1. Max Herzog
Can Mercantilist Development Restructure Global Hierarchy?
A Case Study of the Interplay of Geopolitics and Economic Development in South Korea
Introduction
Power differences between nations construct hierarchical relationships which
structure and regulate state political-economic behavior. While state power has,
historically, been gauged in terms of military clout, national identity, or political
coherence, the rise of the global capitalism has elevated capital accumulation as a central
measure of stature. Discourse about economic “growth” or “development” have often
replaced conversations about geopolitical power (at least, as this concept was deployed
during the age of World Wars). It is not uncommon to refer to a “hegemonic power” (i.e.
a force that defines the shape of the world hierarchy) that exerts its influence through
almost solely economic means. Indeed, Immanuel Wallerstein goes so far as to claim that
modern states “have been located in a hierarchy of effective power which can be
measured neither by the size and coherence of their bureaucracies and armies, nor by
their ideological formations about themselves but by their effective capacities of
accumulated capital within their borders as against those rival states” (Wallerstein 1983).
He posits this hierarchy as the World-Capitalist System.
While the concept of world capitalism has been an increasingly popular one
amongst social scientists of all fields, models of this system’s internal dynamics are hotly
debated. World-systems theorists, interdisciplinary social thinkers who follow the

2. tradition of Wallenstein, often posit the global capitalist hierarchy as a self-reinforcing
and thus static system. Neoliberals, thinkers who endorse a market-based model of
development widely deployed by the world-capitalist hegemony, posit the system as
fluid, allowing for nations to rise and fall in status based on the competitiveness of their
economies.
South Korea provides a fascinating case study for the role that capital
accumulation plays in the global hierarchy dynamics. More specifically, its meteoric rise
in economic stature raises questions about what conditions prompt explosive
development and whether even this level of accumulation is sufficient for a nation to
develop its power relative to the hegemony. Heterodox economist and Korean native Ha-
Joon Chang presents an intriguing take on these questions, as well as his broader
understanding of the world capitalist system, in his 2008 publication Bad Samaritans.
In Chang’s view, South Korea’s history presents a model of development that
resists the coercive and exploitative structural imperatives that are an inherent part of the
neoliberal approach. For him, neoliberalism ensures that less powerful states develop
very little, if at all, compared to more powerful hegemonic entities. By insulating itself
from the effects of these neoliberal imperatives with mercantilist political-economic
policies, Chang claims that Korea freed itself from them, managing to develop not just its
economy, but its power relative to other states.
While this account may fill us with hope for the future of a more equitably
structured, or at least less static, world-capitalist system, it is, unfortunately, undermined
by an expansion of the scope of inquiry beyond South Korea’s borders. By examining
both the regional historical (Japanese Imperialism) and contemporary geopolitical (U.S.

3. containment policy) context through a world-systemic lens, the analysis presented here
shows that Chang ignores important world-systemic factors which reveal that Korea’s
rise was, in fact, both rooted in empire and directly engineered by hegemonic forces and
could never undermine or replace the current world-capitalist hierarchy.
Neoliberalism
Before we can understand Chang’s argument, we must have some discussion of
the popular theoretical framework which he critiques. Much of his version of Korea’s
development is focused on the nation’s opposition to Neoliberalism. This term has
become increasingly popular in recent years, bandied about by politicians and analysts,
activists and observers across the political spectrum. Indeed, this concept is essential to
any understanding of social and environmental issues in the globalizing world. However,
different thinkers and actors often define neoliberalism in different ways, sometimes so
different that its deployment can be limiting and obfuscating. I believe that this concept,
as used by Chang, can be divided into two distinct, but mutually supporting phenomena:
“ideological” (which he rejects as false) and “practical” (which he wants to resist
politically) neoliberalism. Though I draw on a few other authors in my attempt to flesh
out these concepts, I believe I stay true to Chang’s understanding of them.
Ideological Neoliberalism: The Lie of Development
At its root, ideological neoliberalism is (as might be assumed with a Marxist
interpretation of its name) a worldview that is deployed by hegemonic forces to justify,
through a system of conscious and unconscious valuations and ideals, the hierarchical

