledge for politics
State professional State organic intellectuals communicators (news media and the United States Information Agency)
Hegemon’s structural objectives of Strategically chosen foreign policies: maintaining the established power order varied according to the hegemon’s (security, finance & production) perceived priorities
Figure 1:4 indicates that both hegemon’s structural agenda of sustaining the contemporary system and strategically chosen foreign policies have impact on setting research agenda. The hegemon’s intellectuals are unmistakably able to enjoy academic autonomy from their government. The model presupposes though that hegemon’s power elite will pay distinctive attention to providing those defenders of hegemon’s causes with financial and human resources. Accordingly, Figure 1:4 must be understood so that supportive views of political objectives will easily prevail over uncooperative views at least in the arena of public knowledge. For the purpose of articulating how weak states’ intellectuals side-by-side their media assist hegemon in exerting its leadership, I draw
Figure 1:5 which stresses the point that hegemon’s power elite tend to form a strong
11 symbiotic relationship. Here we see the interlocking relationships between policy makers, organic intellectuals and the communicators.
Figure 1:5: A model of international information flow
U.S. policy-makers (Government officials)
U.S. state organic intellectuals (IMF, U.S. professional communicators think tanks, elite universities, private (USIA, global news media) research centers)
Junior partners’ organic intellectuals and professional communicators
Public knowledge for junior partner states
The structure of references/attitudes
Junior partner states’ policy preferences (or)
Public opinion with junior partner states
The first point of notice in Figure 1:5 is that there may be few disputing views at least within hegemon’s power elite. It is thus expected that the intellectuals and media in weak states can easily end up absorbing pre-arranged interpretive frameworks, though with tactical variances. The second notable point is that public opinion in weak states should be mediated by their own media and intellectuals. It implies that the hegemon’s
12 leadership can be much efficient only after it persuades the symbolic elite of weak states not “morally” but “intellectually.” Then, those symbolic elites utilize the intellectual authority borrowed from the hegemon in persuading their ordinary citizens. Since the ordinary public in weak states is positioned as a consumer rather than a producer of knowledge, finally, they go along with their intellectuals. But it is crucial to remember that their perceptions are largely predetermined by the hegemon that has employed its own organic intellectuals and political communicators in order to achieve political objectives. Bearing these points in mind, I attempt to evaluate the applicability of this model by looking closely at South Korea’s coordination with the hegemonic state. Hence
I begin the next section by showing why the case of South Korea can be perceived as a prototype in understanding the U.S. hegemony in general and its intellectual leadership in particular.
1-2: South Korea’s cooptation into the international monetary order
On November 22, 1997, the Korean government became officially subjugated to the guardianship of the Fund by asking for $60 billion of emergency loan. Within less than a month, the foreign currency exchange rate of Korean won against U.S. dollar declined from 800:1 to near 2000:1, along with skyrocketing interest rates that went up to
30%. Gas prices tripled; at least 100,000 children were made homeless; and no less than two thirds of employees in the financial sector were eventually laid-off.13
13 For detailed economic data, please refer to the Bank of Korea, http://bond.emoney.co.kr/bd2/bd03/bd0301/bd030101/bd03010102.html
13
Just as a sick patient would look toward to reliable doctors for diagnoses and
prescriptions, South Koreans strived to seek authoritative voices that could provide the
answers on “what caused the crisis and what should be done.” Yet because the
established authorities in South Korea had failed to prevent the crisis, Korean officials
and business elite in Korea were kept at bay by Korean media at the outset. Similarly,
those intellectuals who failed to criticize government policies also appeared not to
possess proper expertise. Thus the media in Korea deferred mostly to IMF officials,
Western intellectuals and Western media. They then were inclined to pay attention to
those Korean intellectuals who emerged as new authorities because of their critical stance
toward the establishment. Eventually, there emerged such conventional wisdoms that
follow: the Asian crisis mostly stemmed from endogenous problems such as political
corruption, corporate mismanagement, and government-led finance known as reign-
finance; and so, priority should be given to adjusting Korean economic model to
globalization by putting immediate structural reforms into effect.14
In this context, Dae Jung Kim- the newly elected President of South Korea on
December 18, 1997 initiated to allow foreign ownership of state-run enterprises, open further up financial markets, and adopt a fully free-floating currency regime. Since it was believed that financial system had been weakened by Korean model, the Dae Jung Kim administration then urged business leaders to adopt international standards and break up the chaebols (Korean conglomerates). Finally, in criticizing Korea’s economic nationalism, the administration also asked its people to tolerate foreign control over state enterprises and to accept legalization of lay-offs. Yet a notable point was that the new
14 Because East Asian governments controlled the allocation of finance and credit, it was called as “reign- finance.” But it is critical to note that the reign finance had played a critical role in pursuing national development strategies before the crisis.
14
administration implemented such a wide range of social change mostly by relying on
public support.
The transformation of the nation, however, produced very mixed results in the
subsequent years. The Korean economy started to recover from the crisis in less than two
years. Indeed, not only did the foreign exchange rate of Korean won against U.S. dollar
appreciate from nearly 2000 in 1997 to near 1,000 in 2005, but Korea’s foreign reserves
also rose from $8.9 billion in 1997 to $200 billion in 2004. The rate of annual growth
rate of Gross Domestic Product (GDP), which had tumbled to minus 6.7 percent in 1998
also recovered to an average 7 percent. In addition, the Korean Stock Market Price Index
(KOSPI) rose to around 1,100 in 2005.15 However, such economic achievements were
severely tainted not only by a widened income gap between classes but also by
continuing high rate of unemployment among youth. More critically, the crisis ended up
with dramatic increase in foreign ownership across strategically important industries.
Hence, it would be fair to state that Korean society still left the door open for proper
valuation of costs and benefits of the crisis.
Korea’s struggle to cope with the crisis, yet, brought about a few notable points.
First, Koreans, including their elite, largely played down Malaysia’s alternative approach
that proved far more successful at least in terms of social stability and protecting the nation’s strategic industries. Second, Koreans also appeared not to associate subsequent crises in Russia and Brazil with their own crisis. Nor did they look into systematic problems inherent to the current system. Instead, in believing that market volatility was inevitably brought about by globalization, they paid far more attention to fixing internal factors by urging that political corruption be rooted out and structural reforms be put into
15 For detailed information, go to Yahoo Finance at http://kr.quote.yahoo.com/jisu01.html?upcode=1001.
15 firm practice. Third, they also seemed to be comfortable with accumulating more than
$200 billion of U.S. dollars that deprived them of 40 percent of export earnings since
2003 when the dollar depreciated against other currencies. For them, the cost was perceived as an “insurance fee” charged by higher market instability. They thus rarely raised the question regarding “who benefits and who pays” by financing U.S. deficits.
Finally, but interestingly, they subscribed to such convictions voluntarily. The IMF did certainly put pressure on the Korean government to commit to reducing government spending, raising interest rates and liberalizing its financial markets in late 1997. Yet the extent to which South Koreans carried structural reforms out could not be solely explained by the hegemon’s exertion of coercion. More over, Koreans remained in moving forward with IMF-led programs even after they paid IMF loan off in 2001. But before applying the intellectual model to the Korean case, there should be additional reasons to believe that such co-ordination had less to do with the Korean power elite than the hegemon.
It is thus advisable to take into account the following points. Most of all, as mentioned, since the crisis was largely believed to be caused by internal problems, the public’s antipathy toward government officials and business leaders was evident. It was even believed that Dae Jung Kim was able to win his presidency by exploiting public outrage about the failed Young Sam Kim’s administration. The media, in this context, started to keep those former officials away from public attention and tended to defer to
Western intellectuals represented by IMF economists and residing U.S. economists. Yet still it can be argued that the Dae Jung administration needed to manipulate public opinion in order to satisfy its class interest. A noteworthy point was however that D.J.
16 was strongly supported by the middle and lower class. Soon after his inauguration in
December 1997, indeed, Dae Jung Kim was compelled to move against labor unions, which had been one of his staunch political allies, by legalizing lay-offs.
1-3: Purposes of the dissertation
My dissertation is motivated by a concern that the contemporary hegemon developed a tendency of abusing its leadership. Yet because intellectual leadership can be efficient with maintaining legitimacy and credibility, I sense that the tainted leadership will not be healthy for the international society. Thus in concerning about the hegemon’s indifference to international accountability, I will suggest how to improve the quality of hegemonic leadership by facilitating communication between the hegemon and its client states. In order to share the concern with reasonable arguments, I presuppose this model and apply it to South Korea’s cooptation by the U.S.
Thus, I start by articulating the hegemon’s structural agenda and its specified foreign policies in coping with the Asian crisis. I then will show how such political objectivities were incorporated into technical knowledge by organic intellectuals of the hegemon. Since the hegemon’s media are believed to take a part in transforming such knowledge into public knowledge, next, I aim at elucidating their involvement in building up political authority. Considering that the hegemon’s leadership will be supported by educating public opinion in weak states, next, I pay attention to untangling how the hegemon persuaded weak states’ power elite to accept its leadership.
17
Looking into South Korea, I intend to show first how the hegemon’s coercive power paves the way for the South Korean government to cooperate with the hegemon.
Then, assuming that the hegemonic state will exploit pre-established positive relationships between hegemon’s affiliations and weak states, I seek to reveal whether there actually find the presence of soft power. Because my model also presupposes voluntarily assistance of Korean symbolic elite, my next focus is given to understanding how Korean intellectuals led their ordinary public to go along with the leadership.
Presuming that the hegemon can launch public information campaign through Korean media, my final intention is to reveal Korean journalists’ role in completing the cycle of the leadership. However, in focusing on the Korean case, my ultimate intention is to bring forth collective wisdom in envisioning a world after the decline of U.S. dollar hegemony.
1-4: Research questions
Since I intend to examine the hegemon’s construction of intellectual leadership along with its unfolding the leadership in South Korea, my research questions constitute two larger sets of research questioning and queries in six sub-set of inquiring. Thus my first set of research questions seek to identify U.S. structural agenda along with foreign policies in coping with the Asian crisis and what the primary objectives were. After identifying the presence of political causes, I then examine whether the hegemon’s policy-makers actually developed a research consensus by investigating their adoption of specific frames and policies toward the Asian Monetary Fund (AMF), Dr. Mahathir, then
18
Malaysian Prime Minister, and the New International Financial Architecture (NIFA).
Highlighting the hegemon’s urgency in exerting intellectual leadership, the last question is given to identifying alternative political frames.
As residing U.S. intellectuals are organically connected to the national interest of hegemon, the following requires focus on unraveling, first intellectuals’ symbiotic relationship with the hegemon’s power elite, and then on how such a pre-determined frame was transformed into their academic research. I then look at how the technical frame can be suited into shaping attitudes toward the AMF, Dr. Mahathir and the NIFA.
Noticing that the intellectual community within the hegemon promotes internal debates in order to build up academic authority, next, I examine who those defenders of alternative frame were, why they failed in obtaining political authority, and whether they were able to overcome hegemonic frames inherited from the hegemon’s structural agenda.
Third, because the prestigious news media take a critical part in building up public authority, I investigate the media’s adopted frames and their attitudes toward the
AMF, Dr. Mahathir and the NIFA. But, on this stage, I also ask whether there were differences in the content between U.S. media and those of Britain. I argue that the hegemon’s professional communicators form a symbiotic relationship with hegemon’s elite and therefore the nationality of the media in covering the crisis is important. Then, in order to understand how they assisted in promoting the technical frame, I identify the primary cue-givers and examine their interlocking relationships with the hegemonic power elite.
Fourth, for the purpose of understanding how the hegemon’s leadership actually unfolded in Korea and how the Korean power elite assisted in the process, I look at the
19
coercion by the hegemon in the initial stage of Korea’s cooptation. My particular
attention is thus given to collecting evidence of U.S. pressure from September 1997 to
December 1997. Shifting focus on Korean officials, I follow with questions about their
understanding of the Korean crisis and their pre-established relationships with the
hegemon’s affiliations such as the IMF, intellectuals and the media. Lastly, I seek to
apprehend what specific frames they tended to adopt and how their understanding
unfolded as they shaped attitudes toward such issues as the AMF and the NIFA.
Fifth, as suggested by the model, my next set of research questions looks at how
and why Korean intellectuals tended to go along with the hegemon’s leadership. Hence I
start by identifying who those newly emerged Korean authorities were, what frames they
adopted and any connections between their foreign academic training and the adopted
frames. Then, noting that there can be pre-established intellectual apprenticeships
between Korean intellectuals and those of the hegemon, I look for evidence of their
apprenticeship. By analyzing their academic research, I identify their academic reliance
on the hegemon. My next question is given to identifying who the defenders of political
frame were, and how they were able to adopt alternative frames. In noticing that they failed to draw public attention, my last question is why.
Since I assume in this model that Korean media will also play a critical role in interpreting the crisis, my final questions are given to apprehending the professional communicators in Korea. I first ask about their adoption of specific frames and examine their attitudes toward the AMF, Dr. Mahathir and the NIFA. I then examine who the primary cue-givers were in the Korean media in order to understand their relationship
20 with Korean power elite. In looking closely at the cue-givers, finally, I show why they inclined to rely more on affiliations with the hegemon than their own power elite.
1-5: The value of this study
This case study alone cannot untangle a comprehensive structure of U.S. hegemony. Yet by applying the hegemon’s intellectual leadership model to South Korean case, we can understand how U.S. hegemony was able to generate the active cooperation of weak states. In demonstrating the relationship between power and knowledge, this dissertation is also helpful in shifting academic attention from scientific and instrumental knowledge to public knowledge for politics represented by policy analysis and news.
Also, in examining the role of the news media in sustaining U.S. hegemony, it is plausible to take the politics of news media into serious account. That is, in the one way, rather than designating the news media as a neutral information provider, it helps perceive journalists as “professional political communicators” who may be able to provide a truer sense of public spheres. In setting up such spheres, I suggest that they can bring forth the collective wisdom of the public, as well as induce the public’s active and positive involvement in public affairs. In the other way, just as public journalism movement seeks to motivate the ordinary citizens to involve in public affairs, this dissertation helps envision how nation-states can employ globalized news media for engaging in international affairs.
By employing various academic disciplines such as international political economy, international relations, and global finance, as well as media studies I also seek
21 to provide an example of recognizing a more comprehensive view of this topic. Finally, based on the intellectual model, it is likely weak states to seriously consider setting up their own think thanks as well as bringing up professional communicators.
1-6: The organization of the dissertation
Because the leadership model assumes U.S. hegemonic order, I start Chapter Two by providing the reasons for why the current world structure can be better seen as U.S. hegemony. While articulating key concepts such as “power structure,” “national interest” and “the public,” I explain analytical benefits of adopting the hegemony view. In paying closer attention to the historical development of the international monetary system, I then show the organic relationship between U.S. leadership and the current financial system.
The primary heed is thus given to understanding U.S. involvement in the Bretton Wood
System, the free-floating foreign exchange rate regime in 1970s, the Latin America debt crisis in 1980s, and the U.S. strong dollar policy in mid 1990s. Given the inherent weaknesses of the current system, the final part of this section is devoted to exposing negative effects of U.S. dollar hegemony.
My model presupposes that hegemon’s leadership is supported by its organic intellectuals and professional communicators. Since I will consider state’s organic intellectual in Chapter Two, I begin Chapter Three with explaining why news can be perceived as a form of “publicly disposable knowledge for politics.” Intending to show news media’s symbiotic relationship with national interests, I then look more closely at such approaches as the propaganda model, the hegemonic model and the fourth estate
22
model. Pinpointing the strategic relationship between the elite news media and the
foreign policy, next, I explore how actors such as the news media, thinks tanks and
universities play a role in creating the intellectual leadership. Considering that the
hegemon will engage in public opinion in weak states, the last part of this chapter is
given to reviewing the debates over the New International Information Order (NIIO) in
the late 1970s and to applying it to U.S. hegemonic interests.
The model of intellectual leadership makes it necessary to divide the circuit of
mass communication into production, mediation and consumption. Thus, in Chapter Four,
I start with articulating methodologies borrowing from previous studies. Specifically, I
review Edward Said’s work on Orientalism in order to understand the process of research
consensus building.16 I also review media frame studies including the work of Robert
Entman and Todd Gitlin.17 After presenting the research designs, my next section is
devoted to presenting how I conceptualize “research frames,” “cue-givers,” “symbolic
stages,” and “attitude.” Finally, I discuss the data set and sources including government
documents, research articles and news articles.
In Chapter Five, I begin to briefly introduce the Asian crisis and its evolution in
order to help understanding the context surround the AMF, Dr. Mahathir and the NIFA.
Following analysis of the hegemon’s structural agenda and specific foreign policies, I
then move to investigate how the U.S. governmental view of the crisis evolved into a
technical frame that defined the crisis as an “inevitable economic crisis of Asian crony
16 Edward Said, Orientalism. New York, Vintage Books, 1994. 17 Robert Entman, "Framing: Toward clarification of a fractured paradigm." Journal of Communication 43: 51-58, 1993; Todd Gitlin, The whole world is watching : mass media in the making & unmaking of the New Left. Berkeley, University of California Press, 1980.
23 capitalism.” The involvement of intellectuals and professional communicators in creating intellectual leadership will be investigated as well in this chapter.
Since I intend to reveal how the intellectual leadership was supported by South
Korean power elite, I start Chapter Six by presenting the presence of coercion by the hegemon. In order to understand why Korean government officials tended to rely on affiliations with the hegemon, I then discuss the presence of positive relationships and the adopted frames of Korean officials. Moving to Korean intellectuals, I review their academic training in U.S. and show how it ends up as a form of intellectual apprenticeship. Finally, noting that Korean media also supported the hegemon to pursue its leadership, I show that the Korean media’s performance was highly reliant on hegemonic affiliations. The final part of this chapter is thus given to analyzing why they failed in assisting the Korean power elite to pursue political causes in the interests of the
Korean people.
In the summary, Chapter Seven, my attention turns to analyzing the hegemon’s advantages in achieving its leadership. Noting the presence of intellectual labor division between the hegemon and South Korea, I then diagnose the structural disadvantages of weak states. In articulating implications, my final attention is given to searching for the likely mechanism by which both the hegemon and weak states might improve the quality of intellectual leadership. Hence, in reminding that hegemonic affiliations owe their successes to legitimacy and credibility, I suggest improving international accountability by constructing a more democratic international information order. Since I observe that those symbolic elites in South Korea failed to elaborate their own perspectives, I also
24 urge weak states to build up their own think-tanks and to educate professional communicators.
25
Chapter Two
U. S. hegemony and global financial architecture
The intellectual leadership model presupposes that the contemporary international system, especially the financial architecture, can be better understood as one based on
U.S. dollar hegemony. Thus, in what follows, I pay particular attention to articulating such concepts as “international power structure,” “national interests,” “state power elites,” and “the public.” Since the perspective of dollar hegemony is also based on theoretical assumptions, I intend to clarify the benefits of adopting this view. In order to provide more specific evidence of the hegemonic approach, I then look closely at the evolution of the current financial system. I briefly examine the U.S.’s involvement in the system from the mid 1945 to the early 1970 to the Latin Debt crisis and the strong dollar policy in 1995. In attempting to expose the organic relationship between U.S. leadership and the financial system, in this section, my focus is given to apprehending how hegemon responded to external challenges. Because I strongly sense drawbacks of the present global monetary order, in the end, I hope to highlight the negative effects of U.S. dollar hegemony.
2-1: Theoretical framework of U.S. hegemony
Different assumptions surely resulted in different solutions in the Asian crisis. If it were assumed as an inevitable economic crisis of capitalism, for example, it would be reasonable to look for solutions in the over-accumulation of capital or the global business
26
class. But, were the crisis assumed as an avoidable currency crisis of the current financial
system, solutions would be found in systematic deficiencies of the system or the
interventionist interests of the powerful states. Thus I take the perspective of U.S.
hegemony with reliable reasons to suppose the view. Since I intend to make suggestions
about “what should be done,” to clarify assumptions is also critical. I thus begin to look at
the power structure of the current international system and intend to expose the likely
sites of decision-making.
For me, the present international system can be better perceived as “a collection
of national systems and, at the same time, as a single global monetary system, unevenly
and incompletely integrated perhaps, but basically functioning as a single interacting
system offering global opportunities and incurring global risks.”18 Yet although I assume the presence of world system, at first, it is not invisible markets but political decisions that resulted in the current system. My assumption thus goes along with Robert Gilpin’s view that “States, particularly large states, establish the rules that individual entrepreneurs and multinational firms must follow, and these rules generally reflect the political and economic interests of dominant states and their citizens.”19 Noting that multinational institutions such as the Group Seven (G7), the International Monetary Fund
(IMF) and World Bank are not a democratic institution, it is necessary to define the U.S. as working “structural power.”20 This means that, as Susan Strange noted, the U.S. has
“the power to choose and to shape the structure of the global political economy within
18 Susan Strange and Political Studies Association of the United Kingdom, Paths to international political economy. London & Boston: G. Allen & Unwin, 1984, p. 76. 19 Robert Gilpin & Jean Gilpin, Global political economy : understanding the international economic order. Princeton, Princeton University Press, 2001, p. 12. 20 The Group Seven includes Britain, Canada, France, German, Italy, Japan and the U.S.
27
which other states, their political institutions, their economic enterprises, and (not least)
their professional people have to operate.”21
Admitting the pre-eminence of U.S. power, it is also implied that “there is
cooperation in the issue-areas and with the countries of America’s choosing; the choice
of areas and of partners is a political choice and at the same time a demonstration of the
authority exercised indirectly as well as directly by the United States over the world
economy and society.”22 This follows with the views that “US influence is almost always effective in securing a hearing and some actions within IMF and the World Bank” and that “in practice, U.S. has been the dominant power in the IMF as well as WB and
GATT/WTO.”23 Moreover, as pointed out by Strange, I suppose that the U.S. has been able to control not only the system of production, but also security, the system of finance and credit, as well as knowledge.
My second presupposition is that national interests will prevail over class interests represented by the system of production. Thus, for me, the priority of nation-states will be given to national security and “[t]he key decisions and choices that affect them [world people] will have been made by states not by class leaders.”24 Since nation-states and the
governments are believed as the apex of global power, it goes along with the view that
“powerful as they [transnational corporations] are, they must still obey the orders of
governments for the simple reason that their presidents and managers, jet-borne though
21 Susan Strange, Mad money : when markets outgrow governments. Ann Arbor, University of Michigan Press.1998, p. 132. 22 Susan Strange, The Retreat of the state : the diffusion of power in the world economy. New York, Cambridge University Press.1996, p. 193. 23 Foot, R., MacFarlane, S. N., & Mastanduno, M. US hegemony and international organizations : the United States and multilateral institutions. Oxford England ; New York: Oxford University Press. 2003, p. 109; Gilpin and Gilpin, p. 385. 24 Strange, 1996, p. 194.
28
they perpetually are- still have homes and often wives and children and passports.”25
Similarly, a nation’s policy makers are believed to put special interests into the context of national interests not vice versa. I thus reject the notion that U.S. economic policies are dictated by the “Wall St.-Treasury complex.”26 Instead, I agree with the state-centric view that “while economic factors are obviously important for the emergence and success of Multi National Corporations, they could not exist without favorable international political environment created by a dominant power whose economic and security interests favor an open and liberal international economy”27 The centrality of national interests thus helps assume the next position on the “nation-state’s power elite.”
My third assumption is to recognize the autonomy of the state’s power elite and of national government in pursuing the national interest rather than to define the state as acting “the ideal collective capitalist,” which advances the perceived interests of capital.28
Accordingly, I do not accept the view that “the contemporary capitalist state emerged as a response to the continuing economic crises produced by contradictions inherent to the capitalist mode of production.”29 Even though the business elite or capitalist class appears to prevail over national politics, it is believed, they are less so in the case to national security and foreign policy. I admit the possibility however that “claiming to represent the national interest is a common tactic to promote narrow interests and to marginalize the claims of other individuals and groups.”30 Similarly, I agree with William
25 Strange, 1996, p. 194. 26 Bhagwati Jagdish,"The Capital Myth: The Difference Between Trade in Widgets and Dollars." Foreign Affairs 77(3): 1998, p. 7. 27 Gilpin & Gilpin, p. 288. 28 Goran Therborn, quoted in Ronald Bettig, Copyrighting culture : the political economy of intellectual property. Boulder, Colo., Westview Press, 1996, p. 118. 29 Bettig, p.109. 30 Lawrence Jacobs and Robert Shapiro, Politicians don't pander : political manipulation and the loss of democratic responsiveness. Chicago, IL., University of Chicago Press, 2000, p. 304.
29
Domhoff in the view that “the important issue is not defending of a national interest said
to derive from the goals of the state but the defining by private citizens and state leaders
alike of what comes to be accepted as the national interest.”31 Yet I do differ from his
view since he fails to recognize the potential of the public and the centrality of public
opinion in democratic politics. My last assumption is therefore to put the public along
with the professional class on the central stage of politics. For the purpose of articulating
the assumption on the public, I begin to look closely at the historical development of the
public.
Evidence in the Western hemisphere indicates that the public has been historically
established with the emergence of the middle class along with the dispersion of
knowledge through print materials in the early 18 century. Harris Bob thus claimed that
“by its growing ability to open up Parliament to public scrutiny, the press helped to
provide a common political vocabulary and framework within which the discussion of
political developments and events could take place.”32 But a critical point of notice is that such political participation by the public has been possible through a series of “battles against authoritarian rulers who were fully aware of the dangers to which they were exposed by the dissemination of unorthodox opinions and ideas.”33That is, it signifies that the contemporary power order known as democracy was fully materialized with political struggles led by the public side-by-side with the press. Hence it is reasonable to think that
31 William Domhoff, The power elite and the state : how policy is made in America. New York, A. de Gruyter, 1990, p. 107. 32 Bob Harris, Politics and the rise of the press : Britain and France, 1620-1800. London ; New York, Routledge, 1996, p. 86. 33 International Commission for the Study of Communication Problems, Many voices, one world : communication and society today and tomorrow : towards a new more just and more efficient world information and communication order : report. London, New York, Kogan Page ;Unipub., 1980, p. 8.
30
the U.S. government will pay particular attention to obtaining public support for
managing the system.
It is one thing to recognize that the powerful will attempt to manipulate public
opinion. Yet, undoubtedly, it can be quite another thing to believe that public opinion will
not be critical in pursuing national politics. Similarly, the notion of state’s power elite
helps further suppose that both intellectuals and news media can be key elements in
constituting the power elite. That is, for this dissertation, the professional class
represented by top-level intellectuals and elite media are seen not as a part of the global
capitalist class but as a part of national power elite. Hence they take an active role not
because of coercion or manipulation but because of their shared national interests. In
emphasizing their symbiotic relationship with nation-states, accordingly, it subscribes to
the view that “knowledge, knowledge institutions and intellectuals must be analyzed
within the context of the establishment or establishments rather than as independent or
free-floating forces.”34 Noting the importance of professional communicators, Lawrence
Jacobs and Robert Shapiro insisted in this regard, "If the press devoted more and better attention to the public's preferences toward substantive policy issues, it would reinvigorate discussions about the quality of public opinion and its appropriate role in democratic government."35 Table 2:1 below is therefore presented to visually summarize
my assumptions.
34 Parmar Inderjeet, Think tanks and power in foreign policy : a comparative study of the role and influence of the Council on Foreign Relations and the Royal Institute of International Affairs, 1939-1945. New York, Palgrave Macmillan, 2004. p. 222. 35 Jacobs & Shapiro, p.334.
31
Table 2:1: Key assumptions of this dissertation
International power order U.S. structural power (unilateral especially in finance)
Structural agenda National interests (security, finance/credit, economic production and knowledge)
Apex of power (domestic) National government managed by state’s power elite
Roles of public The presence of public opinion along with public spheres
Noting such assumptions, my attention turns below to reviewing the U.S. engagement in
the evolution of the current financial system.
2-2: U.S. dollar policy and the international financial architecture
Money serves, in principle, three key functions: It is a medium of exchange, a unit
of account, and a store of value. Obviously, it is the U.S. dollar that enjoys the key
currency status as the world’s leading reserve and vehicle currency, and the most widely
accepted standard of value. Historical experiences show however that political
involvement led to economic involvement and eventually brought about this key currency
status of U.S. currency. Strange thus noted that “once in place, international economic involvement, in turn, increases the interest of the key currency in maintaining as much political dominance as well.”36 Although the dollar appeared to be “elected” by market forces, C. Fred Bergsten also insisted that “[a] world political role was a necessary precedent for such election, and subsequently reinforced the market’s choice.”37 Robert
36 Susan Strange and Royal Institute of International Affairs, Sterling and British policy: a political study of an international currency in decline. London, New York,, Oxford University Press, 1971, p. 15. 37C. Fred Bergsten, The dilemmas of the dollar : the economics and politics of United States international monetary policy. New York, New York University Press, 1975, p. 420.
32
Roosa, a former U.S. Treasury Undersecretary, confessed similarly that “to use the dollar as the major currency reserve gives it a role which naturally accompanies our leading economic and political position.”38 Even when the sterling pound was the leading world currency, in fact, Britain ran trade surpluses in only five years during the period from
1796 to 1913.39 Hence it is plausible to associate the dominance of the U.S. dollar with
U.S. political power in general and the dollar policy in particular. Yet before exploring
the development of U.S. dollar policy, it is helpful to articulate what constituted it.
The dollar policy can be generally defined as the central component of the
monetary policy of the U.S. The policy was represented by a foreign exchange rate policy and supplemented by domestic monetary policies that included budget and interest rate policies. Yet it is critical to note that such a wide range of policies, in connection with
U.S. foreign policy, clearly aimed at maintaining the reserve currency role of the dollar.
That is, the primary purpose of the policy is to assist the U.S. in acting as the world central bank and ultimately to sustain U.S. economic leadership. Unmistakably, there was no officially proclaimed U.S. dollar policy except for “a strong dollar policy” that intended to appreciate the value of the dollar against other currencies. But it is critical to note that the primary objective of the dollar policy is not to elevate dollar price, which has had negative impact on trade deficits. Nor was it to devaluate the dollar level. That would be detrimental in maintaining the status of dollar as an international reserve currency. It was largely believed though that gradual depreciation of the dollar value might reflect the dwindling power of U.S. as a financial hegemon. Thus when the U.S. dollar was devaluated from 357 in 1971 to 81 against Japanese yen in 1995, Paul Erdman
38 Robert Roosa, quoted in Bergsten, p. 151. 39 Bergsten, p. 170.
33
argued that the European common unit (ecu) and the yen would be able to replace the
dollar.40 Just as the U.S. replaced Britain, Erdman thus argued that “Japan’s huge trade
surpluses and strength of yen would allow it to pile up wealth and grow strong at the
expense of the United States.”41
Accordingly, there was less favor with the dollar devaluation than valuation.
However, it was repeatedly assured that the best option was to maintain a stable value in
order to buttress the role of dollar as a reserve currency. Thus, although the U.S. took a
benign neglect policy by stating that “market, not government, would decide the value of
dollar,” this did not mean that the U.S. government abolished the dollar policy. Instead, it
was to say that the U.S. government would intervene into the market when it failed to
reflect economic “reality” as happened in 1979, 1987, 1993, and 1995. Not only was the
Plaza Accord in 1985 the only time the dollar was devaluated, but it was soon reserved to
elevate the dollar at the Louvre Accord in 1987.42 Similarly, there were repeated
interventions by the U.S. government when the Mexican peso crisis occurred in
December 1994 and pressured the dollar. Historical reviews further reveal that such a
tendency toward intervention can be traced as far back as 1944.
Specifically, in designing the Bretton Woods system in 1944, the U.S.
government did not accept the idea of launching an international reserve currency not
based on national fiat money. Nor did it appear to be concerned about structural
vulnerabilities of the dollar-based system. The warning of Robert Triffin at Harvard
40 Paul E. Erdman, Tug of war : today's global currency crisis. New York, St. Martin's Press, 1996, p. 81 41 Erdman, p. 132. 42 The Plaza Accord refers to the event that G-5 nations (France, West Germany, Japan, the United States and the United Kingdom) agreed to devalue the U.S. dollar in relation to the Japanese yen and German Deutsche mark on September 22, 1995 at New York Plaza Hotel. The Louvre Accord was signed by the then G5 and Italy to halt the continued decline of the U.S. dollar caused by the Plaza Accord.
34
University that the “[U.S.] won’t be able to manage the system beyond private interests such as the profits or seigniorage it gains from its international banking service, oversea activities, and asset acquisition” thus materialized when U.S. president Richard Nixon blocked gold convertibility in 1971. Quite assuredly, the demise of the Bretton Woods
System cannot be merely reduced to the responsibility of the U.S. Indeed, while the
Europeans put blame on Americans for having neglected their responsibilities, the
Americans accused the Europeans (especially the Germans) of failing to make the necessary adjustments. Yet, both the evolution of the Bretton Woods system and a dollar- based free-floating regime made it plausible to believe that U.S. financial policies would take a more crucial role. For this purpose, I review the evolution of the present monetary order.
Bergsten divided the Bretton Woods era (1944 – 1971) into the following three phases: from the end of the World War II to 1958; from 1967 to1968; and to 1971 when
Nixon abandoned gold convertibility. The so-called ‘dollar shortage’ period thus started just after World War II and lasted until 1958. Since the sterling lost its status as an internationally acceptable currency due to war damages and repeated devaluations, the
U.S. dollar worked as the only internationally reliable currency that provided international liquidity and credit. Yet the second phase from 1958 to 1967-68 started with the return of the European currencies as the European countries, in particular West
Germany, were able to significantly improve their current account balance. During the
1960s, the large amount of U.S. capital outflows also steered Europeans to subscribe to the conviction that the privilege conferred on the U.S. government by the key currency status of the dollar allowed it to exchange paper dollar assets for control over European
35
resources. But the U.S. was still believed to control the behaviors of those surplus countries including West Germany and Japan during the second phase. For instance,
West Germany formally renounced its right to convert dollars into U.S. gold in 1967 in order to relieve the burden on the U.S. and to avoid the risk of U.S. troop withdrawal. Yet a sharply increased U.S. current account deficit along with the outbreak of the Vietnam
War and growing uneasiness with U.S. foreign policies behooved European countries, including Britain, to accelerate converting dollars to gold up through the final phase.
Moreover, since the U.S. balance-of-payment deficit eventually resulted in either a loss of gold stock or an accumulation of foreign liabilities, there was a growing concern by Europeans about sustaining the exchange value of the dollar against gold at the price of $35. For European bankers, the solutions were both the deflation of the U.S. economy and reduction of U.S. economic and military aid to developing countries. Because the
U.S. was the only nation capable of financing balance of payment deficits as well as of breaking up the so-called gold-dollar exchange system, however, neither the creation of the international central bank nor inventing “independent” international reserve assets came into being.43
Instead, U.S. policy-makers took actions to strengthen capital export controls and
pushed foreign central banks to hold U.S. dollars in such forms as non-marketable,
nonconvertible, and medium-term U.S. Treasury bonds better known as Roosa bonds.
That is, the U.S. made it clear that the primary objective was not to give up the advantage
of the dollar as an international key currency but to limit abrupt capital exodus from U.S.
Andrew Walter thus noted that “there was less incentive for U.S. to accept a collectively
43 Fred Block, The origins of international economic disorder: A study of United States international monetary policy from World War II to the present, University of California Press, 1977, p. 197.
36
managed system because the importance of the dollar in the international monetary and financial system steadily grew in the late 1960s and into the 1970s.”44
In this historical context, Bergsten proposed an alternative monetary regime known as the dollar based free-foreign exchange regime. Unlike Britain which paid extra insurance fee on the sterling because of alternative assets such as U.S. dollar and gold,
Bergsten thus advised the U.S. government to exploit its competitive advantage in financial market.45 For this policy to be successful, he assured that two requirements be met in advance. First, were the dollar again to meet the necessary criteria of a key currency, the U.S. would need to build dramatically the size of its economy, a well- developed financial market, and strong confidence in the political system. Second, more critically, there would be no appropriate substitutes for the U.S. dollar as an international
reserve asset.
U.S. policies, particularly those blocking alternative reserve assets since the mid
1960s, have shown a strong parallel to the proposal. At first, U.S. policy makers prepared
for the total elimination of gold as a serious contender against the dollar by launching
Despres Plan (1965-66) which assured convertibility into dollars at a fixed price of $35,
much higher than market price.46 Such an effort to give the Special Drawing Rights
(SDRs) an international reserve status in 1969 was also neutralized by U.S. veto power.
As a result, the level of international liquidity has been entirely dependent on U.S.
Federal Reserve Boards and the Treasury Department since 1971. Robert Gilpin and Jean
Gilpin thus maintained that President Nixon destroyed the system of fixed exchange rates
44 Andrew Walter, World power and world money : the role of hegemony and international monetary order. Hemel Hempstead, England, Harvester Wheatsheaf, 1991, p.121. 45 Bergsten, p. 170. 46 Benjamin Cohen, The geography of money. Ithaca, N.Y., Cornell University Press, 1998, p 5.
37
in August 1971 since he believed that it no longer suited American interests.47 Figure 2:1
is thus helpful to understand this point by showing that gold has clearly lost its role as an
alternative international reserve asset since 1971.
Figure 2:1: International reserve assets
100 Gold share 80 )
ve asset 60 Currency share
100% 40 eser ( SDRs & IMF
al r 20 positions share t o
T 0
45 60 70 80 90 92 94 96 98 00 19 19 19 19 19 19 19 19 19 20
(Data from 1991 to 1994 includes only non-debt serving countries)
It is critical to note however that such a shift was not made by market force but by
political decisions initiated by the U.S. That is, it was possible since Henry Kissinger,
then Secretary of State, made all OPEC oil sales denominated in dollars by establishing
“the US-Saudi Arabian Joint Commission on Economic Cooperation” in June 1974.48
Henry Liu claimed that U.S. dollar hegemony was “created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars.”49 In this regard, not only the quadrupling of oil prices in 1973-74 but also
47 Gilpin & Gilpin, p. 88. 48 Bulent Gokay, War in Iraq, petro-dollar and the challenge by euro, Middle East Information Center, 04/30/04. 49 Liu, H. C. K. “US dollar hegemony has got to go,” Asia Times, 04/11/02
38
sudden debt problems in Latin America cannot be correctly understood without
considering such political actions initiated by the U.S.
Just as Asian crony capitalism was criticized as the primary problem behind the
1997 crisis, the majority of Westerners tended to believe that the Latin American debt
crisis primarily stemmed from endogenous factors such as run-away government
spending and currency overvaluation. C. Roe. Goddard thus noted that “highly evaluated
foreign exchange rates not only decreased the competitiveness of Less Developed
Countries exports and worsened the trade deficit but also encouraged local residents to borrow abroad.”50 Similarly, he added that “reportedly government-initiated projects [of
Brazil] were taken in order to improve the ruling party’s track record before elections.”51
Yet, again, it is critical to note that the debt crisis in Latin America was also strongly associated with U.S. dollar policy especially Federal Reserve Bank’s interest rates policy.
Noting that Latin American countries borrowed mostly from private banks based in London and New York on a relatively short-term basis, Goddard claimed that “the burden of interest rates was unbearable when the United States and Great Britain were both pursuing restrictive monetary, anti-inflationary policies.”52 Indeed, as shown in
Figure 2:2, there has been a striking increase of interest payment costs since 1979 when the U.S. adopted a strong anti-inflationary policy by hiking interest rates. It was thus known that “the interest/export ratio in 1983 was about 37 percent for Brazil, 37 % for
Mexico, 42% for Argentine and 25% for Venezuela respectively.”53
50 C. Roe. Goddard, U.S. foreign economic policy and the Latin American debt issue. New York, Garland, 1993, p. 9. 51 Goddard, p. 9. 52 Goddard, p. 12. 53 Kari Polanyi Levitt, quoted in Goddard, p. 28.
39
Figure 2:2: Debt service in non-oiling developing countries (1973-84)
120
100
80 Debt Service 60 Interest Amortization 40
20
0 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984
There certainly are much more complicating factors associated with the origins of the Latin American debt crisis. But it would be beneficial, regarding U.S. dollar policy, to look at how the policy was associated with the crisis. For example, Robert Triffin and
Richard Cooper asserted that “it was the irresponsibility of the United States in first allowing the over-lavish creation of credit and then bringing about its drastic contraction at the end of the 1970s that lay at the root of other troubles [including the debt crisis].”54
Similarly, it was insisted that “since impulses from the United States tend to have a much greater effect on the rest of the world, a dramatic shift in the American monetary policy in 1979, which instigated a rapid process of disinflation and sent real interest rates to record highs, directly bring about the intolerable burden of debt payment for most of the
Latin American states.”55
54 Robert Triffin & Cooper Richard, The International monetary system under flexible exchange rates : global, regional, and national : essays in honor of Robert Triffin, Cambridge, Mass., Ballinger Pub. Co., 1982, p. 16. 55 Walter, p. 215.
40
Still, an important question would be why, then, the U.S. tended to raise interest
rates that would be detrimental to its economy. George Tarlas thus claimed, “While being
confronted with double-digit inflation at home and flooded dollar markets throughout the
world forcing foreign financial institutions to begin to liquidate their dollar holdings by
1978, the rate boost-to suppress inflation was considered the best strategy to bring a halt
to the credit expansion and to save the dollar standard.”56 Emphasizing that the primary task of FRB would be to preserve the integrity of the dollar, Erdman also supported this view by insisting that “during the first half of the 1980s, extremely high American interest rates had attracted money from all over the world, a process that pushed up the exchange value of dollar.”57 Congruently, Jeffrey Sachs and Steven Radelet ascertained that “in the 1982 debt crisis in Mexico, the most important shifts were the steep rise in interest rates in the United States and the accompanying steep appreciation of the U.S. dollar.” 58 It is thus crucial to keep in mind that the U.S involvement in the global
economy was organically bound up with U.S. dollar policy underwritten by its national
interests. My attention now turns to understanding “the strong dollar policy” in 1995 and
suggesting a U.S. strategy for alternative reserve currencies.
So as to understand the strong dollar policy, though, it is important to remember
that the current dollar-based system virtually deprived the U.S. government of the chance
to reduce its trade deficit, though not its federal budget deficit. That is, because the U.S.
dollar played the role of an international reserve currency, improving the U.S. trade
balance would result in squeezing global liquidity unless trade-surplus countries would
56 George S. Tarlas, “The international use of currencies: to U.S. dollar and the euro,” June, 1998. 57 Erdman, p. 26. 58 Steven Radelet & Jeffrey D Sachs, The onset of the East Asian financial crisis. Cambridge, MA, National Bureau of Economic Research, 1998, p. 3.
41
channel their dollar earnings to trade-deficit countries. On the one hand, since those
surplus countries such as Japan and South Korea needed to protect their currencies from
speculative attacks, they tended to accumulate U.S. dollars as foreign reserve assets. On
the other hand, even more crucially, the U.S. Treasury intended the earnings from trade-
surplus to come back to the U.S. not only for financing the U.S. deficits but also for
pushing trade-deficits countries to put financial disciplines into practices. Strange thus
claimed that “if the surpluses had gone instead to the high-growth developing countries,
whether in the form of loans or direct investment, who can doubt that Third World
debtors would have been spared seven very lean, hard years.”59 Noting such a systematic
problem, Liu was also able to claim that “world trade is now a game in which the US
produces dollars and the rest of the world produces things that dollars can buy. The
world's interlinked economies no longer trade to capture a comparative advantage; they
compete in exports to capture needed dollars to service dollar-denominated foreign debts
and to accumulate dollar reserves to sustain the exchange value of their domestic
currencies.”60
It is thus crucial to note what motivated the U.S. Treasury to launch a strong dollar policy in 1994 was not Robert Rubin’s ideology known as “market fundamentalism” but the U.S. national interest bound up with the current system. The centrality of national interest was thus well articulated by Rubin, former Treasury
Secretary, in the following statement:
A strong dollar is in the best interest for our nation, while enhancing the international buying power of Americans and helping to curb inflation. By
59 Strange, quoted in Benjamin Cohen, The International political economy of monetary relations. Aldershot, Hants, England ; Brookfield, Vt., Edward Elgar.,1993, p. 517. 60 Liu.
42
limiting inflation, the stronger dollar also tends to reassure financial markets and hold down interest rates, which can be helpful to boost domestic investment. In addition, a stronger dollar is also needed to insure that central banks continue to hold large sums of dollars as part of their foreign exchange reserves. Moreover, it also helps insure that the United States can continue to finance its budget deficits by selling bonds dominated by dollars.61
For this to happen, the U.S. government started to push trade-surplus countries to open up their markets while at the same time sought to improve the balance of federal fiscal budget. Sachs thus stated that “Clinton deserves enormous credit for turning the country in the correct direction,” “even if the sacrifice he [Clinton] is asking for is tiny compared with what governments are asking of their citizens in much of the globe.”62
Yet in order to retain international confidence in the U.S. dollar at a time of mounting foreign liabilities, the U.S. government also needed to block the emergence of alternative international reserve currencies.
