To paraphrase William Blake’s gripping poem, tiger economy burning bright, what immortal hand or eye has framed thy fearful symmetry? Interestingly enough, the go-to answer these days involves a forelimb of sorts. Specifically, the invisible hand of the market. Is that all to the monolithic success story of East Asia, or is there more to it? Joe Studwell, in his book How Asia Works: Success and Failure in the World’s Most Dynamic Region?, attempts to provide a nuanced answer. The author articulates why some countries in the region boom while others stagnate. The success formula provided by the author involves three essential ingredients – agriculture, manufacturing, and finance – which are alluded to in a table of contents and particularized in the main chapters. Given the notorious intractability of the question, it is a high time for a book like that to emerge and illuminate the issue. This paper aims to provide a concise summary of the key arguments deployed by Studwell and assess their validity. The main assertion of the book review is that despite several inconsistencies and omissions, the three-pronged analytical approach used by the author is fairly effective in the elucidation of the Asian Miracle.
Summary of How Asia Works Analysis
Studwell offers the most comprehensive analysis to date on why the dramatic growth of several Asian economies occurred in less than half a century. His examination of the remarkable transformation of East Asia provides the basis for the evaluation of challenges facing underperforming economies of the region and for drawing valuable implications for the rest of the globe.
Four countries fell under the lens of the author’s analytical microscope: Japan, South Korea, Taiwan, and China. Studwell posits that per capita GDP of the countries grew twice as fast as that of other regional economies in the period between 1965 and 1990. To put the East-Asian record of success into perspective, the writer contrasts it against the historically slow economic development of the world, thereby emphasizing the scope of the “economic miracle.” In the author’s estimation, it took the industrial countries of Europe more than 400 years to demonstrate the increase in per capita income attained by East Asia in less than 50 years.
Studwell offers a three-pronged analytical approach to account for the dramatic transformation of the countries. The writer maintains that the booming economy was spawned by the agricultural reform and the labor-intensive farming following it, rapid industrialization fueled by agricultural surpluses, and financial backing of the growth.
How Asia Works Discussion Questions
Before engaging in the in-depth analysis of the chief arguments posited by Studwell, an example of his writing is in order: “Deregulation policies do not empower a ‘natural’ tendency for finance to lead a society from poverty to wealth, they simply put short-term profit and the interests of consumers ahead of developmental learning and agricultural and industrial upgrading” (Studwell, 2014, p. 97). Quotes like that can serve as a basis for class discussion. For instance, students can be asked whether the weakening of government power in the financial sector creates more or less competition. Other discussion questions might involve the role of government intervention in the fueling of economic growth.
Critique of How Asia Works
In his analysis of Asian tigers, Studwell focuses on, inter alia, the three most fundamental drivers of economic growth: 1) the emergence and the consequent accumulation and use of large agricultural surpluses; 2) the implementation of competitive industrial policies; 3) the deployment of financial boosters for the first two drivers. It can be argued that had the writer stopped his investigation there, the book would be a serviceable analysis of the rapid economic development. Unfortunately, the author has succumbed to the siren song of regulatory economics, which is evidenced by the argument that illiberal policies of East Asian super achievers are superior to “neo-classical ‘efficiency’ economics” christened by him as tyrannical (Studwell, 2014, p. 112). The deployment of the political new speak in the economic analysis resembles the argumentative approach taken by Washington pooh-bahs. Furthermore, his stance is eerily reminiscent of the long-disproved notion that poor economies can prosper by using a well-trodden route and training offered by well-to-do economies. By denouncing laissez-faire economics, Studwell proffers an alternative view of the Asian success story, the extent of the misreading of which is yet to be ascertained. For this reason, some criticism is in order.
Studwell habitually neglected the cost of regulatory policies implemented by the Asian economies in question. In the case of China, he downplays the negative repercussions of the land redistribution preceding the Great Leap Forward and glosses over the reform’s casualties the numbers of which reached into millions. Studwell’s line of inquiry abruptly dropped after the discussion of the countryside investments in Taiwan under Japanese rule in the 1940s. The author seems to be strangely uncurious about moderate alternatives to the implemented policies. Two obvious examples would be the stronger protection of property rights and the introduction of tax cuts it rural Taiwan. Likewise, Studwell focuses on import-protectionism and the resulting GDP spikes without stopping to consider…