4. political-economic status quo (Chang 2008). The base ontology of neoliberal theory,
descending from the Lockean liberal tradition, views humanity as an idealized collection
of isolated rational actors with strong fundamental rights (often termed Homus
economicus) (Chang 2008, Gilpin 2001). These actors make decisions based purely on a
monistic (i.e. all things valued in the same way or on the same scale), utilitarian self-
interest exogenous of all social, historical, and environmental influences (Goudy and
Erickson 2005). As all atomized humans are rational and self-determining in this way, the
aggregate of their individual choices, in the absence of some distorting force that
compromises their rights, always naturally reach equilibria that produce optimal (i.e.
most efficient) outcomes for their existence as a collective on any scale of analysis
(Gilpin 2001).
This social extrapolation of the Homus economicus ontology, when deployed as a
normative discourse, often justifies “liberal” or “free market” economics: a system of
interlocking markets where prices are determined purely by supply and demand,
independent of government control or unfair monopoly (Chang 2008). Domestically,
endorsement of a market economy necessitates a political agenda that consists of radical
privatization, industry deregulation, and reduction in government spending. In a
globalized world, this theory calls for the death of state-centric economics (the
elimination of state support for domestic industries and the dissolution of economic
boundaries between states) as a necessary requirement for the ideal world order.
David Loy observes that the discourse of markets has become so successful that it
is hardly ever questioned anymore. “Rational action” and “free trade” are widely viewed
as natural law rather than social construct, despite the long, prestigious tradition of social

5. scientific study to the contrary (Weber, Polanyi, etc.)(Loy 2015). Ideological
neoliberalism has effectively defined the shape of the global political-economy,
legitimizing the claim that economics should determine politics.
Chang sees the incredible degree of this discursive success embodied in a (largely
false and wholly idealized) historical narrative of last three centuries, used widely
throughout the course of globalization to justify the preservation and expansion of the
political-economic status quo, despite the abundance of evidence that undermines its
validity. It tells of the emergence of liberalism in 18th
century Britain. The policies of
free-trade and competition enacted during this period were so successful that other
nations allegedly began to imitate them of their own accord. Liberalism eventually
became so popular that a new world-order was essentially perfected, under the control of
British hegemony, by 1870. The result was a period of unprecedented global prosperity
and happiness that probably would have lasted forever if it hadn’t been interrupted by
two world wars. Post WWII, the neoliberal system emerged, spearheaded by American
hegemony, to fight for the resurrection of this edenic liberal era. The collapse of
communism and the spread of free-market economics to the “third-world” were
undeniable signs that success is nigh, all that the world needs to do is keep liberalizing.
(Chang 2008)
Practical Neoliberalism: The Hard Truth of Growing Inequality
Chang has dramatically different account of recent history, what he thinks a much
more realistic one. His story is full of coercion and suffering, exploitation and uneven
playing fields. He sees ideological neoliberalism as anything but a natural law. Rather, it

6. is a discursive weapon, a justifying force for a model of development that reinforces the
status quo of the world-capitalist hierarchy. He is more concerned with the politics of this
model, what I call “practical neoliberalism,” than its more abstract counterpart.
Practical neoliberalism can be thought of as having two parts: political and
structural. Political neoliberalism is the political-economic agenda (and, Marxists like
David Harvey would say, the class project) of power accumulation advanced by a global
elite that Chang calls the “Financial-Intellectual Complex.” Structural neoliberalism is
the mobilization and institutionalization of that power across the global hierarchy for the
purpose of assurance of future accumulation. For all intents and purposes, these two
concepts can be conflated: one is the elite’s will to greater power and the other is the
method of its satisfaction. While it is difficult to point to members of this elite, Chang
definitely centers it on the hegemonic power at the nexus of business and government in
the United States. It is the direction that this hegemonic coalition of geopolitically
powerful state governments, international corporations, multilateral financial institutions,
and “academic ideologues” takes world capitalism that Chang considers responsible for
many of the ailments of the developing world. (Chang 2008, Gilpin 2001)
While market deregulation is a large part of the practical neoliberal agenda,
Chang recognizes this deregulation as fundamentally predatory rather than equalizing or
“free.” Instead of a universal deregulation where all states and groups trade with each
other on equal footing as autonomous individuals, practical neoliberalism always wants
to pair the deregulation of vulnerable developing nations with powerful market protection
for powerful developed ones, creating fundamentally unequal trade relationships. These
unfortunate arrangements are pushed by the global elite through a combination of