It was thus fully expected that the U.S. Treasury, not the IMF, would not allow
East Asians to set up the Asian Monetary Fund. Bergsten helped elucidate the point in saying that:
The United States may now find it essential to refocus on building transpacific institutional ties, along the lines of the transatlantic ties that have paid off so handsomely since the Second World War, to channel Asia-only arrangements [such as the AMF] that could do serious damage to US economic and even security interest in directions that would be supportive, rather than destructive, of US interests and the global system.63
Hence, it should be clarified that for Europeans a single currency was not a purely economic experiment but clearly a political choice. President Jacques Chirac of France
61 Robert Rubin, quoted in Christopher Drew, “Rubin sees the big powers focusing on effect of slump,” The New York Times, D-6, 01/19/96. 62 Jeffrey Sachs, quoted in Steven Mufson, “Administration's notion of economic sacrifice is modest by global standards,” The Washington Post: B12, 05/06/93. 63 C. Fred Bergsten, The United States and the World Economy: Foreign Economic Policy for the Next Decade, Institute for International Economics, January 2005, p. 52.
43
also made this point obvious by insisting, “The euro's main aim is to put Europe on an
equal monetary footing with the United States.”64 Bluent Gokay also clarified it by stating that the reserve currency status “benefits for ‘home’ financial institutions, relaxation of the ‘external constraint’ on macroeconomic policy, a greater role for the issuer in international institutions, and the wider geopolitical consequences of exercising currency hegemony.”65 Similarly, Gilpin and Gilpin noticed that “the hegemony of the
dollar conferred extravagant privileges on the United States, because it alone could
simply print dollars to fight foreign wars, could buy up French and other business, and
could go deeply into debt without fearing negative consequences.”66 It is thus reasonable to associate U.S. policy toward Iraq, Iran and Venezuela in early 2000 with defending the dollar as the international reserve currency.
64 Bulent Gokav, "War in Iraq, 'petro-dollar' and the challenge by euro," 04/30/04. 65 Gokav. 66 Gilpin and Gilpin, p. 237.
44
Chapter Three
Symbolic elite and intellectual leadership
The intellectual leadership model supposes that the hegemon’s power can induce
the “active, conscious and voluntary” involvement of weak states in achieving the
hegemon’s causes. I thus articulated, in Chapter Two, that a state’s power elite would pay
particular attention to obtaining public support. Yet because such public engagement can
be possible by instructing the public, I start by explaining why news can be better
perceived as a crucial element of “public knowledge” and then move to relating the news
media to national interests. Since I assume that professional communicators represented
by news media take a part in forming national power elite, here, I seek to show how news media are associated with U.S. foreign policy. Noticing the urgency of constructing
“enlightened national interests” of U.S., my final attention is devoted to explaining how international public spheres can be initiated by U.S. media.
Since I presume that the U.S. hegemon engages in instructing international public opinion, I also attempt to critically reflect on the debate over the New International
Information Order (NIIO). Following brief review of what motivated the debate and what constituted the primary concerns, I thus move to put the MacBride Commission Report in
1980 into a critical perspective. Because I intend to show the continuous disadvantages of weak states in the current information order, I finally envision a more democratic international information structure.
45
3-1: News media and foreign policy
For Joseph Nye, power refers to the capability “to effect the outcomes you want,
and if necessary, to change the behaviors of others to make this happen.”67 In the contemporary world, it appears that such power is more visibly exercised either by transnational corporations (TNCs) or such international organizations as the International
Monetary Fund (IMF) and World Trade Organization (WTO) than national state
governments. The gradual retreating of state power, however, does not necessarily
indicate that nation-states are no longer a primary player in international power struggle,
at least for protecting national interests such as political independence and a stable
currency. Robert Gilpin and Jean Gilpin thus claim that nation states “will not leave the
distribution of the global economic product and the impact of economic forces on their
national interests entirely up to the market.”68 Singling out the International Monetary
Fund (IMF), Strange further insists that “[Even this institution] is above all a tool of
national government, an instrument for the pursuit of national interest by other means.”69
However, such points as the existence of national interests or continuous power struggle among countries do not necessarily negate the point that national interests are largely determined by the ruling class. G. William Domhoff insists, for example, that “the important issue is not defending of a national interest said to derive from the goals of the state but the defining by private citizens and state leaders alike of what comes to be
67 Joseph Nye, The Paradox of American power : why the world's only superpower can't go it alone. New York, Oxford University Press, 2002. p. 4. 68 Robert Gilpin & Jean Gilpin, Global political economy : understanding the international economic order. Princeton, Princeton University Press, 2001, p. 12. 69 Susan Strange, States and markets. London ; New York, 1994, p. xiv.
46
accepted as the national interest.”70 Hence U.S. foreign policies backed by military interventions were paraphrased as positive evidence of U.S. public’s being manipulated, as well as the power elite’s successful construction of national interests. Edward Herman and Noam Chomsky contend that the manufacturing of consent involves “the U.S. government along side the business sector has mounted regular and quite self-conscious campaigns to control the public mind and suppress alternative viewpoints.”71 Stuart Hall additionally notes that such a strategy that aligning a particular class interest with the general interest of the majority has been of critical importance.72
Still, a noticeable point is that not only do such campaigns of manipulation come into being in liberal democratic societies, but national interests can also be conceived of as public goods. Thus, I first raise the question of how the ruling class has exerted its
power over the ruled. I also ask if national interests are actually pursued in line with
meeting general interests, will it be justifiable to argue that the public was merely
manipulated? Having considered that, I embark on exploring the media’s contribution to
constructing public knowledge, providing national symbolic stages for public deliberation
and constructing public consensus on government policies. Then, looking closely at
journalists’ engagement in foreign policy, I plan to evaluate the strengths and weaknesses
of such previous approaches as the propaganda model, the hegemonic approach, and the
fourth estate model. While attempting to clarify theoretical differences regarding
presuppositions, my focus will be given to unraveling journalists’ symbiotic relationship
with policy makers in pursuing national interests. And, finally, I will explore the possible
70 William Domhoff, The power elite and the state : how policy is made in America. New York, A. de Gruyter, 1990, p. 107. 71 Edward Herman & Noam Chomsky, Manufacturing Consensus, 1989, p. 28. 72 Stuart Hall, Policing the crisis : mugging, the state, and law and order. London, Macmillan, 1978.
47
strategies with which the nation state as a whole will be able to articulate ‘enlightened
national interests’ by facilitating public debate, as well as widening international
consensus on domestic policies.
News as “publicly disposable knowledge for politics”
When Louis Althusser insisted that “no class can hold state power over a long
period without at the same time exercising its hegemony over and in the State Ideological
Appartuses,” his focal point was not the mass media including the press, radio and
television but the educational apparatus.73 Michael Schudson similarly asserts, “They [the
media] are not more important influences on the fabric of society than, say, the family,
the schools, the criminal justice system.”74 Noting that the ruling class exerts its power through consensus, which legitimizes the existing distribution of power, Todd Gitlin further adds that “journalism exists alongside-and interlocked with- a range of other professions and institutions with ideological functions within an entire social system.”75 It is likely to argue that there is little reason of paying particular attention to the news media for the purpose of understanding how culture takes a part in legitimizing the status quo. I believe though that what is known as the status quo is indeed a process not a fixation and, as a result, under the influence of collective human interventions such as government policies. Moreover, since the news (media) are supposed to help define national interests, articulate public priorities and win public support, I sense that the objectives of such
73 Louis Althusser, Lenin and philosophy, and other essays. New York,, Monthly Review Press, 1972, p. 146. 74 Michael Schudson, The power of news. Cambridge, Mass., Harvard University Press, 1995. p. 17. 75 Todd Gitlin, The whole world is watching : mass media in the making & unmaking of the New Left. Berkeley, University of California Press, 1980, p. 251.
48
policies cannot be achieved without taking into account the media. Daniel Hallin makes
this point clear by noting that "the media would be the logical institution to fill the
legitimation gap [between the state and the mass public], especially in the United States
where they have almost complete formal independence from the state, and enjoy a much
higher level of public trust than most other institutions."76
However, in the U.S., news has been generally accepted as commodity with the development of industrialization and urbanization. James Carey thus alleges that “the methods, procedures, and canons of journalism were developed not only to satisfy the demand of the profession but also to meet the needs of industry and to turn out a mass- produced commodity.”77 Because news has been primarily produced for business
purposes, it is also alleged that such trivialized, dramatized and entertainment-oriented
news prevail over in-depth political information and result in weakening media’s
surveillance function against government and business elite.78 Besides being consumed as
commodity and functioning as an instrument for promoting capitalist ideology, news is
further believed to take a crucial part in constructing collective identities such as
nationhood. For example, Schudson designates news as “not the materials for rational
public discourse but also the public construction of particular images of self, community
and nation.”79 Even though Schudson recognizes the centrality of news in public
76 Daniel Hallin, We keep America on top of the world : television journalism and the public sphere. London ; New York, Routledge, 1994, p. 31. 77 James Carey, in Eve Munson & Catherine Warren, James Carey : a critical reader. Minneapolis, University of Minnesota Press, 1997, pp. 91 & 149. 78 Ben Bagdikian, The new media monopoly. Boston, Beacon Press, 2004; Ronald Bettig & Jinny Hall, Big media, big money : cultural texts and political economics. Lanham, Rowman & Littlefield, 2003. 79 Schudson, p. 484.
49
deliberation, for him, the news media are believed to play as more “cultural actors, that
is, as producers and messengers of meanings, symbols, messages” than political actors.80
Such points that not only do people use news for a variety of reasons such as entertainment and forming identities, but nowadays they are able to consume more information cannot be refuted. Nevertheless, news, especially provided by the independent elite media, draws my particular attention for the sequential reasons. First, as
Schudson acutely observes, the public does not consume news just for gossip or entertainment but more importantly as "a well-organized form of information in order to make sense of society."81 Equally, Thodore Rosak conceives of news as “focused enquiry
and interpretation based on a solid set of ideas about the world; what matters, where the
history of our time is leading, what's at stake, what are the hidden agenda, and what is the
living truth."82 Noting that people’s demand on news has a good deal to do with keeping up with external changes that may affect their daily life, Robert Entman additionally insists that the primary function of news is to “define problems, diagnose causes, make moral judgment and suggest remedies.”83
Second, it is critical to note that news, which helps us cope with external
challenges, is produced by journalists who follow professional norms such as accuracy,
balance and fairness in order to maintain credibility, as well as work collectively within
hierarchical news institutions. In this context, Schudson assures that “what the media
produce and reproduce is not information: it is what is recognized or accepted as public
80 Michael Schudson, The sociology of news. New York, Norton, 2003, p. 24. 81 Schudson, 1995, p. 17. 82 Thodore Rosak, quoted in Eldridge, J. E., T.Kitzinger, Jenny, & Williams, Kevin. ). The mass media and power in modern Britain. Oxford ; New York, Oxford University Press, 1997, p. 12. 83 Robert Entman, Projections of power : framing news, public opinion, and U.S. foreign policy. Chicago, University of Chicago Press, 2004, p. 52.
50
knowledge given certain political structures and traditions.”84 So it implies that, for instance, a news article published by the New York Times can be different from
generally available public information. Since this newspaper is believed to be a credible
institution, the readers tend to perceive it as “reliable public knowledge” that deserves
their attention.
The third critical point is to understand the relationship between the independent
news media from government control and democratic politics. It is thus crucial to
remember that representative democracy came into being only after the ordinary citizens
were able to access to politically sensitive information about decision-makings. Historical
evidences thus show that both the rulers and the ruled came to establish legitimacy based
modern politics by sharing the information. Associating the development of the press
with the public’s political participation, Bob Harris thus claims that “[t]he press can be
seen to have helped the middling ranks develop a clearer sense of inclusion in national
political culture.”85
However, a more critical point is that such information was obtained, not given,
by launching political struggles in order to take a part in public affairs in national politics.
For that purpose, in Carey’s terms, “the courts and legislatures granted special rights to
the press denied ordinary citizens; occasional immunity from giving testimony, the right
to withhold sources, protection against many libel claims, access to government
document and information.”86 The freedom of the press is thus justified insofar as the media can protect public interests not only by delivering diversity of viewpoints but also
84 Schudson, 1995, p. 31. 85 Bod Harris, Politics and the rise of the press : Britain and France, 1620-1800. London ; New York, Routledge, 1996, p. 109. 86 Carey, p. 80.
51
by performing as a watch dog against power abuses of policy-makers. Yet it is equally
important to bear in mind that the media’s abiding by public interests cannot be separated
from their national interests. Foreign journalists are undoubtedly not provided with the
privileges that the U.S. journalists take for granted. Since the public interests of the U.S.
are not necessarily identical to those of other states, it is therefore believed that the U.S.
media tend to develop a “symbiotic relationship” with their government.
Hence a final point of note is recognition of the inherent national characteristic of
the news media. Observing that information trickles down from government officials to
the public via journalists, Hebert Gans thus contends that “but as they [journalists]
translate that information into news, they frame it in a national context, and thereby bring
the nation into being.”87 Similarly, Robert Stevenson and Donald Shaw reveal that
“nations considered more like us in terms of economic philosophy, political system, values, languages, and so forth tend to be evaluated more favorably relative to those least like us.”88 Such points that not only are the media deeply nationalist but journalists
mostly confer reverence on government officials are thus repeatedly found.89
Of course, not everyone pays attention to news. So it is plausible to argue that the impact of news is less significant in the era of information plentitude. Still, Benjamin
Page argues that “a lot of information, and reasonable conclusions from it, will trickle out through opinion leaders and cue givers to ordinary citizens who can deliberate about it in their own small, face-to-face groups of family, friends, and coworkers.”90 Furthermore, it
87 Herbert Gans, Deciding what's news : a study of CBS evening news, NBC nightly news, Newsweek, and Time. New York, Pantheon Books, 1979, p. 298. 88 Robert Stevenson and Donald Shaw, Foreign news and the new world information order. Ames, Iowa State University Press, 1984, p.88. 89 Hallin, 1994 & Schudson 1995 & 2003. 90 Benjamin Page, Who deliberates? : mass media in modern democracy. Chicago, University of Chicago Press, 1996, p. 7.
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is still the prestigious media that will be able to draw public attention and define public
priorities. Noticing that the elite media are political actors, Page thus insists that they
“still played leading parts in provoking…… in publicizing and interpreting it [national
priority], and in shaping the responses of a wide range of print and electronic media.”91
Lance Bennett notes as well that when it comes to U.S. foreign policy, “The prestigious press [especially the New York Times] continues to set the tone and provide much of the content cues for the nation’s other mass media outlets.”92 Thomas Pickering, former U.S.
Under Secretary of State, confesses in this regard that “we [government officials] expect
there to be a reasonable, factual basis for criticism that doesn’t pretend to ignore the
considerations that governments bring to bear in developing policy.’93
Because the development of the Internet is believed to help alternative media
reach the general public, it is plausible to argue that the power of elite media will be
largely weakened. A noteworthy point is still that such alternative media largely lack in
drawing sufficient level of public attention let alone provide authoritative knowledge.
The independent media and foreign policy
Therefore, in the first place, it is helpful to contemplate on the special relationship
between the foreign policy, the prestigious media and information flow. In general, the
primary role of the media is not to directly engage in policy formulation. Instead, it is to
provide a symbolic stage for facilitating public communications between policy makers,
91 Page, p. 258. 92 Lance Bennett, in David Deese, The new politics of American foreign policy. New York, St. Martin's Press.Development, 1994, p. 18. 93 Thomas R. Pickering, 2003, p.103
53
law-makers and the public, to gain public approval and to mediate public opinion
Moreover, because politicians, backed by professional communicators such as ‘public
relations’ staffs, spin doctors and journalists, tend to manipulate public opinion, it has
been largely claimed that the public is not rational and public opinion is easily malleable
(Jacobs and Shapiro, 2000). Yet it is helpful to recognize the critical importance of public
opinion in achieving policy objectives. That is, not only does the public render political
legitimacy to politicians via opinion polls, but public support is also believed to
contribute significantly to expedite policy objectives. Indeed, the Clinton administration
paid particular attention to obtaining supportive public opinion in order to reduce federal
budget deficit in early 1990s.94 Similarly, soon after the first Gulf war in 1990, U.S.
General Thomas Kelly confessed that “[a]nyone who doesn’t recognize that the support of the American people is a critical element of combat power is pretty dumb.”95
How powerful the news media are in shaping public opinion is undoubtedly murky and varied considerably in accordance with researchers’ perspectives or the case in question. However, what pull such approaches like the propaganda model, the hegemony perspective, and the fourth estate model together is the conviction that
“although people often express routine skepticism about the media, in practice, in the absence of other sources of data, most of us, most of time, go along with, what the media tells us to be the case."96
94 Lawrence Jacobs and Robert Shapiro, Politicians don't pander : political manipulation and the loss of democratic responsiveness. Chicago, IL., University of Chicago Press, 2000. 95 Thomas Kelly, quoted in Lance Bennett & Paletz David, Taken by storm : the media, public opinion, and U.S. foreign policy in the Gulf War. Chicago, University of Chicago Press, 1994, p.15. 96 Eldridge et al., p. 205.
54
For the purpose of articulating theoretical and practical validities of these models, accordingly, it is helpful to start with identifying fundamental presumptions associated with each approach. The following table is thus presented for this purpose.
55
Table 3:1: Media’s relationship with state/ruling class (models)
Propaganda model Hegemony model The Fourth Estate model
Unit of analysis Class Class Nation-state and class
Influence come Possession of means Shared ideologies and Shared national from of production common sense interest (security); elite consensus
Is the public No, still latent Yes, but potential Yes, and rational real?
Journalistic Little autonomy; Autonomy is Cooperative and autonomy determined at last essential, though even powerful instance by economic limited. element of structure governing councils
Role of the state Executive branch for Independent state Independent state the ruling class though influenced by within division of ruling class labor
World-view Global capitalism Pluralistic, Liberal international international system capitalism
56
According to the propaganda model, the powerful is conceived of as the class who
possess the means of economic production, communication and knowledge. The
advocates of this approach thus focused on how such factors as the concentration of
media ownership, the growing income gap between classes are related to the prevalence
of conservative policies and military adventures.97 Since it assumes the continuity of
conflict of class interest, both government and the independent media are believed to
work primarily for class domination. Michael Parenti thus argues that “their [news
media] objective is not to produce an alert, critical and informed citizenry but the kind of
people who will accept an opinion universe dominated by corporate and government
elites, almost all of whom share the same ideological perspectives about political and
economic reality.”98
Certainly, this approach admits that the professional class including academic experts, elite journalists and national opinion leaders can raise political questions and oppose certain government policies. Yet, it is believed in this approach that “such dissent and inconvenient information are kept within bounds and at the margins, so that while their presence shows that the system is not monolithic.”99 It thus means that the ruling
class, which owns and finances news media, achieves their goals “not by crude
intervention but by the selection of right-thinking personnel and by the editors’ and
working journalists’ internalization of priorities and definitions of newsworthiness.” 100
Given that the media play a role as an ideological apparatus for the global capitalist class, it is also argued that “the global media system is better understood, then, as one that
97 Bagdikian, 2004; Bettig & Hall, 2003; Domhoff, 1990; Herman & Chomsky, 1988. 98 Michael Parenti, Inventing reality : the politics of news media. New York, St. Martin's Press, 1992, p.8. 99 Herman & Chomsky, p. xii 100 Herman & Chomsky, p. x..
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advances corporate and commercial interests and values, and denigrates or ignores that which cannot be incorporated into its mission.”101 However, those supporters of this model fail to recognize that not only can national interests be independent from class interest, but the media are organically bound up with their nation-states.
Instead, the hegemony approach starts with looking into how the ruling class exerts power over the professional class and the public. In other words, this model prioritizes "the strength of a world-view, a system of assumptions and social values
accepted as common sense” over “incentives, pressures, and structural constrains.”102 The
proponents of this approach thus take into more account how journalists' ideologies
alongside world views influence on their reporting over foreign policies. Hence, they tend
to focus on such factors as journalists’ progressive ideology,103 Cold-war ideology104 media’s liberal ideology105 and elite journalists' class royalty.106 Since hegemonic model supposes the independence of the state, Hall also alleges that “the state is, or comes to be, the structure which enables a ruling-class alliance to give its ideas the form of universality, and represent them as the only rational, universally valid ones.”107 Hallin observes similarly that “liberal capitalist societies have been able to maintain political stability largely because they have permitted the state to intervene increasingly in the working of the market, softening the social disruptions it produces and ensuring a level of
101 Robert McChesney, Rich media, poor democracy : communication politics in dubious times. Urbana, University of Illinois Press, 1999, p. 103. 102 Hallin, p.59. 103 Gans. 104 Entman, 2003; Hallin, 1994. 105 Robert Lichter, Stanley Rothman & Linda Lichter et al, The media elite. Bethesda, Md., Adler & Adler, 1986. 106 Robert Reich, The Power of public ideas. Cambridge, Mass., Ballinger, 1988. 107 Hall, p. 197.
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private satisfaction high enough that the mass public will remain generally uninterested in
politics.”108
The notion that the journalists, as a part of the professional class, have a sufficient level of autonomy additionally makes the hegemony approach distinctive from the propaganda model. Schudson claims the media “fail to attend to their own integrity and their own credibility with audiences, they may in fact simply become ineffective ideological institutions.” 109 Gans also assures us that “when journalists have autonomy,
they represent the upper-middle class professional strata in the hierarchies and depend on them in their vision of the good nation and society, against the top, bottom and middle.”110 Since the dominant economic class cannot produce ideology directly and
liberal societies do not discourage critical views, the news media are also considered as
not always reflect by the interests of those who fiancé the press. It is believed instead that
journalists tend to be complicit with the ruling class because "the media also have general
interest in stabilizing the liberal capitalistic order as a whole.”111
The fourth estate model is distinct from other models. Not only is the public
“real” but also the news media constitutes a significant component of national power elite.
Certainly, it is admitted in this model that foreign policies are largely produced by power elites and its hired academic experts. Yet it is strongly believed here that not only was the public brought into existence by “the conditions of the eighteenth-century city and by the printing press itself," but public opinion can be “coherent and rational.”112 How the media
108 Hallin, p. 30. 109 Schudson, in Daniel Berkowitz, Social meanings of news : a text-reader. Thousand Oaks, Calif., Sage Publications, 1997, p. 24. 110 Gans, p. 285. 111 Gitlin, p. 280. 112 Harris 1996; Jacobs & Shapiro, 2000.
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can assist the public in drawing sound decisions is thus a critical point in this model. Page
insists, for example, that if the media provide "full, accurate, and well interpreted"
political information, "citizens can decide what policies they want in an informed way,
consistent with their basic values and interests."113 Congruently, Jacobs and Shapiro
assert that "if the press devoted more and better attention to the public's preferences
toward substantive policy issues, it would reinvigorate discussions about the quality of public opinion and its appropriate role in democratic government."114
Noting the media’s symbiotic relationship with government, Timothy Cook further contend that "not only is the news a co-production of the news media and government, but policy today is likewise the result of collaboration and conflict among
newspapers, officials, and other political order.”115 Similarly, Bernard Cohen notes that the media tend to be "critical not in respect of arbitrary practices, but rather in respect of wrong policies."116 Still, this model acknowledges that journalists can be better perceived
as either “junior partners” or “secondary-definers.”117 But the media are more believed to
be “meshed into interdependent relationships with other groups and sectors of society.”118
Piers Robinson thus suggests a “policy-media interaction model” because of the pre- existence of mutual interests between government and the media.119 Accordingly, it is convinced that while media organizations need government officials as an
113 Page, p. 2. 114 Jacobs & Shapiro, p. 334. 115 Timothy Cook, Governing with the news: the news media as a political institution. Chicago, University of Chicago Press, 1998, p. 3. 116 Bernard Cohen, The press and foreign policy. Princeton, N.J.,, Princeton University Press, 1963, p. 32. 117 Hallin, 1994; Hall, 1975. 118 Abbas Maleck, News media and foreign relations : a multifaceted perspective. Norwood, N.J., Ablex Pub., 1997, p. 17 119 Piers Robinson, “Theorizing the influence of mediation on world politics: models of media influence on foreign policy,” European Journal of Communication, 16(4), 2001, p. 523.
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institutionalized information source, policy makers need the media to promote public
communication and obtain political support.
Moreover, in this model, the media are also critical of placing special interests
above public interests. For instance, Carey argues the press “became an independent
profession and a collective institution: a true fourth estate that watched over the other
lords of the realm in the name of those unequipped or unable to watch over it for
themselves."120 Since the media appear to exploit the First Amendment, Page also insists
that "this is particularly a matter of concern when all or nearly all the mainstream media
agree with each other; and when they are substantially out of touch with the public."121
Yet a more essential distinctiveness of this approach lies in its accepting the presence of national interests and media's nationalistic character. Nye thus observes that "American policy [through the independent news media] deliberately promoted norms and institutions such as General Agreement of Trade and Tariffs, the World Bank, and the
International Monetary Fund that created an open international economic system after
1945."122 Equally, it is clear that the BBC still is "an important soft power resource" for
promoting British national interests.123
Yet many media scholars in the U.S. largely fail to recognize such a symbiotic
relationship between U.S. media and U.S. government at least in the foreign policy arena.
Nor do they admit the possibility that the U.S. mass media have been a crucial element of
U.S. public diplomacy that aims at shaping international public opinion. When foreign
120 Carey, p. 245. 121 Page, p. 71. 122 Nye, p. 91. 123 Nye, p. 68.
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governments complained about the U.S. media, this model tends to argue the
independence of the media from government influence.
3-2: The international information order in the age of U.S. hegemony
On November 21, 2004, David E. Sanger, a White House correspondent for the
New York Times, with a 22-year career of foreign policy, Harvard graduate, and
member of the Council on Foreign Relations as well as the Aspen Strategy Group
reported:
In back-to-back meetings with the leaders of China, Japan and South Korea here Saturday morning, Mr. Bush urged each to draw North Korea back into six-nation negotiations. And in a speech later, he issued a direct challenge to North Korea's reclusive leader that echoed President Reagan's demand in 1987 for the dismantling of the Berlin Wall. After the meetings, he said, he was convinced ''that the will is strong, that the effort is united and the message is clear to Mr. Kim Jong Il: Get rid of your nuclear weapons programs.124
The above article, which covers how U.S. president George Bush is handling with the
recent nuclear crisis caused by North Korea and Iran, is apparently for policy makers and
ordinary public in the U.S. Not only does the primary revenue of the New York Times come mostly from the subscribers and advertisers residing in the U.S., but, more critically, for the paper, there is little doubt that what needs to be accounted for first is the
U.S. public interest. In this context, many liberal scholars have attempted to evaluate, for example, whether such articles are ‘accurate, fair and balanced’ so that attentive minorities in the U.S. can make sound decisions. Yet for those who focus on the profit
124David Sanger, “Bush says Iran speeds output of A-bomb fuel,” The New York Times, 11/21/04.
62 motivations of the newspaper, the security issue may not attract visible attention. Quite interestingly, however, it is firmly believed that government officials of many other countries particularly North Korea, Iran and neighboring states such as South Korea and
Saudi Arabia cannot afford to ignore this article. For them, there are good reasons not to disregard such an article: First, this article, written by a senior reporter at the New York
Times, is likely to help construct ‘the structure of references’ through which both leaders and followers in the U.S. perceive and understand as well as to which they must respond;
Second, the article also provides a sort of ‘public forum,’ in which U.S. policy-makers, policy experts and attentive minorities are able to facilitate ‘public communication’ for its foreign policy; Finally, not only international organizations such as International Atomic
Energy Agency (IAEA) but also international public opinion are not immune from the article. This article attests to the continuing existence of the concerns that prompted developing countries to demand a New International Information Order (NIIO) in the early 1980s.
Undoubtedly, there have been many changes in the international society such as the end of Cold War, the development of the Internet and globally integrated economic system since the debate. Most of all, now in 2005, the majority of developing countries have their own media in terms of management and ownership that allow them to express their own opinions. Also, it cannot be disregarded that the concerns about the ‘one-way flow of information’ has been largely mitigated, though not ended, partly with the development of technology. Many recommendations such as setting up regional news pools and international cooperation in order to achieve “fair and balanced information” have been also undertaken. However, although many developing countries possess their
63 own means of expression, it has not been much helpful for them to bring their issues into international political arenas in which the U.S. still wields substantial influence. Nor has regional cooperation improved their chances of being invited in critical decision making that would allow them to address their chronic problems such as foreign debt.
For this purpose of understanding ongoing problems in the current information order, it is a valuable step to revisit the NIIO and to draw some valuable lessons from it.
Following a brief review of the historical backgrounds of the NIIO, I articulate theoretical concerns associated with previous approaches to the debate as dependency theory and liberal-pluralism. Adopting U.S. hegemony approach, then, I provide theoretical contexts in order to untangle the likely problems with the proposals provided by the MacBride
Commission in 1980. Taking the definitional confusion of information into account, next, the Commission’s recommendations are re-evaluated by my analytic device that divides information into political information, technical-instrumental information and cultural products. Finally, I hope to bring forth possible strategies for establishing a more democratic international information order in which the middle ranks countries can put international politics into their surveillance.
Historical background of the NIIO
For placing the NIIO into historical context, it is helpful to start with exploring the legacy of imperialism that has been firmly entangled with the re-construction of the developing countries. Foremost, many politicians in the newly independent countries hold the conviction that their lagging economies along with continuing political
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instability is owed considerably to imperial exploitation as well as Western meddling. For
example, Frantz Fanon claims that “not only were the well-being and the progress o
Europe built up with the sweat and the dead bodies of Negroes, Arabs, Indians, and the
yellow races, but Europe is literally the creation of the Third World.”125 V.G. Kiernan
Harvey Kaye also contend that “what may really have happened was not that people [in the Third World] were pushed down by colonial rule below a level previously attained but that their further progress was held up by colonial rule too long protracted.”126
Yet there are quite opposite views among many Europeans and Americans. For
them, it is not imperialists but the third world elite who failed to bring about social
stability and economic prosperity. Joseph Nye thus claims that “most of the poorest
countries in the world – whether in Africa or the Middle East – have suffered from
misrule, corruption and inept macroeconomic policies.”127 Moreover, because there was less connection between U.S. prosperity and imperialistic exploitation, Americans tended not to accept the reality of a legacy of colonialism. Instead, they moved to export their perceived strengths such as democratic political system, freedom of the press and an industrial strategy of modernization to the developing countries. William Benton, former
Assistant Secretary of State, thus confesses, “Freedom of the press- and freedom of exchange of information generally-is an integral part of our foreign policy.”128
The U.S. government thus argued that adopting “modernization” and
“democracy” would help developing countries to successfully emulate Western
125 Frantz Fanon, quoted in Edward Said, Culture and imperialism. New York, Vintage Books. 1994, p. 103. 126V Kiernan & Harvey Kaye, Imperialism and its contradictions. New York, Routledge, 1995, p. 64. 127 Nye, p. 101. 128 William Benton, quoted in Herbert Schiller, Living in the number one country : reflections from a critic of American empire. New York, Seven Stories Press, 2000, p. 52.
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industrialized countries. Yet the subsequent international economic turmoil since the
early 1970s started to prompt many developing countries to cast doubt on the wisdoms of
Western officials and scholars. Thus, empowered by Arab nationalism in the early 1970s,
politicians in the non-aligned groups known G-77 called for a new information order. For
that purpose, they believed the following concerns needed to be addressed. They first
alleged that Western news media prevented Western developed societies from shaping
favorable public opinion by providing them with “negative, distorted and inaccurate
coverage” of their societies. Second, because Western journalists largely lacked an
understanding of historical contexts, they easily ended up blaming internal factors for and
so impaired political legitimacy of their leaders. Finally, the one-sided flow of Western
cultural products not only destroyed their values and norms but also contributed
indirectly to perpetuating cultural dependence on Western societies.
Before moving forward to subsequent historical changes since the NIIO debate, it
is helpful to note that there were very different perspectives for understanding the
particular era from 1945 to the end of 1970s. For example, the supporters of the
dependency model insisted that those countries in periphery became further dependent on
core industrialized countries.129 The proponents of liberalism, however, tended not to accept the notion of widening inequality. Stressing the successful emergence of the newly industrialized countries in Asia, instead, they urged to adopt such ideas as privatization, capital liberalization and deregulation. Similarly, associating international instability with weakened U.S. influence, many U.S. scholars were inclined to focus on restoring
129 James Cockcroft, Frank Andre and Johnson Dale, Dependence and Underdevelopment: Latin America's Political Economy. 1st ed. Garden City, N.Y.:Anchor Books, 1972.
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hegemonic power.130 However, in criticizing such political decisions as Vietnam War in
1968 and Nixon doctrine in 1972, Europeans insisted that the “U.S. gave first priority to
immediate national goals and too little attention to the long-tem viability of the entire
system.”131 Thus the supporters of a U.S. hegemony view looked for ways to put an
international “check and balance” system into effect.
Historical changes since the NIIO
Subsequent developments such as the Latin American debt crisis in 1980s and the
end of the Cold War in 1990s made it more difficult to correctly apprehend international
affairs. Nevertheless, the rapid expansion of globalization at the expense of local
economies and along with deepening debt crises in many developing countries helped
some critics elaborate the dependency model.132 They thus reiterated that the periphery countries have extended their economic and political dependency on the core capitalist countries through unequal exchange and the international labor division. For example,
Gerald Sussman claims that “the new global infrastructure of telecommunications and media has been designed largely for purposes of intensification of consumption, corporate organization, industrial relocation, military logistics, and a more globalized international division of labor.”133 Rejecting the notion of post-imperialism, Herbert
130 Robert Keohane, After hegemony : cooperation and discord in the world political economy. Princeton, N.J., Princeton University Press, 1984; Robert Gilpin & Jean Gilpin, The challenge of global capitalism : the world economy in the 21st century. Princeton, N.J., Princeton University Press, 2000. 131 Susan Strange, Mad money : when markets outgrow governments. Ann Arbor, University of Michigan Press, 1998, p. 102. 132 Immanuel Wallerstein, World-systems analysis : an introduction. Durham, Duke University Press, 2004. 133 Gerald Sussman, "Who are speaking for Asia." Journal of Media Economics 12 (2). 1998, p. 87.
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Schiller also insisted that “the domination that exists today… is better understood as
transnational corporate cultural domination.”134
Unfortunately for many developing countries, such views based on Marxism
barely helped them comprehend the hegemon’s political power that “determined the
distribution across states and class of gains and losses, risks and opportunities.”135
Because Marxism has focused on TNCs and TNMCs along side international organizations, which do not have meaningful means of decision making, indeed, there has been little room to consider the U.S. government. Those supporters of world-system such as Immanuel Wallerstein thus ended up failing to see that not only has the current
“foreign-exchange” system been created by the U.S. government, but also U.S., as a nation not as a class, was one of the greatest beneficiaries of this system. In considering this dilemma, I begin by associating the NIIO with the U.S. hegemony and then hope to rekindle weak states’ concerns about the international information order. Yet before relating the U.S. hegemony to the NIIO, it is helpful to consider the following points.
NIIO, liberalism, Marxism and U.S. hegemony
First of all, in rejecting the claim that U.S. has lost its dominance since the late
1970s, Strange defines U.S. as “structural power” because U.S. has been able to “choose and shape the structure of the global political economy.”136 Joseph Nye also perceives the
current world as U.S. hegemony because U.S. has considerably more power resources or
134 Herbert Schiller, Mass communications and American empire. Boulder, Westview Press, 1992, p. 15. 135 Strange, p 32. 136 Strange, p. 132.
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capabilities than other states though not necessarily dominance or control.137 Yet, for him,
U.S. leadership is based more on “soft power” that made other countries “follow
Americans, admire its values, emulate its examples and aspire to prosperity and
openness.”138 Similarly, Edward Said notices U.S. imperialism is different from other empires because of “its cultural authority” helped by “the unprecedented growth in the apparatus of or the diffusion and control of information.”139
Yet, interestingly, U.S. hegemony was barely conceived of as having relevance in the late 1970s. That is, because it was believed to be “bipolar world” divided into U.S. bloc and Soviet bloc, the majority of U.S. scholars tended not to subscribe to the view.
Yet Strange acutely noticed that such international cooperation in the appearance of
Western consensus “happens in the issue-areas and with the countries of America’s choosing; the choice of areas and of partners is a political choice and at the same time a demonstration of the authority exercised indirectly as well as directly by the United
States over the world economy and society.”140 I thus present Table 3 that shows
theoretical differences between a hegemonic view and other perspectives.
137 Joseph Nye, Power in the global information age : from realism to globalization. London ; New York, Routledge, 2004, p. 16. 138 Nye, p. 8. 139 Edward Said, quoted in Edward Said & David Barsamian, Culture and resistance : conversations with Edward W. Said. Cambridge, Mass., South End Press, 2003, p. 291. 140 Strange, p.139.
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Table 3: 2: World-views in conflict
Issues Liberal view Marxist U.S. hegemony view \ Perspectives Hegemonic view
Apex of power Multi-polar: TNCs, Uni-polar : U.S. structural Growing market International power power organizations (IMF, WB, WTO)
Means of National media The state and Nation-state based media hegemony for domestic global media (class (national interest- (primary concern) purposes interest-profit) security/economic prosperity)
Ideologies Development Capitalist values: The perpetuation of U.S. theory, neo-liberalism, hegemony or international Modernization consumerism, power order (established International individualism, since 1945) mutual Western norms and understanding values
Third World: Economic Co-opted local Power elite in nation- elite, major issue modernization, capitalists, system, Political economic political/economic/cultural democracy development objective
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Table 3-2 indicates that the U.S. hegemony view is distinctive from the liberal view because U.S. still possesses substantial power not only in initiating supportive political actions but also in preventing unsupportive actions. Unlike the Marxist hegemonic view, this perspective also supposes that the U.S. government will be able to impose substantial influence on multinational organizations and transnational corporations. The role of the independent media is also believed to be quite distinctive.
For the Marxist hegemonic view, there is less concern about media’s nationality because media is supposed to play as an ideological instrument for sustaining global capitalism.
The primary function of the U.S. media in the view of U.S. hegemony is, however, to assist their government in pursuing its foreign policies. Certainly, this view goes along with the liberal view at least in terms of admitting media’s independence from state- government. Yet, the notion that the media are organically bound up with national interests makes this view distinctive from liberal perspective. In other words, in the U.S. hegemonic view, not only do the media play as an organized interest group in domestic politics, but the media form a united front with its power elite in protecting national interests.
In the liberal viewpoint, there find little political biases in such notions as development and modernization model. Since the primary purpose is believed to construct efficient global economy, Marxist view of deepening exploitation by core countries is thus less acceptable to this view. Instead, both Marxist and U.S. hegemony view share the sense that such ideas cannot be separated with political purposes. The U.S. hegemonic view is different from that of Marxist hegemony, however, because the U.S. government, which has autonomy in pursing foreign policies, is believed to be the
71 primary agent in this view. Finally, the liberal perspective pays little attention to unequal power relationship between weak states and the powerful. This view thus tends to accuse local power elite of their chronic problems such as the debt crisis in Latin America or political instability while at the same time stressing political independence in pursing national interests. Noting that those local power elite in weak states can be independent from the global capitalist class, in addition, the U.S. hegemony view differs from the
Marxist view. Local elite’s cooperation with global capitalism is thus believed to be motivated less by their class interest than by their perceived national interest here. Based on this observation, I begin to analyze the MacBride Commission Report in order to reveal theoretical deficiencies. Then, I intend to suggest how to bring about a more democratic international information order.
Major recommendations of the MacBride Report
Throughout the NIIO debate, those terms such as information, communication and communication infrastructure embodied various meanings and used interchangeably.
For example, when politicians in the developing countries criticized “the means of information are dominated and monopolized by a few,” they conceived of the information either as propaganda or disinformation. But when they blamed Western journalists for neglecting “to give them full understanding of the economic and political situation of their problems on both the national and the international plane,” it was such information as “accurate, unbiased, fair, and balanced” political information.141
141 International Commission for the Study of Communication Problems, Many voices, one world : communication and society today and tomorrow : towards a new more just and more efficient world
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Hence, when Mustapha Masmoudi, Tunisia’s permanent representative at
UNESCO, demanded more responsible journalism, journalists both in developing
countries and developed countries tended to believe it as “authoritarian governments’
attempt to restrict freedom of the press.” 142 Similarly, designating Western journalism as
“the journalism of exception” because of their focusing on negative, troubles and crises,
Anthony Smith urged to invent “the journalism of development” that would provide developing states with strategic information for economic development. Moreover, there was barely clear-cut definition of communication. The MacBride Commission defined communication as having “a definite importance for diffusion of great ideas, for the relationship between the authorities and the majority of inhabitants, as well as for the conservation and stabilization of societies."143 However, this definition was largely based on liberal-plural international society and so resulted in merely proposing “international mutual understanding” through “fair and balanced information flow.”
Hence, for the sake of putting the Commission’s proposals into context, it is beneficial to divide information into the following sub-categories:1) political information as a form of publicly disposable knowledge or news that contributes to public understanding, shaping opinions, drawing sound decisions and being involved in political decision makings: 2) non-political instrumental information including scientific research, managerial know-how, technology and environment information; and 3) cultural products like comic books, movies, music and television programs. I draw Table 3:3 by utilizing the categories.
information and communication order : report. London, New York, Kogan Page ;Unipub, 1980, p. 157. 142 Anthony Smith, The geopolitics of information : how Western culture dominates the world. New York, Oxford University Press, 1980, p. 161. 143 International Commission for the Study of Communication Problems, p. 6.
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Table 3: 3: Recommended strategies (divided for analytic purpose)
Advised Free and balanced information & improving international understanding actions / (political justice, economic equality and cultural co-existence) Objectives Political Information Instrumental Cultural products Information North 1) More attention to the More transfer to the South to garner South including international support for money and technology South 2) Better understanding indigenous cultures and conditions
South 1) Set up domestic news 1) Strengthen 1) Safeguarding agencies collective self- national cultural 2) Regional alliance like reliance: exchange of development news-pool technical knowledge 2) More exchange 3) More attention to other 2) Installing national of radio, TV developing countries and communication program and films areas such as TNCs, infrastructure within the South economic forecasting 3) Raising viable human resources
Commonly 1) International information system for coordination, information sharing, watch world affairs and transmit to the world International research projects for 2) More attention to world peace movement, international organizations devoted to peace and disarmament 3) Establish Convention on the International Right of Correction (against negative, inaccurate, malicious reporting) 4) Education for professional communicators: diversity, international understanding 5) Free access to news sources; protection of journalists
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Critical reflection on the proposals
To grasp the whole framework of NIIO debate is certainly out of the scope of my dissertation. Instead, by introducing Table 2, I intend to pinpoint what were main problems in terms of international geopolitics. First of all, this table helps me elucidate the point that the primary purpose of the politicians in South was not the free and balanced flow of political information as well as instrumental information. Instead, for me, it appears what they really attempted to achieve was not “free and balanced flow of political information” but to reduce “trade deficit.” That is, because it was believed to be
U.S. hegemony, there will be little demand on political information come from weak states. Put differently, if the information means such “political information” as “give them [public or South] full understanding of the economic and political situation,” it is expected to flow down from decision-makers in the international power structure.
Therefore, a noteworthy point is not to achieve “balanced flow of political information between hegemon and weak states” but “how to secure such political knowledge if hegemon tends not to share it with developing countries.”
Hence it is possible to think that “fair and balanced flow of information” may be more related to achieving economic equality by “balanced trading of cultural products.”
Hence it will be possible for developing countries to produce their own cultural goods and trade them with the powerful. Indeed, many developing countries such as India,
Brazil and South Korea are now a net exporter of cultural products. But a critical point is that these countries still send their correspondents to Washington not to Africa. If possible, I define this type of political information as “vertical political information”
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because such information cannot be obtainable without securing access to decision-
makers, and, more importantly, without political struggle to obtain access. It thus means
that the developing countries need to focus on establishing a more democratic
information system that makes hegemon be internationally accountable.
Second, if we can dissect politics from knowledge, such instrumental knowledge
may be easily transferred from the powerful states to weak states. Indeed, there is little difficulty for Western industrialized countries to share such information as hurricane with the rest of the world. But, were such information believed to have strategic importance to national security, it is less likely to expect the information to flow freely and equally between the powerful and weak states. Simply, the U.S. will not allow weak countries particularly rogue states such as North Korea and Iran to have nuclear technology freely.
Thus it is fair to state that even the “instrumental information” cannot be freely and equally tradable insofar as nation-states have to compete with each another for scarce resources. Accordingly, for weak states, the problem is not to persuade the powerful to provide them with “free and balance information” but to look forward to develop their own instrumental information.
Indeed, the MacBride report recommended the South “to set up national news agencies and to establish links between them in order to increase the developing world's means of expression and to gather and exchange news, films and various broadcasts for the mutual benefits of these countries.”144 But, such a policy proposal failed to articulate
specific strategies because it was based on the presupposition of plural international
society. That is, the report appeared to miss the point that having the means of
144 International Commission for the Study of Communication Problems, p. 40.
76 communications does not necessarily mean that their voices will be actually accounted in decision-making processes of the hegemon.