7. coercive foreign aid and finance packages, distorted market mechanisms, unfair trade
agreements, and cultural warfare. For Chang, and many others, a simplified version of the
process often plays out like this:
1. Developed governments and/or international finance organizations offer
developing countries desperately needed funds and resources, either framed as
altruistic aid or simple investment. This offer is qualified with one-sided
requirements to reduce or eliminate taxes on imported foreign goods, limits on
exports, limits on foreign ownership of domestic firms, subsidies for domestic
industries and all other barriers to foreign capital flow and supports for
domestic industry.
OR
Developed governments force the previously stated changes on developing
countries using more explicit economic or military coercion.
2. Developing governments accept the proposed terms either out of desperate
need for resources, fear of sanction, or inculcated cultural fascination with the
promises of ideological neoliberalism.
3. Developing countries find themselves totally unable to compete with the more
advanced and protected industries of developed countries. They find their
industries bought up by foreign capital. With their own economies out of their
control, developing countries find themselves stuck on the lowest rungs of the
product cycle while developed countries profit. They are relegated to basic

8. production functions at extremely low wages with only the slowest and most
painful of escape options open to them.
(Chang 2008, Gilpin 2001, Stiglitz 2002)
By pushing the practical neoliberal agenda, the groups that wield the most
geopolitical power continue to accumulate more as they weaken their victims. Even when
developing nations develop higher standards of living and bolstered economies by
playing along with the rules of the global elite, their gains are always paltry compared to
those at the top. Thus, contrary to the ideological neoliberal claims that liberalization
“raises all boats” (i.e. that markets create the optimal outcomes for everyone), the reality
is a zero-sum game that developing countries always lose. Even as a country “advances,”
its global power is diminished. Not only do the global elite always, in the end, become
more powerful, the very process of power accumulation reinforces the institutional
structures (i.e. legitimacy of international financial institutions, structure of global trade
agreements, etc.) that enable them to constrain the outer limits of international
economics, politics, and security relationships, further streamlining the process.
Such self-perpetuating domination is the definition of hegemonic hierarchy, not
the condition for equality. Peter Evans sums up this situation by claiming that “we don’t
live in a neoliberal world at all. We live in a pseudo liberal world where powerful nation
states in general, and the United States in particular, pursue mercantilist and imperialist
policies at the expense of both economic rationality and equitable world order.” It was
this trap of a false and unfair neoliberal hegemony that Chang claims South Korea sought
to resist. (Chang 2008, Gilpin 2001, Evans 2008)

9. The Perfect Mercantilist State
Chang’s Account: How Korea Escaped Neoliberalism
Growing up, Chang watched as two successive military governments pushed the
South Korean people, kicking and screaming in some cases, through an extremely
demanding pattern of industrialization and modernization. In 1961, two years before
Chang’s birth, South Korea emerged from the Korean War with an average yearly
income of $82 per individual and 50% its industries and 75% of its railways destroyed. In
2008, at the time of his writing, its purchasing power had multiplied 14 times over. It had
run through the product-cycle from producing almost solely agricultural products to
being a hub of information technology innovation, achieving levels of development that
took Britain and the U.S. centuries in just 40 years. (Chang 2008)
Chang asserts that this “economic miracle was the result of a clever and pragmatic
mixture of market incentives and state direction” which recognized and adapted to the
terrible dangers of neoliberalism and the world market. Through mercantilism, an
approach to national economics that focuses on state self-sufficiency through strong
government regulation, Korea managed to create an export-based economy on its own
terms. Using tariffs, excise taxes, and embargos to prevent all unsanctioned influxes of
foreign currency, the Korean government shielded its developing industries from the
economic leeching of neoliberalism and simultaneously nurtured them with targeted
subsidies. (Chang 2008)