Looking forward to the possible strategies
The recent struggle of Iran and North Korea is beneficial to elucidate this point.
First, in 2004, such rogue states as Iran and North Korea had their own national news media for expressing their opinions. Also, they look to influence international public opinion by providing their viewpoints. Still, even South Koreans, who use the same language, fail to correctly apprehend them because their voices need to be mediated by the hegemon’s media. They thus largely fail to share their concerns with international public at least attentive minorities. This is exactly the point what many politicians in the developing countries intended to raise. The development of information technology cannot solve this problem. Nye claims in this consideration that “power in information flows goes to those who can edit and authoritatively validate information, sorting out what is both correct and important.”145
Therefore, the countries in the South as well as the international middle ranking countries need to shift their attention to sharing critical political information that will assist them to organize collective actions against U.S. hegemony. If possible, I intend to put it “horizontal political knowledge” because it can be obtained without permission from the ruling section as well as supported by their sharing common interests. Hence, it is be helpful to remember that “the development of the press was, in one sense, parasitic on broad-based economic progress, growing wealth among the middle ranks in society,
145 Nye, 2002, p. 67.
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expanding markets, importing communications.”146 Similarly, by taking advantage of new information technology, those emerging economies in East Asia and Latin America will be able to set up a democratic international information structure.
146 Bob Harris, Politics and the rise of the press : Britain and France, 1620-1800. London ; New York, Routledge, 1996, p. 109.
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Chapter Four
Methodology and data collection
Since I seek to apply the intellectual leadership model to South Korea’s
cooptation, I begin to look at the likely information flow from U.S. power elite to Korean
media and to the general public in Korea. I then present Edward Said’s work on
Orientalism in order to articulate my approach. 147Noting the critical importance of financial news in instructing public opinion, next, I look at media frame research so as to categorize primary texts produced by the hegemon into technical, political and counter- hegemonic frame. The second section is thus devoted to articulating my approach in adopting frame analysis. Since I also plan to analyze news articles, in this section, I
present how I conceptualize “research frames,” “symbolic stages,” “cue-givers,” and
“attitudes.” I finally pay particular attention to providing specific strategies for data
collection. My approach to sampling is also laid out here.
4-1: Methodological reasoning
Undoubtedly, the majority of South Koreans are not able to reach directly to
Western news media particularly the U.S. prestigious media. Not only can they not read
such news articles written in English, but they largely fail to correctly decipher encoded
messages. Yet the situation is not very unique for South Koreans because Washington
news is believed to be “an insider’s conversation, one interest group speaking to another,
with reporters acting as symbol brokers coding stories into a conversation only the
147 Edward Said, Orientalism. New York, Vintage Books, 1994.
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sophisticated can follow.”148 The ordinary people thus can fall short of correctly grasping
intended meanings in news articles. Nevertheless, it is also true that a lot of information
may be “trickled out through opinion leaders and cue givers to ordinary citizens.”149 Just as ordinary U.S. public are ultimately influenced by the prestigious media, South Koreans are not immune from the influence. Looking at the current information flow from the U.S. to South Korea can be helpful to clarify this point.
On the front line, there are Korean correspondents at Washington or New York in order to deliver direct impressions to the readers in Korea. They are mostly well-educated having foreign diplomas and maintain a relatively higher social and economic status in
Korea. But they are not expected to keep in regular touch with U.S. policy makers. In
South Korea, there will be journalists, academic experts, government officials and very
limited number of attentive minorities who can pay special attention to Koreans media
next to the U.S. media. And, in the final stage, there are Korean readers who still are able
to afford time, resource and have proper level of intelligence. Taking into account this
information flow, I plan to explain how Said’s work helped me approach to “primary
texts” produced by the power elite of the U.S. hegemon.
4-2: The emergence of research frame: power and knowledge
First of all, Said allows me to understand the relationship between “non-political”
knowledge such as economic analysis and “political, institutional, and ideological
148 James Carey, quoted in Eve Munson & Catherine Warren, James Carey : a critical reader. Minneapolis, University of Minnesota Press,1997, p. 153 & 154. 149 Benjamin Page, Who deliberates?: mass media in modern democracy. Chicago, University of Chicago Press, 1996, p. 7.
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constrains” on producing it.150 Said then helps me realize the probability of the author’s political intention that will determine the utility of knowledge. That is, if the author intends not to shed light on structural problems and focuses instead on technical problems, it is very likely for the readers not to recognize systematic problems.
Further, Said assists me in considering the plausible flow from authoritative research institutions in a hegemon to its media to Korean elite and finally to the public in
Korea. Said first notes, for example, that that there will be “a pool of interests” that is able to command “the attention of strategic planners and policy experts in [the] U.S. government.”151 He then takes a notice the presence of “the leading academic figures … determined the intellectual agenda and the perspectives of influential sectors of the government and academy.”152 This dissertation thus attempts to identify who those authoritative sources were and how political interests incorporated into their financial analyses.
Yet it appears to me that Said’s work failed to take into account media framing process and readers’ decoding process. That is, since Said focused on primary texts written by residents in empires, he neglected in examining how such an imperialistic discourse as “Orientalism” was reproduced by the Arabs. My approach is thus to look at the production of financial knowledge along with South Koreans’ reproduction of their own meaning. Because public knowledge about finances and economics is conceived of as “instrumental and technical knowledge,” I believe that contemplating how such knowledge is reproduced as a part of “the structure of Korean public knowledge” can be essential.
150 Edward Said, Culture and imperialism. New York, Vintage Books, 1994, p. 13. 151 Said, pp. 290 & 302. 152 Said, 1994, p. 290.
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Said observed clearly that “the media are not only a fully integrated practical
network, but a very efficient mode of articulation knitting the world together.”153
However, he appeared not to pay attention to media framing process in which professional communicators would transform primary texts into news. For the sake of filling the gap, I look closely at how such technical analyses including government’s documents are adapted to “publicly disposable knowledge” by media practitioners. Table
4: 1 is thus presented to articulate my approach.
Table 4:1: The emergence of research frame
Edward Said My dissertation
Primary texts Political decrees, artistic texts Financial research papers & including novels and letters government financial analyses
Focus of analysis Style, figures of speech, setting Research frame (problem, and narrative devices causes & solutions) about Asia crisis
Purpose Identity formation for imperial Inducing weak states’ co- domination optation by educating public opinion
Apex of authority Foreign policy think tanks, U.S. government (Treasury and Arab experts in business State), IMF, World Bank, top- community particularly crude- level economists at think tanks, oil industry; and Middle East universities and private departments at elite corporations in U.S. universities
Target readers Implicitly, residents in Weak states’ power elite, the Western empires and international public & U.S. the Middle East public
153 Said, p. 309.
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4-3: Research frame, media frame and public knowledge
I presuppose to see news as a form of public discourses since the news is expected
to provide “a meaningful ‘story’ in the same way as speech is made up out of elements of
language. Yet in order to convey story-lines or narratives to audiences, there must be a
frame or schema that “holds together and gives coherence and meaning to a diverse array
of symbols.”154 So such professional communicators as journalists, public relation experts
and government spokespersons require make strategic choices in devising supportive
frames. It is thus believed that news frames can be manifested by “the presence or
absence of certain keywords, stock phases, stereotyped images, sources of information,
and sentences that provide thematically reinforcing clusters of facts or judgments.”155 Or,
such strategies as “persistent, patterns of cognition, interpretation and presentation, of
selection, emphasis and exclusion” are supposed to be utilized so as to formulating news
frames.156
Hence it is reasonable to claim that such media frames cannot be fully untangled by using such quantitative methods as content analysis. Undoubtedly, it will be plausible to descriptively examine such points as “uses of languages,” “positions of images” and
“number of sources.” Yet since framing is to “select some aspects of a perceived reality and make them more salient,” it is less likely to identify such qualitative aspects by quantitative methods alone.157 Thus, for example, Todd Gitlin combines content analysis
154 William Gamson et al, "Media images and the social construction of reality." Annual Report of Sociology 18: 373-393, 1992. 155 Robert Entman, "Framing: Toward clarification of a fractured paradigm." Journal of Communication 43: 51-58. 1993. 156 Todd Gitlin, The whole world is watching : mass media in the making & unmaking of the New Left. Berkeley, University of California Press, 1980, p. 36. 157 Entman, p. 52.
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with discourse analysis in order to figure out “strategies for noting and taking account of
emphasis.”158 But noticing that recurrence of certain texts may not be impressive, he also
adds that the really significant item will be “the one which stands out as an exception
from the general pattern- but which is also given, in its exceptional context, the greatest
weight.”159
Yet it is misleading to believe that such frames are able to penetrate audiences or
readers. In other words, audiences may have different schema or frames that can negate,
or at least neutralize the organizers’ intended frames. The proponents of active audience
model thus attempt to prove that audience had the capability of alternative decoding.
However, in general, it is believed that such “unspoken and unacknowledged” media
frame can affect not only the organizers notably journalists but also audiences. Russell
Neuman et al claim in this regard that even though media frame would not predetermine
the information that individuals would seek, it might shape aspects of the world and so it
would take a central part in the process of constructing meaning.160 Similarly, John
Eldridge et al insist that “media portrayals can shape audience understandings of what is legitimate or desirable, and of which characters are likely to be seen as ‘cool’, ‘amazing’, or the sort of person who ‘everyone’ would wish to be like.”161 Thus David Paletz and
Robert Entman even claim that “the general impact of the mass media is to socialize people into accepting the legitimacy of their country's political system; lead them to acquiesce in America's prevailing social values; direct their opinions in ways which do
158 Gitlin, p. 305. 159 Gitlin, p. 305. 160 Russell Neuman, Marion Just & Ann Neuman, Common knowledge : news and the construction of political meaning. Chicago, University of Chicago Press, 1992, p. 102. 161 J.E. Eldridge et al. The mass media and power in modern Britain. Oxford ; New York, Oxford University Press, 1997, p. 284.
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not undermine and often support the domestic and foreign objectives of elites; and deter
them from active, meaningful participation in politics-rendering them quiescent before
the powerful.”162
The recognition of influential media frames thus drew growing concern about
media’s ideological function, for example, in perpetuating class-domination. Examining
TV newsmakers’ coverage over industrial disputes, Greg Philo thus maintains that
journalists tend to defer to government officials’ interpretations, while at the same time
marginalizing labor unions’ voices.163 Similarly, Gitlin reveals ways of media’s contribution to the decline of New Left Movement in the 1960s by stressing social and political order. Gitlin thus claims that “normally the dominant frames are taken for granted by media practitioners, and reproduced and defended by them for reasons, and via practices, which the practitioners do not conceive to be hegemonic.”164 Even though
Shanto Iyengar does not specify media’s hegemonic function, his experiment with
‘episodic’ and ‘thematic frame’ also shows that media frames could bring about political
impact.165 Indeed, as indicated in his experiment, respondents are inclined to accuse individual victims of such social problems as unemployment and homeless when they were exposed to episodic frame that lacked in presenting in-depth backgrounds.
Yet it can be fair to state that media’s ideological function is not a primarily subject in frame research. Dividing fames into “crisis frame” and “economic- consequence,” for one instance, Peter Vreese attempted to show that Europeans differed
162 David Paletz & Robert Entnam, Media power politics. New York London, Free Press ; Collier Macmillan, 1981, p. 76. 163 Greg Philo, G. Message received : Glasgow Media Group research, 1993-1998. Harlow, England ; New York, Longman, 1999. 164 Gitlin, p. 257. 165 Shanto yengar, Is anyone responsible? : how television frames political issues. Chicago: University of Chicago Press, 1991.
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in their adopting media frame in accordance with nationalities.166 Similarly, in dividing media frame into “talk,” “fight,”’ “impasse,” and “crisis” frame, Amy Jasperson et al paid more attention to relating media frame to the shift of public opinion.167 Hence, it can conclude that not only are media frames largely re-construed in accordance with research purposes, but there is less academic zeal in relating political purposes to media frames.
It is thus advised to contemplate such points that follow. First, media frames draw academic attention because of its political implication. For instance, it was insisted that journalists tended to help the ruling class by adopting dominant frame that prioritized social order over justice. But such previous frame researchers in the U.S. as Gitlin and
Iyengar appeared to focus on the “negative politics” of the media either in preventing social instability or in downplaying conflict of class interests. Second, they also seemed to believe journalists to be a passive adoptee of pre-established dominant frames. That is, media practitioners were supposed not to take an active part in adapting primary texts to public knowledge. Finally, they neglected to recognize U.S. journalists’ playing the role that “promoting the national interest of the United States through understanding, informing and influencing foreign audiences."168 In sum, not only did they focus on
“negative politics in domestic territory” but they also failed to understand media’s
organic relationship with national interests.
I thus attempted to show in Chapter One that not only are media frames associated
with specific political purposes, but, professional communicators take a critical part in
building up political authority. Indicating media’ symbiotic relationship with national
166 Peter Vreese, "Framing politics at the launch of the euro: A cross-national comparative study of frames in the news." Political Communication 18: 107-122. 2001. 167 Amy E. Jasperson et al. Framing and the public agenda: Media effects on the importance of the federal budget deficit. Political Communication, 15(2), 205, Apr 1998. 168 The United State Information Agency, http://usinfo.state.gov/
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power elite, I also supposed that the media particularly elite media formed a part of
national power elite supposed to work together in public diplomacy. Further, I noted that
there would be pre-existing “primary research frame” elaborated by organic intellectuals
who tended to go along with nation’s decision makers. A noteworthy point is thus that
research frame is different from media frame. That is, it means that professional
communicators transform “research frame” into “publicly disposable media frame.”
Table 4:2 is therefore presented to illuminate my approach in adopting frame analysis.
Table 4:2: Media frame and public knowledge
Previous approaches My approach
Political implication Negative politics Positive politics (to maintain class (to induce cooperation) domination & social order)
International relations Transnational news media U.S. news media (part of capitalism) (part of public diplomacy)
Relationship/government Relatively independent The Fourth Estate (watch dog function)
Relationship/the ruling class Junior partners Symbolic power elite
Role in frame (media) Passive mediators of Professional dominant frames communicators of creating public knowledge
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4-4: Concepts explication
Research frame
There are four important concepts in my dissertation. Thus, I begin to define
“research frame” as “interpretive framework that determines the primary problem, articulates causes of the problem and suggests solutions to the problem.” For this purpose,
I first assume that there can be hegemonic frame and counter-hegemonic frame.
Hegemonic frame refers to that not only is the framework considered as “taken-for- granted” knowledge, but, it is organically bound up with hegemon’s structural agenda that intend to maintain the status quo. Instead, counter-hegemonic frame means the framework that can raise questions about the established power order. Since I noticed that an orthodox view, during the crisis, was considered as “technical, scientific and objective” knowledge, I define it as “technical frame.” Yet with the definition, I also intend to allude that the framework largely focuses on fixing “technical problems of the current system.” On the contrary, because not only was an unorthodox view criticized as having political biases, but it tended to raise political questions, I designate it as “political frame.” Hence, I present Figure 4:1 to elucidate my approach.
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Figure 4:1: Hegemonic frame, research frames and public knowledge
Counter- Hegemonic frame hegemonic frame
Technical frame Political frame
Media frame in main stream
Specialized Politicizable legitimate public knowledge knowledge (beyond public attention)
I intend to articulate in Figure 4:1 that the public can barely reach to the counter- hegemonic frame. Since I noticed that most of supporters of the political frame failed to realize the presence of the counter-frame, the frame was thus believed to be remaining as specialized knowledge for attentive minority. Instead, because the hegemonic frame was able to prevent advocates of the political frame from accessing to counter frame, I also assign far larger room for such a hegemonic frame. Yet, still, the public is less likely to access to the political frame, because hegemonic views through technical frame can prevail over alternative views. Bearing in mind that the mass media pay particular attention to maintaining “publicity and legitimacy” I additionally believe that political frame may be found in the mainstream media. Yet a noteworthy point is that the technical frame can easily prevail over political one because it is endorsed by academic authority. Applying these frames to the Asian crisis, in Chapter Five, I will show how
89 such frames are adopted by hegemon’s power elite in order to achieve its political objectives.
National symbolic stage
I noted in Chapter Three that the media would provide a symbolic stage for facilitating public communications between policy makers, law-makers and the public.
Yet noting that not only do the news media focus on domestic politics, but, more critically, foreign journalists are not allowed to access sensitive political information, I name it as “national symbolic stage.” Since I recognize that hegemon’s primary goal of public diplomacy is to “inform or influence public opinion in other countries,” I also intend to show the difference between hegemon’s symbolic stage and that of South Korea.
My peculiar attention is thus given to identifying the primary sources on the symbolic stage.
Cue-givers
The reason of my approach to cue-givers is to identify who the primary and authoritative voices in determining media frame and attitudes. Because there are too many voices on the symbolic stage, it is unreasonable to take into account all the sources.
Thus I sort out the authority in defining the problem, articulating causes and suggesting solutions. Yet given that the media strive to maintain “fair, balanced and objective,” I attempt not to disregard important cue-givers. Hence if there are conflicting views, I assign more than one cue-giver. However, I treat editorials to have only one cue-giver.
Since I intend to specify who those cue-givers are, all of the cue-givers are categorized in accordance with their nationalities and occupations.
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Attitudes
Since I clearly concern about subjectivity, to identify attitudes toward Asian
Monetary Fund (AMF), Dr. Mahathir, then Malaysia Prime Minister and New
International Financial Architecture (NIFA) can be helpful to mitigate the concern. Thus, by dividing media’s attitudes into cynical/skeptical, neutral/descriptive, and supportive/positive, I plan to improve reliability of data. Since the hegemon’s media tend to go along with its power elite, there will be thus more cynical and skeptical attitude in
U.S. and British media. Instead, since Korean journalists appear to fail to apprehend contexts surrounding those political agenda such as the AMF and the NIFA, more articles can be coded as “descriptive” or “neutral” in the Korean media.
4-5: Data collection
My data collection is divided into six stages that follow: U.S. government officials, U.S. intellectual, U.S and British media, Korean government officials, Korean intellectuals, and Korean news media. By collecting data from September 1997 to May
2005, I used those search words such as “Asia crisis, Korea crisis, causes and solutions, the Asian Monetary Fund, Dr. Mahathir, IMF reform and the New International Financial
Architecture.” Accordingly, I began to collect the U.S. government documents by using
Google search engine. For this purpose, I first identified those government officials who worked with Treasury, State Department, Federal Reserve Banks, Commerce Department, the IMF and World Bank during the Asian crisis. Then, using specific names and the
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Asian crisis or the Korean crisis, I attempted to reach to government official documents.
Because U.S. Treasury, U.S. Congress and IMF provided all the related documents, there
was little difficulty in collecting data. Particularly for the purpose of obtaining insider-
views, I also reviewed two biographies written by Paul Blustein at the Washington Post and Robert Rubin, former U.S. Treasury Secretary.169
In order to identify hegemon’s organic intellectuals, I then sorted out the most
prominent think tanks in the arena of foreign economic policy. Such think tanks as the
Institution of International Economics (IIE), American Enterprise Institution (AEI),
RAND Corporation, Brookings Institution and Council on Foreign Relations (CFR) were
found. Since I intend to look closely at primary texts represented by research articles, my
particular attention was also given to collecting relatively well-articulated financial
analyses. Such universities as Harvard, Massachusetts Institution of Technology,
Stanford, and University of California-Berkeley were intensively investigated for this
purpose. Also I employed Google and ProQuestDirect in particular to assemble related
articles. News articles were thus collected by using Lexis Academic or Factiva. In order
to identify media frames along with specific attitudes, I focused on collecting editorials
and news analyses that had average length of above 400 words. Since I intended to look
into how research frames incorporated into public knowledge, I preferred lengthy articles
to short-ones. Eventually, the total number of 201 articles was analyzed after being
collected from the New York Times, Washington Post, (Asia) Wall Street Journal and
Financial Times and Economist.
169 Paul Blustein, The chastening : inside the crisis that rocked the global financial system and humbled the IMF. New York, PublicAffairs, 2001; Robert Rubin & Jacob Weisberg (2003). In an uncertain world : tough choices from Wall Street to Washington. New York, Random House.
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After selecting 68 articles out of the population of 201, accordingly, I divided them into technical, political and counter-hegemonic frame. The remaining articles of
133 were divided by their relevance in order to examine attitudes toward the AMF, Dr.
Mahathir, and the NIFA. Put specifically, I first divided the remnant articles of 133 into the AMF-associated articles (36), Dr. Mahathir (60) and the NIFA (37). Then, I coded them into cynical (skeptical), neutral (descriptive) and supportive (positive) articles by evaluating arguments about the above mentioned subjects. Also, in order to identify primary cue-gives, I looked into primary sources which provided expert opinions about the Asian crisis and related subjects such as the AMF, Malaysia’s approach and the
NIFA.170
Since I could not access directly to the Korean government and its officials, I used instead Korean media and the Internet. Using search engines, thus, I first identified the officials who worked as decision-makers during the crisis. I then looked for their understanding of Korea crisis by collecting interviews or addresses. Coding their adopted frames, next, I attempted to understand their perception on hegemon’s affiliations.
Similar to hegemon’s intellectuals, my primary attention was given to collecting academic financial analyses written in English or in Korean. For this purpose, I identified authoritative economists in Korea and sought to collect their financial analyses of the
Korean crisis. Because I plan to examine how Korean intellectuals ended up assisting the intellectual leadership of the hegemon, I clarified their adopted frames and taking U.S. academic training. The total number of fifty six Korean intellectuals was categorized by academic major, Ph. D. earned institution and adopted frame.
170 Specific coding examples can be found in Appendix A and B.
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For evaluating the performance of Korean professional communicators, finally, I collected related articles by using Korean KIND service. Even though there was a huge volume of articles that dealt with Korea crisis, the total number of 235 articles was eventually analyzed after dividing them into the following subjects: media frame (112), the AMF (36), Dr. Mahathir (59) and the NIFA (28). Because I seek to examine how research frame incorporated into news, in Korean media, I also focus on relatively lengthy and well-elaborated articles represented by editorials and news analysis. While identifying the cue-givers in the symbolic stages of Korea, I intend to discover the presence of the hegemon on those stages. Similar coding processes were applied to
Korean news articles. The sample articles are collected from the following Korean media: the Chosunilbo, Dongailbo, Hankookilbo, Korea Herald, Korea Times, Kyunghwang,
Monthly Jungang, Monthly Chosun, Sekyeilbo, Seoul, Hangyere, and Weekly Donga.171
171 For detailed coding processes and examples of news articles, please refer to Appendix A and B.
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Chapter Five
U.S. hegemon’s exertion of intellectual leadership
In this chapter, I seek to untangle the mechanism through which U.S. hegemony has brought intellectual leadership forth in coping with the Asian crisis since 1997. Thus the first section begin to look at historical and political contexts associated with research frames, Asian Monetary Fund (AMF), Dr. Mahathir, former Malaysia Prime Minister, and New International Financial Architecture (NIFA) from 1997 to the present 2005.
Since hegemonic power is believed to adapt at utilizing non-governmental instruments, this section is also devoted to investigating how hegemon’s affiliations such as the media, think tanks, and credit corporations involved in the processes.
I start the subsequent section by identifying hegemon’s structural and strategic objectives and move to discover whether U.S. foreign policy has incorporated into technical research frame. My attention then goes to examine how the technical frame actually resulted in specific actions in handling with the AMF, Dr. Mahathir and the
NIFA. Noting the presence of alternative frames such as political and counter-hegemonic one, I end this section with suggesting hegemon’s necessity of unfolding intellectual leadership.
My model supposed that hegemon’s organic intellectuals would play a critical role especially in producing “good intellectual products” to distribute. The third section is thus focused on first figuring out those organic intellectuals and then investigating their relationships with policy-makers. In order to get a better understanding of their interlocking relationship with hegemon’s political agenda, I then explore their adopted
95 research frames and attitudes toward the AMF, Mahathir and the NIFA. Even though I admit that such organic intellectuals can enjoy academic autonomy, I intend to show that even independent-minded intellectuals failed to appreciate counter-hegemonic frame.
The last section is assigned to look into how U.S. professional political communicators have engaged in establishing ‘politicizable public knowledge’ in line with technical frame. Since credibility would be an indispensable component of hegemonic leadership, on this stage, I endeavor to unravel how the communicators promoted specific frame, while at the same time suppressing alternative frames. Taking a step further, I also will show how they contributed to achieving hegemon’s political objectives by examining their reporting manners. Finally, by looking into media’s construction of national symbolic stage, I attempt to explain why elite journalists can be better perceived as “professional political communicators.”
5-1: Putting the Asian crisis into a historical and political perspective172
It was generally known that the Asian crisis started on July 27, 1997 when
Thailand government asked for IMF emergency loan and followed by dramatic devaluation of Thai baht against U.S. dollar. Yet the crisis that started merely with currency crisis soon evolved into full-blown national economic crisis and then spread quickly over neighboring countries including Philippine, Indonesia, Malaysia and South
Korea. Since East Asian countries have recently shown remarkable economic success, such an unprecedented level of market collapse in the region spontaneously drew huge international attention. Interestingly though, from the start, there emerged sharp
172 Detailed history can be found in Appendix E.
96 discrepancy not only in defining problems but in articulating solutions especially between
Western industrial countries led by the U.S. and East Asian countries notably Japan and
Malaysia.
On the one hand, while defining the primary problem as Asian crony capitalism represented by governments’ intimate relationship with corporations, the U.S. and the
IMF pushed the region to implement structural reforms. For them, not only was the crisis caused by endogenous factors such as government-led macroeconomic policies along with weak financial sector, but massive capital outflow from the region was driven by market judgment on Asians’ mismanagement. Thus, they urged those inflicted countries to minimize government intervention into business sector, to accelerate financial liberalization and to implement IMF-led prescriptions that included tightening government spending and raising interest rates.
On the other hand, however, in designating the crisis as a foreign exchange-rate crisis, East Asian countries found fault with exogenous factors such as capital liberalization, hedge funds, and the crisis-prone foreign exchange market. For them, the crisis was caused more by market panic prompted by currency speculators than regional governments’ policy mistakes. Hence, their primary agenda were to impose greater regulation over excessive capital movement, to discourage currency speculation and to set up a truly international last resort that could act independently from the U.S. and
European influence. Although such a perception gap still exists up to now in 2005, the
U.S. and the Fund were easily able to prevail over Asian perspectives in part utilizing global news media represented by the Wall Street Journal, Financial Times, Bloomberg and Reuters. In presenting themselves as an independent mediator of market sentiment,
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those media tended to dismiss Asian voices as being politically biased and urged to IMF-
prescriptions into practices in order to restore investors’ confidence on Asian economies.
However, Asians’ reluctant, and sometimes grumbling, acceptance of IMF programs resulted in more troubles for the region. That is, while sky-rocketing interest rates forced many local corporations to collapse and eventually being handed over to foreign owners, there was little sign of improvement in terms of market stability. In this context, while U.S. repeatedly rejecting any bilateral assistance to even traditional ally such as Thailand, East Asian countries began to look forward alternative solutions including the Asian Monetary Fund.
The Asian Monetary Fund (AMF)173
From the outset, Dr. Mohamad Mahathir, then Malaysian Prime Minister and
Eusike Sakakibara, then Japanese Deputy Finance Minister, claimed that IMF-led structural reforms and austerity policies should be rejected. In their view, Asian economies didn’t have chronic current account deficits that made austerity policies inevitable, as much as it was not government failure that justified the abolition of Asian economic model. Yet their arguments were largely marginalized not only by the U.S. government along side the IMF, but by global news media side-by-side private and public intellectuals. For example, when Dr. Mahathir denounced currency speculators by singling George Soros out in the mid 1997, it was the Wall Street Journal that criticized him as “lacking of reality about what is actually going on in the big wide world out
173 For detailed chronicle about the AMF, please refer to Appendix F.
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there.”174 Similarly, when Sakakibara was poised to challenge IMF directorship in 1999, the Asia Wall Street Journal depicted him as an anti-capitalist who tried to move against history citing his advocating on Japanese economic model.175
Yet since the U.S. appeared not to cooperate in putting currency speculation under control, while at the same time promoting IMF programs identical to U.S. foreign policies, East Asians developed a strong consensus on establishing regional solutions through pulling their foreign reserve together. Thus, when Japan proposed the AMF by pledging $30 billion on September 10, 1997, even traditional rivals such as China and
South Korea came to be complicit and that pledged full coordination. Moreover, because the U.S. seemed to be indifferent to such a regional movement, East Asians were not prepared for fierce objection from Western power that has dominated IMF and the World
Bank since 1945.
The response of the U.S. government to Japanese proposal of the AMF started with dispatching senior Treasury officials such as Timothy Geithner and Ted Truman to
lobby against it on September 17, 1997. A few days later, Japan attempted to play it
down by stating that the proposal could be a supplement not an independent institution
from IMF. Historical resentment of Japanese imperialism also helped such countries as
China, South Korea and Indonesia withdraw their support for the proposal. Finally, on
November 20, 1997, U.S. Treasury and the IMF were able to shelve the proposal by
reassuring the centrality of IMF in coping with Asian crisis at Asia Pacific Economic
Cooperation (APEC) meeting.
174 Peter Waldman & Lesile Lopez, “Southeast Asian markets,” WSJ-A8, 08/29/97. 175 Brian Fowler, “Japan calls for more control over markets,” AWSJ-9, 01/25/99.
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On the surface, the U.S. objection was based on the argument that not only could
such a regional fund give inflicted countries an excuse not to take structural reform, but it
would also prompt them to anticipate international bailouts for their own mistakes. Yet,
in hindsight, it turned out that the opposition by the U.S. had less to do with moral hazard
than the hegemon’s structural agenda of retaining U.S. influence through the IMF. Robert
Rubin, then U.S. Secretary of Treasury, insisted in one instance that since countries and
their political leaders had to pay a high price for financial missteps, large rescue packages
provided by the Fund would not encourage countries to borrow unwisely or adopt
unsound policies.176 For the other instance, C. Fred Bergsten testified before U.S.
Congress that the U.S. opposed to Japan’s proposals for an Asia-only Asian Monetary
Fund, because “[it] would exclude the U.S. from the most crucial area of cooperation
with the world’s most dynamic economies.”177
Up to now, in 2005, it is unclear why then East Asian countries including South
Korea and Indonesia, which fell into IMF guardianship within a month, drew their support back. However, as C Fred Bersten noted, it became clearer that the disunity in the region cornered East Asians to be deeply dependent on “the international institutions that directed by the Atlantic powers.” 178 Put differently, not only were South Korea and
Indonesia coerced to swallow IMF-led austerity policies that turned out to be
counterproductive, but they also had to hand over the most profitable, state-owned,
corporations to foreign owners at fire-sale prices.
176 Robert Rubin, In an uncertain world : tough choices from Wall Street to Washington. New York, Random House, 2003, p, 218. 177 C. Fred Bergsten, "The Asian Monetary Crisis: Proposed Remedies," November 13, 1997. 178 Bergsten, “America’s Two-Front Economic Conflict." Foreign Affairs 80(2). March/April 2001.
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Malaysia’s alternative approach and Dr. Mahathir179
In Korea, it appeared, President, Dae Jung Kim, along with the majority of
Korean intellectuals tended to assign more responsibility to Korean development model represented by government-led banking system and chaebols than capital liberalization.
In Malaysia, however, Prime Minister Dr. Mahathir developed a firm view that the Asian crisis had nothing to do with Asian economic model and anything to do with currency speculators and their hosting countries notably the U.S. which intended to open up Asian markets. He first maintained that “if we were a bad government, then long ago our currency would have collapsed.”180 For him, accordingly, genuine solutions to the Asian crisis were to impose greater regulation on international currency speculators and to develop Asian-only devices that could function independently from the Atlantic powers.
Yet just as his early desire of establishing East Asian Economic Group (EAEG) in
December 1990 was humbled by APEC, his support for setting up the AMF was also marginalized by the U.S. and the Fund on November 1997. Similarly, his claim of curbing currency speculation was repetitively criticized as an excuse to cover up policy mistakes.
However, his suspicion on Atlantic powers that appeared to exploit the crisis was not much helpful for Malaysia to cope with the crisis. In responding to continued currency tumbling and capital outflow, hence, the Malaysian government finally moved to put IMF advices into practice by tightening government spending and deferring major national projects in December 1997. Yet Malaysian approach was clearly different from
179 Detailed chronicle is available at Appendix G. 180 Mohamad Mahathir, Interview with Executive Intelligence Review, 02/19/1999.
101 those other affected countries since it intended to pursue structural reforms at its own pace without succumbing to the IMF which attached harsh conditionalities. Furthermore, although South Korea, from the early 1998, appeared to succeed in putting foreign exchange market under control, it became clearer to Dr. Mahathir that Indonesian situation was far from improvement.
In the U.S. Treasury’s and the Fund’s perspective, the primary culprits for relentless market turmoil in Indonesia were General Suharto and his cronies who resisted swallowing IMF prescriptions. Instead, for the Indonesian government, Jeffrey Sachs,
Joseph Stiglitz and other critics of the Fund, IMF policies such as abolition of government subsidiaries on basic needs and closing almost two third of banks surely meant political disaster. Yet since the Fund persistently focused on fixing Asian crony capitalism, the reluctance of Indonesian government was interpreted as either rejection of solutions or lack of political leadership. In this situation, when the U.S. Treasury and the
Fund finally succeeded in pushing General Suharto regime to take their prescriptions,
Indonesian society rapidly descended into a chaotic situation. The national riot that happened on May, 1998 alone left more than 1,000 people dead. The World Bank also reported that about two-thirds of Indonesian companies were bankrupt and, as a result, deprived Indonesians of taking advantage of currency devaluation supposed to help export sector.181 For this reason, Joseph Stiglitz, then Chief Economist at the Bank, asked, “[D]id America--and IMF--push policies because we, or they, believed the policies would help East Asia or because we believed they would benefit financial interests in the
181 Eduardo Lachica, Asian Financial Crisis Sparks Blame Game, The Asian Wall Street Journal, 02/19/99
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United States and the advanced industrial world? And, if we believed our policies were
helping East Asia, where was the evidence?”182
Understandably, neither the sudden collapse of the Suharto regime nor emerging
crisis in Russia helped change Malaysian’s approach that firmly denied IMF assistance.
Eventual recovery of South Korea and Thailand at least in taming currency market
followed by their putting IMF programs into effect, however, imposed real pressure on
Dr. Mahathir. For example, from the mid 1998, the U.S. media, which largely went along
with the Treasury and the Fund, renewed their attacks against Malaysian cronies notably
Dr. Mahathir and urged Malaysian public to replace their leadership which failed to turn
the crisis around. U.S. credit-rate corporations, coincidentally, downgraded repeatedly
Malaysia’s long-term currency rate and forced Malaysian government to forsake
international borrowing through selling national bonds.183
Dr. Mahathir’s response to mounting pressures was not to give up Malaysia’s
alternative approach that rejected to ask for IMF loans. Instead, he announced capital
control just as Chile did in early 1990s and moved against the Fund by deferring austerity
policies. Also, in following days, he dismissed Anwar Ibrahim, who has managed IMF-
led reforms since December 1997, from Finance Minister. Such measures prompted
immediate international outcries notably from Wall Street, Western media and IMF
officials who argued that Malaysia would be completely isolated from international
economy. For one instance, Christopher Lingle, a professor at Singapore National
University and vocal columnist in the region, contended that “[c]apital controls are a
salve that can at best only bring temporary relief. This salve will only cover up the rising
182 Joseph Stiglitz, “The insider: what I learned at the world economic crisis,” The New Republic, 04/17/00. 183 For detailed information, please refers to Mohamad Mahathir, interview with Executive Intelligence Review, 02/19/99; Also see Appendix G.
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corruption while disguising the costs paid by most of the population that has not the
means to evade them.”184 Designating Dr. Mahathir’s capital control as resurgence of protectionism, for the other instance, it was also alleged that the U.S. and APEC should take actions not to “let their interests in Asia be threatened by Mahathir’s protectionist policies.”185 In spite of such dire predictions, however, it turned out that capital control
actually helped Malaysia put volatile currency market under control. Nor was Malaysia
isolated from international investors.186 Thus, Ethan Kaplan and Dani Rodrik, prominent
Harvard economists, even claimed that “Malaysia would have fared even better if they had imposed capital controls sooner-better than earlier IMF remedy, and better than they did subsequently.” 187
The Malaysian government declared in late 1998 that such measures were
successful and has been endorsed by remarkable economic recovery since 1999. The IMF
also reported that Malysia's recovery in 1999–2000 was among the strongest of the Asian
crisis economies. More importantly, not only were Malaysians not suffered from
collapsed social safety networks, but they did not have to hand over state-owned
corporations along with local banks to foreign owners. However, a noteworthy point was
that Dr. Mahathir’s decision not to ask for IMF guardianship was certainly possible by
his political leadership. Later, he confessed that imposing capital control against the Fund
along with international criticism was one of the challenging decisions he had to make.188
184Christopher Lingle, In search of a new Asian model, Korea Times, 09/23/98. 185 Richard D. Fisher, J., Robert P. O'Quinn, and Daryl M. Plunk, Clinton's Trip to Asia: Time to Show U.S. Leadership. Backgrounder (1236). November 13, 1998. 186 Malaysian recovery can be found in Appendix D. 187 Ethan Kaplan & Dani Rodrik, “Did Malaysia capital control work?” Feb., 2001. 188 Mahathir, 02/19/99.
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The New International Financial Architecture (NIFA)189
As mentioned above, Sakakibara remained in the conviction that the Asian crisis
was a global crisis which had little with Asians’ own mismanagement. Thus, when the
Asian crisis spread over Russia and Brazil in August, 1998, he assured that “[now] even
skeptics began to accept that the international financial system itself needed to be
reformed.”190 Soon after near-collapse of Long Term Capital Management in September
1998, coincidentally, U.S. President Bill Clinton proposed to set up an independent task force to improve global financial stability. Consensus on stabilizing global financial market in principle, however, did not mean that there would be much agreement on how to achieve it between nations.
On the one hand, since the U.S. and the IMF actually managed the system, they tended to shed more light on endogenous problems along with players such as local borrowers and international lenders than the structure. Thus, for them, neither currency speculation nor market panic was believed to be serious problem because they alluded to systematic deficiencies. Similarly, they attempted to define subsequent crises in Russia,
Brazil, Turkey and Argentina as primarily an isolated and domestic economic problem not as a part of global currency crisis. For example, in reporting Russia crisis in August
1998, the New York Times claimed that “the current reports about huge sums of Russian
money flowing through the Bank of New York only reinforce the notion of a nation
whose entire economy, Government and military have succumbed wholesale to
gangsterism, greed, embezzlement, cronyism and bribery, all with a bewilderingly
189 Both U.S.-led orthodox approach and unorthodox approach can be found in Appendix H and I. 190 Eisuke Sakakibara, “Reform of the international financial architecture,” 06/25/99.
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sophisticated manipulation of global monetary mechanisms.”191 Expectedly, for the other
example, when Brazil descended into currency turmoil in late 1998, the way Newsweek
put it was that: “[n]ations with more solid economic foundations can more easily fend off
international turbulence, but the origins of the renewed financial difficulties in many
Latin American countries lie in domestic and political conditions.”192
From the Asian crisis to Russia crisis and finally to the Argentine crisis, the hegemon’s historic bloc notably U.S. Treasury, Federal Reserve Banks and the IMF remained in firm denial of structural problems. Yet, eventually, they moved to respond to such critics who claimed that neither did the Fund play a truly international last resort role nor it had sufficient resources and expertise in coping with a series of crisis. Robert
Rubin, then Treasury Secretary, thus invited G-22 members to help strengthen the architecture of the international financial system in April 1998. The Council on Foreign
Relations (CFR) also embarked on organizing an independent task force and later published a report titled “The Future of the International Financial Architecture.”
Similarly responding to the critics, the Fund side-by-side with the Bank started to adopt reforms measures that aimed at improving transparency and accountability. But, certainly, the primary purpose of such orthodox approaches was to strengthen the established decision-making structures by producing “an international program to strengthen transparency and disclosure, the development of core principles for banking supervision in emerging markets, the establishment of and ‘Emergency Financing Mechanism’ to accelerate the IMF’s capacity to respond in crisis.”193
191 Serge Schmemann, “What makes nations turn corrupt?” NYT, B-11, August 28, 1999. 192 Jorge Castaneda, “Time to reconsider,” Newsweek, p.2., 02/15/99. 193 Timothy F. Geithner, "Statement of Timothy F. Geithner, Assistant Secretary International Affairs, Department of the Treasury before U.S. Congress."02/24/98, RR-2243.
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On the other hand, however, for those critics of the U.S. and the Fund, it became
clearer that not only were those crises directly connected to rapid capital liberalization
but U.S. took advantage of the crises in way of achieving its foreign policy objectives.
Thus, in defining problems, they tended to find more fault with exogenous factors that
included currency speculation and absence of a truly international last resort than crony
capitalism and moral hazard194. Correspondingly, in looking for solutions, they attempted to put greater regulation over currency speculation and to slow down capital liberalization that U.S. and the Fund have pushed hard since 1994. In addition, since the Fund appeared to lose its legitimacy in coping with the crises, they developed a strong tendency toward either establishing regional cooperative mechanism or improving IMF accountability by reforming decision-making structure.
Contending that the IMF actually descended into “a profound crisis of legitimacy,” Walden Bello thus urged world leaders at the Davos Forum to create
“Global Commission on the Future of IMF, which would decide whether to radically transform the institution or, as I would prefer, decommission it.”195 Since it was believed that the Fund suffered from democratic deficiency, Stiglitz also assured that “[u]nless we change the system of governance, it will be very difficult for us to achieve fundamental reforms in the international economic arrangement” 196 In a similar way, although they
agreed principally on the need of international standards and improved transparency,
many developing countries believed that U.S.-led reforms failed to take into account “the
role played by institutions and policies in creditor countries in triggering international
194 Moral hazard here refers to the likelihood that not only borrowers but also lenders tend not to worry about wrong investment by anticipating their being bailed out by the IMF. 195 Walden Bello, “Has Asia really rebounded,” Davos Forum, 02/04/00. 196 Stiglitz, 2000.
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financial crises” and “many issues of concern to developing countries have not reached
the discussion table.”197 For U.S. officials, however, it was firmly believed that “the IMF
is in fact one of the best possible deals we [U.S.] could ever imagine: its programs cost us
nothing yet it provides enormous benefits for our economy and our foreign policy.”198 In taking lessons from Europeans who successfully launched the single currency euro in
1999, in this regard, East Asians eventually moved toward establishing their own defense mechanisms that included Chiang Mai Initiative in 2000 and the Asian Bellagio Group on in 2005.
5-2: U.S. structural agenda and the emergence of technical frame
I presupposed, in the intellectual leadership model, that public knowledge surrounding the Asian crisis was ultimately shaped by hegemonic state’s desire of sustaining influence in security, production and money. Since the desire has penetrated time and space since 1945, I first refer it to structural agenda of U.S. hegemony. Since the
U.S. government had to cope with changing circumstances that necessitated strategic decisions on policy priorities, though within structural agenda, I then propose to conceive of such decisions as strategically chosen foreign policies. Thus in order to understand how hegemonic structural agenda was able to shape research frameworks, I begin to look at what constitutes U.S. structural agenda.
197 UNTAD Report, “Reforming the international financial architecture,” December 2000. 198 C. Fred Bergsten, “The IMF and the national interests of the United States,” Testimony before U.S. Congress, 02/24/98.
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Structural agenda of U.S. hegemony
First of all, as noted in Chapter Two, the most prominent component of hegemon’s structural agenda is to provide security first to U.S. citizens and, if possible, then to strategically chosen allies including client states and multilateral organizations.
Thus, although the current Bush administration declared that the U.S. would not allow the emergence of military rivalries, it was U.S. structural agenda not partisan politics for special interests that played a critical role in shaping such a doctrine. Scott Snyder and
Richard Solomon reported in this context that:
The challenges for U.S. leadership in response to the region’s current financial crisis are to effectively contain the damage so that it does not cause a global round of economic deflation and domestic instability that could have implications for regional security and sustain confidence in U.S. leadership in order to stimulate reform of the regulatory system for managing global capital flows.199
Second, because U.S. military superiority and economic prosperity have been
substantially financed by U.S. dollar-based international financial architecture, an equally
important part of the agenda was to retain the status of U.S. dollar as an international
reserve currency. Bulent Gokay argued, particularly in this reason, that “the dollar
hegemony is key to the future of American global dominance, in many respects as
significant if not more so, than the overwhelming military strength.”200 Bergsten also
clarified this point by testifying that the U.S. government lobbied hard against the AMF
because not only did the members of the AMF hold monetary reserves of almost $1
199 Scott Snyder and Richard H. Solomon, “The Asian financial crisis: political and security implications; Challenges and opportunities for U.S. leadership,” April, 1998. 200 Bulent Gokay, “War in Iraq, petro-dollar and the challenge by euro,” Middle East Information Center, 04/30/04.