10. Only two significant channels of foreign exchange were left open. The first was
government-financed purchases of the means of production (i.e. high-tech machinery,
specialized computer technology, etc.) aimed at building national industrial capacity
while protecting against the toxic effects of qualified foreign investment. The second was
ruthless pirating of foreign intellectual property, breaking down biased intellectual
property laws that privileged the global elite. In this way, Korea managed to develop its
political-economy at a rate far greater than that of more powerful nations. The end result
was a significant leap in geopolitical status, an elevation of position within the world
capitalist hierarchy. (Chang 2008)
Consequences: Mobility within the Capitalist Hierarchy
Essentially, Chang claims that Korea’s great advance in geopolitical status can be
attributed to its use of the anti-liberal, mercantilist policy recipes historically deployed by
the U.S., Britain, and all the other successful proponents of neoliberalism. He by no
means tries to hide the social costs of this endeavor. He describes how high economic
pressures on average households forced many children, especially girls, to seek
employment in factories with poor conditions reminiscent of an industrializing U.S.
(Chang 2008). These pressures also resulted in significant domestic income inequality
and the creation of urban slums or “moon villages” which were (and continue to be)
appropriated by government development banks, torn down, and redeveloped into high-
rises, pushing the poor residents further and further from city cores (Chang 2008).
However, he sees these costs as trivial compared to the hardships imposed by
neoliberalism. Beyond that, Chang believes that mercantilism allowed Korea to achieve

11. something structurally impossible within the confines of neoliberalism; it became rich,
not just absolutely, but relative to every other nation.
The thrust of Chang’s argument is indeed potent; its ramifications grab the
attention. South Korea made itself a geopolitical power by through strategic insertion into
the world market. A nation can, in fact, increase its standing relative to the other nations.
Should it prove true, there are two potential consequences, both revolutionary for our
understanding of the future of the global political order. The first is that the hegemony of
the current global elite is not necessarily as stable as it may have appeared in the past.
Other nations can challenge the powerful nations of Europe, even supersede the U.S. as
the top of the hierarchy, given that they strategize carefully enough. Such a conclusion
confirms rumblings that the rise of China may spell the end of U.S. dominance. The
second, perhaps less likely, consequence is that the world-capitalist system holds the
potential for all nations to rise to equal (or, at least, more equal) status. Korea’s assent, as
defined by Chang, was a positive-sum game at the international scale; no other state was
limited or hurt. Should this approach to development translate to other nations, it would
seem that all nations could become significantly more powerful in the international
sphere. Much as many wish it were true that Chang’s work could actually demonstrate
these outcomes, there are powerful critiques of his argument that must be considered.
The World-Systemic Context
An important criticism of Chang’s account of South Korean development arises
from its limited geopolitical scope. By focusing on the ways in which Korea was isolated
from the rest of the world during its four decades of incredible development, Chang falls
Comment [SC1]: At least he elides that
question. He acknowledges the power
competition inherent in both the duplicity of
the neoliberal proponents, and in the
mercantile model. But then he says that
Mozambique could do what S. Korea has
done.