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trillion, but they could clearly rival the Fund and raise potential conflicts with the U.S.201
Similarly, the U.S. government intended to put the Fund at the center stage in coping with series of crises because the “[IMF] is structured along weighted voting lines, its mission- finance and economics- is one where the United States is not only pre-eminent but where
Americans are prominent.”202
In addition, the promotion of rapid capital liberalization by the U.S. Treasury can be better understood in this context. Clearly, the policy of capital liberalization, which benefited Wall Street financial corporations, has been notoriously emphasized by the
Clinton administration. Thus those critics who tended to define the Asian crisis as a financial panic found primary fault with Wall-Street-Treasury Complex. Jagdish
Bhagwati thus contended that “Wall Street naturally wished to enlarge its sphere of operations; the U.S. Treasury reflected that lobbying pressure while also succumbing to the ‘ideology’ of the market while forgetting that the capital funds markets is not as innocuous as goods markets and needs to be monitored and regulated carefully.”203
However, liberalizing capital market was also to expand financial hegemony, as well as to reduce trade deficit by supporting U.S. financial sector that enjoy global competitive advantage. Hence, Robert Wade maintained that “[b]y promoting market access for
American financial services firms which have great advantages over competitors in everything from securities placement, debt work-outs, privatizations, and mergers and
201 C. Fred Bergsten, “America’s two-front economic conflict,” Foreign Affairs, March/April, 2001. 202 Thomas C. Dawson, "Prepared Testimony of`Thomas C. Dawson, Director of Financial Institutions Group Merrill, Lynch & Co., House Banking Oversight Subcommittee Hearing on the International Monetary Fund." 04/21/1998. 203 Jagdish Bhagwati, The wind of the hundred days : how Washington mismanaged globalization. Cambridge, Mass., MIT Press, 2000, p. 103.
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acquisitions, the American government has a strong interest in lessening current account
deficit via the earnings of financial institutions.”204
For U.S. policy-makers, sustaining hegemonic power also meant to control over
raw materials, markets, and capital, as well as competitive advantages in highly valued
goods. Thus, the U.S. government has become wary of emerging economic rivalries since
the end of Cold war that helped the U.S. shift its priority from security concerns to
economic affairs. The U.S. government first started to weaken local governments’
strategic relationships with local corporations and then pushed them to adopt
international standards that contrived to fit with its strategic purposes.205 Madeleine
Albright, then Secretary of State, testified in this regard that “our policy is to help every state that is willing and able to draw closer to the international community to do so, because it is in America’s interest to work with partners within the framework of international standards that we helped create since the day of Bretton Woods.” 206 But,
insisting that developing countries were unfairly forced to adopt such international standards, Henry Liu responded that “of course, countries need banking, accounting, and regulatory standards, but there is no agreed best universal practice. Even the Group of
Seven (G7) industrialized nations cannot agree among themselves on a common standard.”207
Yet identifying the hegemon’s structural agenda in areas of security, finance and production itself is not sufficient to understand why East Asian countries notably South
204 Robert Wade, Governing the market : economic theory and the role of government in East Asian industrialization. Princeton, N.J., Princeton University Press, 2004, p. 219. 205 Ha June Jang, Kicking Away the Ladder : Development Strategy in Historical Perspective. London: Anthem, 2002. 206 Madeleine K. Albright, Testimony for Congress, 02/13/98. 207 Henry C K Liu, “The case for an Asian Monetary Fund,” Asia Times, 07/12/02.
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Korea, Indonesia and Thailand ended up with being co-optation into the hegemonic order.
It might be the case, as John Ikenberry insisted, that the U.S. was able to “induce small
powers to buy into its vision of international order and to accept as their own.” 208
However, there should be pre-established structure of references by which the hegemon is able to draw out positive and conscious coordination from weak states. Thus, I assumed that the hegemon would pay particular attention to producing public knowledge that could go along with structural agenda. Indeed, the U.S. government has efficiently utilized such multinational organizations as the Fund and World Trade Organization
(WTO) in way of achieving its structural goals. Yet since weak states were wary of their being manipulated, the hegemonic state required legitimate knowledge not only to rebut alternative views, but also to minimize “either political instability, nationalist backlash, or the moral hazards of bailing out either irresponsible investors or unreformed political leaderships.”209 Because hegemon’s structural agenda could only provide guidelines or ultimate goals, however, it was necessary to articulate the political objectives of the hegemon during the crisis.
Hegemon’s strategically chosen foreign policies
U.S. foreign policies associated with Asia and subsequent currency crisis were largely divided into financial and trade policy that aimed at sustaining U.S. dollar hegemony and preventing economic rivalries respectively.210 The U.S. government, in
208 G. John Ikenberry, quoted in Rapkin, D. P. World leadership and hegemony. Boulder, L. Rienner & Charles A. Kupchan, 1990, p. 52. 209 Snyder and Solomon, 1998. 210 Because of the focus on U.S. economic leadership, the military geopolitical policy is not discussed here.
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this context, did commit to capital liberalization, free-floating foreign exchange regime,
promoting international standards and ultimately strengthening the established
institutions notably the Fund.
Specifically put, while inheriting Ronald Reagan’s doctrine of “knocking down
barriers to trade and foreign investment and the free movement of capital," the Clinton administration gave its priority in rapid capital liberalization after 1994. In order to
achieve it, as Robert Wade noticed in the above, the U.S. raised penalties against not
undertaking rapid financial opening and persuaded Asians to believe that capital account
opening would be in their own best national interest.211 The New York Times thus
revealed that Clinton officials actually set up a “war room” under the leadership of
Ronald H. Brown, then Commerce Secretary, to “identify 10 rising economic powers”
and “push relentlessly for business for US companies in these countries.”212 Sticking to this policy, Rubin adhered to the conviction that “the right response to recent events
[crises] is not to slow the pace of liberalization but to accelerate the creation of an
environment in which capital flows to its most productive uses and which also
encourages the strengthening of the financial sector.”213 Malaysia’s capital control in
September 1998 thus prompted immediate criticism notably from the U.S. government.
U.S. policy of supporting free-floating foreign exchange regime can be traced as far back to 1973 when the U.S. dismantled the fixed gold-dollar system. Since then, it was claimed, the U.S. was able to avoid painful adjustments while weak currency states were pushed to accumulate U.S. dollars in order to prevent speculative attacks on their currencies. Hence, whenever those inflicted countries were under criticism of their
211 Wade, p. 203. 212 Hardev Kaur, “An East Asian financial crisis made in the US,” the Business Times, 02/22/99. 213 Robert Rubin, Statement of Secretary Robert E. Rubin IMF Interim Committee. RR-2370. 04/16/98.
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mismanagement of foreign exchange regime, the U.S. government through the Fund
pushed them to adopt fully free-floating exchange regime and, as a result, East Asians
ended up actually supporting U.S. double deficits.
For U.S. policy-makers, adoption of international standards in banking,
corporations and local governments was easily believed to be a critical way to improve
transparency and accountability that would bring forth efficient global market. Thus,
while utilizing international institutions such as the Bank of International Settlement
(BIS), the U.S. government strived to formulate appropriate standards and pressured
weak states to adopt them. Timothy F. Geithner, then U.S. Treasury Undersecretary for
International Affairs, thus testified that “within the Treasury, we have created a new task
force composed of country specialists and officials knowledgeable in particular issue
areas, such as banking, trade, labor, and the environment. Other U.S. government
agencies, such as the U.S. Trade Representative, the Labor Department, the Commerce
Department, and the State Department, will provide input into the work of the task
force.”214 Then, while borrowing such an authoritative voice as Barry Eichengreen, a
senior IMF advisor at the University of California at Berkeley, it was claimed that “the
only feasible approach to this problem [financial crisis] is for national governments and international financial institutions to encourage the public and private sectors to identify and adopt international standards for minimally acceptable practice.”215 The uncritical adoption of universal standards of East Asian countries, however, resulted in virtual abandoning their national strategies since it prevented them from mobilizing their financial system to achieve public projects. Henry Liu thus maintained that “national
214 Timothy F. Geithner, Testimony for Senate Committee on Banking, Housing and Urban Affairs, 03/09/1999 215 Barry Eichengreen, Toward a New International Financial Architecture, IIE, 1999. p. 21.
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policies [under financial globalization] suddenly are subjected to profit incentives of
private financial institutions, all members of a hierarchical system controlled and directed
from the money center banks in New York.”216 Moreover, there were sufficient reasons for nation-states not to subscribe to the standards since “there is not sufficient agreement on the nature of the problem, nor on how a safe financial system ought to work, and nor on how agreement in principle could be administered in practice.”217
Finally, for the purpose of retaining U.S. financial leadership, the U.S. elite paid continuous attention not only to strengthening the established multinational organizations such as the Fund and World Bank but also to deterring alternative institutions including the AMF. Rubin, for instance, testified that the “IMF is at the center of these efforts [of reestablishing financial stability and helping strengthen the architecture of the international financial system], and it will remain critical to any effective U.S. response to protect our interests in this crisis, as well as future international financial crises.”218
Refuting those critics who favored to set up new international institutions, Stanley Fisher,
then IMF Deputy Director, also replied that “do we need different rules? I think we need,
in the first instance, countries to strengthen the set of common rules- in terms of
accounting standards, the way markets work—that they all have.”219 Moreover, although the U.S. and the IMF apparently argued that the AMF would remove the necessary incentives for reform and create a ‘moral hazard’ problem, as Rubin indicated, the objection of the U.S. had much more to do with U.S. financial policy.
216 Henry Liu, “The BIS and national banks,” Asia Times, 05/14/02. 217 Strange Susan, Mad money : when markets outgrow governments. Ann Arbor, University of Michigan Press.1998, p. 172. 218 Rubin, 04/16/98. 219 Stanley Fischer, "The IMF and the Asian crisis." The IMF Report, 03/20/98.
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The structural agenda of U.S. hegemon in preventing economic rivalries and
retaining control over goods and services was also specified as U.S. trade policy.
Although both trade policy and financial policy are interlocked each other, it is still
plausible to note that the trade policy aimed at dismantling Asian economic model led by
Japan, opening up Asian markets, and pushing to adopt market-friendly policies
including deregulation and privatization so as to improve U.S. current account balance.220
Pushing trade policy, the Clinton administration thus began to pay special heed to opening up Asian financial markets. Laura D'Andrea Tyson, then chairwoman of
National Economic Council at the White House, confessed later that “[Asian markets notably Japan] was seen as a potential gold mine for American banks and brokerages.”221
Yet a less visible, but critical, point was that U.S. Treasury’s push went also along with
its pre-launched “a strong dollar policy” that targeted to improve the balance of payment
of the U.S. Reflecting on such a policy, Larry Summers, then Treasury Deputy Secretary,
kept on claiming that “[t]he largest financial sector crisis we have seen in the 1990s- that
of Japan- has occurred in a system that has historically been most closed and ‘long- termist’ in its approach.”222 Stuart E. Eizenstat, then State Undersecretary, also reiterated the point by arguing that “Japan must do the same to stimulate domestic-led growth and open its market. Most important to this effort are trade liberalization, effective deregulation, and resolution of its banking problems.”223
220 C. Fred Bergsten, The United States and the World Economy: Foreign Economic Policy for the Next Decade, Institute for International Economics, January 2005, p. 249. 221 Laura D'Andrea Tyson, reqoted in Hardev Kaur, 02/22/99. 222 Larry Summers, "Building an International Financial Architecture for the 21st Century." RR-2770, 10/22/98. 223 Stuart E. Eizenstat, “Asian Financial Crisis: Broader Implications," 02/24/98.
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Yet, before Asia crisis, U.S. officials’ using coercive measures such as import
quotas or tariffs or anti-dumping measures brought about deepening anti-Americanism as well as boosting regional protectionism. Hence, while East Asian countries such as Japan and South Korea intended to sustain their economic model represented by government leadership and its strategic alliance with banks and big corporations, they came to believe that the model “has been at the root of our persistent trade problems with the country
[South Korea], because it resulted in poor market access, uneconomic investment, excessive concentration, and excess capacity in key industries.”224 Moreover, since big
Asian corporations including Korean chaebols or Japanese keiretsu appeared to threat hegemon’s leadership in the global market, the U.S. government became vigilant on the emerging economic rivalries in East Asia. Thus, for them, the crisis was believed to be an ideal time to achieve its long-waited objectives. Eizenstat testified, while emphasizing the utility of the Fund as a legitimate multinational organization, that:
Indeed, IMF has accomplished in a few short months what the U.S. has pressed for years, even decades: 1) from elimination of trade-related subsidies to harmonizing import certificate procedures in accord with World Trade Organization standards; 2) from binding liberalization of financial services to increasing opportunities for foreign investment; 3) from eliminating import monopolies to reducing tariff levels; and 4) from eliminating restrictive import licensing practices to ending directed lending based on political factors, which has led to over-capacity in some sectors that compete with U.S. producers.”225
But since such structural reforms tailored to fit with U.S. foreign policy were expected to stir up public resentment in the region, they needed to engage in public information campaign that aimed at winning public support. That is, in Strange’s terms,
224 David A. Liption, "Treasury Under Secretary David A. Lipton, House Ways and Means Subcommittee on Trade." RR-2242, 02/24/98. 225 Stuart E. Eizenstat, 02/24/98.
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they did attempt “to develop a strong political/economic ideology that assert, on the one
hand, that the domestic and international interests are coincident if not identical, and on
the other hand, that a prime aim of the state should be to persuade others that their
national interests also coincide with the maximum development and extension of the
international economy.”226
Foreign policies incorporated into the technical frame
When U.S. officials and IMF staffs came out with their own definition of
problems, causes and solutions, they largely went along with hegemon’s structural
agenda and its specified policies. That is, soon after Thailand fell into currency crisis in
July 1997, they started to define it as “inevitable economic crisis of Asian crony
capitalism.” It was therefore insisted that “the root of the crisis is not simply a money
problem, but a management crisis stemming from ‘crony capitalism,’ poor economic
surveillance and politically distorted decision-making, and weak financial and regulatory
institutions.”227 Rubin also emphasized that “at the core, for all of them, close links between governments, banks and corporations led to fundamentally unsound investments by corporations funded by unsound lending by banks.”228 Stanley Fischer, then IMF
Deputy Director, exactly repeated Rubin’s logic by claiming that such problems as “weak financial institutions, inadequate bank regulation and supervision, and the complicated and non-transparent relations among governments, banks, and corporations were central
226 Strange, p. 89. 227 Snyder and Solomon. 228 Robert Rubin, 01/21/98, RR-2168.
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to the economic crisis.”229 Thus, quite interestingly, even though Japan was hardly touched by the crisis, U.S. officials repeatedly claimed that Japan needed to take actions by reforming its banking system and opening up financial markets.230
They then moved to associate the primary definition with such problems as moral hazard, weak financial system and lack of transparency. For instance, it was contended that “with financial and industrial policy enmeshed within a widespread business sector network of personal and political favoritism, and with governments that appeared willing to intervene in favor of troubled firms, markets operated under the impression that the return on investment was somewhat ‘insured’ against adverse shocks.”231 Similarly, the
U.S. government pushed Asian countries to publish strategic information that included
“new government contracts and industry transaction and also on medium-term prospects determined by government development plans and market trends.”232
However, it should be clear that their arguments were undoubtedly based on actual, though selective, facts. In other words, they abided fully by public diplomacy
doctrine that assured, “to be persuasive we must be believable; to be believable we must
be credible; to be credible we must be truthful.”233 Among other officials, Lawrence
Summers, then Treasury Deputy Secretary, showed outstanding performance in public
diplomacy. Since Asian economies were really successful up until the crisis, first of all,
he worked hard to provide credible explanations about why the crisis happened in 1997
and, to do this, tended to employ local critics who were apt to blame their own
229 Fischer Stanley, , “Response to Feldstein,” Foreign Affairs July-August 1998. 230 David Sanger, “U.S. sees new villain in Asia Crisis: Tokyo's leadership,” the New York Times, 02/22/98. 231 Giancarlo Corsetti & Nouriel Roubini, "Paper tigers? A model of the Asian crisis." European Economic Review. 43(7): 1211. Jun 1999. 232 Krause Lawrence, U.S. economic policy toward the Association of Southeast Asian Nations : meeting the Japanese challenge. Washington, D.C., Brookings Institution,1982, p. 77. 233 Quoted in “The Planning Group for Integration of USIA into the Dept. of State,” 06/20/97.
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governments and corporations for home-grown problems.234 He endeavored then not to dismiss unfortunate exogenous factors such as excessive capital inflow and technological development. Yet he made it utterly clear that the governments and elites in the region failed to adapt to such challenges.235 His sophisticated and elaborated argument went thus exactly along with U.S. departmental view that placed more responsibility to endogenous factors. Noting that East Asians differed from Latin American countries, he thus contended that “the problems [of Asian countries] that must be fixed are much more microeconomic than macroeconomic, and involve the private sector more and the public sector less.”236
Before visualizing technical frame adopted by the hegemon, but, it is helpful to
note that such the departmental view included critical assumptions. First, the view largely
dismissed the point that the Asian crisis was transformed from a merely currency crisis to
national economic crisis by inappropriate measures of the IMF. That is, although U.S.
officials tended to blame weak financial system saturated with bad-loans, sharp currency
devaluation came first and followed by mounting bankruptcies not vice versa. Moreover,
according to Paul Blustein at the Washington Post, it was Treasury officials who first cornered local corporations into bankruptcies by pressuring Asian governments to raise
interest rates and then to sell failed corporations to foreigners.237
The U.S. government then paid little attention to the points that not only the financial market could be distorted by currency speculators, but the commercial media
234 Lawrence Summers, "Policy Challenge for Asia in 1999” Deputy Treasury Lawrence Summers, Remarks Before the American Chamber of Commerce Seoul, Korea” RR-2978, 02/25/99. 235 Rubin, Rubin, 04/16/98, RR-2370. 236 Lawrence Summers, "Opportunities Out of Crises: Lessons From Asia,".RR-2309, 03/19/98. 237 Paul Blustein, The chastening : inside the crisis that rocked the global financial system and humbled the IMF. New York, Public Affairs, 2001. p. 157.
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supposed to represent “genuine market sentiment” were also associated with the
speculators. Indeed, Gordon De Brouwer noted that the New York-based macro hedge
funds and proprietary trading desks of international investment banks and securities firms
played a critical role in destabilizing Asian currency and equity markets in 1997 and
1998.238 Moreover, they barely considered that those inflicted countries were forced to ask for IMF loans since the U.S. Treasury blocked currency swap and regional financial cooperation that the U.S. was, still is, doing. In this particular reason, Dr. Mahathir insisted that:
Firstly, of course, the currency traders and their devaluation of our currency, and then we had IMF, which is pressuring us to open up our market, and then, of course, there is this attempt to stir up the people to rise and overthrow an elected government, a democratic government. … Then, we have the attempts to prevent us from recovering, like, for example, press reports, which deter people from visiting Malaysia. … And then, beyond that, not only the press, the rating agencies, when we have a need to borrow money, they immediately downgraded us so that it will cost us 15% to borrow money.239
I thus draw Figure 5:1 after taking these points into consideration.
238 Gordon De Brouwer, quoted in The IMF and its critics: Reform of global financial architecture, David Vines and Christopher L. Gilbert (eds). Cambridge University, 2004, p. 260. 239 Mahathir Mohamad, in Datuk Seri, “Interview with Dr. Mahathir,” 02/19/1999.
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Figure 5:1: Technical frame (definition and diagnosis)
Endogenous economic crisis of Asian crony capitalism
Implicit assumptions: 1) Primary culprit: affected Asian states and international lenders 2) Purely economic and unavoidable crisis caused by states’ mismanagement 3) Market (investors’ confidence) as objective reflection of reality
Asian (Japanese) Moral hazard primarily Market panic, if so, economic model and by local corporations and prompted more by lack weak financial/banking imprudent lenders of information system
In this frame, it is possible to read that, in the first place, the definition of the
problem was clearly related to the U.S. structural agenda that aimed at sustaining U.S.
dollar hegemony. So it must have been an Asians’ own problem not a global currency
crisis. Then, the hegemon moved to identify primary causes ultimately determined by the
definition. As this frame indicated, those culprits such as Asian governments, big
corporations, and general population were under criticism for involved in moral hazard problem. Finally, since the crisis was an inevitable result of Asians’ mismanagement, sudden capital exodus from the region was believed to have stemmed more from lack of information and deliberate disinformation than currency speculation.
Since the Asian crisis was defined as such, U.S. officials tended to seek solutions in eliminating such problems as the moral hazard, weak financial system and lack of information. That is, in pinpointing the moral hazard, they attempted to discourage
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government intervention as well as to sever strategic alliances within big corporations
that threatened U.S. corporations. Thus, Summers claimed that “greater transparency and accountability of public institutions, the elimination of cartels, subsidies, trade restriction
and other distortions—all of these will have a direct effect on the scope for cronyism and
corrupt practices, and a direct, and positive long-term effect on growth.”240Also, since the
primary culprit was believed to be Asian governments which resulted in misallocation of
resources, they were able to promote market-friendly policies such as deregulation and
opening up markets as viable solutions. Summers stressed again that “the emphasis is on
reducing direct public involvement in the productive sector,” and “it has been on opening
the economy to foreign participation and competition with sweeping trade and financial
sector liberalization, both to improve the efficiency of the economy and to let long-term
capital in.”241
Moreover, since they perceived it as an economic and financial crisis, they
inclined to dismiss Asians’ demands on greater regulation over capital movement. Instead,
they accused it as having political biases that aimed at covering up their cronies and
policy mistakes. Edwin M. Truman, then Treasury Assistant Secretary, thus stated, “The core issue, I believe, is not whether we should seek to manage capitals flow, it is whether we can assist markets to perform better with fewer crises, for example via increased transparency and disclosure.”242 In addition, when the U.S. and the Fund lobbied against
Japanese proposal of the AMF, they justified it by contending that such a measure would encourage moral hazard problem and delay required structural reforms to fix crony capitalism. Finally, for the Fund proved its utility as a legitimate instrument for pursuing
240 Summers, 03/19/98, RR-2309. 241 Summers, 03/19/98, RR-2309. 242 Edwin M. Truman, "Are we in a global economic crisis?" 04/17/99.
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U.S. foreign policy, there was little interest, at least within the U.S. government, in reforming decisions-making structure of the Fund. Instead, U.S. Treasury paid particular attention to strengthening the Fund either by improving accountability to U.S. public or by setting up additional forums such as Financial Stability Forum (FSF) and G-20 meeting.
Figure 5:2: Technical frame (solutions and lessons)
Technically identifiable solutions
Implicit assumptions: 1) IMF as a technical assistant armed with expertise 2) Measures of transparency and accountability as having less political implications 3) Technical reforms of international institutions as in way of strengthening international organizations
IMF-led structural Further integration into Strengthening reforms in way of global financial market international institutions embracing market- by fully adopting by improving public friendly policies international standards accountability
Just as the technical frame included suspicious assumptions in articulating problems, Figure 10 also reveals imbedded assumptions in suggesting solutions. First of all, the technical frame barely questions the IMF’s politics, as well as its authority in designing structural reforms. Yet critics notably Japan and Malaysia hardly failed to notice the persistence of political biases in the Fund that favored the U.S. and West
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Europeans and so have cast doubt over its capability as the last resort. Second, even though this frame assumed that it was common interests to adopt international standards, some critics such as Strange, Liu and Mahathir insisted that not only would such international standards benefit Western industrialized countries, but there was also little consensus over universal rules. Noting the point that only the powerful countries particularly U.S. could change the rules, Mahathir thus claimed that “we [weak states] have to follow the rules as they keep on changing.” 243 Third, in assuming that the Asian
crisis had more to do with government failure than market failure, the U.S. government
was able to achieve its strategic purposes represented by deregulation and liberalization.
Yet, Stiglitz made it clear that “the view that we can’t do anything through government
policies to decrease the frequency of these crises, or ameliorate their magnitude, is
wrong.” 244 Finally, the frame also fails to recognize that although the U.S. promised to improve public accountability, there was little promise that the U.S. would not abuse its power in managing those multinational organizations. In other words, no answers were found in this frame about “how to enable the formerly excluded countries to acquire a genuine stake in the decision-making structure of the global financial system” and “who
should be judging and how should this (reform) take place?”245 In short, since this frame
was ultimately shaped by the hegemon’s structural agenda, there was less room for
political questions.
243 Mohamad Mahathir, in PBS Commanding Heights, 07/02/01. 244 Joseph Stiglitz, quoted in Louis Uchitelle, “Ounces of prevention for the next crisis,” NYT, 02/01/98. 245 Randall D. Germain, "Reforming the International Financial Architecture: the New Political Agenda.” 2002, pp. 7 & 15.
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Undoubtedly, there were internal debates between U.S. officials in coping with the Asian crisis. For example, when Indonesia fell into national crisis, Pentagon officials urged Treasury to ease its conditionality given that General Suharto played a critical part in regional security stability. Yet Treasury officials who relentlessly pursued the hegemon’s financial policy eventually prevailed over critics and finally forced Suharto
Regime out in May 1998. In Blustein’s view, such internal cacophony happened even between the Fund and Treasury. Since Treasury usually enjoyed control over the Fund, however, it was Treasury officials notably Rubin and Summers who directed U.S. strategies. Table 7 shows it quite clearly. Except for Stiglitz, then Chief Economist at
World Bank and dismissed later, there was overwhelming consensus within the U.S. government. Hence, it should be utterly clear that even if U.S. officials debated over specific strategies, not only the hegemon’s structural agenda but also its specified strategic objectives were rarely challenged.
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Table 5:1: U.S. departmental view and policy consensus246
Institution Officials or Researchers Adopted frame Treasury Department Robert Rubin (Secretary) Technical Larry Summers (Deputy Secretary) Technical David Lipton (Under Secretary) Technical Timothy F. Geithner (Assistant Secretary) Technical Caroline Atkinson (Deputy Assistant) Technical State Department Madeleine Albright (Secretary) Technical Stuart E. Eizenstat (Under Secretary) Technical Warner Rose (U.S. Information Agency ) Technical Commerce Department Eleanor Robert Lewis (Chief Counsel) Technical Federal Reserve Banks Alan Greenspan (Chairman) Technical Roger W. Ferguson, Jr. (Governor) Technical Alice M. Rivlin (Vice Chairman) Technical Ramon Moreno, Gloria Pasadilla & Technical Eli Remolona (FRB-San Francisco) Giancarlo Corsetti, Paolo Pesenti & Technical Nouriel Roubini (FRB-New York) U.S. Congress Scott Snyder & Richard H. Solomon Technical (U.S. Institute of Peace) Richard P Cronin (Congressional Technical Research Service) IMF (U.S. officials) Stanley Fischer (Deputy Director) Technical Karin Lissakers (Executive Director) Technical Michael Mussa (Research Director) Technical Jack Boorman (Policy Director) Technical Shailendra Anjaria (External Relation Technical Director) Morris Goldstein (Deputy Research Technical Director) World Bank (U.S. James Wolfensohn (President) Technical officials) Joseph Stiglitz (Chief Economist) Political National Security Samuel Berger (National Security Technical Council (NSC) Advisor) Gene Sperling (National Economic Technical Advisor)
246 Since the unit of analysis is a state, I define U.S. state as including the White House, ad hoc agencies linked with major departments, multinational organizations under U.S. influence and the staff members of U.S. Congress.
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Alternative frames and hegemon’s necessity of winning public opinion
I attempted to show in the above that although the technical frame appeared to be
technical, scientific and truthful knowledge, it was hardly free from political biases. Yet
if such a frame were based on universal consensus over definition of problems, causes
and solutions, there would be less urgency for the hegemon to engage in public
information campaign or public diplomacy. In the same way, were there objectively
discoverable common interests, the hegemon did not have to roll out its intellectual
leadership. That is, not only was technical frame contested by alternative frames such as
political and counter-hegemonic frame, but, more critically, it was political struggles that
gave birth to common interests.
From on the stage of defining problems, the political frame was distinctive from
the technical frame. Rather than assuming that the Asian crisis was ‘inevitable’ crisis, this
frame first noted that a mere currency crisis was aggravated by political misjudgment
such as IMF’s austerity policy and U.S. objection to the AMF. Then while admitting the
point that Asian economies had structural problems, those advocates of political frame
tended to pay more attention to market distortion by speculative hedge funds. For them,
therefore, the Asian crisis was not of Asians’ own-making but an unfortunate crisis
helped by currency speculation, internal policy mistakes and poor international responses.
In articulating primary causes, accordingly, they attempted to address that the crisis as having more to do with market panic than economic fundamentals. Jeffrey Sachs thus insisted that “this was not a crisis of fundamentals; it was a crisis of confidence, and
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the crisis was so much more extreme than justified by the fundamentals.”247 In designating the Asian model as “alliance capitalism,” not “crony capitalism,” Robert
Wade also stressed the failure of market not government. He thus insisted that government leadership in the region actually brought forth efficient alliances of financial resources in way of achieving remarkable economic growth in Asia. Since East Asians tended to rely on their own savings, he further claimed that neither did Asians require foreign capital inflow and rapid capital liberalization. Nor such relatively high debt/earning ratio of Asian corporations were believed to be problems.248 As a result, within the political frame, those exogenous factors such as uncontrollable capital movement, global currency speculators, lack of international cooperation were conceived of as primary causes. Figure 5:3 reveals it more visibly.
Figure 5:3: Political frame (definition and diagnosis)
Exogenous financial crisis of global capitalism
Implicit assumptions: 1) Primary culprit as global capitalism 2) Preventable financial crisis aggravated by political misjudgments 3) Market can be distorted by speculators and investors’ herd behavior
Market panic less Speculative hedge funds IMF mismanagement associated with and liberalized global and U.S. objection to economic fundamentals capital market AMF
247 Blustein, p. 157. 248 Wade, p. 102.
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Based on their diagnosis, then, those supporters for this frame urged greater
regulation over currency speculation and the slowing down of capital liberalization. Since
the crisis was perceived as a part of global currency crisis, they also started to urge U.S. and Western industrialized countries to reform the international financial architecture.
Hence, when it became clearer to East Asians that the Atlantic powers were inclined not to change the political structure within multinational organizations, they shifted their attention toward setting up regional cooperative mechanisms such as Chiang Mai
Initiative and Asian Bellagio Group. Yet it is crucial to remember that the political frame largely failed to recognize structural agenda of the hegemon that pre-determined the limit of solutions. Thus, as Figure 5:4 suggests, there included the following assumptions.
Figure 5:4: Political frame (solutions and lessons)
Cooperatively agreeable solutions
Implicit assumptions: 1) IMF as having political bias; so, needs political reform 2) Measures of transparency and accountability as having less to do with politics 3) Solutions can be found with international cooperation though not necessarily challenging U.S. leadership
Curbing rapid capital Further integration into Reforming political liberalization and global market by structure of IMF and speculative hedge funds adopting international pursuing regional standards cooperation mechanisms
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First of all, even though this frame recognized currency speculation as a critical part of the problem, there was little attention to U.S. financial hegemony that intentionally pushed greater capital liberalization. Partly because those supporters constituted economists who poorly understood geopolitics, there was an assumption that better international cooperation could prevent future currency crises. Similarly, because it was assumed that a globalized market would benefit developing countries as much as
Western industrialized countries, they barely questioned whether political biases are associated with international standards. Jagdish Bhagwati thus stated that “So while I am quite enthusiastic about improving accounting standards and the structural reform of banking systems overloaded with bad debts, I see little connection between other reforms such as the privatization of public enterprises and the prevention of financial crises or the recovery from the current one.”249 In a similar way, while criticizing the IMF’s austerity policies, U.S. critics such as Jeffrey Sachs, Martin Feldstein and Dani Rodrik rarely brought up political biases of IMF-led structural reforms. Feldstein thus insisted that “the
International Monetary Fund should eschew the temptation to use currency crises as an opportunity to force fundamental structural and institutional reforms on countries, however useful they may be in the long term, unless they are absolutely necessary to revive access to international funds.”250
Instead, the counter-hegemonic frame starts with pinpointing structural deficiencies of the dollar based international financial architecture. For the tiny number of defenders on this frame, the Asian crisis was certainly a part of the global currency
249 Jagdish Bhagwati, “East Asia: Miracle or Debacle?” 2001. 250 Martin Feldstein, “Refocusing IMF: overdoing it in East Asia,” Foreign Affairs, March/April, 1998.
131 crises that traced back to as early as 1970s. Noting the point that the U.S. government and the Fund exploited the Asian crisis in way of achieving its political objectives, they then designated a primary culprit as hegemon and its strategically chosen allies. That is, in buying into the argument that both liberalized capital market and currency speculation played a more critical role, they further recognized the continuity of the hegemon’s political decisions behind the scene. Strange, for instance, argued that “it was not invisible hands in market but political decisions regarding money and finance in the history of the world’s monetary system that determined the distribution across states and class of gains and losses, risks and opportunities.”251 Since the hegemon was able to influence market through media, credit-rating corporations and ultimately the Fund who could approve or deny loans, they were also aware of the possibility that market sentiment or investors’ confidence could be manipulated by hegemon. My drawing of
Figure 5:5 thus takes into consideration such points.
251 Strange, p. 32.
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Figure 5:5: Counter-hegemonic frame (definition and diagnosis)
Exogenous structural crisis of U.S. dollar hegemony
Implicit assumptions: 1) Primary culprit as the U.S. dollar based financial architecture 2) Managed crisis in accordance with U.S. national interests; 3) Financial market as an efficient U.S. policy tool supported by media and credit rating corporations
Market panic associated U.S. fiscal exuberance Systematic failure of with hegemonic strategic that prompts global U.S. dollar based objectives such as capital liquidity crisis financial architecture liberalization
Consequentially, the supporters for this frame tended to dismiss previous
solutions as technical ones and so believed that such measures would result in
strengthening, not weakening, U.S. dollar hegemony. For them, it was clear that the
European’s repeated efforts to fix structural problems were vetoed by the U.S.
government with good reasons. Thus, in their point of view, the European single currency
“euro” was believed to be a realistic option to establish international “check and balance”
mechanism. Bulent Gokay also agreed such point by quoting “the euro's main aim is to
put Europe on an equal monetary footing with the United States - ending the dollar's
''hegemony.''252253 Liu thus claimed that “[s]tructural reform, while necessary, is not enough. There is a need for a safety net through a regional financial arrangement. Asia
252 Bulent Gokay, “War in Iraq, 'petro-dollar' and the challenge by euro,” 04/30/04.
133 needs an Asian system, operated by Asians and for Asia.”254 As indicated in Figure 5:6, they thus urged the establishment of a truly international last resort that would work independently from the hegemon. If not, for them, the regional alliance was an inevitable choice especially for weak states.
Figure 5:6: Counter-hegemonic frame (solutions and lessons)
Politically negotiable solutions
Implicit assumptions: 1) IMF as a principal policy instrument for U.S. hegemony; 2) Measures of improving transparency and accountability as having political implications 3) Regional balancing power as a realistic solution for new financial architecture
Fiscal adjustment of U.S. Fundamental political Creation of new government by reducing reform of international international financial current account deficits institutions architectures including regional alliance
Yet before looking into how the hegemon was able to pulverize alternative frames, it is helpful to note that there were at least two critical weaknesses in those frames. On the one hand, since alternative frames were supported by East Asians side-by-side a few
U.S. residing critics, the views were easily dismissed as having political biases and, as a result, perceived as lacking authority. It was therefore reported that “it is hardly surprising that Asians of all stripes are seizing on criticisms of IMF. Jeffrey D. Sachs, the
254 Henry Liu, “The case for an Asian Monetary Fund,” Asia Times, 07/12/02.
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Harvard economist who is a longtime critic of the fund, attracts more Asian reporters
than a Hong Kong pop star when he shows up at conferences to make his case that the
policies are only making matters worse.”255 More over, while the hegemony could
provide practical blueprints, defenders of alternative approaches fell short of presenting
well-organized visions that would bring forth positive politics. In other words, although
Mahathir was right in his argument on currency speculation, he was not able to how to
minimize negativities while at the same time benefiting global economic integration.
On the other hand, because the hegemon had competitive advantage of utilizing
such legitimate institutions as independent media and multinational organizations,
alternative frames could not reach to the international public. The above Figure 8 was
thus presented to explain how hegemonic frame could prevail over counter-hegemonic
frame. Certainly, the development of the Internet widened access to alternative voices
and condensed time and space. Yet Nye repeatedly insisted that the power of such
prestigious media might be strengthened rather than weakened.256 The Fund and U.S. news media, in that sense, outperformed private economic research institutions and regional media.
5-3: Hegemonic state’s organic intellectuals and academic authority
Antonio Gramsci noted that the intellectuals of the ruling class took a critical part
in “producing more convincing and sophisticated theories” in order to “inculcate other
intellectuals with the dominant world-view and assimilate them to the hegemon’s
255 David E Sanger & Richard Stevenson, “Second guessing the economic doctor,” NYT, 02/01/98. 256 Joseph Nye, The Paradox of American power : why the world's only superpower can't go it alone. New York, Oxford University Press, 2002, p. 67.
135 cause.”257 Yet because Gramsci neglected to consider international relations between nation states, I suggest a categorization of those top-level intellectuals as a part of nation’s symbolic elite. Then, I also assume that not only do symbolic elites have intellectual autonomy, but, more critically, they will pursue class interests in line with satisfying the national interest. Since my intellectual leadership model assumed intellectuals’ symbiotic relationship within a hegemonic state, my attention is thus given to looking at the career changes of top officials at the U.S. Treasury and the Fund. For that particular purpose, I present Table 5:2.
Symbiotic relationship within hegemonic state
First of all, it is possible to discover that those officials are generally promoted from elite schools, news media, international organizations, and private sectors. Table 5:2 also shows, when they left the Treasury Department or the Fund, they eventually settled down in think tanks, news media, universities and multinational corporations. To be specific, among other think tanks, the Council on Foreign Relations (CFR) and the
Institute for International Economics (IIE), which supposed to take a leading part in formulating U.S. foreign economic policy, are prominent.258 Interestingly, both Rubin and Fischer who directed U.S. policy during the Asian crisis moved to Citigroup criticized to be one of the biggest beneficiaries of Asia crisis. Given that Fischer promoted to Vice Chairman of Citigroup and Governor of Bank of Israel, it is plausible to
257 Gramsci Antonio. Letters from Prison. 1st ed. New York,: Harper & Row, 1973. p. 7. 258 Parmar Inderjeet, Think tanks and power in foreign policy : a comparative study of the role and influence of the Council on Foreign Relations and the Royal Institute of International Affairs, 1939-1945. New York, Palgrave Macmillan, 2004.
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claim, as Ronald Bettig notes, that there is a truly international capitalist class.259 Karin
Lissakers’ relationship with George Soros, singled out as an international currency speculator by Mahathir, proves it as well.
Yet it is critical to note that the majority of those officials changed their positions within the U.S. power house. Thus, it is still plausible to think that Fischer’s promotion to the President of the Bank of Israel may have to do with his political choice as an Israeli not as an international ruling class. The prominence of the CFR and IIE, which prioritized
U.S. national interest over that of the ruling class, also supports the notion of hegemonic state’s symbolic elite than the international ruling class. It is further revealed that the
majority of Treasury and Fund officials are prompted from elite schools because of their
outstanding academic performance. Summers, who had worked as a Chief Economist at
World Bank before his coming to Treasury, was indeed promoted to President of Harvard
University.
259 Ronald Bettig, Copyrighting culture : the political economy of intellectual property. Boulder, Colo., Westview Press.1996, p. 190.
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Table 5:2: State officials’ symbiotic relationship with intellectual community
Name Before the crisis During the crisis After the crisis
Caroline Atkinson Washington Post, the Treasury Deputy Stonebridge Economist & IMF Assistant International & CFR
David Lipton Woodrow Wilson Treasury Under Carnegie Endowment Center, UNDP & Secretary for International Peace IMF
Gene B. Sperling Director of economic National Brookings fellow, policy for Clinton- Economic CFR and columnist for Gore Advisor Bloomberg, CNBC
Karin Lissakers Columbia University, IMF Executive Open Society Institute State Department, Director (George Soros Senate Foreign Foundation) Relation Committee
Larry Summers MIT, Harvard & Treasury Deputy Harvard University World Bank Secretary
Michael Mussa University of IMF Research IIE Chicago Director
Robert Rubin Goldman Sachs & Treasury Citigroup & President’s Economic Secretary CFR Advisor
Stanley Fischer MIT & World Bank IMF First Deputy Governor of Bank of Director Israel & Citigroup, IIE
Timothy Geithner Kissinger Associates Treasury IMF, BIS, Federal Assistant Reserve Bank (New Secretary York) & CFR
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Table 5:2 shows, quite clearly, the existence of interlocking relationship between policy-makers, symbolic elite and business elite. But, at this point, it is still unclear whether top-level intellectuals are really involved in and had impact on foreign policies.
Thus my next attention is given to discover intellectuals’ symbiotic relationship within the hegemonic state. For this purpose, I first identified research articles that primarily focused on the Asian crisis. I then investigate their professional involvement in intellectual institutions and policy-makings. I draw Table 5:3 in order to elucidate the relationship.
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Table 5:3: Hegemonic state’s organic intellectuals (defenders on technical frame)
Name Intellectual Associations Political Associations
Barry Eichengreen U.C. Berkeley; NBER Senior Advisor to IMF C. Fred. Bergsten IIE; Brookings Institute; Treasury; National Security Carnegie Endowment for Council International Peace; CFR Chales Wolf. Jr. U.C .Los Angeles; Hoover State Department; Economic Institute; RAND Corporation ; Cooperation Administration; CFR Foreign Operations Administration David R. Henderson Hoover Institution; Naval Council of Economic Advisers Postgraduate School Jeffrey E. Garten Yale University White House; State Department; Commerce Department John H. Markin America Enterprise Institute Consultant to Treasury, (AEI) Congressional Budget Office and IMF
Lawrence Krause U.C. San Diego; CFR White House Economic Advisor; Consultant to State Department
Marcus Noland Johns Hopkins Univ.; USC; Council of Economic Advisers Korea Development Institute; IIE Morris Goldstein IIE IMF Paul Krugman MIT; Princeton University Council of Economic Advisors Rudi DornBusch MIT; IIE; Brookings Institute Advisor to Federal Reserve Bank of New York and Boston Sebastian Edwards U.C. Los Angeles; NBER; Consultant to Inter-American Development Bank, W.B., IMF and OECD William H. Overholt RAND; Hoover Institute State Department; National Security Council
It is easy to find, in Table 5:3, that all investigated researchers took a critical part in the policy makings process either as advisor or government official. That is, they not only participated at the State Department, Federal Reserve Bank, National Security
Council, Treasury Department and U.S.-dominating multinational organizations, they
140 also could reflect upon their experiences at various think tanks and universities. Among others, Charles Wolf. Jr. and Bergsten show such a symbiotic relationship most clearly.
Bergsten, for one instance, started his career as an assistant to Henry Kissinger at
National Security Council. Then, in completing his mission to articulate U.S. dollar strategies in the early 1970s, he moved to Treasury to the National Security Council
(NSC) to CFR and finally settled down in IIE as a director. For the other instance, after earning Ph.D. degree from Harvard University, Wolf started his career as a professor at such elite schools as Cornell, University of California at Berkeley and Los Angeles. Then, while serving with State Department, the Economic Cooperation Administration, and the
Foreign Operations Administration, he became dean of the RAND Graduate School. And, currently, he is a senior research fellow at the Hoover Institution and a senior economic adviser and corporate fellow at the RAND Corporation.
Building academic authority up
Since the above mentioned intellectuals were undoubtedly conceived of as authorities in the international economic affairs, East Asians indeed conferred reverence on them. Thus, while South Korean media tended to quote Jeffrey Sachs and Martin
Feldstein in order to balance reporting, Korean intellectuals along with government officials paid primarily attention to such figures as Rudi DornBusch, Bergsten and
Eichengreen largely believed as the experts. Yet intellectuals’ participation in policy- making processes did not necessarily mean that they actually reflected on U.S. foreign policies and unfolded their opinions in line with the U.S. governmental view. Table 5:4 is
141 therefore designed to address this particular question. Thus, I begin with identifying their opinions about causes, solutions and implications. Since it was those influential intellectuals who provided U.S. officials with sophisticated and well-organized technical analysis, my next attention also investigate their opinions about the AMF, Mahathir and the NIFA.
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Table 5:4: Involved think thanks (intellectuals) and their adopted frames260
Institution Researcher Adopted frame Institution for International C. Fred. Bergsten Technical Economics (IIE) Marcus Noland Technical Morris Goldstein Technical Heritage Foundation Gerald P. O’Driscoll. JR. Technical John T. Dori Technical Richard D. Fisher Technical William W. Beach Technical Cato Institute John Greenwood Technical Christopher A. Hartwell Technical American Enterprise Institute John H. Makin Technical (AEI) Lawrence B. Lindsey Technical RAND Corporation William H. Overholt Technical Chales Wolf. Jr. Technical Hoover Institution David R. Henderson Technical Massachusetts Institute of Rudi DornBusch Technical Technology (MIT) Paul Krugman Technical Brookings Institution Barry Bosworth Political Council on Foreign Relations Lawrence Krause Technical (CFR) Martin Feldstein Political Harvard University Steven Radelet & Jeffrey Political Sachs Ethan Kaplan & Dani Rodrik Political Columbia University Jagdish Bhagwati Political Yale University Jeffrey E. Garten Technical University of California (LA) Sebastian Edwards Technical
260 Emphasis was made in order to identify the adoptee of the political frame among residing U.S. intellectuals.
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Table 5:4 reveals that the majority of investigated intellectuals tend to deplore
Asian crony capitalism, its nurturing moral hazard problem, its role in weakening
financial sector and transparency deficiency. Morris Goldstein at IIE, a former IMF
Deputy Research Director, thus insisted that “there [in East Asia] was too much
‘connected’ and ‘policy-directed’ lending; state-owned banks did not pay much attention to the creditworthiness of borrowers; bank capital was often inadequate relative to the reckless of banks’ operating environment; and there were strong expectations of government bailouts should banks get into difficulties.”261 In an identical tone, Brett
Schaefer and William Beach argued that “[a]t a deeper level, however, the financial crisis
in Asia stems from truly abysmal banking practices, incredible leverage ratios, and
policies on the part of banks that support unsustainable loans. We now know that the non-
reporting, non-performing loans in Japan are not of half a trillion dollars, but a full
trillion dollars.” 262 David Henderson even contended that “[a] better term for much of
what happens in South Korea, Indonesia, and Malaysia is “crony fascism.”263
Because it was financial-sector fragility that played a key role in Asia crisis, accordingly, it was suggested that “insolvent banks and finance companies should be resolved, while those that are undercapitalized should be recapitalized to meet international standards. Foreign ownership limits should be liberalized.”264 Since the
crisis was caused by government failure, it was also claimed that “without restructuring
and privatization of economic decision-making – away from government bureaucracies
261 Morris Goldstein, "Lessons of recent currency crises." Brookings Trade Forum 173-181, 2002. 262 Brett Schaefer & William Beach. "Let markets work." The World Vol.1-13April, 1998, p. 69. 263 David R. Henderson, July-August 1999). "For less destruction, reduce government power." POLICY OPTIONS.1999. 264 Morris Goldstein, The Asian financial crisis : causes, cures, and systemic implications. Washington, DC, Institute for International Economics, 1998.
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and chaebols—Korea will come to look just like the sick advanced economies [like
Japan, German and France].”265 Since the Japanese economic model was believed to be the ultimate core of Asian crony capitalism, John Greenwood at the Cato Institute maintained as well that “the extent to which these economies are able to shift from the
Japan model to the Anglo-Saxon model will be a significant factor in deciding whether or not they can correct and reform their systems.”266 Similarly, Bergsten testified before the
Congress that “countries must be held to the newly agreed norms, for adequate restructuring and supervision of their banking regimes, as part of any comprehensive program to avoid future disruptions of a similar type.”267 Yet a noticeable point is to recognize that there is an opposite view in understanding Japan’s banking problem let alone political biases imbedded into international standard such as the Basle Capital
Accord. Liu insisted in this regard that “there is increasing evidence that the Japanese bank system crisis is not the cause but merely the symptom of its economic malaise
which has resulted from the disadvantaged structural position Japan has allowed itself to
fall into in terms of the global financial system.”268
Since those defenders uncritically adopted the technical frame and its assumptions,
as I mentioned earlier, their responses toward the AMF, Mahathir and the NIFA are not
different from those of U.S. officials. Thus, for instance, Eichengreen remained in the
conviction in 2002 that “however alluring the vision of an Asian bloc as a zone of
monetary and financial stability, trying to create one, under present political
265 Rudig Dornbusch, "Malaysia: Was it Different?" 8325, June, 2001. 266 John Greenwood, "The real issues in Asia." CATO Journal 4. December, 1999. 267 Bergsten, November, 1997. 268 Liu, 05/14/02.
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circumstances, could be a dangerous mistake.”269 When Dr. Mahathir announced capital control and arrested his deputy Anwar, their responses were also very similar to that of the U.S. government. For example, John T. Dori laid out U.S. strategy in dealing with
Malaysia. The U.S. should do, in his terms, which “criticize Malaysia’s adoption of counter-productive economic policies, express concern about the treatment of U.S. friend
Anwar [the Finance Minister], link U.S. interests with the goals of Malaysia’s emerging democratic forces.”270 Indeed, coincidentally, Ms. Albright, then Secretary of State, met with Azizah Ismail, the wife Anwar Ibrahim, on November 15, 1998. And, on November
1999, Al Gore, then U.S. Vice President, publicly endorsed the Malaysians’ reform movement that aimed at toppling Dr. Mahathir regime. And, when it became clearer that
Malaysia was rapidly recovering from the Asian crisis after imposing capital control, they tended to downplay such alternative measures by claiming that “capital controls tend to
mask the true causes of capital crises and exacerbate the problems that developing
countries face, rather than mitigate them.”271
Yet, certainly, hegemonic intellectuals’ contribution to the intellectual leadership
lay far more in providing visions and blueprints than in academically playing down
alternative frameworks. In other words, while departing from their relatively passive and individual approach to alternative ideas, they started to engage, actively and collectively, in the provision of the NIFA. Soon after U.S. President Bill Clinton proposed a study about global currency contagion on September 1998, for a good example, the CFR sponsored an independent task force in particularly order to advance U.S. national
269 Barry Eichengreen, quoted in Chung, D. K., Policy Roundtable: Fiver years after Korean currency crisis. Seoul, Seoul National University, 2002. 270 John T. Dori, 11/16/98. 271 Christopher Hartwell, “The case against capital controls: Financial flows, crises, and the flip side of the free-trade argument," Policy Analysis (CATO) (403), 06/14/01.
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interest in the new architecture. Being directed by Goldstein, the task force thus began to
recruit a wide range of “U.S. authorities” in the sense that they worked either for the U.S.
government, the IMF, U.S.-based think tanks and universities or U.S-headquartered
global banks. When they finalized a report titled “Safeguarding Prosperity in a Global
Financial System,” it was also quite clear that they were fully aware of the critical
importance of maintaining U.S. leadership.272 To be specific, on the one hand, they made it clear that “the primary responsibility for crisis prevention and management in emerging economies should be placed on emerging economies themselves.” 273 On the other hand, they urged developing countries to reform their banking systems, to abolish fixed- currency regime and to improve transparency and accountability. The leadership of the
U.S. supported by the centrality of the Fund and the Work Bank was thus hardly doubted.
Yet, again, in spite of their apparent consensus on the hegemon’s structural agenda in its approach to the NIFA, there clearly existed internal debate over how to achieve it. Since it was clear to Bergsten, for instance, that East Asians would pursue regional alliances, he first advised U.S. lawmakers “to accord East Asia more voting shares and leadership assignments to account for its greatly increased economic weight- mostly at the expense of Europe.”274 He then urged U.S. officials to play an active role in the creation of Asia Pacific Monetary Fund (APMF) for the purpose of defeating the
Asians’ own device-the AMF. Instead, for U.S. critics who believed that the Fund failed to achieve the hegemon’s foreign policy objectives, such alternative organizations as global central bank, international credit insurance or international bankruptcy court were
272 Morris Goldstein et al, Safeguarding prosperity in a global financial system : the future international financial architecture : report of an independent task force. Washington, D.C.: Institute for International Economics, 1999. 273 Goldstein, p. 15. 274 C. Fred Bergsten, “America's two-front economic conflict,” Foreign Affairs,March/April, 2001.
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appeared to be more practical solutions. For those critics in the developing countries,
though, such U.S.-led reform movement was believed to be lacking in taking into account
“the role played by institutions and policies in creditor countries in triggering international financial crises."275
Intellectual autonomy and hegemonic frame
Starting from discovering intellectuals’ symbiotic relationship with the hegemonic
state, in the above, I attempted to show that they took an active, voluntary and conscious
role in strengthening the hegemon’s intellectual leadership. Since they were largely
believed as having authority and well-supported by their internal network let alone
financial assistance, it was also suggested that their opinions would prevail over those
critics residing in non-hegemonic bloc. Accordingly, when Young Chul Park, a
prominent Korean intellectual, attempted to address the necessity of having the Asian
Fund, it appeared, he had to respond to the criticism that “East Asian are not ready for, or
capable of, creating and managing an effective regional monetary fund.”276 Similarly,
when Han Koo Lee, a vocal Korean critic of the Fund, tried to discredit IMF diagnoses,
he had to rely on U.S. critics including Paul Krguman, Jeffrey Sachs and Martin Feldstein
believed to have similar level of authority.277 In this consideration, my attention below goes first to discovering who those U.S. critics were and move then to examining whether they were really immune from the hegemon’s structural agenda, though not specific policies. Table 5:5 is presented for this purpose.
275 UNCTAD report, “Reforming the international financial architecture,” 04/24/01. 276 Young Chul Park, “Beyond the Chiang Mai Initiative,” 09/24/00. 277 Staff writer, “Reflection on IMF programs: South Korea and Malaysia,” the Moonhwa-ilbo, 09/17/99.
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Table 5:5: U.S. critics and their association with hegemonic state
(political frame supporters)
Name Intellectual Associations Political Associations
Barry Bosworth Harvard University; Brookings Council on Wage and Price Institute Stability (1977-1979)
Dani Rodrik Harvard Univ.; NBER; Center for Economic Policy Research;IIE;CFR
Jagdish Bhagwati Columbia University; CFR Advisor to Director-General, GATT (WTO) and U.N.
Jeffrey Sachs Harvard University; Columbia Advisor to Secretary General University; NBER (UN), IMF, WB and OECD
Joseph Stiglitz Yale, Stanford and Princeton Council on Economic Advisor, University World Bank
Martin Feldstein Harvard University.; NBER Council of Economic Advisor
Robert Mundell Columbia University Advisor to U.N., IMF, European Commission
Steven Radelet Harvard University; IIE Treasury
It turns out that only very limited number of residing U.S. intellectuals are categorized into the supporters of the political frame. Like the defenders of the technical frame, as shown in Table 5:5, I notice that they also take an important part in establishing the intellectual network within the hegemony. Their relatively indirect involvement in policy-makings and intensive involvement in multinational institutions such as WTO and
UN, however, differentiated them from those supporters of the technical frame. Except for Steven Radelet who advised to Indonesian Government and was promoted to
Treasury Deputy Assistant Secretary in 2003, no one actually participated directly as a
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government official. Even though both Stiglitz and Feldstein worked as economic
advisors to the White House, they tended to remain in either schools or relatively
independent think tanks. For a specific example, although Sachs and Summers graduated
from the same school and earned similar level of academic reputation, it was Summers
who was invited to the powerful inner-core. In other words, while Summers was
promoted to President of Harvard University after his serving with Treasury, Sachs
moved from Harvard to the director of Earth Institute at Columbia University. Similarly,
soon after Joseph Stiglitz started to publicly denounce IMF policies, he was under intense scrutiny and later dismissed from Chief Economist at World Bank.278
The fact that they were not favored by the powerful core, however, didn’t mean that they disagreed on the hegemon’s structural agenda and adopted counter-hegemonic view. From the outset of the Asian crisis, those defenders of political frame indeed argued that not only had Asian crony capitalism little to do with the crisis, but that the
IMF was also wrong in pursuing austerity policies. But in understanding why the Fund pursued such absurd programs, they tended to associate them either with political ideology, i.e., market fundamentalism or with special interests of Wall Street. That is, although Stiglitz relentlessly accused the Fund of pushing East Asians to cut government spending off in time of crisis, for him, the problem was either “the view” that “says free markets by themselves work or “a view” which “puts more emphasis on the private markets than many of us, within our own democracies, where markets worked very well, would believe is appropriate.”279 In spite of the fact that “neither cronies nor capitalism
are unique to Asia,” in Bhagwati’s view, it was also “Wall Street- Treasury Complex”
278 David Moberg, “Silencing Joseph Stiglitz,” Salon.com, 05/02/00 279 Joseph Stiglitz, "The insider: what I learned at the World economic crisis," The New Republic. 04/17/00.
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that pushed free capital mobility in order to enlarge their self-interest.280 In addition,
although Sachs noted that the U.S. made a clear mistake by blocking Japanese proposal
of the AMF, it appeared, he barely raised political questions about U.S. foreign policy
that motivated U.S. Treasury and the Fund to dispose of it. Despite Feldstein remained in
doubt about IMF’s demand on structural reforms, as seen by his participation and
endorsement of CFR project on NIFA, Feldstein rarely doubted over IMF leadership as
well. Strange stated probably in this regard that “it will not be easy for U.S. trained
economists, let alone political scientists, to question the dollar hegemony and its relation
to current crises as they are trapped in the established system.”281
5-4: Professional communicators and political authority
In noting that “the legitimacy of American primacy was not primarily a question
of ‘spin’ or propaganda or even cultural exchange,” Stephen Walt placed hegemon’s
possessing “a good product to sell” on emphasis.282 Yet for the purpose of attracting junior partners’ attention and ultimately persuading them to buy into hegemonic order, I sensed, there should be pre-established relationships that would support hegemonic state to bring forth positive politics. Since weak states’ credibility on the hegemon cannot be established by physical forces within a short range of time, I then suggested that the hegemon’s soft power would take a critical part in building weak states’ relationships up with the hegemon and its affiliations that included intellectuals, professional communicators and multinational institutions.
280 Jagdish Bhagwati, “The Capital Myth,” Foreign Affairs, May/June 1998. 281 Strange, p. 17. 282 Stephen Walt, “In the national interest,” Boston Reivew, 2005.
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Hence, in analyzing professional communicators’ performance, my particular
attention goes to unraveling how they assisted the hegemon in unfolding intellectual
leadership. For this particular purpose, I begin to examine those media’s adopted frames
and then analyze their attitudes toward the AMF, Mahathir and the NIFA. Since I intend
to discover media’s relationship with the hegemonic state, in this stage of the dissertation,
I look closely at identifying the nationality of media supposed to work together within
hegemon’s historic bloc. Then, based on this content analysis, I plan to unravel the mechanism through which the communicators, supposed to be independent and objective, were able to move forward with hegemonic frame. Given the assumption that professional communicators, especially those elite media, would play as a part of symbolic elite, my final focus is given to providing analysis about why they could be better perceived as such.
Media’s promotion of technical frame
So as to get a better picture about media’s manners, it is critical to remember, on the one hand, that the notion of Asian crony capitalism was actually de-legitimatized by subsequent crises in Russia and Brazil. Thus, as I mentioned above, Japanese officials
including Sakakibara and Kiichi Miyazawa, then Finance Minister, insisted that “[now]
One cannot help but realized that these successive crises stemmed not only from specific
problems in particular economies, but also from general problems inherent in today’s
global economic system.”283 On the other hand, and even more critically, it is necessary
283 Kiichi Miyazawa, “Toward a new international financial architecture,” Speech at the Foreign Correspondents Club of Japan, 12/15/98.
152 to recognize that there was, and still is, continuous conflict of viewpoints in understanding the Asian crisis. For example, Eichengreen confessed that “more than two years after the outbreak of South Korea’s crisis, two rival interpretations of its plight in
1997-8 continue to compete: one which attributes it exclusively to investor panic, and another which cites a soft rot in the banking and industrial sectors.”284 Franscis
Fukuyama, a well-known neoconservative at Johns Hopkins University, noted in 2005 as well that “Americans tended to see the problem [of Asia crisis] as one of crony capitalism, poor corporate governance, and flawed exchange rate management on the part of Thailand, Indonesia, Korea and other countries. The East Asians, by contrast, interpreted the behavior of the US and U.S. influenced international financial institutions like IMF as narrowly self-interested, seeking to open up Asian financial markets to U.S. investment banks.”285 Thus I first work in identifying media’s adoption of specific frame and produce Table 5:6.
Table 5:6: Media frames (hegemonic media)286
Technical frame Ambivalent (Unclear) Political frame
Before (# 39) 82% 13% 5%
After (# 29) 58% 28% 14%
Total (#68) 72% 19% 9%
284 Barry Eichengreen, Can the moral hazard caused by IMF bailouts be reduced? Geneva, London, Washington, D.C., International Center for Monetary and Banking Studies ; Centre for Economic Policy Research ; the Brookings institution Press, March 2000. 285 Fukuyama, Francis. “All quiet on the Eastern front?” WSJ A18, 03/01/05. 286 The total number of 68 out of 201 in U.S./British media is analyzed for this purpose.
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Table 5:6, however, reveals that hegemon’s professional communicators tended
not to take into account such points. Undoubtedly, their adoption ratio of technical frame
was decreased from 82 percent to 58 percent after the Russian crisis. Yet, a critical point
of notice is that the political frame was still under-represented in remaining around 14 percent, while at the same time the ambivalent view gained more salience moving from
13 percent to 28 percent. Taking specific examples is helpful to understand how they actually handled the Asian crisis. On the stage of defining problems, before Russia crisis, they began to focus primarily on endogenous factors that included “excessive government influence,”287 “the huge conglomerates, known as chaebols,”288 “South
Koreans’ misleading western bankers about the liquidity of their reserves and the
leverage of their banking system,”289 or “the legacy of the Japanese model and its Asian
variants.”290 They thus claimed that the only solutions would be found either in
“[making] significant changes in its banking system, improve corporate disclosure, strengthen regulatory agencies, open its financial markets and break the lifetime employment habit in corporations,”291or “[overhauling] their banking systems and adher[ing] much more closely to the disciplines of the market.”292
Russian and Brazil crisis did not help them change their coverage in terms of defining problems and suggesting solutions as well. For instance, the Wall Street Journal
reported in February, 1999 that “most economists still believe that the Asian countries for
the most part brought the trouble upon themselves. Indeed, the International Monetary
287 Anne Tergesen, “Mutual funds; South Korean chaos could eventually mean opportunity,” The New York Times, 3-6, 11/30/97. 288 Andrew Pollack, “Koreans pressing U.S. and Japanese for speedier aid,” The New York Times, A1, 12/04/97. 289 Staff writer, Interview with Mr. Camdessus, “Defending the Fund,” FT, 02/09/98. 290Charles Wolf Jr., “Asia’s reckoning: what caused Asia’s crash?” WSJ-1, 02/04/98. 291 Tergesen, 11/30/97. 292 Bernard Wysocki Jr, “Can U.S. engine pull Asia out of its slump?” WSJ, 12/08/97.
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Fund's bitter medicine for Thailand, Indonesia and South Korea is based on the
assumption that rising current-account deficits, poor bank supervision, crony capitalism and other internal faults were what brought them to grief.”293 In a similar manner, for U.S. media, the mainstream view was believed to be either “countries like Thailand and Russia and Brazil are in trouble today largely for internal reasons, including poor banking practices and speculation that soared out of control,”294 or “the key solutions to crises
remain policy adjustments within the countries themselves.”295 The media’s
encouragement of the technical frame was further assisted when I analyzed their attitudes
toward the AMF, Dr. Mahathir and the NIFA. Since the technical frame assumed the
inevitability of the Asian crisis regardless of the AMF, I examined their perception on
setting up the regional organization. Table 5:7 below is therefore presented.
Table 5:7: Attitude to the Asian Monetary Fund (hegemonic media)296
Cynical (skeptical) Neutral (descriptive) Supportive (positive)
Before (#10) 70% 30% 0
After (#26) 35% 58% 7%
Total (#36) 44% 50% 5%
Table 5:7 indicates that they revealed very skeptical attitude to Japanese proposal
of AMF before Russia crisis. Claiming that the AMF could encourage moral hazard
problem, for example, the Wall Street Journal reported that the AMF “could worsen an
293 Eduardo Lachica, “Asian financial crisis sparks blame game,” WSJ, 02/19/99. 294 Nicholas D. Kristof with David E Sanger, “How U.S. wooed Asia to let cash flow in,” NYT, 02/16/99. 295 Louis Uchitelle, “Rethinking what’s driving the emerging market crisis,” NYT (C-1), 01/29/99. 296 The total number of 36 articles out of 201 in the hegemon’s media is analyzed for evaluating attitude toward the AMF.
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already worrisome problem: That global investors take huge risks and destabilize small
economies because they assume, often correctly, that they’ll get bailed out if things turn
sour.”297 Since the proposal might give those affected countries an excuse to delay necessary reforms, they also contended that “setting up a new fund even more vulnerable to blackmail by the Mahathirs of Asia is an invitation for more corruption, more investor
disregard of risk, and more upheaval.”298 Similarly, in associating the proposal with
Japan’s ambition of regional leadership, they promoted the view that “the U.S., and some
Asian officials traditionally wary of Japan, suspects Tokyo is using the proposal to try to reassert dominance in Asia.”299 Even the demise of the AMF proposal in November 1997
was thus interpreted as “Japan’s deepening problems, in fact, have forced the country to
back away from a proposal.”300 Yet, intended or not, David Sanger at the New York
Times failed to mention that the hegemon’s lobby also played a crucial role in shelving the proposal.
On the surface, however, that the hegemonic media shifted their attitude from cynical to neutral after Russia crisis. Hence they appeared to notice that “many in Asia now regard that [shelving the plan by the U.S.] as a crucial missed chance, and there is real bitterness that the United States should have muscled in to prevent Japan’s attempted rescue of its neighbors.”301 Yet they continued to express skepticism by insisting that “if an AMF was a bad idea in 1997, it remains one now. Indeed, given the poor track record of Asian nations at regional institution building, an AMF would most likely undercut the
297 Jathon Sapsford and David Wessel, “Japan pushes Asian monetary fund despite US., IMF concerns,” WSJ-A14, 11/06/97. 298 Jim Hoagland “From boom to bust in Asia,” WP, C9, 10/12/97. 299 Sapsford and Wessel, 11/06/97. 300 Sanger, 12/03/98. 301 D. Kristof & Sheryl WuDunn, “Of world market,” NYT-1-2, 02/17/99.
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very reforms crucial to long-term economic health.”302 Moreover, for them, U.S. officials
objected to the proposal because they failed to realize the seriousness of the crisis.303 But it is interesting to remember that not only was the moral hazard concern rejected even by
Rubin, but, more critically, it was U.S. foreign policy that neutralized the proposal.304
Indeed, the technical frame certainly assumed that the Asian crisis stemmed not from rapid capital mobility but from Asian cronies and their nurturing weak financial system.
Accordingly, defenders of the technical frame maintained that Malaysia’s capital control would worsen its problem. Table 5:8 is thus designed to untangle how media’s adopted frame unfolded in covering Malaysian experiment.
Table 5:8: Attitude to Dr. Mahathir (hegemonic media)305
Cynical (skeptical) Neutral (descriptive) Supportive (positive)
Before (#22) 91% 9% 0 %
After (#38) 68% 29% 3%
Total (#60) 77% 21% 2%
Soon after Thailand descended into currency turmoil prompted by New York-
based global hedge funds, Mahathir began to attack currency speculators and urged
Western industrialized countries to impose capital regulation. Since that there was
profound uneasiness about his harsh criticism against Western imperialism, however,
those professional communicators tended to be negative to him. Indeed, as revealed by
302Salil Tripathi, “Containing Contagion: Watch Out, the AMF Rises Again,” AWSJ, 09/26/00. 303 Kristof, 12/21/97. 304 Rubin, 2003, p. 219. 305 Out of 201 articles, 60 articles are categorized as having relevance with Dr. Mahathir.
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Table 5:8, they, in particular U.S. media expressed little sympathy with Malaysia’s
approach. Nor did they shift their opinion from cynical to supportive in spite of
Malaysia’s economic recovery and growing evidences of market distortion by currency speculation. For example, the New York Times responded to Mahathir first by claming that “a decade ago, blaming a foreign scapegoat in this way [as Mahathir did] before a domestic audience might have worked.” In associating market movement with his arguments, the newspaper then reported that “the upshot in Malaysia’s case was that investors promptly added to Dr. Mahathir’s problems by sending the ringgit even lower, concluding that he was more interested in pointing fingers than reforming his economy.”306
When Dr. Mahathir finally announced capital control on September 1998, it was thus claimed that “financial analysts said the moves offer a short-term fix but leave
Malaysia with longer-term problems as investors steer clear of an unpredictable economy. With reduced foreign investment, they said, Malaysia is likely to have more difficulty reviving its ailing banking system and pulling itself out of recession.”307 In associating capital liberalization with political freedom, it was even argued that “they
[Malaysians] love capital controls because such controls make the vote on their bad policies much less transparent. Capital controls allow government to hide the damage their policies do, which leads them to even-more-damaging policies.”308 Although
Malaysia survived from currency crisis after imposing capital control, those communicators remained in denial by stating that “Malaysia’s decision to impose controls hasn’t been vindicated, many analysts and officials insist. In the first place, they
306 Nicholas D. Kristof, “Asian democracy has two masters,” NYT-1-4, 12/21/97. 307 Seth Mydans, “Malaysian chief ousts deputy who opposed him on economy,” NYT-1-3, 09/03/98. 308David R. Henderson, “Let capital flow freely,” WSJ-A22, 09/10/98.
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say, the country’s success is attributable mainly to the sound financial policies it adopted,
especially its moves to restructure its banking system by getting rid of bad loans and
injecting fresh capital into banks.”309 The New York Times noted in an identical way that
“economists say this Malaysian renaissance has less to do with Mr. Mahathir’s policies
than with a cyclical rebound generated by demand for Asian exports from the US and
Europe.”310
Yet when there emerged growing evidences of Malaysian’s success following the capital control, they shifted the attention from economic recovery to Mahathir’s handling with Anwar. Downplaying a historical context in which Mahathir was compelled to dismiss Anwar, the Washington Post instead claimed that “[now] the chief cause of
Malaysia’s problem is its longtime ruler, Prime Minister Mahathir Mohamad.”311 The
Washington Post then coincidentally propagated U.S. policy by insisting, “Many
Malaysians have taken to the streets to protest. Mr. Anwar’s wife, Dr. Azizah Ismail, and other pro-democracy leaders have formed a new political party. The future is on their side.”312 Yet, interestingly, such repeated criticism about Malaysia’s lack of political freedom came to a sudden end with September 11 Attack in 2001. Interestingly, in 2002, the New York Times quoted a senior official at the Bush administration in saying that “if you can have a democracy without a completely free press … then Malaysia can be called a democracy.”313 Mahathir later stated, particularly based on his experiences
during the crisis, that “if you go against the powerful [including U.S. and the Fund], they
will use every instrument against you; but we feel that if we are going to be independent,
309Paul Blustein, “Malaysia survives dire predictions,” WP-E1, 05/19/99. 310Wayne Arnold, “More and more Malaysians question economic policies,” NYT- 5-2, 12/04/99. 311 Editorial, “Mr. Mahathir’s disgrace,” WP-A18, 04/19/99. 312 Arnold, 12/04/99. 313 Raymond Bonner, “Malaysia’s canny autocrat grows stronger,” NYT, 02/09/02.
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and you believe in democracy and freedom of speech, you must be frank, and we must
tell the world that this is what is wrong.” 314 Since the technical frame supposed that the
NIFA should be pursued with the centrality of the Fund along with U.S. leadership, my final heed is given to untangling their manners of the new international financial order advocated especially by those supporters of counter-hegemonic frame. Hence I present
Table 5:9.
Table 5:9: Attitude to the New (unorthodox) International Financial Architecture
(hegemonic media) 315
Cynical (skeptical) Neutral (descriptive) Supportive (positive)
Before (#3) 100% 0 0
After (#34) 53% 35% 12%
Total (#37) 57% 32% 11%
Partly because it was believed that East Asians’ internal factors brought about the
crisis, there are a tiny number of articles about the NIFA before Russian crisis. Thus
when I analyzed all three articles in the (Asia) Wall Street Journal, it was either about
why the U.S. needed to support the Fund or about why IMF-led reforms would be
perceived as the right approach. The Wall Street Journal thus reported that “since the current crisis was not caused in large part by macroeconomic policies, but by financial fragility and lack of transparency, the conditions were designed to respond to those
314 Mahathir, 1999. 315 The remaining 37 out of 201 sample articles are analyzed by identifying its attitude toward the NIFA.
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causes.”316 The continued crisis in the region and its contagion to other nations, however,
eventually prompted those media to shed light on this issue. Indeed, soon after Russia
descended into currency turmoil, the New York Times insisted that “with IMF partly sidelined for now, the debate on how to stop the financial carnage rages at two levels--- what beleaguered countries should do for themselves and what the international
community should do for them.”317
Yet I discovered that the media tended to be more neutral and appeared to be affirmative to the NIFA at least in comparison with their attitude to Dr. Mahathir. That is, not only did they start to report the growing resentment of the developing countries over
U.S. power, but they provided more editorial space for defenders of the political frame.
For example, the Wall Street Journal conferred an editorial page on Judy Shelton, a
member of the Board Empower America, who insisted that “for all the barbs hurled at
Indonesia and South Korea for indulging in “crony capitalism’ and despite the harsh
criticism leveled at Japan for not sufficiently stimulating its economy through
government spending, the current economic crisis is largely the result of a world
monetary system that has utterly broken down.”318 Even though the assumption of the centrality of the Fund was hardly challenged, capital control was also believed to be an option for weak states. The Washington Post thus claimed by quoting Eichengreen who claimed that the IMF “ought to be actively prodding developing countries to use controls, especially nations with fragile banking systems that make them susceptible to crises.”319
For this to happen, he also maintained that "the U.S. Treasury needs to overcome the
316 David Rockefeller, “Why we need IMF?” WSJ- 1, 05/01/98. 317 Weinstein Michael, “The markets: economic scene; twisting controls on currency and capital,” NYT-C1, 09/10/98. 318 Judy Shelton, “Time for a new Bretton Woods,” WSJ- A22, 10/15/98. 319 Paul Blustein, “Taming currency crises,” WP- H1, 06/20/99.
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`Wall Street complex' that renders it reluctant to embrace such policies [as temporary
capital control].”320
Yet a careful examination of their approach reveals that U.S. media certainly
objected to a fundamental change of the current system. In other words, for them, to
reform the Fund was to shift IMF’s role from “a fireman” to “a policeman,” in the sense
that it would be able to “constantly police compliance with international rules and
regulations--- and make sure that the markets understand who is abiding by the rules and
who is not.”321 Similarly, while casting doubt over any fundamental change, it was implied that “the most practical approach would be to let those same governments and lenders sort things out for themselves.”322 Hence an alternative view such as Stiglitz were
usually followed by countering views that advocated more market freedom, improvement
of transparency and accountability in developing countries. Thus it can be said that they
largely went along with the hegemon’s structural agenda. Indeed, Shelton made this point
clearer by arguing that “today the U.S. has put its own financial house in admirable order.
We are in a position to help other nations -- particularly the less developed ones --
become integrated into the global economy.”323
Nationality of the media
I supposed in Chapter Four that if there were any significant difference in
covering the Asian crisis, it could be less within U.S. media than between U.S. and
320 David Wessel, “Beyond talk: global action urged to redo `Financial Architecture' WSJ, 03/02/99. 321David Sanger, “It’s a global mess. What a world to do?” NYT-1-4, 02/28/99. 322 George Melloan, “New architecture for global finance,” WSJ- A23, 09/22/98. 323 Judy Shelton, “Global markets need golden rule,” WSJ-A14, 07/16/99.
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British. In specifying how they differed in their manners, I thus design below tables.
Since those financial corporations at New York and London were the biggest
beneficiaries of the crisis, my particular attention was paid to discovering their approach
to capital liberalization.
Table 5:10: Distribution of media frame (divided by nationality)324
NYT (#23) WP (#16) (A)WSJ (#14) FT/Economist (#15)
Technical 70% 75% 72% 74%
Political 9% 0 14% 13%
Ambivalent 21% 25% 14% 13%
Total 100% 100% 100% 100%
Table 5:10 reveals that there is little difference in terms of frame. Regardless of
nationality, it shows that both U.S. and British communicators appear to agree with the
notion that the crisis was inevitable result of Asian crony capitalism. They also remain in
the conviction that those inflicted countries needed to open up financial market in order
to strengthen financial system, as well as to minimize governmental intervention.
However, in reflecting upon the national interest of Britain that supported the single euro,
the British media were inclined to be more supportive in dealing with Dr. Mahathir, the
AMF and the NIFA.
324 Detailed coding process divided by news organizations can be found in Appendix B; # signifies the total number of articles categorized as having relevance.
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Table 5:11: Attitude to the Asian Monetary Fund (divided by nationality)
NYT (#3) WP (#3) (A)WSJ (#17) FT/Economist (#13)
Cynical 33% 67% 59% 23%
Neutral 67% 33% 41% 62%
Supportive 0 0 0 15%
Total 100% 100% 100% 100%
As Table 5:11indicates, there are more neutral and supportive articles in the Financial
Times and Economist. In delivering more Asian voices, indeed, British journalists paid a lot more attention to identifying U.S. policy that neutralized the AMF proposal. The
Financial Times thus noted that “[a]lthough Tokyo is still unwilling to confront the U.S. and IMF openly with such a proposal, its policymakers have learned from the missed opportunity to create an Asian Monetary Fund in 1997 and do not want to be bystanders this time.”325 Even though the U.S. media particularly the New York Times appeared to
take a neutral approach in covering the AMF, they rarely reported on the proposal and so
largely marginalized Asian voices. They instead focused on providing those officials in
Treasury and the Fund with opportunities to justify their approach to the crisis. When the
World Bank Report harshly criticized IMF policies in late 1998, in a clear instance, the
New York Times helped Fischer justify the policies by arguing that “[i]n most cases governments call us in only after they discover they are in a mess, usually because they didn't do things they needed to do long ago. If the problems were easy to solve, they'd do
325 Heribert Dieter & Richard Higgott, “East Asia looks to its own resources,” FT-17, 05/16/00.
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it themselves."326 However, interestingly, there were little Asian voices who could directly criticize such policies in the New York Times.
Nationality of media is further found in Table 5:12 that shows media’s attitude
toward Dr. Mahathir. Indeed, U.S. media revealed strong cynicism and rarely shared their
symbolic stages with Dr. Mahathir in their covering Malaysia and its leader. Yet, in
British media, there was more supportive or at least neutral stance that restrained in
directly criticizing Dr. Mahathir. British communicators, of course, remained in the
conviction that “Dr. Mahathir needs to swallow both his pride and his rhetoric [of
accusing currency speculators], and admit that the main reason why investors lost
confidence in Malaysia was his failure to put its economic house in order.”327 However, they attempted to put Malaysia’s capital control in context by quoting Dr. Mahathir who suggested that “Hong Kong’s intervention in the domestic stock market and pressure from the US and IMF on banks not to withdraw capital from Korea were both forms of capital control.”328
Table 5:12: Attitude to Dr. Mahathir (divided by nationality)
NYT (#18) WP (#8) (A)WSJ (#20) FT/Economist (#14)
Cynical 78% 87% 85% 57%
Neutral 22% 13% 15% 36%
Supportive 0 0 0 7%
Total 100% 100% 100% 100%
326 David E Sanger, “U.S. and I.M.F. made Asia crisis worse, World Bank finds,” NYT, 12/03/98. 327 Anonymous, “Dr. Mahathir and the markets,” the Economist-16, 09/06/97. 328Clyde Prestowitz, “A Malaysian lesson in home remedies,” FT-17, 11/02/99.
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But as revealed by Table 5:13, the biggest gap is found in their reporting the
NIFA. Similar to their approach to the AMF, British media largely supported the NIFA
that demanded on reforming IMF’s decision-making structure. Understandably, however,
British media paid more heed to listen to alternative views from those critics such as
Sachs and Stiglitz. Sachs thus could insist in the Financial Times that “if instead IMF
continues to be the lender of first resort, aimlessly defending overvalued exchange rates
while allowing private creditors to make off with public funds, the new facility will add
to global instability.”329 Similarly, they noticed the point that "IMF policy [within U.S- led reforms] does not and will not deviate in any important or fundamental way from the policy of the US Treasury.”330
Table 5:13: Attitude to New (unorthodox) International Financial Architecture
(divided by nationality)
NYT (#5) WP (#8) (A)WSJ (#17) FT/Economist (#7)
Cynical 80% 63% 71% 0
Neutral 20% 25% 23% 71%
Supportive 0 12% 6% 29%
Total 100% 100% 100% 100%
Taking into account the findings, it is thus possible to argue that the media have
nationalities at least in pursuing their perceived national interests. Also it implies that the
relationship between U.S. think tanks and those of Britain can be applied to the British
media’s relationship with U.S. media. Hence I support Parmar Inderjeet’s conclusion that
329 Jeffrey Sachs, “Stop preaching,” FT-22, 11/05/98. 330 Nancy Dunne, “IMF reforms have 'met Congress demands,” FT, 03/10/99.
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“the leaders of both Chatham House and the CFR were motivated by a sense of mission,
of history, of a collective elite responsibility for the development of their society and
state in the context of global challenges and opportunities.”331
Media’s symbiotic relationship
Timothy Cook insists that "not only is the news a co-production of the news
media and government, but policy today is likewise the result of collaboration and
conflict among newspapers, officials, and other political order.”332 Particularly focusing on media’s role in foreign policy, Bernard Cohen also claims that a reporter usually defines his/her role as “a critic of wrong policies." 333 In taking into account such points, I thus attempt to discover whether media’s symbiotic relationship can be found in their covering the crisis. In order to relate media’s performance to U.S. foreign policy, in the above, I thus detailed about U.S. structural agenda and its specified foreign policies.
Since the media were supposed to develop a symbiotic relationship with their hosting government in the model, I present subsequent tables that identify the cue-givers on the national symbolic stage.
331 Parmar Inderjeet, Think tanks and power in foreign policy : a comparative study of the role and influence of the Council on Foreign Relations and the Royal Institute of International Affairs, 1939-1945. New York, Palgrave Macmillan, 2004. p. 221; The Chatham House refers to the Royal Institute of International Affairs. And, the CRR is the acronym of the Council of Foreign Relations. Both institutes are known as the most prominent think tank in the arena of foreign policy in Britain and U.S. respectively. 332 Timothy Cook, Governing with the news: the news media as a political institution. Chicago, University of Chicago Press, 1998, p. 3. 333 Bernard Cohen, The press and foreign policy. Princeton, N.J., Princeton University Press, 1963, p. 32.
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Table 5:14: Cue-givers in the hegemonic media
Sources Proportion (frequency)
U.S. government officials 27% (63/237)
International Organizations (excluding U.S. officials) 14% (32/237)
Non-profit institutions (think tanks & universities) 30% (72/237)
Wall-Street private corporations (research analysts) 15% (35/237)
Asian voices (South Korea, Malaysia & Japan) 9% (22/237)
Others 5% (13/237)
Total 100% (237/237)
Table 5:14 reveals that the U.S. government, international organizations, think tanks and private Wall-Street corporations take the majority of the cue-givers. Just as there was less than 10 percent of political frame was found in the media, there is a similar pattern that excludes Asians voices. Since there would be a pre-established symbiotic relationship between government, intellectual community and business elite, it was plausible to claim that the symbolic stage was predominantly for hegemon’s power elite.
Hence, at least in terms of cue-givers, Cook’s argument of “governing with the news” appeared to be reliable. Because those communicators tended to reproach U.S. Treasury and the Fund more for tactical mistakes than imposing structural reforms, his observation that journalists form a symbiotic relationship with policy-makers was also supported here.
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Table 5:15: High profiling institutional cue-givers (hegemonic media)334
Institution Proportion (frequency)
The International Monetary Fund 30% (40)
U.S. Treasury 26% (34)
Institution of International Economics (IIE) 11% (15)
Massachusetts Institution of Technology (MIT) 10% (13)
Harvard University 9% (12)
The World Bank 6% (8)
Morgan Stanley 4% (5)
Deutsch Bank 4% (4)
Total 100% (131/131)
Table 5:15 also reveals an intensive interlocked relationship between officials in
Treasury and the Fund, top-ranking think tanks and elite schools, as well as global
corporations. Table 5:16 further shows the relationship. Even though Sachs and Stiglitz
appear to draw media attention, those defenders of technical frame such as Rubin,
Summers, Fischer, Krugman, Bergsten and Camdessus are the most prominent cue-givers
in the elite media. More crucially, since the symbolic stage is primarily for hegemon’s
national politics, few foreigners are invited to the stage. Thus when Michael Camdessus,
French, was believed to be less supportive to hegemon’s political agenda, the media
tended to not confer publicity on him. Hence it is fair to argue that there was very limited room for the hegemonic media to construct a truer sense of international public sphere.
334 The total number of 131 out of 237 is distributed by their portion.
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Nor would those U.S. power elite put international common interests before hegemon’s national interest.
Table 5:16: High profiling individual cue-givers (hegemonic media)335
Name (occupation) Proportion (frequency)
Robert Rubin (U.S., Treasury Secretary) 21% (18)
Larry Summers (U.S., Deputy Treasury) 15% (13)
Stanley Fischer (IMF, Deputy Director) 13% (11)
Jeffrey Sachs (Harvard University) 13% (11)
Joseph Stiglitz (World Bank, Chief Economist) 10% (9)
Paul Krugman (MIT, Professor) 10% (9)
C. Fred Bergsten (IIE, Director) 9% (8)
Michael Camdessus (IMF, Director) 9% (8)
Total 100% (87)
Professional political communicators
Previous tables clearly indicated that the national symbolic stage was dominated by government officials, top-level organic intellectuals and private sector experts.
However, a noteworthy point is that prestigious media were important parts of the national power elite. First of all, there was a pre-established interlocked relationship
335 The total 87 out of 237 is categorized into high-profiling individuals.
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between the elite media such as the New York Times, Washington Post, and Wall Street
Journal and the power elite. Indeed, there were relatively a tiny number of reporters and
columnists who virtually managed the symbolic state. For example, not only did such
reporters as David Sanger (NYT), Paul Blustein (WP) and Michael Schumann (WSJ) produce at least one-third of related articles, but a handful of columnists including
Thomas Friedman (NYT), Judy Shelton (WSJ) and Robert Samuelson (WP) actually managed the stage. Considering their intimate relationships with inner-circle members, it is less likely to believe that professional communicators were either manipulated or coerced by the ruling class.
The next noticeable point is that the professional communicators could occupy a strategic position between policy makers and the public. It may be possible to claim that they are dictated by the powerful. But it is crucial to note that the cue-givers on the stage were “intentionally and voluntarily” selected by the communicators in line with meeting perceived policy objectives. Foremost, as revealed by Table 5:4, there clearly existed a wide range of experts supposed to have similar authority with alternative frames. Hence, the question we have to ask is not about “manipulation” or “coercion” but about “what motivated them to defer to the supporters of technical frame.” The final point of supporting the notion of professional political communicators lies thus in understanding this particular question.
For those U.S. intellectuals such as Herbert Gans, Michel Schudson, Robert
Lichter, Ronald Bettig and Todd Gitlin, journalist’s performance has strongly associated with their class interest and world views. Hence, while Lichter arguing media elite’s liberal ideology, Gans pinpointed "centrist ideology" of the media that tended to “prefer
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management to labor, whites over blacks, conventional politics over dissident politics, militarism over pacifism, nationalism over internationalism.”336 However, it is valuable to think that not only can ideas or ideologies not be separated from political and economic interests, but our understanding of interests is affected by socially constructed values such as security, wealth, justice and equality. Thus, in understanding elite media side-by-side the symbolic elite, it is necessary to consider class interests in the context of national interests underpinned by U.S. structural agenda and foreign policies.
336 Robert Lichter (eds.) The media elite, Bethesda, Md., Adler & Adler, 1986; Herbert Gans, Deciding what's news : a study of CBS evening news, NBC nightly news, Newsweek, and Time. New York, Pantheon Books. 1979, p 67.
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Chapter Six
South Koreans’ buying into the leadership
Since I seek to explain South Koreans’ cooptation with U.S. hegemony by adopting intellectual leadership model, I begin this chapter to look closely at hegemon’s exertion of coercive power in pushing the Korean government to put structural reforms into practices in late 1997. Given that hegemon’s soft power would take a more crucial part in bring positive politics forth, I then focus on revealing Korean officials’ pre- established relationship with hegemon’s affiliations such as the International Monetary
Fund (IMF), U.S. intellectuals and U.S and British media. Since it was thought that government officials would lead in South Koreans’ coordination with hegemonic state, my next attention is given to analyze Korean officials’ adopted frames and their understanding of the Asian crisis along with such related issues as the Asian Monetary
Fund (AMF), Dr. Mahathir, former Malaysia Prime Minister, and the New International
Financial Architecture (NIFA). Then, given that the hegemon needed to obtain Korean intellectuals’ support, the second section is devoted to looking at how and why they assisted the hegemon in unfolding intellectual leadership.
My second section starts by identifying newly emerged Korean intellectuals supposed to involve in constructing “Korean references” and then investigates their adopted frames along with their attitudes. Since I intend to understand why Korean intellectuals tended to adopt the technical frame, on this stage, my attention is given to discovering the presence of “intellectual apprenticeship” between Korean intellectuals and those of the hegemon. Since the apprenticeship was believed to be supported by
173 educational training, the hegemon’s soft power and intellectual reliance, I also attempt to understand how such factors actually influenced the shaping of the intellectuals’ preferences. My last focus is then devoted to locating those defenders of political frame and to unraveling their intellectual reliance on hegemon’s organic intellectuals.
Because the media are additionally believed to take a crucial part in exerting the leadership, my final section begins to analyze media performance in terms of research frame and attitudes. Based on their actual performance, I then unravel the mechanism by which hegemonic state was able to employ Korean media in order to achieve the hegemon’s structural agenda. My attention to identifying cue-givers in Korean media is therefore designed for this particular purpose.
6-1: The evolution of South Korean government’s cooptation
Although I placed far more weight on hegemon’s intellectual leadership supported by soft power, I do not downplay the underpinning of the hegemon’s coercion at least in the early stage of positive politics. I also sensed, as John Ikenberry’s legitimacy model suggested, that Koreans’ cooptation might have more to do with their early adoption of hegemon’s norms such as market-friendly policies.337 Thus, it could be argued that although South Korea fully adopted capital liberalization after the crisis, the Korean government already started to move toward opening up capital market in December 1994.
Yet it is important to note that there was a pivotal difference between Korean’s approach in 1994 and that of 1997. That is, while the approach in 1994 was intended to place financial liberalization into Korean’s own terms, the Korean government was forced to
337 John Ikenberry, in Rapkin, D. P. World leadership and hegemony. Boulder, L. Rienner, 1990, p. 57.
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follow the IMF’s terms in 1997. Sang Kee Min thus asserted that “the general level of
liberalization at the time of Korea’s accession to the Organization for Economic Co-
operation and Development [OECD] in 1994 was much lower than that of Mexico or
even most Southeast Asian countries.” 338 Hence I believed that Koreans’ co-option into
hegemonic order at least since 1997 can be better explained with the intellectual
leadership model that has been supported all the time by material and cultural power.
Unfolding hegemon’s coercive power339
Even when the Indonesia government succumbed to the IMF directorship on
October 30, 1997, the Korean government firmly believed that Korea would be able to
avoid such an unprecedented currency crisis given its sound economic fundamentals.
Indeed, while recording historical economic growth of 8.9 percent in 1995, South Korea
experienced little trouble in term of current account deficit that was recovering from 4.7
percent in 1996 to 2.5 percent in mid 1997.340 Even though Korea had relatively high
level of short-term foreign borrowing along with about $110 billion of external debt, it
was not conceived of as a serious problem given Korea’s productive capacity and
economic potential.341 Martin Feldstein, for example, contended that Korean crisis was
“clearly a case of temporary illiquidity rather than fundamental insolvency,” since
338 Sang Kee Min, quoted in Chung, D. K., Ed. Policy Roundtable: Fiver years after Korean currency crisis. Seoul, Seoul National University, 2002, p. 67. 339 For detailed chronicle of Korea crisis, please refer to Appendix J. 340 To check Korean economic strength at the time, please refer to Appendix K. 341 Mihir Rakshit, The east Asian currency crisis. New Delhi Oxford, Oxford University Press, 2002, p. 118.
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“Korea’s total foreign debt was only about 30 percent of gross domestic products, among
the lowest of all developing countries.”342
Additionally, even though the U.S. and the IMF repeatedly put blame on Korean economic model and Korean chaebols for market turmoil, the Korean government was reluctant to accept it with the following reasons. First, Korean officials observed that relatively high debt/equity ratio of Korean chaebols, like Japanese keiretsu, had more to do with both business strategy that prioritized market-share than profit margin and high level of domestic savings. Second, in referring to the Asian (Korea) model as “alliance capitalism” not “crony capitalism,” they sensed that such an intimate relationship between government, banks and corporations could be justified since it helped to pursue long-term national industrial strategy. And, lastly, they believed that since Korean crisis was a temporary liquidity crisis stirred up by currency speculation, tearing down Korean model was not a necessary option.
Accordingly, it was believed to them that if market participants such as hedge funds, multinational banks and local investors would have had comprehensive information about Korea’s economic fundamentals, South Korea could avoided the crisis.
Unfortunately for Korea, however, not only was the financial market distorted by speculators who prevailed over local governments, but, more critically, market sentiment or public opinion about financial markets was predominately mediated by Western media.
Yet since U.S. journalists tended to confer authority to U.S. Treasury officials, IMF economists and the hegemon’s intellectuals, they went along with the technical frame that
found primary fault with crony capitalism. Stanley Fischer, then IMF Deputy Director,
was therefore able to claim that “[g]iven the widespread view in the market before the
342 Martin Feldstein, “Refocusing the IMF,” Foreign Affairs, March/April, 1998.
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crisis broke out, that there were fundamental financial sector and corporate financing
problems in the crisis countries, the program [the Fund’s aid packages] had to attempt to
deal with these difficulties if it was to succeed.”343
The very programs notably austerity measures and structural reforms, however, were already under severe criticism at the time. In a specific example, Jagdish Bhagwati at Columbia University contended that “the excessive conditionality being imposed by the IMF requiring all sorts of ‘reforms’ is truly absurd, since it is based on a rejection of the Asia’s ways of doing many things when three decades of unprecedented growth under that way of doing things ought to make us at least a little more circumspect in these matters.”344 In a similar vein, Joseph Stiglitz, then World Bank Chief Economist,
criticized the IMF’s austerity policies by stating that “virtually every American
economist rejects the balanced-budget principle during a recession. [So] why should we
ignore this when giving advice to other countries?”345 Thus, it is critical to note that even when the Korean government was compelled to ask for IMF help on November 19, 1997,
Korean officials did not fully forsake their own solutions including currency swap or bridge loans that the U.S. government has used to employ in time of crisis.346
The Korean government, however, appeared not to understand the political
implications of putting the Fund at the center stage in coping with the crisis. For the U.S.
and the IMF, it meant that international assistance would be available only after South
Korea sincerely put IMF-led programs into practices, not vice versa. Instead, Korean
343 Stanley Fischer, “The international financial system: crises and reforms,” IMF, April, 1999. 344 Jagdish Bhagwati, The wind of the hundred days: How Washington mismanaged globalization, MIT Press, 2000. 345 Joseph Stiglitx, quoted in Bod Davis and David Wessel, “World Bank worries that IMF measures may exacerbate Asian Crisis,” WSJ, 01/08/98. 346 Gap Je Cho, interview with Kyogn Shik Kang “Hidden story about IMF crisis,” the Monthly Chosun, 04/98.
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officials naively believed that they would be able to channel international assistance into
implementing structural reform on their own terms. For Koreans, as I noted in the above,
there were plenty of reasons to be reluctant in swallowing the IMF’s prescriptions that
indeed turned out to be mistaken. Yet in responding to the reluctance of the Korean
government, the IMF refused to release pledged money of $21 billion while at the same
time U.S. Treasury blocked other countries particularly Japan from delivering $25 billion.
That is, as Madeleine Albright, then U.S. Secretary of State, testified, the U.S. government would not let financial assistance “[b]e disbursed to countries who are not implementing programs, adopted in agreement with IMF, to address their problems and prevent their recurrence.” 347 As a consequence, within less than a month from when
Korea first approached the IMF, the Korean stock price index (KOSPI) fell from 601.3 on
November 21 to 359.8 on December 12, 1997. The foreign exchange value of Korean
won against U.S. dollar was also devaluated more than 60 percent moving from 1,051 to
1,709 during the time.
Thus, by mid December of 1997, there emerged a genuine possibility that South
Korea would be the first victim of sovereign debt crisis in the region. By then, yet, the
total injected money was only $5.6 billion that amounted about one-tenth percent of $60
billion agreement. To make things worse, while U.S. media insisted that investors had
lost confidence in the Korean economy because of delayed reforms, U.S. credit-rating
corporations such as Moody’s, Standard & Poors continued to downgrade Korean
sovereign bonds rate to near junk bond status. In the meantime, Robert Rubin, then
347 Maldeline Albright, “The Economic Crisis in Asia." Testimony before the Committee on Banking, Housing and Urban Affairs Congress Testimy, 02/01/98
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Treasury Secretary, kept on contending that “[t]he Koreans should implement the reforms
that are needed to get Korea back on the right path.”348
It was only after Dae Jung Kim, the newly elected President in South Korea, pledged to fully subscribe to the IMF doctrine that South Korea was able to avoid impending national default. Immediately after the Korean financial officials fully gave up their control of the financial system on December 23, 1997, Rubin allowed Japan to deliver a pre-arranged $2 billion to Seoul. On the following day, Rubin also set up a debt- negotiation meeting between U.S., Japan, South Korea and top U.S. commercial banks at
Plaza hotel in New York. In responding to it, on December 29, Korea parliament passed long-delayed financial laws that literally identical to U.S. foreign policy objectives.
David Lipton, then Treasury Undersecretary, thus testified that Korean’s pledges included that “to eliminate subsidies to Korean exporters, ease up on import licensing and cumbersome customs procedures, end government-directed non-economic lending and substantially ease restrictions on foreign ownership of Korean companies.”349 In noting that the Fund missed a critical time, however, Feldstein insisted that “the situation in
Korea might have been much better and the current deep crisis avoided had such negotiations [including Plaza debt-negotiation], happened late December in 1997, begun much earlier.”350
Hence, it is crucial to recognize that not only was there strong resentment over
U.S. power among Korean officials, but they were also not fully persuaded by the hegemon’s norms. It can therefore be expected that there would be additional factors that
348 Robert Rubin, quoted from Andrew Pollack, “Koreans pressing U.S. and Japanese for speedier aid,” NYT, 12/12/97. 349 David A. Lipton, House ways and means subcommittee on trade, February 24, 1998, RR-2242 350 Feldstein, p. 32.
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motivated them to coordinate with hegemon’s causes. Since the general public in South
Korea strongly denounced their government of the crisis, of course, it was plausible to
claim that public opinion forced them to cooperate. However, Korean officials were very
critical of the newly elected D.J. administration that attempted to exploit public opinion
in order to make innocent officials political scapegoats.351 For the purpose of understanding their cooptation, my attention is thus given to the hegemon’s’ construction of positive relationships between weak states and hegemonic affiliations.
Soft power in establishing positive relationships
For most of Korean officials, there was little doubt about U.S. support for protecting South Korea from regional military aggression. Yet, as was well detailed by
Lipton, there was growing tension, at least in terms of economic policies, between South
Korea and the U.S. Thus, when South Korea fell into financial crisis, there immediately emerged strong anti-Americanism in South Korea. Summers pointed out in this regard,
“If there was no IMF in these circumstances, there would be no internationally recognized source of apolitical advice.”352 For this reason, I also presupposed that the
hegemon would surely engage in maintaining “legitimacy and credibility” of its
strategically chosen affiliations. Thus I began to examine how Korean officials perceived
international institutions notably the Fund, credit-rating corporations, U.S. media and
residing U.S. intellectuals. If they developed a positive relationship with them, I assumed,
there would be better chances for the hegemon to achieve positive politics.
351 In-Ho Kim, “Korean currency crisis and its structural causes,” the WIN, 03/18/1998. 352 Larry Summers, 02/13/98, RR-2226.
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My first investigation on how those officials perceived the Fund reveals that there
actually was a strong positive relationship. When In-Ho Kim insisted that Korean crisis
was caused by domestic politics that delayed structural reforms, for example, he
repeatedly stated that “the IMF, as an excellent doctor, gave us diagnosis and
prescriptions.”353 Similarly, in criticizing the ordinary public in South Korea for their ignorance of the benefits of IMF programs, Duk-Woo Nam, former Finance Minister, claimed, “Without knowing the full implications of IMF medicine, people on the street denounced their government, IMF, and their big brother, the United States, for their misfortune.”354 Yong Hwan Kim, then Special Envoy for Korean debt-negotiation in
December 1997, also revealed an identical attitude toward IMF. Even though he was
suspicious on Western industrialized countries and multinational banks, in his view, there
was little reason to play IMF’s expertise down.355 Kyong-Shik Kang, then Finance
Minister, also showed an identical attitude. For example, in designating the IMF as a prominent Western doctor, he even maintained, “We [South Koreans] should appreciate
IMF since they assisted us in curing our chronic disease.”356Similarly, Nam bought into this sense by stating that “in a sense, the current financial crisis is a blessing for the
Korean economy because ongoing reforms promise to bring about a new economic order in which economic units will be able to exert the best effort in a new environment in which free and fair competition will prevail.”357
353 In-Ho Kim, 03/18/1998. 354 Duk-Woo Nam, “Financial Crisis in Korea.” On the 11th Conference of the Korea U.S. Business Council, 01/19/98. 355 Yong Hwan Kim, “IMF crisis and our response,” Monthly Joongang, March, 2002. 356 Kyong-Shik Kang, “Hidden story about IMF crisis,” Monthly Chosun, 04/98. 357 Nam.
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Their attitude toward Western media was also turned out to be a very positive one.
Among Korean officials, within my scope of data, no one dared to cast doubt on media’s
association with the hegemon’s foreign policy let alone their intimate relationship with
policy makers within the hegemon. Not only did they perceive the media as an “objective
and independent” mediator of market sentiment, but they also believed that foreign media
would be more accurate in diagnosing Korea’s structural problems because they were not
imbedded in the society. Hence, when In-Ho Kim noticed that such media as the Wall
Street Journal and Bloomberg started to amply Korea’s impending default just before
Korea’s asking for IMF loans, in his view, it was either because of mistakes or stemmed primarily from ignorance.358In a similar way, Kang stated that the best way to stop foreign media’s misinterpretation was to improve transparency.359 For them, reforming
Korean economic system in way of Western media’s request was thus perceived as the only solution to restore international investors’ confidence on Korean economy.
My next looking at their attitude toward U.S-residing intellectuals as well as IMF economists further supported hegemon’s unfolding soft power in terms of building credibility and legitimacy up. That is, not only did they prioritize such analysis produced by IMF, U.S. think tanks and U.S.-residing intellectuals, but, more interestingly, they were keen on listening to those international experts dominated by hegemon’s organic intellectuals such as Barry Eichengreen, Stanley Fischer, Michel Mussa and C. Fred
Bergsten. Moreover, even though they eventually recognized U.S. critics such as Martin
Feldstein and Jeffery Sachs, they largely failed to see that even those critics tended not to adopt counter-hegemonic frame. Kang thus insisted that “I totally agree with Paul
358 In-Ho Kim. 359 Kyong-Shik Kang.
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Krugman in the sense that there was no such thing as Asian value or Asian model.”360 For them, Korea crisis was therefore either an “inevitable crisis because of Korea’s obsolescent model,” or “caused primarily by Korean chaebols and lack of political leadership,” or even “Japan’s conspiracy.”361
Furthermore, although Mahathir repeatedly warned credit-rating companies’
political bias, there found little debate over U.S.-dominating credit system. Instead, they
urged Korean society to be more adoptive in foreign capital and implement required
reforms in order to upgrade its credit-rating. Thus, whenever those credit-rating
corporations threatened to downgrade Korea’s credit-rating, they tended to criticize
delayed reforms that aimed at dismantling its economic model and opening up capital
markets. Since they confessed later that they fully acknowledged structural problems
rooted in the Korean system, at this point, it is still unclear how much they were actually
influenced by the hegemon’s intellectual leadership. Yet the subsequent investigation on
their understanding of the crisis clearly reveals that they uncritically adopted technical
frame and that lacked in noting the presence of alternative frames. Table 6:1 is therefore
presented here.
360 Kang. 361 Jong-In Kim, “Interview with Media Daum,” 03/18/05; Kyong-Shik Kang; and In-Ho Kim.
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Table 6:1: South Korean officials and technical frame
Name (position during the crisis) Adopted frame
Byun, Yang Ho (Deputy Finance Minister) Technical
Chung, Duk Koo (Assistant Finance Minister) Technical
Kang, Man Soo (Deputy Finance Minister)
Kang, Kyong Shik (Finance Minister) Technical
Kim, In Ho (Chief Economic Advisor) Technical
Kang, Bong Kyun (Deputy Finance Minister) Technical
Kim, Jong In (Chief Economic Advisor) Technical
Kim, Tae Dong (Chief Economic Advisor) Technical
Kim, Yong Hwan (Special Envoy for IMF Technical negotiation)
Lee, Kyung Shik (President of Korea Bank) Technical
Lee, Hyun Jae (Director of Financial Regulation) Technical
Lim, Chang Yuel (Finance Minister) Technical
Ryu Jong Kyun (Special Economic Advisor) Technical
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Moving forward with technical frame
From the beginning of defining Korean crisis, as Table 6:1indicates, all
investigated officials shared the notion that the crisis was “inevitable result of Korean
economic and political system,” that failed to adjust to globalization. For instance, Nam claimed that “the anomaly of the financial system is mainly responsible for the skewed distribution of loans to conglomerates at the expense of small and medium-sized firms and industries; the accumulation of many bad debts and non-performing assets by banks, and the lack of transparency in the managerial and financial status of banks and enterprises.”362 Even though Kim insisted that Korea’s economic fundamentals were
strong, he also agreed the notion that “Korean crisis was caused more by structural
problems of Korean economic system rather than foreign-exchange rate
mismanagement.”363
Similarly, in particularly criticizing Korea’s domestic politics that delayed required financial reform-laws, Kang claimed that “most serious problems were lack of transparency and absence of political leadership.”364 Quite interestingly, yet, subsequent
crises in Russia and Brazil did not help them change their definition of problem. Nor did
they take into serious account Malaysia’s alternative experiment that declined the IMF
assistance. Duk Koo Chung, then Assistant Finance Minister, thus contended that “Korea
clearly needed more time to establish an adequate infrastructure for the market economy,
362 Duk-Woo Nam, On the 11th Conference of the Korea U.S. Business Council, 01/19/98 363 In-Ho Kim. 364 Kyong- Shik Kang.
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especially in the financial sector.”365 Yet he appeared not to apprehend the view made by
Joseph Stiglitz that:
It is useful to remind ourselves that financial and currency crises have occurred elsewhere in the world, most recently in Norway, Sweden and Finland. The fact that these countries had highly transparent economic systems and advanced institutional frameworks demonstrate that transparency is not enough to underpin robust financial systems.366
Korean officials instead largely focused on putting structural reforms into
immediate effects. That is, as Alan Greenspan, Chairman of U.S. Federal Reserve Bank,
noted, they forced Korean society to “understand the importance of greater reliance on
market forces, reduced government controls, scaling back of government-directed
investment, and embracing greater transparency--the publication of all the data that are
relevant to the activities of the central bank, the government, financial institutions, and
private companies.”367 Of specific note, their focus was thus given to “breaking down
Korean chaebols,” “abolishing reign-finance,” “liberalizing financial markets,” and
“adopting market-friendly policies.”368 Since they firmly believed that the IMF possessed
reliable solutions, they even restrained in openly criticizing its austerity policies that
ended up with mounting bankruptcies. When there followed a series of bankruptcies, they
thus tended to perceive it as Korea taking the right track in order to modernize its
system.369
Because they primarily adopted the technical frame along with its assumptions, it
was also found that they showed less interest in reforming the international financial
365 Duk Koo Chung, Policy Round Table: Evaluation of Korea crisis after 5 years, Seoul National University, 2002. 366 Joseph Stiglitz, “Asia’s reckoning,” WSJ- 1, 02/02/98. 367 Alan Greenspan, Testimony before the Subcommittee on Foreign Operations of the Committee on Appropriations, U.S. Senate, 03/03/98. 368 In-Ho Kim, Jong-In Kim, Kyong-Shik Kang and Jong-Ku Ryu. 369 Jong In Kim, “Special interview with the authority,” Shin-DongA, 02/01.
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architecture. Hence, even though Korean government officials acknowledged the need of
setting up regional cooperative mechanism represented by the Chiang Mai Initiative and
ASEAN +3, they rarely raised political questions that helped shelve the AMF in 1997.
Instead, whenever they approached the issues of regional financial cooperation, there was
uneasiness about Japan which, in their point of view, intended to exploit such devices for expanding its influence. Similarly, in failing to recognize the hegemon’s structural agenda, they focused on fixing technical problems such as improving transparency and adopting international standards and that failed to articulate the reason why the hegemon preferred the Asia Pacific Monetary Fund to the Asian Monetary Fund. However,
Bergsten made it utterly clear by noting that:
It is even encouraging that our officials are actively engaging in the discussion on the creation of any new ‘Asian monetary fund,’since APEC unambiguously includes the U.S… We should seek to use it as the locus for any such arrangements and to thereby defend some of our most fundamental national interests.370
Their leadership in South Korea’s cooptation into hegemonic order, however, should not
be exaggerated. Since they failed in preventing the crisis, it was expected, their roles
might be less critical at least compared to Korean intellectuals and the media.
370 C. Fred Bergsten, "The Asian Monetary Crisis: Proposed Remedies,” Testimony before Congress, 11/13/97.
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6-2: Inculcated intellectuals and intellectual apprenticeship
I presupposed in this model that the intellectual leadership of the hegemon would be supported by two critical pillars such as its organic intellectuals and professional political communicators. In order to implement its leadership, I also assumed that the hegemon needed to obtain critical support from Korean intellectuals and its media. My attention is thus given first to identifying newly emerged academic authority and then to unraveling the established intellectual apprenticeship between Korean intellectuals and the hegemon’s organic intellectuals. In attempting to understand how the apprenticeship inculcated Korean intellectuals, next, I examine their adopted frame and attitudes toward the above mentioned issues. Noting that a tiny number of Korean intellectuals were able to adopt a political frame, though not the counter-hegemonic frame, my final attention is devoted to analyzing how they maintained a political frame, as well as to untangling the reasons of why they failed to promote the frame. Since I believed the continuity of the hegemon’s exertion of soft power, I start by looking at the possibility of hegemon’s intervention in promoting supportive voices.
Newly emerging authority
Until the crisis of 1997, the authority of Korean financial officials mostly promoted from their passing “Higher Civil Servant Examination,” was hardly challenged at least in the area of economic policies. Accordingly, although the Korean government decided to dismantle its “Economic Planning Board,” in 1994 for joining OECD
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membership, it was misleading to claim that they lost the authority. Korea’s asking for
IMF loans in November 1997, however, virtually deprived them of the prestige. In other
words, not only were they accused of failing to prevent the crisis, but, more critically,
they along with business elite were believed to be the primary culprits for weakening
financial sector and so encouraging reckless investment. It appeared, on the surface, that
such a conviction was fully developed by Koreans’ collective wisdom based on objective
facts. Yet a noteworthy point is that the conviction was able to prevail over alternative
viewpoints in spite of unsupportive events such as subsequent crises in the other region
and the economic recovery of Malaysia which adopted an alternative approach.
Hence, even though the hegemon did not create such a conventional wisdom as
purely propaganda, it was plausible to suggest that the hegemon might play a role first in
promoting a specific frame and then assisting Korean media to build supportive authority
up. Indeed, only after the media such as the Wall Street Journal and Financial Times started to praise Ha Sung Chang- a well-known critic of Korean chaebols as a civil hero for improving economic democracy, Korean media started to treat him as the authority.
The U.S. media’s treatment of Dr. Mahathir also helped me convince that the hegemon would take a similar part in promoting supportive authority, while at the same time, suppressing unsupportive authority. However, I did not pay much attention to collect evidences about hegemon’s engagement in producing new authority in South Korea.
Instead, by presenting Table 6:2, I intend to grasp who those newly emerged authorities were.
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Table 6:2: Distribution of Korean intellectuals by Ph.D. earned countries (# 56)371
Ph.D. earned countries Proportion(frequency/total # of quotation)
The United States of America 80% (45/56)
South Korea 7% (4/56)
Belgium 5% (3/56)
Spain 4% (2/56)
Japan 2% (1/56)
France 2% (1/56)
Total 100% (56/56)
Table 6:2 reveals that 80 percent of Korean cue-givers in the mainstream media come from U.S. trained Ph. D. holders. Yet given that non-hegemonic countries tended to adopt political and counter-hegemonic frame, it implies, Korean readers may be less exposed to alternative frames. The fact that only 7 percent of the cue-gives come from
Korean universities also means the presence of academic dependence on the hegemonic state. Table 6:3 further indicates that Koreans’ understanding their crisis is predominantly influenced by economists who majored in economics, finance and management.
371 For detailed information about cue-givers in Korean media, please refer to Appendix L and M.
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Table 6:3: Distribution of Korean intellectuals by major (# 59)
Expertise Proportion (frequency/total # of quotation)
Economics Economics 80% (47/59)
Management 5%(3/59)
Finance 3% (2/59)
Sociology 7% (4/59)
Political Science 5% (3/59)
Total 100% (59/59)
Having U.S. academic training does not necessarily mean that they uncritically
buy into hegemon’s viewpoints. But, as Stephen Walt noted, it is likely to anticipate that
they may “become familiar with national mores while simultaneously absorbing
mainstream American views on politics and economics.”372 Also, majoring economics itself does not negate the possibility that they can raise political questions surrounding the
Korean crisis. Yet, again, they are less plausible to recognize that “the solution for financial stability and economic security needs to be found not only in economic reforms but also in political actions.”373 Hence I devote the last part of this chapter to untangling how both U.S. training and majoring economics actually resulted in their adopting technical frame and, consciously or not, assisted in completing the cycle of the hegemon’s intellectual leadership.
372 Steven Walt, “In the national interest,” Boston Review, Feb/Mar., 2005. 373 Susan Strange, Mad money : when markets outgrow governments. Ann Arbor, University of Michigan Press.1998, p. 14.
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Intellectual apprenticeship and technical frame
I presuppose that there may be at least three components in order to establish and
maintain successful intellectual apprenticeship. The first one is to have a direct
experience with the hegemonic state either by taking academic training or by
participating in hegemonic affiliations including the IMF or World Bank. Table 6:2
indicated that the majority of Korean intellectuals, at least within my investigation, had
the experience. The next part is to develop a positive relationship with the hegemon and
its affiliations. Even though those intellectuals’ attitudes toward the IMF, U.S. think tanks and residing U.S. intellectuals are not examined, it is plausible to think that their attitudes may not be differ from those of Korean officials.
The final component is to be intellectual dependence on the hegemon. Given that not only are Korean students trained by professors in the hegemonic state, but the hegemon also tends to set research agenda, it is supposed that such dependence takes a part in maintaining the apprenticeship. In investigating their adopted frame and their opinions about the AMF, Dr. Mahathir and the NIFA, I thus pay particular attention to discovering the presence of academic reliance. Since I suppose that the reliance may not be found in secondly data such as news articles, the subsequent investigation confines to those intellectuals who actually produced academic research. Table 6:4 is thus presented.
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Table 6:4: South Korea’s inculcated economists (advocates of technical frame)
Name Institution (Ph.D. earned)
Cha, Dong Se Vanderbilt University
Chang, Se Jin University of Pennsylvania
Cho, Dong Kyun University of Cincinneti
Choi, Kong Phil University of Virginia
Hong, Won Tak Columbia University
Jung, Woon Chang Princeton University
Kim, In June Harvard University
Kim, Kyung Soo University of Pennsylvania
Kong, Byung Ho Rice University
Nam,Duk Woo Oklahoma State University
Park, Dae Kyun & Lee Chang Yeung Harvard University
Park, Won Am Massachusetts Institute of Technology
Rhee, Kun Shik University of Maryland
Ryu, Jang Hee & Moon, Chul Woo University of Texas (A & M)
Sakong, Il University of California (Los Angeles)
Ywang, Yune Jong Yale University
As shown by Table 6:4, all of the investigated intellectuals earned their Ph.D. degree from U.S. universities. Since they adopt the technical frame, apparently, it is possible to insist that there is a positive correlation between their academic training and absorbing the frame. Largely assuming that the crisis was inevitable, Dae Kyun Park and
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Chang Yeung Lee indeed insisted that “as long as structural weakness was the major
cause of the Korean crisis, macroeconomic responses without structural reforms could
not have prevented the crisis any way.”374 Probably because of their majoring in
economics, they also fell short of sharing Mahathir’s claim that the professional
communicators of the hegemon exploited market sentiments. Park and Lee thus claimed
that “Korean government’s requesting foreign news organizations to correct ‘exaggerated
stories’ about financial situation of Korea is the evidence of government’s denial
attitude.”375 It may be helpful to remember though that the notion of “market reflected
exactly on economic fundamentals” was not a truth but an assumption at least during the
Asian crisis. Political frame indeed insisted that market was distorted by currency
speculation, as well as the media were not free from political biases that favored Wall
Street financial corporations.
Similarly, in buying into the technical frame that accused predominantly
endogenous factors of the crisis, Jang Hee Yoo and Chul Woo Moon sought solutions
either in urging government to demonstrate “a definitive manner that the domestic market
will operate based upon market principle and fair competition,” or “in requesting labor
unions “[to] refrain from extreme resistance against the reform policies.”376 Even though they attempted to cast doubt on the hegemon’s intervention, they mostly ended up with
“mea culpa” that meant “I am to blame.” By absorbing ‘mea culpa,” they thus failed to recognize that Korean government was able to control external factors such as capital liberalization and currency speculation instead of implementing dubious structural
374 Daekeun Park & Changoung Rhee, “Currency crisis in Korea: How has it been aggravated?” 12/31/98 375 Park & Rhee. 376 Jang-hee Yoo & Chul Woo Moon, “Korean financial crisis during 1997-1998 causes and challenges,” Journal of Asian Economics 10 (1999), 263-277.
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reforms. Indeed, not only did Malaysia impose capital control, but, more critically, the
measure was also proven to be very successful. Ethan Kaplan and Dani Rodrik at
Harvard University claimed in this regard that “Malaysia would have fared even better if
they had imposed capital controls sooner-better than earlier IMF remedy, and better than
they did subsequently.”377
My next investigation on how their academic training actually incorporated into
their shaping opinions about regional cooperation and new financial architecture, yet,
reveals ambivalent results. For instance, In June Kim remained in the conviction that
Koreans deserved IMF programs because they failed to fix their own diseases. He argued
though that “we [Koreans] should seriously think about setting up a regional common
currency system with an Asian currency unit.”378 Il Sakong insisted similarly that “the real root cause of the crisis was the inherent structural weaknesses in the Korean economy, particularly in the banking and corporate sectors.” But he also urged Koreans to move forward with organizing regional cooperative mechanism. It might be seen, on the surface, that there was no logical contradiction in their arguments.
Yet it is helpful to take a notice that had Koreans have the AMF in 1997, they did not have to ask for IMF loans, as well as implement structural reforms on the IMF’s terms. Joseph Stiglitz indeed maintained that since the problems in Korea were not anywhere near the nature of the structural problems that the IMF had said, Korea was able to recover in six or seven months.379 Thus, logically, if they would admit the critical importance of such a common currency system, their conviction of “mea culpa” was to
377Ethan Kaplan and Dani Rodrik, “Did the Malaysian capital controls work?” Harvard University, February 2001 378 In June Kim, 2002. 379 Joseph Stiglitz, “Time to sniff the IMF?” Left Business Observer, No 102, 09/2002.
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be false. Moreover, it was not South Korea but the hegemon that prevented the AMF in
1997. Young Chul Park and Yune Jong Wang insisted in this context that “the painful
lessons learned from the emerging market crises since 1997 raise the question of the
adequacy of the current global financial system, and awaken interests in rethinking and
redesigning the international financial architecture.”380
Hence, the logical contradiction prompts me to look intensively at their arguments
and helps me figure out their intellectual reliance on the hegemon’s intellectuals. Il
Sakong, in an instance, appeared to follow very closely with Bergsten first in
understanding the Asian crisis, then in suggesting solutions, and finally in managing
Asians devices such as AMF and ASEAN +3. Not only was Bergsten invited frequently
by Il Sakong, Sakong’s views were quite identical to those of Bergsten. Sakong thus
tended not to agree with Sakakibara and Mahathir who intended to set up an independent
AMF from the IMF.381 Woon Chang Chung, in the other instance, also revealed such a tendency by relying primarily on Lawrence Summers and Alan Greenspan. Not only did he use the same terminology such as “microeconomics” in articulating problems, but his suggestion of solutions also went exactly along with Summers.382 Accordingly, when he argued that Korea should accumulate additional U.S. dollar as an insurance fee because of increased financial instability, he was repeating Greenspan’s term and viewpoint. Yet in asking why international society had to pay additional insurance fee for unnecessary currency turmoil, Stiglitz contended that “this is the ultimate irony: the financial system
380 Y.C. Park & Yune Jong Wang, “Reforming the international financial system: perspects for regional financial cooperation in East Asia,” 381 Il Kong Sa, “The world doesn’t wait for us.” 2001, p. 336-337; C Fred Bergsten, “America's Two-Front Economic Conflict,” Foreign Affairs, March/April 2001 382 Woon Chang Chung, “Korean economy and university in personal view,” 2004; Lawrence H. Summers, RR-3114 & RR-2309
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allows the Untied States to live year and year beyond its means, buying abroad far more
goods than it sells.”383
My final look at primary references in their research further reveals the presence of intellectual dependency. In prioritizing hegemon’s organic intellectuals represented by
Paul Krugman, Jeffrey Sachs, and Paul Volker, in fact, they also depended highly on hegemon’s media such as the Wall Street Journal, Bloomberg and New York Times.
Their reliance on other Korean sources did not challenge this view because there was a
strong tendency within Korean intellectual community that preferred residing U.S.
intellectuals to those of non-hegemonic states. Hence the defenders of counter-hegemonic
frame such as Susan Strange, Henry Liu and Wallden Bello were rarely found in their
references. Since they primarily deferred to U.S. critics who failed to raise political
questions, they also fell short of recognizing even the existence of the counter-hegemonic
frame.
Defenders of political frame
Han Koo Lee, from the outset of the crisis, clearly noted the presence of
alternative frames. Thus, he tended to define the primary problem as “temporary currency
crisis” not “inevitable crisis of Korean economic model” and that suggested the
establishment of the regional financial alliance such as the Asian Fund. Yet even though
he possessed sufficient level of academic authority, it appeared, his political authority
was severely tainted by his association with Korean chaebols believed to be one of the
primary culprits. Noticing the similarity between Mahathir and Lee in term of political
383 Joseph E. Stiglitz, “A fair deal for the world,” The New York Review of Books, 05/23/02
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authority, in Table 6:4, I thus identified the defenders of alternative frames and attempted
to understand their relationships with hegemon’s intellectuals.
Table 6:5: Korean intellectuals (advocates of political frame)
Name (major) Institution
Choi, Byung Il (Trade) Yale Univeristy
Jang, Ha June (Economics) Cambridge University
Kim, Min Woong (Sociology) Tokyo University
Kim, Soo Hang (Marxist Economics) Seoul National University
Lee, Chan Kyun (International Trade) Navarra University(Spain)
Lee, Han Koo (Economics) Kansas State University; Former chief
economist at DERI
Park, Se Il (Economics) Cornell University; Former Chief Economic
Advisor to President
Park, Young Chul (Economics) University of Minnesota
Shin, Yong Ha (Sociology) Seoul National University
Son, Ho Chul (Political Science) University of Texas (Austin)
Yune,Young Kwan (Political Science) Johns Hopkins University
Table 6:5 indicates that those intellectuals trained in non-hegemonic countries
such as Spain, France, Norway and Britain are likely to adopt a political frame. Largely
reflecting on British intellectual’s critical viewpoints, Ha June Chang, an economist at
Cambridge University, thus insisted that the primary culprit was not Asian economic
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model but liberalized capital market.384 Pinpointing that the biggest beneficiaries of
Korea crisis was Wall Street banks, Chan Kyun Lee, a graduate from Navarra University, also urged to put greater regulation on capital movement. Similarly, while subscribing to a world-system view, Yong Ha Shin, a graduate from Seoul National University, accused
U.S. Treasury and the IMF of imposing harsh conditionalities and suggested that the
Wall-Street Complex exploited the crisis for maximizing their profits.
To take non-economics scholars such as political science and sociology appeared to help even U.S. trained intellectuals adopt political frame. Even though he admitted structural weaknesses of Korean financial system, for example, Young Kwan Yune claimed that not only did the IMF programs benefit Wall Street corporations, but U.S.
Treasury also preferred financial gains to regional security by succumbing to special interest.385 Ho Chul Son, who majored in political science, also attempted to take into
account endogenous factors with exogenous factors. He thus claimed that the primary
causes were either “over-accumulation of capital and development of speculative hot
money,” “inefficient Korean economic model,” or “policy mistakes including capital
opening in 1994.”386
Professional experience as a member of power elite further proved a very
powerful factor in supporting them to take alternative frame. Han Koo Lee was indeed a
director of Daewoo Economic Research Center, one of the largest private institutes in
Korean conglomerates. Not only did he repeatedly insist to set up a regional cooperative
mechanism, but he also revealed strong confidence in the Korean economic model.
384 Chang Ha June, Kicking away the ladder : development strategy in historical perspective. London, Anthem. 2002. 385 Young Kwan Yune, “U.S. response to Korea crisis,” Seoul National University Conference, October, 2002. 386 Ho Chul Son, “IMF crisis, what caused it?” Economy & Society, Spring ,1998.
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Young Chul Park, a former director of Korea Development Institute, was also a strong supporter for the AMF. Casting doubt on the definition of Asian crony capitalism, he was indeed one of the early adoptee of the financial panic view. Because they served with
Minister of Foreign Relations and Chief Economic Adviser to President respectively, it was expected, Yong Kwan Yune and Se Il Park would develop resentment over U.S. power. Yet, again, it was clear that they usually moved forward with the Korean government which failed to recognize Japan’s relational power structured by U.S. hegemonic power. Thus they all appeared to subscribe to the view that Japan took advantage of Korea crisis in way of expanding its regional influence.
The tendency of relying on hegemon’s intellectuals was also found in the supporters of the political frame. Since they needed authority in order to support their alternative views, U.S. critics such as Jagdish Bhagwati, Jeffrey Sachs, Joseph Stiglitz and Martin Feldstein were their primary references. Largely buying into the notion of
“the Wall Street-Treasury Complex,” they thus focused on accusing special interests represented by New York based global hedge funds. Moreover, it turned out that the defenders of a political frame mostly come from Marxist economists who absorbed
Marxist hegemonic view. Hence, in their point of view, Korea crisis was an inevitable result of the development of global capitalism not the problem of U.S. dollar-based foreign exchange regime.
Hence, while uncritically following U.S. critics along with their assumption on capitalist hegemony, they failed to understand the hegemon’s structural agenda and its foreign policies. As a result, their critique focused more on the global capitalist class than the hegemon’s power elite. Not only subsequent crises in Russia and Brazil but also
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Malaysian’s successful capital control failed to promote the political frame. Because
Korean media also played such factors down, my next attention is paid to untangling how
they promote the technical frame and, at the same time, suppress alternative frames.
6-3: Disputed national symbolic stage and semi-professional communicators
I presumed that there would be national symbolic stages on which professional political communicators transform sophisticated knowledge such as policy analysis into public knowledge for political purposes. Since nation state’s power elites were supposed to be a leading provider of such intricate knowledge, in the above, I attempted to show how they performed the role and ended up assisting the hegemon’s political causes. This section is therefore devoted to unraveling how the hegemon was able to enlist the support of Korean media. For this purpose, I begin to look closely at how the media promoted specific frame that predetermined the causes and solutions of the Korean crisis. To see how their adopted frames incorporated into their covering the AMF, Dr. Mahathir and the
NIFA, I then attempt to articulate their attitudes. Remembering that the hegemon’s elite media established a symbiotic relationship with its power elite, my next attention is paid to identifying the relationship of Korean communicators with the power elite of Korea.
Given that Korean professional communicators appeared not to rely on Korean power elite, finally, I critically reflect on the communicators in Korean media.
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Educating public opinion
The hegemon strives to establish and maintain “legitimacy” and “credibility” of its affiliations. Hence it is critical to note that Korean communicators, similar to government officials and intellectuals, have been developing a positive relationship with the affiliations such as the IMF, U.S. media and residing U.S. intellectuals. It meant in practice that their legitimacy and authority was barely disputed by Korean media. Since a media frame was designated as having information about “definition of problem, articulated causes and suggested solution,” I start with presenting the result of media’s adopted frames. Yet in order to elucidate Korean journalists’ reliance on the hegemon’s media, I also compare the performance of Korean media with those of U.S. and British.
Table 6:6: South Korean media’s adopted frames 387
Before (#32) After (#80) Total (#112) U.S/British media
Technical frame 69% 74% 72% 72%
Political frame 25% 13% 16% 9%
Ambivalent 6% 13% 12% 19%
Total 100% 100% 100% 100%
Table 6:6 shows that not only did technical frame easily prevail over alternative frames all the time, but Russia crisis also failed to prompt Korean media to adopt political frame. Unlike the U.S. media that decreased the proportion of technical frame from 82 to
387 The total number of 112 articles out of 234 is analyzed for this purpose.
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58 after Russia crisis, Korean communicators remained not to take into account the
subsequent crises. In suppressing the political frame, instead, they promoted the myth of
“Japan responsibility,” as well as the notion of “mea culpa” that accused Korean power
elite of emulating Japan along with Japanese economic model. They thus quoted Young
Chul Park who maintained that because the crisis of Korea was “the apparent collapse of
Asian economic model, or Japanese model,” “it is time to pay critical attention to this model’s inefficiency, as well as looking forward to alternative paradigm.”388 Also they helped Paul Samuelson, Lawrence Summers’ uncle, insist in a special column that
“Korea is now paying the price of following Japanese model that locates at the center of
Asian crony capitalism.”389 Similarly, they deferred to Choong Young Ann who insisted
that “because Japan let us drowned, Koreans should discard Japanese model and adopt
American model.”390 They thus failed to recognize the view that “state intervention and industrial policy [represented by Japanese model] were indeed vital factors in the economic success of the East Asian economies.”391
Moreover, the view of associating the Asian crisis with Japan was very identical to that of the U.S. government. The Congress Research Service report indeed insisted that
“the current crisis [at Asia] is the outcome of a failure by Japan to effectively address the
root cause of its own economic and financial problems.”392 Hence, although Miyazawa claimed following the Russian crisis in 1998 that “one cannot help but realized that these successive crises stemmed not only from specific problems in particular economies, but
388Yong Chul Park, “Japan must do something in overcoming Asian crisis,” Chosun-ilbo, 12/03/97. 389Paul Samuelson, “World experts series,” Chosun-ilbo, 07/06/98. 390Choong Young Ann, “East Asian financial crisis and Japan,” the Moonhwa-ilbo, 02/20/98. 391 Robert Gilpin & Jean Gilpin, Global political economy : understanding the international economic order. Princeton, Princeton University Press, 2001, p. 326; Also refer to Susan Strange, Susan Strange, Mad money : when markets outgrow governments. Ann Arbor, University of Michigan Press.1998, p. 172. 392Richard P. Cronin, Asian financial crisis, Congress Research Service, 04/23/98.
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also from general problems inherent in today’s global economic system,” they appeared
not to buy into his argument. 393 Instead, they adhered to claim either that “it [Korea
crisis] was a good opportunity to improve our systemic weaknesses,” or that “the best
strategy lies in continuous reforms including financial sector, industrialized labor culture,
sound budget, and bankruptcy law.”394 Since they reiterated the view that Korea crisis
stemmed primarily from endogenous factors, the primary culprits were still believed as
either “Korean decision-makers who not only denied the severity of our problems but
also argued that economic fundamentals were sound,”395 or “Korean chaebols which
failed to obtain credibility because of their lacking of transparency and inefficient
ownership structure.”396
Opinion poll thus showed in 1999 that Koreans remained in convincing “political corruption, crony capitalism, government mismanagement and chaebols” to be the primary villains.397 Even when the IMF was under severe criticism in particular for its
austerity policies, they persisted in advertising such views as “Korean economy has been
able to survive thanks to IMF assistance”398and “the assistance of the Fund was possible
because Clinton administration concerned more Korean security instability than
economic benefit of U.S.”399 However, interestingly, the only countries to be involved bilaterally in all three East Asian packages were Australia and Japan in the region. Indeed,
393 Kiichi Miyazawa, “Towards a New International Financial Architecture,” December 15, 1998. 394 Staff writer, “Overcoming IMF crisis and continuing challenge,” Seoul-shinmoon, 11/19/02. 395Sung-Chul Lee, “IMF crisis caused by our fault and endless political fighting,” Hankook-ilbo,11/02/01. 396 Young-June Kyoen, “What does economic recovery of Japan imply,” Syekye-ilbo, 11/28/03. 397 Internet poll, “What caused the Korean crisis,” Mail Economy, 02/08/99. 398 Staff writer, “Interview with Duk-Koo Chung,” Chosun-ilbo, 03/21/03. 399Sung-Chul Lee.
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there was no bilateral contribution from the U.S.400 Table 6:7 further reveals such an
absurd proclivity of Korean media.
Table 6:7: Korean media’s attitude to Asian Monetary Fund (# 36)
Before (#11) After (#25) Total (#36) U.S/British media
Cynical 36% 36% 36% 44%
Neutral 45% 32% 36% 50%
Supportive 18% 32% 28% 5%
Total 100% 100% 100% 100%
Regarding the AMF, there certainly was conflict of interest between the hegemon
and East Asians. Bergsten confessed before U.S. Congress in this regard that “the costs of
any such outcome [of Asia-only Asian Monetary Fund], to the broad national security as well as economic interests of the United States, would play out over many years and could be huge.”401 Thus, it was anticipated that there would be growing support for establishing the AMF in South Korea. Table 6:7 reveals that Korean media, in fact, tend
to give more support to the proposal by moving from 18 percent of neutral position to 32
percent of supportive stance after September 1998. Yet a noticeable point is that their
opinion remained in cynical or neutral that amounted to 72 percent. Being compared with
the hegemonic media that continued to be cynical or neutral, there was little
distinctiveness in Korean media. A closer look at specific examples further illuminates
the aptitude.
400 Gordon De Brouwer, quoted in The IMF and its critics: Reform of global financial architecture, David Vines and Christopher L. Gilbert (eds). Cambridge University, 2004, p. 254. 401 C. Fred Bergsten, "The Asian Monetary Crisis: Proposed Remedies,” Testimony before Congress, 11/13/97.
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Largely turning a blind eye to the fact that U.S. Treasury started to lobby against the AMF in September 1997, Korean media seemed to believe that “the U.S. government would assist in establishing the AMF because it worried about IMF’s lacking resources and potential damages on global economy from the Asian crisis.”402 Similarly, when the
IMF and the U.S. shelved Japanese proposal of the AMF in late 1997, they interpreted it as “the IMF finally agreed on establishing the AMF as a supplementary institution by pulling back its previous objection to it.”403 Beyond such ignorance, interestingly, they kept on floating the notions that “Japan intended to be Asian financial hegemon by proposing AMF”404 and so Korea required being concerned about the possibility that
“Japan’s influence will be increased with the AMF.”405
Neither subsequent crises nor Malaysia’s capital control helped them change the
convictions. Not only did they remain in suspicion on Japan’s motivation of raising the
issue of the Asian Fund in spite of U.S. objection, but they urged Japan to open up its
market in order to fix Asian crony capitalism. In a specific example, the Korea Economic
Daily claimed that “in order to put the AMF in place, Japan should buy more Asian products, cooperate with international community in implementing structural reforms, and build credibility by apologizing colonial misconducts and compensating for them.”406
When Jong Phil Kim, then Korean Prime Minister, expressed his support for Asian monetary cooperation, in an identical tone, they played down it by insisting that “many
402 Hee-Kyun Park, “Background of Asian Monetary Fund,” Kyeong-hyang Shinmoon, 11/03/97. 403 Staff writer, “IMF finally approved Asian Monetary Fund,” Hankook-ilbo,11/06/97. 404 Staff writer, “Hegemony dispute between U.S. and Japan,” Seoul Economic Daily, 09/24/97. 405 Yong-Jin Kim, “The emergence of Asian monetary fund,” Mail Economic Daily, 09/23/97. 406 Staff writer, “Re-emergence of the AMF,” Korea Economic Daily, 12/01/98.
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observers feel that Kim, co-leader of the Kim Dae-jung administration, is breaking from
the administration's stance in order to achieve some sort of political gain.”407
Only after the Korean government began to move toward regional alliances such
as Chiang Mai Initiative and ASEAN+3, they have shed light on the issue. In this context,
Bun Soon Park, a chief economist at Samsung Economic Research Institute, claimed in a
special column that “world powers appear to be too busy taking care of their own
interests, to worry about the struggling Asian economies. Therefore it is necessary for
Asian countries to cooperate among themselves to stabilize their economy.”408 However,
it is crucial to note that such a supportive voice was mostly followed by an opposite view
that “one of the worst ideas to be floated as a remedy for what ails the Asian economies is
the formation of a regional monetary fund.”409 Since they incorporated the notion of “mea culpa” into their understanding, they also neglected to pay proper attention to the proposal. A similar proclivity is also found in their coverage over Dr. Mahathir and
Malaysian experiment.
Table 6:8: Korean media’s attitude to Dr. Mohamad Mahathir (# 59)
Before (#28) After (#31) Total (#59) U.S/British media
Cynical 68% 39% 54% 77%
Neutral 25% 52% 39% 21%
Supportive 7% 9% 16% 2%
Total 100% 100% 100% 100%
407 Staff writer, “PM Kim favors Asian Development Model,” Korea Times, 12/11/98. 408 Bun Soon Park, “Flood of ideas for Asian economic cooperation, but no consensus,” Korea Herald, 05/19/99. 409 Christopher Lingle, “The rise and decline of the Asian century,” Korea Herald, 05/24/00.
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Korean media’s cynical and skeptical attitude toward Dr. Mahathir is surely
indicated by Table 6:8. Before the Russian crisis, as 68 percent of cynical attitude
indicates, they insisted that “it may be convenient for Asian leaders to blame speculative
traders, George Soros specifically, but more attention to their own inadequacies in
macroeconomic policies and bank regulation would be a wiser course.”410 Since they largely absorbed the technical frame that presupposed of “reflective market” and “public opinion of financial market,” moreover, the continuity of currency turmoil in the region was hardly related to market distortion by currency speculation. The Moonhwa-ilbo thus claimed that “the free-fall of Asian currencies after Dr. Mahathir’s accusing George
Soroso of currency speculation endorsed the view that the Asian crisis was stemmed more from structural problems in the region than currency speculators.”411 Yet there certainly was market distortion by speculators such as New York-based macro hedge funds, proprietary trading desks of international investment banks and securities firms.412
Given that the percentage of a neutral opinion was improved from 25 to 52 after late 1998, they appear to take Malaysia’s alternative approach into consideration. But a closer looking at their reporting revealed that not only did they belittle Malaysia’s capital control, but they also shifted their attention to lack of democracy in Malaysia. The
Kyenghwang indeed insisted that “Malaysian model was inappropriate to Korea for such
capital control played negatively in restoring international confidence, as well as delayed
410 Seong C. Gweon, “The nature of finance,” Korea Herald, 10/08/97; Staff writer, “Mahathir accuses Jews again,” Maeil Economic Daily, 10/16/97. 411 Staff writer, “What’s happening in East Asia,” Moonhwa-ilbo, 10/09/97. 412 Brouwer, p. 260.
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necessary reforms to cure crony capitalism.”413 Emphasizing that South Korea was not able to adopt Malaysia’s approach, the Kookmin maintained similarly that “Malaysia model, like that of South Korea during military dictatorship, needs to be seen as a kind of economic dictatorship that stands against individual freedom.”414Yet it is likely to state that they were barely divergent from the hegmon’s media that first ridiculed Dr. Mahathir, then played down capital control, and, finally, shifted the attention to absence of political freedom in Malaysia. Such a habitual reliance on hegemonic media thus easily incorporated into their attitude to the NIFA.
Table 6:9: Korean media’s attitude to NIFA (# 28)
Before (#0) After (#28) Total (#28) U.S/British media
Cynical 0 36% 36% 57%
Neutral 0 32% 32% 32%
Supportive 0 32% 32% 11%
Total 0 100% 100% 100%
Table 6:9 indicates that Korean media rarely pay attention to reforming the global
financial architecture before the Russian crisis. It appears, on the surface, that South
Korea’s economic recovery might help them look at alternative options such as capital regulation, reforming the Fund and regional cooperative mechanisms. But, certainly, their primary attention was given to “strengthening international financial system” initiated by
U.S. Treasury and the IMF than to regional cooperation or capital regulation. The Korea
Times thus insisted that “enhanced surveillance, improved standards of transparency, and
413 Kwan-chul Oh, “My way in the era of globalization,” Kyeonghwang-Shinmoon, 06/02/01. 414 Yong-rae Cho, “Mahathir myth,” Kookmin, 10/26/99.
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an effective early warning system [should] be put in place to ward off risks of
contagion.”415 In other words, just as they looked up to hegemonic affiliations in
diagnosing the crisis, they again turned to U.S. media and residing U.S. intellectuals in
believing that they would provide the best solutions for South Korea. In providing a
senior IMF official with its editorial space, the Chosun indeed assisted in promoting the perspective of the hegemon that aimed at focus on technical reforms with the centrality of the Fund.416
Yet in spite of their giving credibility to hegemon’s affiliations, eventually, they were compelled to seek unorthodox approaches that included ASEAN +3 and Tobin Tax that aimed at curbing short-term capital movement. The Seoul thus delivered Stiglitz’s view that accused the IMF and powerful countries of their lacking accountability and political biases of favoring global financial corporations. 417 Similarly, the Moonhwa
shared its editorial column with Yukimiss Sanada who insisted that “Asian countries need
to cooperate in building regional alliances both in finance and in security.”418 It can be fair to conclude that they mostly failed to critically reflect on the hegemon’s arguments.
Nor did they recognize that even U.S. critics including Bhagwati, Feldstein and Sachs fell short of raising questions about U.S. leadership. Their focal point was thus on global financial capitalists and multinational institutions. Taking the findings into account, I then intend to understand why Korean media moved forward with hegemon’s causes and that assisted in giving birth to South Korea’s cooptation into U.S. hegemony.
415 Staff writer, “Seoul calls for strengthened world financial structure,” Korea Times, 10/09/98. 416 Eduardo Aninate, “Financial crisis and IMF,” Chosun, 09/09/00. 417 Staff writer, “Interview with Joseph Stiglitz,” Seoul, 10/16/02. 418 Staff writer, “Interview with Sanada Yukimiss,” Moonhwa, 01/02/02.
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South Korea’s disputed symbolic stages
I supposed in the above that news can be seen as “publicly disposable knowledge
for politics.” Also it was proposed that the mainstream media would take a crucial part in
drawing public attention, in defining public priorities and in shaping public preferences,
as well as ultimately in bringing forth public endorsement. I thus revealed that while
forming a symbiotic relationship with hegemon’s power elite, the professional
communicators of the hegemon endeavored to promote a specific frame and to generate
public support for foreign policies. Yet when I look closely at the national symbolic stage
of Korea, it turns out that Korean communicators opt to share the stage with the hegemon
and its affiliations. Table 6:10 below is thus presented to illuminate this point.
Table 6:10: Cue-givers in South Korean Media419
Sources Proportion (frequency)
Korean government (officials) 6% (13/202) 41%
Korean think tanks and intellectuals 35% (72/202) (combined)
U.S. government officials, IMF & World Bank 16% (33/202) 49 %
U.S.-residing experts (including private analysts) 24% (49/202) (combined)
Hegemon’s media 9% (19/202)
Asian government officials 6% (12/202)
Others 2% (4/202)
Total 100% (202/202)
419 Emphasis is to show the sure presence of the hegemon, or vice versa, the disputed status of Korean symbolic stages.
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Table 5:14: Cue-givers (U.S/British Media- re-quoted from the above)420
Sources Proportion (frequency)
U.S. government officials 27% (63/237)
International Organizations (excluding U.S. officials) 14% (32/237) 86%
Non-profit institutions (think tanks & universities) 30% (72/237) (combined)
Wall-Street private corporations (research analysts) 15% (35/237)
Asian voices (South Korea, Malaysia & Japan) 9% (22/237)
Others 5% (13/237)
Total 100% (237/237)
Table 6:10 shows that while the hegemon was able to represent 49 percent,
Korean cue-givers constituted only 41 percent in the symbolic stage. Moreover, because
more than 80 percent of Korean intellectuals had U.S. academic training and adopted the
technical frame, it was not wrong to state that the stage was virtually occupied by the
hegemon. The salience of the hegemon on the stage also meant that there was little room for Korean supporters of political frame. Yet, as shown by Table 5:14, the hegemon’s media barely shared the stage with Asians who represented less than 10 percent. Indeed, the communicators of the hegemon provided their power elite with the stage and assisted them in pursuing their strategically chosen foreign policies. It might be argued of course that Korean media employed the hegemon and its affiliations in order to achieve their national interests. However, in the above, I showed that not only were they apt to adopt the technical frame, but they were inclined to define their national interests in the context
420 Emphasis is to indicate the under-representation of weak states on the symbolic stage of the hegemon.
212 of the hegemon’s foreign policies. Since they were neither coerced by the hegemon nor by the Korean government, it is reasonable to conclude that they worked voluntarily for the hegemon. Looking closely at specific cue-givers further assists in clarifying this point.
Table 6:11: High profiling cue-givers in Korean media (Institutions)421
Institution Proportion (Frequency)
The International Monetary Fund 19% (17/91)
Harvard University 14% (13/91)
Seoul National University (SNU) 14% (13/91)
Massachusetts Institution of Technology (MIT) 12% (11/91)
Ministry of Finance (Japan) 8% (7/91)
Korea University 7% (6/91)
Joongang University 6% (5 /91)
Ministry of Finance (Korea) 6% (5/91)
The New York Times 6% (5/91)
Korea Development Institution (KDI) 6% (5/91)
Institution of International Economics (IIE) 5% (4/91)
Total 103% (91/91)422
Table 6:11 indicates that they highly depend on the IMF, Massachusetts
Institution of Technology, Harvard, New York Times and the IIE. Also they develop a tendency of favoring university professors who supposed to have U.S. academic training.
But both Korean government officials at the Ministry of Finance and Korea Development
421 The total number of 93 out of 202 is categorized into high-profiling cue-givers; bolded parts indicate that they come from Korean sources. 422 103 % is caused by rounding-up calculation.
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Institution, which had managed Korean economy before the crisis, earned only 12 percent of representation. Hence it is likely to argue that Korean communicators went along with the hegemon’s leadership at the expense of the power elite of Korea. The reverence for the hegemon and its affiliations is also found in Table 6:12 that reveals high-profiling individual cue-givers.
Table 6:12: High profiling cue-givers in Korean media (Individuals)423
Name (occupation) Frequency
Stanley Fischer (IMF Deputy Director) 7
Jeffrey Sachs (Harvard University, Professor) 7
Paul Krugman (MIT, Professor) 6
Martin Feldstein (Harvard University, Professor) 5
Eusike Sakakibara (Japan Deputy Finance Minister) 5
Woon Chan Chung (Seoul National University, President) 5
Christopher Lingle (Korea Times & Singapore Univeristy) 4
Mohamad Mahathir (Malaysia Prime Minister) 4
Total 43
There is only one Korean intellectual who received similar media attention among high-profiling cue-givers. Yet it is helpful to remind that Woon Chan Chung was barely deviant from Summers and Greenspan in defining problems, in articulating causes and in suggesting solutions. Moreover, according to Paul Bluestein, the highly represented intellectuals including Fischer, Sachs, Krugman and Feldstein were believed to form an
423 Emphasis is to identify a highly visible Korean cue-giver in Korean media.
214 intimate network.424 My attention next is thus given to understanding the reasons of why they looked up to residing U.S. intellectuals and, as a result, helped the hegemon to exert its intellectual leadership.
Semi-professional political communicators
The journalists in South Korea, unlike the ordinary citizens, are able to access to government document and information, as well as to form intimate relationships with
Korean power elite. Yet, as I noted in Chapter Three, such privilege was not given to foreign journalists with good reasons. Hence I suggested that Korean journalists were organically bound up with the national interest of South Korea not that of the hegemon.
Also I pointed out that they were neither coerced by Korean power elite nor manipulated by the hegemon and its affiliations. It was therefore believed that their performance had much to do with the conviction that South Korea would be better served by abiding by the hegemon’s leadership. By proposing the intellectual model, thus, I attempted to show that not only did such a conviction need to be nurtured by pre-established positive relationships, but it was also reinforced by hegemon’s active involvement in constructing academic and political authority. Yet a noteworthy point is that Korea’s semi- professional communicators indeed took a part in bringing forth the leadership as well.
On the one part, they failed to realize that U.S. intellectuals were not free from subjectivity and political bias. That is, although their analyses appeared to be “technical, scientific and objective knowledge,” such analyses were based on “subjective” decision
424 Paul Blustein, The chastening : inside the crisis that rocked the global financial system and humbled the IMF. New York, Public Affairs, 2001. p.157.
215 on “the primary problem,” as well as “political” consideration about “appropriate solutions.” Not only did hegemon’s intellectuals “arbitrarily” define the primary problem as “crony capitalism,” but they also articulated “causes and solutions” in line with achieving hegemon’s political objectives. Since it was totally possible to strengthen financial system through government leadership, “opening up financial market and adopting international standards” was not the only solution but strategically chosen political one. It was also plausible to bail out troubled corporations and banks rather than to sell them at unrealistic prices to foreign owners. Indeed, the U.S. government used to bail out strategically important corporations such as the Enron, Long Term Capital
Management, and airline industry. Yet because Korean media barely doubted on the biases, they ended up going along with the hegemon’s leadership. As a result, instead of helping their power elite including intellectuals articulate “analytic frameworks” for promoting the national interest of Korea, they allowed the hegemon to determine
Koreans’ priorities and that supported its pursuing foreign policy agenda.
On the other part, they also neglected to recognize that they were organically bounded up with their government and the power elite in South Korea. They certainly succeeded in performing their watch dog function against domestic power abuses that, in their point of view, had been represented by incapable government officials, chaebols, militant labor unions and corrupted politicians. Yet they fell short of barking at foreign forces that threatened to inflict national interests by pushing their currency down and exploited the crisis. There was a reasonable expectation that they would take into account not only endogenous factors but also exogenous factors. Had they paid proper attention to alternative voices come from Japan, Malaysia and Europe, they have worked together
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with their power elite and supported them to cooperate, not marginalize, with neighboring
countries. It might be argued, of course, that because the ruling class in South Korea
failed to protect the national interest, they started to abide by the hegemon. Yet I reiterated the point that the ruling class in any country would pursue their class interests in the context of national interests. Thus, it is fair to conclude that they were ignorant of
the point that “any effort to resolve the governance issue must take into account the fact
that we still live in a world of states, power, and national interests.”425
425 Gilpin and Gilpin, p. 399.
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Chapter Seven
Conclusion and envisioning
I started this dissertation with sensing that such a social crisis as Asian crisis was different from natural disasters such as an earthquake or hurricane. That is, not only could social crises be avoidable by taking appropriate measures, but, more critically, it would be truly possible to utilize the crises in way of achieving common goods. So unraveling the mechanism by which hegemonic state was able to induce weak states’ cooperation might be conceived of as my intellectual adventure to attest such points. For that purpose, after presupposing the intellectual leadership model, I attempted to apply it to South
Korea appeared to be co-opted by the hegemonic state.
Hence, in the following summary, I begin to explain why the model can be helpful to understand U.S. dollar hegemony. Noting that hegemon’s organic intellectuals and professional communicators played a crucial role in establishing the leadership, I then move to articulate their symbiotic relationships with the national interest of hegemon.
Since such a leadership was also believed to be effective by supportive public opinion in weak states, my next heed is given to relating the international information order to U.S. hegemony. Following my brief outline of methodology, in the end, I embark on summarize research findings. How hegemon exerted its leadership by utilizing weak state’s assistance is therefore outlined.
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7-1: Research summary
For me, U.S. dollar hegemony could not be adequately understood without contemplating the points that follow. The first noteworthy point was that there were far more currency crises after the U.S. government unilaterally adopted free-floating foreign exchange regime in 1971. The notion that common interests between hegemon and junior partners made international cooperation possible was thus less acceptable to me. I sensed instead that not only was the hegemon able to shape weak states’ perception of common interests, but such interests would be “social construction” not “discoverable reality.” The second noticeable point was that East Asians, through the crisis, tended to cooperate with
U.S. in spite of their strong resentment over U.S. power. Hence, the argument that the
U.S. hegemony would be weakened by Iraq war in 2003, which provoked international outcry, was not sensible to me. Since U.S. hegemony was not sustained by morality or enviable norms, I reasoned that hegemony might have more to do with prevailing over heads than winning hearts.
The next point of consideration was that weak states should acquire “technical and practical knowledge” to put hegemon’s normative orders into effect. In other words, it meant that even though those weak states convinced the value of a flexible currency regime, they still needed to learn financial prowess in order to manage the regime. There thus was a strong tendency for foreign students in the hegemonic state to end up majoring in such “non-political” areas as economics, finances and engineering. I speculated in this regard that a hegemonic order could be adequately apprehended with considering the structure of public knowledge. The final point of notice was that public opinion was
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supposed to take a growing part in politics particularly in liberal democratic societies. It
was therefore less believable to me that the hegemonic state would neglect of exploiting
such a critical factor in bringing forth weak states’ cooptation. Yet since U.S. lacked in directly accessing to the ordinary public in weak states, I speculated that the hegemon might be able to employ weak states’ intellectuals along with their media in order to educate their public opinion. Taking into account such points, I started this dissertation by proposing the intellectual leadership model.
Accordingly, I assumed in the model that hegemon’s relationship with weak states could be similar to that of the one between teachers and students. In other words, not only are teachers able to impose discipline on students, but they have authority lead students.
In placing intellectual leadership at the center, I also believed that such a leadership might be underpinned not only by physical strength such as military power but also by soft power including cultural attractiveness. I then moved to suggest that there would be at least two ways of building intellectual authority up. Just as teachers should be perceived as having academic superiority, in one way, the hegemon was required to possess intellectual competitive advantage.
Yet since authority was also believed to be supported by “publicity and legitimacy,” in the other way, the hegemon would engage in constructing political authority. It was therefore supposed that such hegemon’s affiliation as news media, multinational institutions and academic institutions might play the role. Since the hegemon was supposed to employ weak states’ symbolic elite, finally, I believed that hegemon’s soft power might be associated with establishing positive relationships between the hegemon and weak states. For me, a teachers’ relationship with students
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appeared to be the same. That is, if students tended to develop a negative relationship
with their teachers, it was anticipated, their academic achievement would be less
impressive. Since I paid particular attention to the evolution of the Asian crisis in 1997,
South Korea was thus believed to be an ideal case to apply this model. Foremost, not only
did it appear that South Korea was co-opted by the hegemon, but its relationship with U.S.
was very akin to that of between teachers and students.
I was well aware of the point of course that there were assumptions in adopting
the leadership model. My next attention was thus given to articulating key assumptions
imbedded in the model. I thus started with defining the current system as “a collection of
national system with a single global monetary system.” Yet, for me, not only was the U.S.
able to prevail over other states, but it was nation-states, not global capitalist class, that
established the rules. I thus supposed to designate the U.S., as having a “structural
power” that could “choose and shape the structure of the global economy.”426 Since the hegemon was expected to have motivation in leading weak states, I then presupposed that there could be critical national interests. In adopting the notion that nation states tended to pay particular attention not only to national security but also to balance of payment and domestic economic prosperity, my next assumption was to suggest the existence of nation’s power elite.
Since nation states are believed to have autonomy, I was also able to presuppose that hegemon’s power elite could include government bureaucrats, business elite, military elite and symbolic elite. My placing symbolic elite in emphasis was suggested on this stage as well. That is, for me, such symbolic power elites as top-level intellectuals and
426 Susan Strange, Mad money : when markets outgrow governments. Ann Arbor, University of Michigan Press.1998, p. 132.
221 elite journalists were not junior partners in the power house of the hegemon. Nor were they supposed to be coerced or manipulated by the ruling class. Since I sensed that the public could be real in democratic politics, the final attention was thus given to articulating my assumptions on the public, public sphere and public opinion.
Such a point that the hegemon needed to decide upon priorities in pursing its national interests further prompted me to look at hegemon’s inspiration for managing the international financial system. My next section was therefore focused on reviewing U.S. dollar policy and its contribution to the evolution of U.S. dollar hegemony. Accordingly,
I began to look at the historical development of the Bretton Wood System and its collapse in 1971. Because I intended to show the emergence of U.S. financial hegemony, my particular attention was given to understanding why and how the U.S. was able to adopt free-floating foreign currency regime in the early 1970s. The points that follow were presented in the section: First, the U.S. could elect U.S. dollar as an international reserve currency by cajoling OPEC to sell its oil only for dollars in early 1970s; Second, U.S. trade deficit was a structural problem because the U.S. government would not allow alternative international reserve assets; Lastly, the hegemon’s interest was organically bound up with preventing alternative currencies such as the euro or the possible Asian single unit. Following identification of the hegemon’s structural agenda of sustaining the dollar hegemony, in the last part, I suggested that there would be on-going political struggles between the hegemon and weak states. Even if this section helped me understand hegemon’s causes, but, how the hegemon was able to exert its intellectual leadership was not unsolved. Thus, I looked at the role of hegemon’s symbolic elite in pursuing its national interests.
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Presupposing that hegemon’s leadership might be possible by schooling public
opinion in weak states, I started this chapter by indicating how news could be better conceived of as “publicly disposable knowledge for politics.” I thus introduced the view that defined news as “focused enquiry and interpretation based on a solid set of ideas about the world.”427 It was noticed as well that the news media could be a critical provider of “national symbolic stages” on which policy makers and the broader public took a part in facilitating public deliberation. Yet since the independent media were supposed to protect public interest within the framework of national interests, my next focus was to examine how hegemon’s professional communicators could be associated with foreign policy. Since they appeared to act as the fourth estate in the hegemonic state,
I perceived them as a part of hegemon’s power elite.
In the subsequent part, I attempted to put the international information order into
U.S. hegemony perspective. My objective of this section was to show that there was little room for weak states to promote their political causes in the current order. I thus began to review what prompted developing countries to raise the New International Information
Order (NIIO) in 1970s and then moved to expose theoretical deficiencies of their adopting Marxist framework. Insisting that the debate over the NIIO failed to take into account the U.S. hegemonic order, I then critically reflected on major recommendations made by the MacBride Commission in 1980. By dividing information into political, instrumental information and cultural product, my final attention was thus given to suggesting how to set up a more democratic international information system. Because I took a notice that hegemon’s public diplomacy could take advantage of the current
427 Eldridge, J. E. T., Kitzinger, J., & Williams, K. The mass media and power in modern Britain, 1997,p.102.
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information order, in the next chapter, I started with suggesting an imaginary information
flow between the hegemon and South Korea.
Based on the assumption that U.S. hegemon would engage not only in producing
public knowledge but also in disseminating it to the international society, in Chapter Four,
my first attention was paid to articulating methodology. Since Edward Said’s work
helped me assume the presence of primary texts accumulated by hegemon’s organic
intellectuals, I thus clarified my strategies to seek those primary texts such as government
official documents and financial analyses.428 Since research frame was a critical part in this dissertation, I then moved to explain my approach to frame analysis. Suggesting that previous researchers of media frame tended not to consider journalists’ assistance in producing public knowledge, next, I suggested dividing frame into “research frame” and
“publicly disposable media frame.” After articulating the approach that categorized research frame into “technical,” “political” and “counter-hegemonic frame,” I also explained how I collected data. Total six sets of data were therefore specified in this section.
I began Chapter Five by providing historical and political contexts associated with the Asian crisis. Reviewing of the crisis from 1997 to 2005, I thus reviewed the Asian
Monetary Fund (AMF), Dr. Mahathir, former Malaysian Prime Minister, and the New
International Financial Architecture (NIFA). Since I intended to apply the leadership model, as suggested by Figure 1;1 and 1:2, my particular focus here was given to identifying how the hegemon exerted commanding and co-optive power. As presupposed by Figure 1:3, I thus focused on articulating hegemonic national interests underpinned by its structural agenda. Because hegemon’s developing research frame was supposed to be
428 Edward Said, Orientalism. New York, Vintage Books, 1994.
224 associated with political purposes, I also attempted to articulate hegemon’s foreign policies in the region. The political purposes such as improving current account balance, accelerating capital liberalization and assisting U.S. financial corporations were therefore identified.
Taking the policies into consideration, I then tried to show how such policies incorporated into specific research frame categorized into technical frame. It was found that not only did the frame define the primary problem as “inevitable economic crisis of
Asian crony capitalism,” but it focused on blaming “Asia’s weak financial system along with Japanese economic model” for the crisis. Major solutions in the frame were also very identical to hegemon’s agenda that intended to open up Asian markets and to break down Asian governments’ strategic relationship with their business sector. Since the frame was clearly formulated by U.S. foreign policy, I also discovered that the frame evolved into a department view in the U.S. government. Yet clearly such a frame was not the only interpretive framework throughout the crisis. Nor did there was a universal consensus on “the definition of problem.” Hegemon’s urgency of suppressing alternative frames, while at the same time promoting technical frame, was thus fully expected.
I began the next section with articulating the differences between technical frame and alternative frames. Differentiating its definition of problem, those supporters of political frame tended to focus on “capital liberalization” and “currency speculation.” For them, the Asian crisis was not an inevitable crisis of Asian economies but an unfortunate crisis of global capitalism helped by market panic. They thus urged to slow down capital liberalization and accused the Fund of pushing East Asians to adopt unreasonable policies such as hiking interest rates and tightening government spending. Since currency
225 speculation was believed to aggravate the crisis, they then sought solutions in imposing greater capital regulation, encouraging regional financial cooperation and reforming decision-making structures in the IMF. It was clear, however, that not only were they disposed to blame special interests of Wall Street financial corporations, but they failed to raise questions about U.S. dollar hegemony.
Instead, a tiny number of supporters of counter-hegemonic frame pinpointed structural deficiencies of the dollar hegemony. That is, in designating the primary problem as “U.S. dollar-based free-exchange system,” they tended to find solutions in political struggles. They thus urged East Asian countries to set up its own system operated by Asians and for Asia. Noting hegemon’s unwillingness to concede its privilege, their primary focus was also given on establishing international “check and balance” system.
Before outlining how the hegemon unfolded its leadership, however, it would be helpful to bear in mind the following two points: Since alternative frames were promoted by East Asians or a few U.S. critics, on the one hand, the frames were easily criticized as having political biases and so perceived as lacking academic authority; Because it was hegemon that could utilize those institutions such as the IMF and global media, on the other hand, there was little place for the frames to draw public attention. Hence it is plausible to conclude that the suggestion of hegemon’s building authority was well suited to this Korean case. Yet it is critical to acknowledge that hegemon’s leadership owed much more to positive politics than to negative politics. In other words, the hegemon was able to induce weak states’ cooperation not by preventing them from accessing to
226 alternative frames but by proving them with reliable blueprints, though within the context of technical frame.
My next attention was paid to evaluating the validity of Figure 1:4 that supposed the hegemon’s utilizing its organic intellectuals and professional communicators in order to build up the intellectual leadership. Thus, I started to look at the symbiotic relationship among hegemon’s power elite. For this purpose, after identifying those policy-makers in
U.S. Treasury and the IMF during the crisis, I then traced their promotion within the power house of the hegemon. Table 5:1 thus revealed their interlocked relationships established by moving from government to think tanks to elite schools to the prestigious media and to multinational institutions. For example, soon after the crisis, Stanley
Fischer-then IMF Deputy Director first promoted to Vice Chairman of Citigroup and then appointed as the President of Bank of Israeli.
Table 5:2 also showed that not only did hegemon’s intellectuals comprise the national power elite, but they were also able to build up authority by combining their professional experiences with academic trainings. C. Fred Bergsten showed it very clearly. Staring from an assistant to Henry Kissinger in 1960s, he first served with U.S.
Treasury and National Security Council, then participated in prominent think tanks such as the Council on Foreign Relations, Carnegie Endowment for International Peace and
Brookings Institution, and ended up with a director at the Institute of International
Economics. For evaluating Figure 1:4, which assumed the incorporation of political objectives into financial/economic analyses, next, I focused on unraveling intellectuals’ assistance in constructing academic authority.
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It turned out in Table 5;3 that the majority of them tended to adopt technical
frame and be very critical of such attempts as regional currency union or capital control.
Barry Eichengreen at UC-Berkeley thus insisted that “an Asian bloc as a zone of
monetary and financial stability” “could be a dangerous mistake.”429 Since there were a
few critics who adopted political frame, I also looked into their relationship with
hegemon’s power elite. The Table 5:5 indicated, however, that they were not allowed to promote to higher ranking positions. Nor have they cast doubt on U.S. dollar hegemony.
In staying at either relatively independent institutions or multinational organizations, accordingly, they tended to believe that the Fund was exploited by Wall Street –Treasury
Complex.430
Since the professional communicators of the hegemon built up political authority,
my subsequent attention was paid to untangling their contribution to the leadership. I thus
looked at their adopted frame along with their attitudes toward regional financial bloc,
Malaysian’s alternative approach and setting up a new international financial architecture.
Table 5:6, 5:7, 5:8, and 5:9 were presented to elucidate their role in developing
intellectual authority. It was found that not only did subsequent crises in Russia and
Brazil fail to change their understanding of the Asian crisis, but they remained in going
along with hegemon’s departmental view.
The media’s symbiotic relationship with its national power elite also prompted me
to examine the nationality of the media. Supposing that British media could not be
independent from the national interest of Britain, I compared the performance of the
Financial Times and Economist with the New York Times, Washington Post and (Asia)
429 Barry Eichengreen, quoted in Chung, D. K., Ed. Policy Roundtable: Fiver years after Korean currency crisis. Seoul, Seoul National University, 2002. 430 Jagdish Bhagwati, “The Capital Myth,” Foreign Affairs, May/June 1998.
228
Wall Street Journal. For this particular purpose, I drew Table 5:10, 5:11, 5:12 and 5:13.
The table 5:10 indicated that two British media hardly differed in defining the primary problem as Asian crony capitalism. Given that those financial corporations in U.S. and
British firmly agreed on capital liberalization, the result was fairly anticipated. Yet, in reflecting upon British foreign policy that inclined to join Europe’s single currency euro, they revealed more sympathy with Dr. Mahathir and the alternative financial order. In providing East Asians particularly Japanese and Malaysians with editorials, they indeed attempted to expose hegemon’s political agenda. Accordingly, there were more alternative voices such as Jeffrey Sachs and Joseph Stiglitz in the British media. Since I sought to understand why hegemon’s communicators failed to critically reflect on the
IMF policies, I then looked at the symbolic state in the hegemonic state by identifying those primary cue-givers.
Thus in presenting Table 5:14, 5:15, and 5:16, I showed the media’s developing a symbiotic relationship with the power elite of the hegemon Largely marginalizing Asian perspectives that represented less than 10 percent, it showed, they paid particular attention to providing U.S. policy makers side-by-side its intellectuals with the stage. Yet it was clear that not only was there a pre-established symbiotic relationship between elite media and other power elite, but there was less coercion by the ruling class in journalists’ selecting cue-givers. Hence, I suggested seeing them as “professional political communicators” sharing a clear sense of national interests with other power elite. As a result, the hegemon was able to launch into public information campaign in order to educate public opinion both in U.S. and in weak states. The table 7:1 below shows the established departmental view.
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Table 7:1: Hegemon’s intellectual leadership
U.S. Frame AMF Mahathir NIFA
Government officials Technical Antagonistic Skeptical Skeptical
Organic intellectuals Technical Skeptical Skeptical Skeptical
News media Technical Skeptical Skeptical Skeptical
Thus my following focus was to examine how the official view was able to penetrate into
initially the power elite and ultimately the ordinary public in South Korea. In other words,
I sought to evaluate the relevance of Figure 1:5 that presupposed the mechanism by which the hegemon could induce the power elite of South Korea to voluntarily co-opt into the leadership.
Reminding that the leadership could be supported not only by disciplinary power but also by attractive power, I started to look into how hegemon cajoled the Korean government into asking for IMF emergency funds. I first found that the hegemon actually prevented neighboring countries notably Japan from currency swap. Then, by persuading
Asia Pacific Economic Cooperation (APEC) members to put Asian Monetary Fund off, the hegemon also forced the Korean government to approach the IMF. Next, even after the Fund pledged emergency loan about $60 billion, the U.S. government delayed to release the loan so as to put pressure on the Korean government. The Korean Stock Index
(KOSPI) and Korean won against U.S. dollar thus fell down more than 40 percent within less than a month. Only after Dae Jung Kim, the newly elected president in December
1997, totally forsook his grip on the Ministry of Finance, U.S. Treasury allowed the money to be delivered and helped Koreans avoid national default.
230
When I shifted the focus on hegemon’s soft power, it was also found that there
was a pre-established positive relationship between Korean officials and hegemonic
affiliations. In a typical example, Kyong Shik Kang, then Finance Minster in Korea,
insisted that South Koreans needed to deliver their appreciation to the Fund because it
helped them fix their own chronic diseases.431 Since Korean government officials
uncritically conferred legitimacy on the intellectuals and media of the hegemon, they
developed a strong tendency in deferring to them. It thus turned out that all of the
investigated officials ended up adopting technical frame. The Table 6:1indicated it
obviously. Correspondingly, they seemed not to understand why Dr. Mahathir had to say
that “if you go against the powerful [hegemon], they will use every instrument against
you; but we feel that if we are going to be independent, and you believe in democracy
and freedom of speech, you must be frank, and we must tell the world that this is what is
wrong.”432
To examine whether the intellectual leadership was helped by weak states, my final attention was given to examining Korean intellectuals and its media. Since the authority of Korean government officials was challenged by the crisis, I started to identify those newly emerged authoritative voices since the crisis. Table 6:2 thus revealed that more than 80 percent of leading intellectuals earned their Ph.D. from U.S. universities. Yet since U.S. training itself would not determine their understanding of
Korea crisis, then, I examined their adopted frame along with attitudes toward the AMF,
Dr. Mahathir and the NIFA. Table 6:4 showed that all of the investigated intellectuals trained in U.S. adopted the technical frame.
431 Kyon-Shik Kang. 432 Mohamad Mahathir, Interview with Executive Intelligence Review, 02/19/1999.
231
While uncritically absorbing the notion of “mea culpa- I am to blame,” moreover, they highly dependent on hegemon’s intellectuals. Those figures such as Paul Krugman,
Jeffrey Sachs, and Martin Feldstein were repeatedly quoted for their financial analyses of the Asian (Korean) crisis in 1997. When I looked closely at a few of defenders of political frame, such an intellectual apprenticeship between Korean intellectuals and those of hegemon was further noticed. Yet clearly both academic training in non-U.S. and taking a part as policy makers appeared to help them adopt political frame. Since they subscribed to hegemon’s soft power, however, they also ended up accusing the global capitalist class and, as a result, neglected in criticizing of the U.S. government.
From the outset, the intellectual leadership model made it clear that the hegemon could not be able to directly access to the ordinary public in weak states. For this particular purpose, I supposed that it would pay particular attention to seizing the symbolic stage in weak states. My final part was thus devoted to discovering the presence of the hegemon on the stage. But because it was necessary to evaluate Korean media’s performance, I started this section by examining Korean journalists’ adopted frame and attitudes toward the AMF, Dr. Mahathir and the NIFA. Table 6:6, 6:7, 6:8 and 6:9 were correspondingly presented to reveal their understanding. It turned out that not only did they remain in accusing their government and business elite of the crisis, but they also showed substantial ignorance that hindered them to properly apprehend the issues such as the AMF or the NIFA.
Most critically, they barely understood U.S. foreign policies let alone U.S. dollar hegemony. The media’s weakness was further supported by looking closely at Korean symbolic stage. Unlike hegemon’s symbolic stage managed predominantly by its power
232 elite, it was found, they tended to share the stage with hegemonic affiliations represented by IMF officials, residing U.S. intellectuals and U.S.-headquartered news media. As
Table 6:10 revealed, while hegemon was able to represent more than 49 percent, those of
Korean amounted only 41 percent. Subsequent Table 6:11 and 6:12 also indicated that the stage of Korea was surely disputed by the hegemon. Given that not only Korean media failed to protect national interests of Korea but they also lacked in producing their own public knowledge, finally, I suggested perceiving them as “semi-professional communicators.” Put together, it is helpful to refer to Table 7:2 below for the particular purpose of understanding how Koreans ended up consuming hegemon’s leadership.
Table 7:2: Unfolded leadership in South Korea
South Korea Frame AMF Mahathir NIFA
Government officials Technical Neutral Skeptical Skeptical
Organic intellectuals Technical Neutral Skeptical Skeptical
News media Technical Neutral Skeptical Skeptical
In comparison with the hegemon’s understanding, there was only a difference in perceiving the benefit of having the AMF in Korea. But it should be utterly cleared that
Koreans’ approach to the Asian Fund was very identical to that of the U.S. In other words, not only would Koreans not allow Japan to take a leading role in the Fund, but they tended not to challenge the IMF leadership by setting up an independent institution.
233
7-2: Discussion and implications
The primary purpose was to untangle the mechanism by which hegemon was able
to exert its leadership and manage the current financial system known as U.S. dollar
hegemony. Since I clearly observed that the hegemon was able to construct the leadership
by utilizing its intellectuals and media, the section below starts by analyzing the
hegemon’s advantages in building such a leadership up. Since the leadership was also
assisted by weak states, my next focus is devoted to untangling their disadvantages that
ended up with their buying into the leadership. Noting that the hegemon’s leadership can
be improved in way of enlarging international common goods, I finally attempt to suggest
how not only the hegemon but also weak states will be able to contribute to enlarging common interests.
A united hegemon stands up
First of all, hegemon’s power elite was able to approach the (international) public
with a united voice underpinned by intensive internal deliberation. Even though there
were internal debates over specific tactics, it appeared that they fully understood the
structural agenda side-by-side its specified foreign policies. Thus when the hegemon’s
officials confronted with critics of their approach, they were well supported not only by
its organic intellectuals but also by professional communicators. Hence, when Joseph
Stiglitz criticized the IMF of imposing austerity policies, for instance, Stanley Fischer
could refute him publicly on the New York Times by arguing that “but it is politically
234 convenient for governments around the world to cry, 'IMF made us do it,' and pin their mistakes on us.”433
The second critical advantage of hegemon lay in its disposal of organic intellectuals who proved to be very powerful in terms of authority. Since the technical frame was endorsed by such internationally renowned scholars as Bergsten and
Eichengreen, in fact, political frame was appeared to be lacking academic authority.
Similarly, when junior partners started to cast doubt on systematic deficiencies after
Russia crisis in 1998, the Council on Foreign Relations took an active role in envisioning how to reform the current system. Exploiting East Asians’ suspicion on Japanese ambition, Bergsten also took an initiative in designing the Asian Pacific Monetary Fund instead of the Asian Monetary Fund.
The next benefit of hegemon was to employ its legitimate affiliations represented by IMF, think tanks and news media. Since weak states tended to believe that the IMF was equipped with financial prowess, in fact, they rarely questioned about its imposing structural reform. Even if many Asian economists challenged to IMF’s austerity policies, they thus failed to query why the IMF kept on criticizing Japan which had less to do with currency crisis. Since East Asians neglected to take a notice the symbiotic relationship between hegemonic intellectuals and its national interest, in a specific example, Korean intellectuals appeared not to understand why Feldstein criticized the IMF policies. Given his later involvement in the task force sponsored by the Council on Foreign Relations in
1999, which aimed at designing new order based on IMF leadership, it was clear that his
433 Stanley Fischer, quoted from David E Sanger, “IMF role in world economics woes is hotly debated,” NYT, 10/02/98.
235
main concern had less to do with intellectually supporting East Asians than protecting
IMF legitimacy.
The U.S. media’s credibility also proved to be very efficient in exercising the
hegemon’s intellectual leadership. Indeed, even though Korean officials started to accuse
the media of provoking market panic, not only intellectuals but also journalists in South
Korea tended to see it as government’s denial attitude. Such a point that Korean
intellectuals frequently quoted hegemon’s media as a primary reference also attested
media’s utility in hegemonic order. However, it was obvious that the hegemon never
gave up utilizing its coercive or disciplinary power. Not only did the hegemon put
pressure on Japan not to help those inflicted countries, but it paid particular attention to
preventing other countries from following Malaysia’s alternative approach. Dr. Mahathir
thus confessed that “we were and are fortunate that no one has followed or said they
intent to follow Malaysia’s example. … A heretic can be tolerated. But a heresy
cannot.”434 Hegemon’s coercive power, however powerful, was not enough to achieve its leadership though.
A divided South Korea lies down
The hegemon clearly exploited the disunity of East Asian countries by successfully shelving Japanese proposal of AMF in November 1997. It should be cleared
though that such cacophony or lack of consensus on national interests was also found
within a nation. South Korea showed it most visibly. At the outset of the crisis, it
appeared, Korean society tended to accept the notion of “mea culpa,” by insisting “it is
434 Mark Landler, “Did Malaysia, its head in the sand,” NYT- 1-2, 09/04/99
236
useless to accuse others of my own mistakes.”435 But when they began to articulate the primary culprits, there emerged extreme disunity. For example, for Kyongshik Kang, the primary culprit was lack of leadership helped by populist politicians. For Han Koo Lee, a former director of Dae Woo Economic Institution, however, it was Kim Dae Jung administration which heralded in breaking down Korean chaebols. For Korean journalists, moreover, South Korea deserved the crisis because Korea was a “totally rotten society.”
They thus accused virtually everyone including labor unions, inefficient chaebols, economists and useless politicians of the crisis.
But, unfortunately, Korea’s second disadvantage could not be understood without taking into account its failed symbolic elite. First, political scientists largely tended not to involve in elaborating Korea’s own analytic frameworks with the conviction that the crisis was a financial/economic crisis. Hence even though there were a few political scientists, their adopted perspectives were predominantly either dependency theory or
Marxist view. Barely any political scientists appeared to adopt U.S. hegemony view.
Similarly, U.S. trained economists inclined to go along with hegemon’s intellectuals by uncritically adopting the technical frame. As a result, while prioritizing economic efficiency over other social values such as stability and equality, they kept on believing that half-hearted structural reform was the most serious problem.
Yet, most critically, it was Korean journalists who deprived South Korea of the opportunity of contemplating its own national priorities. Since they failed to apprehend international political economy, they first played international geopolitics down. They then paid little attention to domestic critics such as Han Koo Lee who urged the Korean
435 Dong Kyun Cho, Evaluation of IMF reform progams and new economic paradigm for South Korea, Seoul; Zip-Moon Dang, 2000, p. 5.
237 government to take an active part in setting up Asian Monetary Fund. Next, absurdly believing that hegemon’s communicators would provide them with the best solutions, they remained in transmitting hegemonic views to the ordinary public. Even though they were a critical part of Korean power elite, finally, they inclined not to cooperate with their power elite and, instead, deferred to affiliations with hegemon. Thus it was certain that hegemon’s occupation of Korean symbolic state was not caused by hegemon’s coercion. Surely, it was those semi-professionals in South Korea who voluntarily shared the stage with hegemonic affiliations.
Envisioning collective wisdoms
This dissertation showed that the hegemon was able to intellectually persuade
South Koreans including their power elite to co-opt into U.S. dollar hegemony. However, there are a few points that deserve further contemplation in order to improve the intellectual leadership. Since hegemon’s affiliations owe their credibility and legitimacy to the international society, their power abuses seem to be unhealthy in coping with future global financial crisis. Thus my suggestion is to ask them to pay more attention to recovering legitimacy by taking into account international accountability. Indeed, as I noted, they started to consider this point by promising to improve transparency and that moved forward to assign extra quota to emerging countries. However, the IMF Reform
Act of 1998 made it clear that U.S. lawmakers tended to prioritize their constituencies over the international society. If they remained in denying their indebtedness to weak states, there would follow much intensive struggle for establishing regional institutions.
238
Because the hegemon’s intellectuals were also believed to owe their legitimacy to weak states, I then intended to suggest them to take weak states’ viewpoints into account.
Even though they were well-positioned to lead the world, the international society had to pay the price of their power abuse. Specifically, for me, it would be totally possible to pursue “enlightened national interests” in line with sustaining the current system.
Invading weak states would not be a sensible option for defending the dollar while at the same time pushing East Asians to finance its mounting deficits. Hence, a noteworthy point is that weak states did put their resentment over hegemonic power aside because they believed the hegemon’s leadership. Tainted leadership is not helpful to achieve international common goods.
There were indeed many problems within Korean media. Yet it is critical to note that the semi-professional communicators in Korea believed the integrity of hegemon’s media in their delivering “fair, balanced and bipartisan” information. It is easy to blame their naivety in putting such notions into practice. Collapsed credibility, however, may not be helpful to solve urgent international challenges such as anti-Americanism and recurring currency crisis. Given that foreign journalists were not allowed to hegemon’s decision-making processes, U.S. journalists are required to initiate into constructing a truly sense of international symbolic stages. If not, as we seen in the Middle East and
Latin America, bringing forth international collective wisdom can be possible by accelerating regional alliances.
Noting that Korea’s disadvantages stemmed more from their failed symbolic elite, it is also likely to find ways in which weak states took a part in helping the hegemon’s leadership. Since common interests can be social constructions not discoverable realities,
239
merely following up the leadership was not sufficient. That is, in articulating their
interpretive frameworks based on their own national interests, weak states need to
persuade the hegemon to take into account such alternative views. No one can claim
omnipresent knowledge. Thus, it is urgent to seek for the mechanism by which the
international society can bring forth collective wisdom. Untangling the intellectual
leadership of the hegemon was believed to be a good starting point for this purpose.
Hence, it is plausible to apply the model to those impaired countries such as
Thailand, Indonesia and Latin American countries. Since they also put their resentment
over U.S. power aside in order to overcome their economic crises, I believe that the
model can be a reliable interpretive framework for understanding their cooperation with
the hegemony. It is further possible to expand this model to international security and
trade regime in which the hegemon has induced weak states to support U.S. leadership.
For example, by adopting the notion of hegemon’s intellectual power, we can untangle the mechanism in which smaller states tend to abide by the Non-Proliferation Treaty
(NPT) that prevents them from developing nuclear deterrence. Similarly, I believe that weak states’ cooperation with the World Trade Organization (WTO) can be better
understood by taking the hegemon’s intellectual leadership into account.
In addition, since I focused on policy analysis and news, this model can be helpful
to extend the area of cultural studies to such “objective and scientific” knowledge. In
revealing the hegemon’s active involvement in the mass circuit of public knowledge from
production to mediation to consumption, it is also plausible to put the hegemon and its
affiliations such as organic intellectuals and professional communicators into the context
of international geopolitics. Thus it helps perceive, for example, U.S. think tanks and U.S.
240
media, as having a Janus-face that looks both outward to the world protecting national
interest and inward at their domestic territorial base promoting their special interests.
Moreover, in taking into account public diplomacy initiated by the hegemon, it is likely
to shed more light on social construction of reality. In other words, this model can
provide an interpretive framework for understanding how the hegemon mobilizes agents
such as smaller states and multinational organizations to sustain its leadership in spite of
growing foreign indebtedness and weakening economic competitiveness.
7-3: Limitations
There are at least four weaknesses in this dissertation. First of all, even though this model appeared to be well fit to South Korea, the assumption of South Korea as a prototype may be wrong. Especially, the analytic power of the intellectual leadership model may be varied by different regions or non-economic areas. Also, even though I sought to minimize subjectivity by employing a wide variety of data, coder reliability needed to be enhanced by employing independent coders. Thus, there may be difference particularly in determining media’s attitudes. Koreans’ understanding of the crisis along with attitudes should be supplemented by in-depth interviews as well as by further investigation into the structure of Korean public knowledge. Similarly, this dissertation is not free from data sampling bias. At least, it is clear that there may be missing research articles that can provide alternative frames. Since I predominantly depended on Korean media in identifying Korean intellectuals, lack of data representative can be criticized.
Also it is plausible to argue that the very assumption of Korea’s co-optation into U.S.
241 dollar hegemony may be exaggerated. Moreover, this dissertation needs to be improved by considering the role of the United State Information Agency (USIA), the other pillar of professional communicators, in exerting the leadership.
242
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APPENDICES
Appendix A: Coding examples of news articles (overall)436
Example 1: WSJ- 1, David Wessel,01/22/98, Treasury’s Rubin defends approach of U.S., Sources (cue-givers) Robert Rubin, Bill Clinton Causes Crony capitalism and moral hazard Solutions Lessons or implications Meta frame (comments) IMF is fine, but, needs to change (from Democratic David Bonior and Republican Lauch Faircloth), No mention on IMF’s relationship with Treasury (Too obvious)
Example 2: NYT (C-1, Louis Uchitelle), 01/29/99, Rethinking what’s driving the emerging market crisis, Sources (cue-givers) Lawrence Summers, Stephen S. Roach (Morgan Stanley), Barry Eichengreen, Paul Krugman , William Cline(Institute for International Finance) , Dani Rodrik (Harvard), Jeffrey Sachs (critical of IMF remedies), C Fred Bergsten (Institute for International Economics), Ricardo French-Davis (Chilean economist, UN) Causes Crony capitalism, bad banking system, lenders’ lack of prudence Solutions Financial sector reforms Lessons or implications To limit the flow of short-term capital flow; pursuing flexible exchange rates; introducing bankruptcy laws; standstill provisions in time of crisis (Chilean model) Meta frame (comments) Critical of IMF policies in time of crisis, but, still, hardly mention on structural problem of the international financial system let alone the rules of the game including IMF decision making processes
Example 3: Hankook Economic Daily, 10/04/02,International symposium. “Beyond the crisis,”, Sources Yoon-chang Jung (SNU), Kong-phil Choi (KDI-financial institution), Young-kwan Yun (SNU), In-joon Kim (SNU), Causes Korean economic model (especially chaebols) and market panic (Kong-phil Choi), Solutions IMF policy mistakes Lessons or implications Meta frame (comments) Part of political (base on the following quotation)
436 Bolded names refer to the cue-giver(s) in terms of providing authoritative opinions.
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“But, Young-kwan Youn criticized U.S., which exploited Korean crisis to execute Wall Street financial interest.” “Robert Rubin, particularly, reshaped Korean economic structure in line with U.S. model by pressuring further liberalization of financial and trade,”
Example 4: WSJ-A8, Peter Waldman & Lesile Lopez, 08/29/97, Southeast Asian markets: Sources (cue-givers) Mahatir, Peter Churchouse (Chase Manhatan- cue giver), Manu Baskaran (SocGen Crosby) Causes Solutions Lessons or implications Attitude Cynical (based on the following argument)
“Malaysia’s leadership is demonstrating a lack of reality about what is actually going on in the big wide world out there,” says Morgan Stanley’s Mr. Churchouse.
Example 5: FT-19, Martin Wolf, 05/19/04, Asia needs the freedom of its own monetary fund, Sources (cue-givers) Martin Wolf Causes Solutions Lessons or implications Attitude Positive (supportive based on the subsequent argument)
It makes no sense for a region with huge current account surpluses and foreign currency reserves to be so desperate to avoid international financial crises. The US should fee vulnerable instead. A step towards reducing the region’s perceived vulnerability would be to create a large Asian Monetary Fund.
Example 6: FT, 09/10/98, Nancy Dunne, Summers in financial crisis plea. Sources (cue-givers) Lawrence Summers Causes Crony capitalism Solutions Reforms, Lessons or implications Attitude Negative (cynical) based on the following quotation
"It would be a catastrophe if countries were to develop the idea that somehow withdrawing from the global system was right and that building the foundation for a market economy was wrong," he [Summers] told a Federal Deposit Insurance Corporation conference.
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Appendix B: Coding examples of news articles (divided by news organizations)
The New York Times (# 49)
* Media frame (# 23)
Technical frame Political frame Ambivalent (Unclear) Before 11 1 2 After 5 1 3 Total 16 2 5
* Attitude toward AMF, Mahathir and New Order
AMF (# 3) Mahathir(# 18) New international financial architecture (# 5) Before 0 # 6: 0 Antagonistic (5) ; Neutral (1) After Cynical (1) # 12: Skeptical (#4): unrealistic, no Neutral (2) Antagonistic ( 9) need for alternative order, agree : ; Neutral (3) with IMF reforms (without understandable, questioning U.S. leadership) descriptive Neutral (1: Michael Weinstein, story 09/10/98) # Attitude: antagonistic (cynical); neural (descriptive); supportive or cooperative
* Cue-givers (# 64)
Category Identification Frequency U.S. government officials Robert Rubin (Treasury Secretary) # 8 20 Larry Summers (Deputy Secretary of Treasury) # 5 Stanley Fischer (IMF deputy director) # 3 Daniel Tarullo (White House Advisor) # 2 Jack Boorman (IMF, Director of Policy Development) # 1 Alan Blinder (FRB, vice chairman) # 1
International Organizations Michael Camdessus (IMF director) # 1 6 (excluding U.S. officials) Joseph Stiglitz (World Bank) # 2 Barry Eichengreen (IMF, UC Berkeley) # 2 Herbert Neiss (IMF, Asia director) # 1 Non-profit institutions Albert Fishlow (Columbia) # 2 23 (think tanks & universities) C. Fred. Bergsten (IIE) # 3 Edward J Lincoln (Brookings Institution) # 1
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Dani Rodrik (Harvard) # 2 Jagdish Bhagwati (Columbia) # 1 Jeffrey Sachs (Harvard) # 4 Jeffrey E. Garten (Yale) # 2 Lawrence Krause (CFR member, UC San Diego) # 1 Morris Goldstein (IIE) # 1 Paul Krugman (MIT) # 4 Rudiger Dornbusch (MIT) # 1 Thomas L. Friedman (NYT) # 1 U.S. based private Kenneth Courtis (Deutche Bank) # 2 6 corporations Robert Hormat (Goldman Sachs) # 1 (Research analysts) Stephen Roach (Morgan Stanley) # 1 James Fiorillo (Barings) # 1 Whilliam Belchere (Merrill Lynch) # 1 Mark Mobius (Templeton Fund) # 1 Others Many economists # 2 9 Lim Chang Yeul (Korea, Minister of Finance) # 1 Ricardo French-Davis (Chile) # 1 Oh Ho Gun (South Korean economist) # 1 Charles Wyplosz (French scholar) # 1 Ali Alantas (Indonesian Foreign Minister) # 1 You Jong Keun (Korean chief economic advisor) # 1 Mahathir Mohamad (Malaysia Prime Minister) # 1
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The Washington Post (# 35)
* Media frame (# 16)
Technical frame Political frame Unclear (ambivalent) Before 9 0 1 After 3 0 3 Total 12 0 4
* Attitude toward AMF, Mahathir and New Order
AMF (# 3) Mahathir(# 8) New international financial architecture (# 8) Before None Antagonistic (3) After Neutral (1) Skeptical (1); Neutral (2) Cynical (2) Cynical (3); Cynical (5) Neutral (1) Supportive (1: William Greider, -mostly focus on 10/07/98) autocratic and political problem # Attitude: antagonistic (cynical or skeptical); neural (descriptive); supportive or cooperative
* Cue-givers (# 58)
Category Identification Frequency U.S. government James Wolfensohn (WB director) # 1 21 officials Shailendra Anjaria (IMF External Relation Director; Treasury secretary for IMF) # 2 Stanley Fischer (IMF, deputy director) # 3 Robert Rubin (Treasury) # 3 Larry Summers (Treasury) # 3 Daniel Taullo (White House Advisor) # 1 David Lipton (Treasury) # 1 Michael Mussa (IMF) # 1 Jack Boorman (IMF) # 2 Edwin M. Truman (Treasury) # 1 Clinton Administration official # 2 J.T. Young (Senate Republican Policy Committee) # 1 International Michael Camdessus (IMF director) # 4 8 Organizations IMF staff # 2 (excluding U.S. Joseph Stiglitz (WB) # 1 officials) Bijan Aghevli (IMF) # 1
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Non-profit institutions Adam Posen (IIE) # 1 14 (think tanks & C. Fred Bergsten (IIE) # 1 universities) Jacobo Rodriguez (CATO) # 1 Jeffrey Sachs (Harvard) # 2 Lawrence Krause (CFR member, UC-San Diego) # 1 Marcus Noland (IIE) # 1 Morris Goldstein (IIE) # 2 Rudiger Dornbush (MIT) # 1 Robert Samuelson (WP) # 2 Robert Solomon (Brookings Institution) # 1 William Greider # 1
Private corporations Arturo Porzecanski (ING Barings) # 1 8 (Research analysts) David Hale (Zurich Group) # 1 David Rothkoph (Newmarket Co.) # 2 Kenneth Courtis (Deutsch Bank) # 1 William Duldley (Goldman Sachs) # 1 Desmond Lachman (Salomon Smith Barney) # 1 Tim Condon (Morgan Stanley) # 1 Others Joseph Yam (Hong Kong) # 1 7 Eisuke Sakakibara (Japan) # 1 Miyazawa (Japan Finance Minister) # 1 You Jong-Kuen (Korea, economic advisor) # 2 Mohamad Mahathir (Malaysia) # 1 Azizah Ismail (Mr. Anwar’s wife) # 1
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The (Asia) Wall Street Journal (# 68)
* Media frame (# 14)
Technical frame Political frame Unclear(ambivalent) Before 6 1 (Stiglitz) 0 After 4 1 (Fukuyama) 2 Total 10 2 2
* Attitude toward AMF, Mahathir and New Order
AMF (# 17) Mahathir(# 20) New international financial architecture (# 17) Before Antagonistic (5) Antagonistic (7) Skeptical (3) Neutral (1) Supportive (0) After Cynical (5) Cynical (10) Skeptical (9) Neutral Neutral (4; Judy Shelton, (descriptive: 6) Neutral (3) 10/15/98 & 07/16/99; David Wessel, 03/02/99) Supportive (1: David Malpass, 12/31/01) # Attitude: antagonistic (cynical); neural (descriptive); supportive or cooperative
* Cue-givers (# 77)
Category Identification Frequency U.S. government officials Alan Greenspan (FRB) # 2 18 Jim Saxton (Rep. law-maker) # 1 Robert Rubin (Treasury) # 7 Larry Summers (Treasury) # 3 Stanley Fischer (IMF) # 5 Stanley Roth (State Department) # 1 Jack Kemp (vice presidential contender) # 1 Micheal Mussa (IMF) # 1 International Organizations Alassane Ouattara (IMF) # 1 12 (excluding U.S. officials) Barry Eichengreen (IMF) # 2 Michael Camdessus (IMF) # 1 David Williams (IMF) # 1 Joseph Stiglitz (WB) # 5 Hans Tietmer (Bundesbank President) # 1 Herbert Neiss (IMF) # 1 Non-profit institutions C. Fred Bergsten (IIE) # 4 24
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(think tanks & universities) Charles Wolf Jr. (Rand) # 2 Francis Fukuyama (Johns Hopkins) # 1 Jeffrey Sachs (Harvard) # 2 John Makin (AEI) # 1 Judy Shelton (DUXX, member of Empower America) # 3 Milton Freedman (Chicago) # 1 Morris Goldstein (IIE) # 2 Paul Krugman (MIT) # 4 Peter Kenen (Princeton) # 1 Rudi Dornbusch (MIT) # 1 Sebasitian Edward (UCLA) # 1 Steven Radelet (Harvard) # 1 Private corporations Alasdair Morrison (Morgan Stanley) # 1 12 (Research analysts) Barton Biggs (Morgan Stanley) # 1 David Malpass (Bear Stearns) # 1 David Roche (Independent Strategy) # 1 David Rockefeller (Chase Mahatan) # 1 Del Ricks (ABN Amro) # 1 Eric Miller (D.C. analyst) # 1 George Soros (Fund manager) # 1 Kenneth Landon (Deutsch Bank) # 1 Paul Dowling (Standard Chartered) # 1 Peter Churchhouse (Chase Manhatan) # 1 Stephen Roach (Morgan Stanley) # 1 Others Private sector economists # 1 11 Most economists # 1 Yoo Seung Min (Korea Development Institute) # 1 Kim Jong Seok (Korea, professor) # 1 Thanong Bidaya (Thailand) # 1 Somkid Jatusripitak (Thailand) # 1 Jose Isidro Camacho (Philippines, Secretary of Finance) # 2 Salil Tripathi (Malaysia journalist) # 1 Mohamad Mahathir (Malaysia) # 1 Dr. M. Anwar (Malaysia) # 1
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The Financial Times/ Economist (# 51)
* Media frame (# 15)
Technical frame Political frame Unclear Before 6 0 2 After 5 2 (Stiglitz; Sachs) 0 Total 11 2 2
* Attitude toward AMF, Mahathir and New Order
AMF (# 13) Mahathir(# 14) New international financial architecture (# 7) Before Antagonistic (2) Antagonistic (5) Neutral (2) Neutral (1) After Cynical (1) Cynical (3) Neutral (5) Neutral (6) Supportive (R. Neural (4) Positive (2: Alan Beattie, Mundell & 02/13/03; Jeffrey Sachs, Martin Wolf; 2) Supportive (1; 11/05/98) Clyde Prestowitz, 11/2/99) # Attitude: antagonistic (cynical, skeptical); neural (descriptive); supportive (positive, cooperative)
* Cue-givers (# 38)
Category Identification Frequency U.S. government officials Alan Greenspan (FRB) # 1 4 Larry Summers (Treasury) # 2 Timothy Geithner (Treasury) # 1 International Organizations Michael Camdessus (IMF) # 2 6 (excluding U.S. officials) Joseph Stiglitz (WB) # 1 Herbert Neiss (IMF) # 2 Vijay Kelkar (IMF) # 1 Non-profit institutions Christopher Lingle (National University, 11 (think tanks & universities) Singapore) # 1 Clyde Prestowitz (Economic Strategy Institute, former Reagan advisor) # 1 Enzo Grilli (IMF, Johns Hopkins) # 1 James Tobin (economist) # 1 Jeffrey Sachs (Harvard) # 3 Paul Krugman (MIT) # 1 Milton Freedman (Chicago) # 1
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Bernard Yeung & Yasheng Huang (MIT) # 1 Robert Mundell (Columbia) # 1 Private corporations Avinash Persaud (JP Morgan) # 1 9 (Research analysts) Chong Yoon Chou (Aberdeen Asset) # 1 Daniel Harwood (ABN Amro) # 2 David Hale (Zurich Group) # 1 Dominic Amstrong (ABN) # 1 Lim Say Boon (Crosby Corporate Advisory) # 1 Richard Samuelson (Warburg Dillon) # 1 Paul Schulte (ING Barings) # 1 Others Jang Ha Sung (Korea uni.) # 1 8 Kang Bong Kyun (Korean official) # 1 Takahoshi Ito (Hitotscubashi Uni.) # 1 Ichizo Ohara (Japan, law-maker) # 1 Kiichi Miyazawa (Japan, ) # 1 Ilkong Sa (Korea) # 1 Economists # 1 Lee Jung Soo (ADB) # 1
*** Please bear in mind the difference between political frame and counter-hegemonic frame; i.e., Sachs, Stiglitz, or similar reforms, though within U.S. leadership, needs to be counted as a kind of political.
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Appendix C: East Asians’ financing U.S. deficits
Appendix D: Economic recovery of East Asian countries
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Appendix E: Chronicle of the Asian crisis
Date Noticeable events July 27, 1997 Thailand asks for IMF emergency loan, following repetitive currency speculations led by Wall Street corporations such as Quantum Fund, Tiger Fund, Goldman Sachs, JP Morgan, Citibank and Morgan Stanley August, 1997 U.S. declines bilateral assistance to Thailand, while urging Thailand to implement IMF-led structural reform and austerity measures; Also, U.S. / British media reiterate the urgency of putting structural reforms along with IMF- advices into practice in order to restore market sentiment or investors’ confidence September 10, 1997 Japan proposes to set up Asian Monetary Fund to provide “collective financial security umbrella” September 17, 1997 Dr. Mahathir denounces currency speculators by singling George Soros out and urges greater regulation over international financial market at IMF meeting; In the mean time, U.S. Treasury and Federal Reserve Board started to lobby against the AMF October 30, 1997 Indonesia asks for emergency loan from IMF November 19, 1997 South Korea’s asking for direct, bilateral, help from U.S. and Japan was rejected by U.S. Treasury November 20, 1997 IMF and U.S. successfully abolished AMF proposal and so IMF remained as a key institution in dealing with Asian crisis November 22, 1997 South Korea asks for IMF emergency loan December 10, 1997 South Korea’s demand on early injection of $15 billion from U.S. and Japan was denied (The total injected money, at that time, was only $5.6 billion come from IMF) December 11, 1997 Moody’s downgrades credit rating on Korean bonds to closer to ‘junk’ status after downgrading Korean rating from A1 to A3 a few days earlier December, 1997 Malaysian government adopts IMF’s austerity measures including government spending-cut as well as deferring major investment projects December 24, 1997 Robert Rubin, U.S. Secretary of Treasury, initiates to set up a negotiation meeting with six major American banks, officials of the United States, Japan, and South Korea at the Federal Reserve Bank of New York April, 1998 U.S. Treasury invites G-22 members to “help strengthen the architecture of the international financial system” with IMF at the center May, 1998 General Suharto’s regime collapses, following nation-wide riot that killed more than 1,000 July, 1998 Malaysian government gives up selling national bonds with Moody’s and S & P’s downgrading Malaysian currency rating August, 1998 Russia currency (ruble) crisis followed by U.S. bailing Long Term Capital Management out
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September 1, 1998 Dr. Mohathir announces capital control and followed by removal of Deputy Prime Minister, Anwar Ibrahim who favored IMF policies September 14, 1998 Moody's cuts Malaysia's long-term foreign currency rating from Baa2 to Baa3 and followed by S&P’s downgrading September, 1998 U.S. president Bill Clinton set up an independent task force to improve global financial stability after near-collapse of Long Term Capital Management October 3, 1998 Japan proposes “New Miyazawa Plan” after the AMF proposal was shelved by U.S. and IMF November, 1998 Brazil currency (real) crisis November 15, 1998 Madeleine Albright, U.S. Secretary of State, met with Azizah Ismail, the wife of Malaysia’s ousted deputy prime minister, Anwar Ibrahim November, 1998 IMF Director, Michel Camdessus proposes an agenda toward “International Monetary and Financial Reform” December, 1998 Malaysian prime minister, Dr. Mahathir, urges ASEAN to find “a more suitable forum to discuss our [Asians] own needs” January, 1999 Official debut of the euro-a single European currency April, 1999 ASEAN financial officials urge “a more equitable international monetary system” and “greater transparency in the credit rating process” May-June, 1999 IMF & World Bank set up Financial Section Assessment Program (FSAP); G7 establishes the New International Financial Architecture (NIFA) that constitutes Financial Stability Forum (FSF) and G-20 September, 1999 Independent Task Force, sponsored by the Council on Foreign Relations, issues a report titled “The future of the international financial architecture” November, 1999 U.S. vice president, Al Gore, officially endorses ‘reformasi’ movement that demands the ouster of Dr. Mahathir at Kuala Lumpur March, 2000 The International Financial Institutions Advisory Committee (IFIAC), created by Congress in 1998, publishes "Meltzer Commission Report” May, 2000 ASEAN + 3 (Japan, China and South Korea) announce “the Chiang Mai Initiative” to improve regional financial cooperation November, 2000 Turkish currency (lira) crisis November, 2001 South Korea announces the end of IMF guardianship by paying IMF loan off December, 2001 Argentine currency (Peso) crisis, following IMF’s decision on severing promised loan; Turkey receives IMF loan instead August, 2002 Uruguay currency (New Peso) crisis January, 2005 C. Fred Bergsten, one of the most influential figures of U.S. foreign economic policy reiterates the critical impact of “Asia - only arrangements” on U.S. national interest
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February, 2005 ASEAN +3 set up a new organization called the Asian Bellagio Group to help stabilize Asian currency market as a counterpart of the G-7
Appendix F: Chronicle of the Asian Monetary Fund
Date Events in point August, 1997 : U.S. declines bilateral assistance to Thailand; Instead, U.S. urged Thailand to follow IMF-prescribed structural reform and austerity measures September 10, 1997 : Japan initiated Asian Monetary Fund to provide appropriate liquidity for the affected Asian countries September 17, 1997 : U.S. Treasury and Federal Reserve Board initiated to lobby against the AMF proposal; Tim Geithner & Ted Truman were dispatched to East Asia November 20, 1997 : IMF and U.S. successfully abolished AMF proposal; IMF remained as a key institution in dealing with Asian crisis October 3, 1998 : Japan proposes “New Miyazawa Plan” that includes an aid package of $ 30 billion for affected Asian economies; U.S. tacitly admits this proposal after Japan agreed with IMF’s Brazilian rescue plan May, 2000 ASEAN + 3 (Japan, China and South Korea) announce “the Chiang Mai Initiative” to improve regional financial cooperation Feb., 2005 ASEAN +3 set up a new organization called the Asian Bellagio Group to help stabilize Asian currency market as a counterpart of the G-7
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Appendix G: Malaysia’s alternative approach
Date Events in point September 17, 1997 Dr. Mahathir denounces currency speculators such as George Soros and urges greater regulation over international financial market at IMF and World Bank meeting at Hong Kong October 16, 1997 U.S. Federal Reserve Chairman Alan Greenspan publicly dismisses Dr. Mahathir’s claim on speculators and capital regulation October 30, 1997 Indonesian governments asks for IMF emergency loan November, 1997 APEC leaders assure IMF leadership and dismiss Dr. Mahathir’s demand on capital regulation: AMF proposal was officially shelved December, 1997 Malaysian government adopts IMF’s austerity measures including government spending-cut and deferring major investment projects May, 1998 General Suharto’s regime collapses, following nation-wide riot that killed more than 1,000 July, 1998 Malaysian government gives up selling national bonds with Moody’s and S & P’s downgrading Malaysian currency rating September 1, 1998 Dr. Mohathir announces capital control and deputy prime minister ,Anwar Ibrahim, was charged for corruption and misdemeanor in following days September 14, 1998 Moody's cuts Malaysia's long-term foreign currency rating from Baa2 to Baa3 and followed by S&P’ November 15, 1998 Madeleine Albright, U.S. Secretary of State, met with Azizah Ismail, the wife of the country's ousted deputy prime minister, Anwar Ibrahim. August, 1999 Dr. Mahathir announces that capital control was successful and it was endorsed by remarkable economic recovery since 1999 November, 1999 U.S. vice president, Al Gore, officially endorses ‘reformasi’ movement that demands the ouster of Dr. Mahathir at Kuala Lumpur August 27, 2001 IMF reports that Malaysia's recovery in 1999–2000 was among the strongest of the Asian crisis economies
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Appendix H: U.S.-led orthodox approach to the NIFA
Date Events in point July 1995 G-7 leaders call for a number of measures for global financial stability after Mexico peso crisis. It includes better economic and financial data and provision of greater resources to IMF April, 1998 U.S. Treasury invites G-22 members to “help strengthen the architecture of the international financial system” with IMF at the center September, 1998 U.S. president Bill Clinton set up an independent task force to improve global financial stability after near-collapse of Long Term Capital Management October, 1998 G-22 publicizes a report focused on 1) enhancing transparency and accountability; 2) strengthening financial systems, and 3) managing global financial crises November, 1998 IMF director Michel Camdessus proposes an agenda toward “International Monetary and Financial Reform February, 1999 Senior IMF advisor, Barry Eichengreen, publishes a proposal titled “Toward a new international financial architecture: A practical post-Asia agenda” May-June, 1999 IMF & World Bank set up Financial Section Assessment Program (FSAP); G7 establishes the New International Financial Architecture (NIFA) that constitutes Financial Stability Forum (FSF) and G-20 September, 1999 : Independent Task Force, sponsored by the Council on Foreign Relations, issues a report titled “The future of the international financial architecture” March, 2000 : The International Financial Institutions Advisory Committee (IFIAC), created by Congress in 1998, publishes "Meltzer Commission Report” July, 2000 IMF identifies key reform agenda including “improving transparency, developing international standards, strengthening financial sector, involving private sectors and modifying IMF financial facilities
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Appendix I: Unorthodox approach to the NIFA
Date Events in point September 10, 1997 Japanese deputy financial minister, Eusike Sakakibara, proposes to set up Asian Monetary Fund to provide “collective financial security umbrella” October 3, 1998 Japan proposes “New Miyazawa Plan” after the AMF proposal was shelved by U.S. and IMF objection December, 1998 Malaysian prime minister, Dr. Mahathir, urges ASEAN to find “a more suitable forum to discuss our [Asians] own needs” January, 1999 Kiichi Miyazawa’s, Japanese financial minister, proposal of “a tricurrency system with the Euro and yen joining with the dollar” rejected by U.S. January, 1999 The Economic Commission for Latin America and the Caribbean (ECLAC) urges fundamental reform of the global financial architecture and criticizes Western-dominated approach that failed to raise questions about “the rules of the game” April, 1999 ASEAN financial officials urge “a more equitable international monetary system” and “greater transparency in the credit rating process” March, 2000 Robert Mundell, the Nobel laureate in economics, urges Asians “to create a regional fixed exchange rate mechanism – at the same way that Europe had done with the euro.” May, 2000 ASEAN + 3 (Japan, China and South Korea) announce “the Chiang Mai Initiative” to improve regional financial cooperation August, 2000 Countries such as Malaysia, China, Indonesia, Pakistan, Korea and Japan criticize lack of global financial reform and urges to correct imbalance between the developed and developing countries September, 2000 Lamberte, M.B, president of Philippines Institute of Development Studies, presents Asian and developing countries’ view on new international financial architecture (see below) April, 2001 UNCTAD criticizes IMF-centered financial reform and urges to change the rules of the game (See the following for detail)
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Appendix J: Chronicle of South Korean crisis in 1997
Date Events in point February, 1994 Korean government announces “Capital Liberalization Plan” for the purpose of obtaining OECD membership December 3, 1994 South Korean President Y.S. Kim orders to close the “Korea Economic Planning Board” with pressure from U.S. December 12, 1996 South Korea joins OECD as a 29th member July, 1997 Thai baht crisis begins and soon spread over neighboring East Asian countries including South Korea in November 1997 September 30, 1997 South Korean Finance Ministry publicizes, “Current account deficits will be improved from $23.7 billion in 1996 to $15.0 billion in 1997” November 19, 1997 South Korea’s asking for direct, bilateral, help from U.S. and Japan was rejected by U.S. Treasury. November 20, 1997 Japan’s proposal of Asian Monetary Fund was officially disregarded at Asia Pacific Economic Cooperation with U.S. and IMF opposition November 22, 1997 South Korea asks for $60 billion emergency loan from IMF December 2, 1997 IMF announces $57 billion bailout plan ($21 billion directly from IMF and $25 billion from G11 countries December 10, 1997 South Korea’s demand on early injection of $15 billion from U.S. and Japan was denied (The total injected money, at that time, was only $5.6 billion come from IMF) December 11, 1997 Moody’s downgrades credit rating on Korean bonds to closer to ‘junk’ status after it downgraded Korean rating from A1 to A3 on November 28, 1997 December 12, 1997 South Korea’s sovereign risk rating was downgraded by Thomson Financial Services; Debt ratings of Korean conglomerates were downgraded by Standard & Poors as well December 13, 1997 Japan’s initial agreement on earlier delivering $10 billion was called off by pressure from Washington that demanded further concession from South Korean government December 14, 1997 Three candidates in Korea’s presidential election officially pledge to keep IMF terms December 18, 1997 Kim Dae Jung was elected as new South Korean President December 24, 1997 U.S. agrees to rapid $10 billion infusion—including $3.3 billion from Japan, $2 billion from IMF, and contributions from a variety of European nations; Robert Rubin, Secretary Treasury, set up a negotiation meeting with six major American banks, officials of the United States, Japan, and South Korea at the Federal Reserve Bank of New York. August, 2001 IMF graduation
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Appendix K: Key index for Korean economic fundamentals
1990 1991 1992 1993 1994 1995 1996 1997 GDP 9.5 9.1 5.1 5.8 8.6 8.9 7.1 5.5 External 29.3 27.8 28.6 29.0 29.8 32.8 33.1 29.6 Debt Service Current -0.9 -3.0 -1.5 0.1 -1.2 -2.0 -4.7 -1.8 account balance Net fiscal 1.5 1.7 0.6 0.6 0.3 0.6 0.5 -1.4 balance Official 2.5 2.0 2.5 2.9 3.0 2.9 2.6 1.6 reserves/imp orts (in months) (Source: Asian Developing Bank, Asian Development Outlook; IMF, International Financial Statistics)
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Appendix L: Korean cue-givers and Ph.D. degree institution (# 56)
Name Institution (major) Frequency Ann, Choong Young Ohio State University (Economics) 1 Ann, Kook Shin Univ. of Minnesota (Economics) 1 Chang, She Jin Univ. of Pennsylvania (Management) 1 Cho, Ha Yeon Univ. of Chicago (Economics) 1 Choi, Jong Moo New York University (Finance) 1 Choi, Kong Phil University of Virginia (Finance) 1 Hong, Ki Taek Stanford University (Economics) 2 Jang, Ha Sung University of Pennsylvania (Finance) 3 Jeon, In Young University of Cincinnati (Political Science) 1 Jung, Sung Bae Paris University (Sociology) 1 Jung, Oon Young University of Louvain-Belgium (Economics) 3 Jung, Woon Chan Princeton University (Economics) 5 Jwa, Sung Hee Univ. of California Los Angeles (Economics) 2 Kim, In June Harvard University (Economics) 2 Kim, Kyeng Soo University of Pennsylvania (Economics) 1 Kim, Kyu Hyung University of Michigan (Management) 1 Kim, Young Ho Osaka State University – Japan (Economics) 1 Kim,Wan Soon Harvard University (Economics) 1 Kyun, Young June University of Pennsylvania (Economics) 1 Lee, Chan Keun Navarra University-Spain (Economics) 2 Lee, Chang Young Harvard University (Economics) 1 Lee, Han Koo Kansas State University (Economics) 2 Lee,Jong Hwa Harvard University (Economics) 1 Lee, Hong Jong University of Cincinnati (Economics) 1 Park, Soon Bun Korea Foreign University-Korea (Economics) 2 Park, Jae Ha Pennsylvania State University (Economics) 1 Park, Se Il Cornell University (Economics) 1 Park, Young Chul Univ. of Minnesota (Economics) 1 Park, Yune shik Texas A & M University (Economics) 1 Pyo, Hak Kil Clark University (Economics) 1 Rhee, Sung Sup New York State University (Economics) 1 Ryu, Jang Hee Univ. of Texas A & M (Economics) 1 Ryu, Suk Choon University of Illinois (Sociology) 1 SaKong, Il Univ. of California, Los Angeles (Economics) 2 Son, Ho Chul University of Texas (Political Science) 1 Song, Bok Seoul National University (Sociology) 1 Son, Jung Shik Southern Methodist Univ. (Economics ) 1 Ywang, Yune Jong Yale University (Economics) 2 Yune, Young Kwan Johns Hopkins University (Political Science) 1 Yune, So Young Seoul National University (Economics) 1 Total 56
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Appendix M: Cue-givers in Korean media (total)
Category Identification Frequency Korean government officials Kim Dae Jung (Korea President) # 1 6% Kim Jong Phil (Korea Prime Minister) # 2 (13/201) Kim Tae Dong (President advisor) # 1 Lee Hyun Jae (Finance Minister) # 1 Lee Kyu Sung (Finance Minister) # 1 Jung Duk Koo (Finance official) # 2 Government official # 1 Kim Jong In (President advisor) # 1 Kang Kyung Shik (Finance Minister) # 1 Park Sung June (Korea Bank) # 1 Yang Sung Chul (Ambassador) # 1 Korean intellectuals at think Ann Choong-Young (Joongang Univ.) # 1 35% tanks, universities and Ann Kook Shin (Joongang Univ.) # 1 (71/201) private research centers Chang Se Jin (Inha Univ.) # 1 Cho Ha Yeon (Yonsei Univ.) # 1 Choi Jong Moo (Temple Univ.) # 1 Choi Kong Phil (KDI) # 1 Choi Yong Shik (economist) # 1 Hong Ki Taek (Joongang Univ.) # 2 Jang Ha Sung (Korea Univ.) # 3 Jwa Sung Hee (Korea Free Enterprise) # 2 Jung Sung Bae (Paris Univ.) # 1 Jeon In-Young (SNU) # 1 Jung Tae- In (Seoul Social Science) # 1 Jung Yoon Chan (Seoul National University) # 5 Jung Oon-Young (Kyungki Univ.) # 3 Kim In-June (SNU) # 2 Kim Kyeng Soo (Sunggyunkwan Univ.) #1 Kim Kyu-Hyung (Joongang Univ.) # 1 Kim Ywan Soon (Korea Univ.) # 1 Kim Young Ho (Kyungbook Univ.) # 1 Korea (Economic) Development Institution # 5 Korea Institute of Finance # 2 Kyun Young June (Kyonghee Univ.) # 1 Lee Chan-Keun (Inchon Univ.) # 2 Lee Chang Yeung (SNU) # 1 Lee Han Koo (DERI) # 2 Lee Jong Hwa (Korea Univ.) # 1 Lee Hong Jong (Bookyoung Univ.) # 1 Lee Sung Sup (Soongsil Univ.) # 1 Park Bun Soon (SERI) # 2
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Park Jae-Ha (Korea Financial Institution) # 1 Park Se Il (SNU) # 1 Park Yun Shik (Washington Univ.) # 1 Park Young-Chul (Korea Univ.) # 1 Pyo Hak Kil (SNU) # 1 Ryu Jang Hee (Ewha Womens’ Univ.) # 1 Ryu Suk Choon (Yonsei Univ.) # 1 Sa Kong Il (Institute for Global Economics) # 2 Son Ho- Chul (Seogang Univ.) # 1 Son Byung-Doo (National Business Association) # 1 Song Bok (Younsei Univ.) # 1 Son Jung Shik (Hanyang Univ.) # 1 Ywang Yoon Jong (KIEP) # 2 Yune Young Kwan (SNU) # 1 Yune So Young (SNU) # 1 Daewoo Economic Research Institution # 2 Samsung Economic Research Institution # 2 LG Economic Research Institution # 1 Hyundai Economic Institution # 1 Officials (economists) at Alan Greenspan (FRB) # 1 16% U.S. government, IMF & Donald Greg (Korea Ambassador) # 1 (33/201) W.B. Kim Se Jik (IMF economist) # 1 Herbert Neiss (IMF) # 2 James Wolfenson (WB) # 1 James Leach (Republic, law-maker) # 1 Joseph Stiglitz (WB) # 2 Michael Camdessus (IMF) # 3 William Shaw (WB, former official at Department of Agriculture) # 1 Larry Summers (IMF) # 3 Horst Koeler (IMF Director) # 1 IMF report # 2 IMF official # 3 M. Albright (State Department) # 1 Robert Rubin (Treasury) # 1 Stanley Fischer (IMF) # 7 State Department Official # 1 U.S. Congress # 1 U.S. –residing experts Alis Amsden (MIT) # 1 (49/201) including private analysts C. Fred. Bergstein (IIE) # 3 Christopher Lingle (National Univ. of Singapore; Korea Times editorial board) # 4 Dani Rodrik (Harvard) # 1
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Donald C. Hellman (Univ. of Washington) # 1 Fareed Zakaria (Foreign Affairs) # 1 Fransis Hukuyama (Johns Hopkins) # 1 Jagdish Bhagwati (Columibia) # 1 Jeffrey Sachs (Harvard) # 7 Laura D. Tyson (UC Berkeley) # 1 Lawrence Krause (UC San Diego) # 1 Matin Feldstein (Harvard) # 5 Morris Goldstein (IIE) # 1 Paul Krugman (MIT) # 6 Paul Samuelson (MIT) # 1 Richard Feinberg (UC San Diego) # 1 Robert Mundell (Columbia) # 1 Rudig Dornbusch (MIT) # 3 Davis Williams (Alliance Capital) # 1 George Soros (Soros Fund) # 2 Kenneth Courtis (Deutsch Bank) # 2 Stephen Roach (Morgan Stanley) # 1 Kris Tinker (ING Barings) # 1 Bank of America Report # 1 Saloman Brothers Report # 1 U.S./British media New York Times (Thomas Freeman) # 5 19/201 The International Herald Tribue (William Paff) # 1 LA Times # 1 Washington Post (Jim Hoagland) # 2 Financial Times # 2 The Times # 1 The Economist # 3 The Bloomberg # 1 The Wall Street Journal # 2 The Business Week # 1 Asian officials E. Sakakibara (Japan Deputy Finance) # 5 12/201 Egie Ogawa (Japan official) # 1 Mohamad Mahathir (Malaysia Prime Min.) # 4 Robert de Ocampo (Philippine Finance) # 1 Sanada Yukimis (Japan) # 1 Others De Bernis (France) # 1 4/201 Robert Wade (LSE) # 1 Sen Yamaia (Cambridge Univ.) # 1 Yomioi/ Nikkei (Japan paper) # 1 Total 201/201
SUNG-HAE KIM
101 White Course Dr. Holderman Hall, University Park, PA, 16802
Education:
Ph. D. The Pennsylvania State University, PA, December 2005. Dissertation title: Educating public opinion: U.S. dollar hegemony in the age of global news media.
MA, Political Science, University of Georgia, GA, December 2002. Thesis title: U.S. dollar policy and modern currency crises: How is U.S. dollar policy associated with recurrent financial crises?
MA, Journalism and Mass Communications, University of Georgia, GA, May 2001. Thesis title: The Korean economic crisis: Analyzing the performance of the elite financial press.
BA, Journalism and Mass Communications, Yonsei University, South Korea, Feb. 1994.
Work experiences:
Teaching assistant, The Pennsylvania State University, PA, 2003-2005.
Stock dealer, Dongbu Security Company, South Korea, 1995-1998.
Conference presentation:
Sung-Hae Kim. (May, 2003). The Korean economic crisis: analyzing the performance of the elite financial press. Annual conference of the International Communication Association (ICA), San Diego, CA.
Sung-Hae Kim. (February, 2004). The news media and national economic interests: implications for international public sphere. The Michigan Graduate Student Conference, Ann Arbor, MI.
Award:
Sung-Hae Kim. (October, 2004). The politics of the news media: a comparative analysis of media coverage over the federal budget deficit. The Graduate Student Exhibition at the College of Communications, University Park, PA.