12. into a tradition of analysis that East Asian Historian and World-Systems Analyst Bruce
Cummings calls “ahistorical disaggregation.” (Cummings 1984). This method, reinforced
by the dominant school of U.S. modernization theory, overlooks the many ways in which
development is often rooted, both historically and contemporarily, in the machinations of
actors beyond state borders. For Cummings, the mistake of ahistorical disaggregation is
especially dangerous when brought to bear in any consideration of development in East
Asian countries like Taiwan, Japan, and Korea. For him, “such an approach misses the
fundamental unity and integrity of the regional effort in this century” (Cummings 1984).
Cumming’s wider lens of analysis sees Korean “rapid upward mobility in the world
economy” as occurring “within the context of two hegemonic systems: the Japanese
Imperium to 1945 and… American hegemony since the late 1940s” (Cummings 1984).
Consequently, in order to gain a broader understanding of Korean development from the
1960s to the 2000s, we must look back further, to the age of Japanese Imperialism.
Prologue: Prewar Imperialism
Japanese imperialism was significantly different than U.S. imperialism in that it
arose in the global context of a British hegemony and the historical context of the
American forced Meiji Restoration in 1870 (Cummings 1984). Japan’s elite, a coalition
of government bureaucrats, state-managed banks, and Zaibatsu (private plutocratic
families), felt that their geopolitical position was extremely vulnerable and sought to
build its defense capacity against further foreign encroachment (Alexander 2007). This
imperative allowed military voices to dominate the construction of the post-restoration

13. policy agenda of the early 1900s, instilling a logic of economic mobilization and political
expansionism into the government structure (Alexander 2007).
Beginning in the 1930s with the Sino-Japanese War, this project resulted in the
acquisition of colonies and centralization of their institutions under the umbrella of
Japanese administrative structures (Alexander 2007). The fact that Japan’s colonies were
spatially adjacent allowed it to pursue a doctrine of “tight knit integration,” a sort of
lateral political expansion that focused on consolidation of the empire into a single,
cohesive mercantilist unit that could advance through the product-cycle using internal
power dynamics but deal with the outside world as an individual. This method involved a
high level of direct central control , exercised throughout the empire, to protect nascent
industries and adopt of foreign technologies in an attempt to protect the imperium from
foreign competition and speed it through the product cycle (Cummings 1984). The
passage of the 1943 munitions law represents the pinnacle of this technique, eliminating
all corporate responsibility to shareholders and replacing it with direct control by the
Japanese government (Alexander 2007).
Transitions between product cycle phases involved strategic import-substitution,
shifting national balances between imports and domestic production (i.e. outsourcing old-
phase industries to colonies in order to develop new phase industries in Japan). This
process required Japanese access to space, labor, and natural resources in its colonies. In
Korea, the Japanese elite initially used the domestic aristocracy as a locus for exerting its
imperial control; by slowly eroding traditional limits on nobles’ landholdings, Japan
mobilized the assets it required. Though this process generated substantial social
upheaval, precipitating several full-scale peasant rebellions as well as continual guerilla

14. resistance, the imperium did not let up. Seoul was one of the largest centers of this type
of industrial displacement. (Cummings 1984)
Interested as it was in creating a cohesive power bloc (rather than simply
increasing its own stature) the Japanese elite invested heavily in industrial, political, and
municipal infrastructure for some of its colonial labor sources as it “moved fluidly
through a classic production-cycle industrialization pattern” (Cummings 1984). For this
reason, instead of extracting every last bit of capital from Korea and Taiwan, Japanese
Imperialism jump-started their product-cycle development. By 1935 the beginning
Korea’s transition from agrarianism to industrialism was already apparent and by the time
World War II had fully erupted, Korea could reasonably considered a semi-peripheral
nation, importing a good deal of its basic foodstuffs and raw materials from the more
peripheral Manchurian colony (Cummings 1984).
Post-World War II: Onset of U.S. Hegemony
With the end of the war in 1945, the political-economic situation of the globe
changed dramatically. Economically bolstered while every other prominent nation was
shattered, the U.S. replaced Britain as the great power in the West. Operating on a scale
that Britain hadn’t possessed since the peak of its empire, American hegemonic status
became truly unquestionable. A virtual monopoly on security and aid resources were
leveraged to facilitate dependence relationships with most of the developed world
(Cummings 1984). In this way, the U.S. redefined and expanded the boundaries of the
world-capitalist system, making it much more relevant to politics in East Asia. However,
this hegemony faced two serious threats, one internal and one external.

15. Internally, the structure of the world-capitalist system had been remade. While the
parameters for success (capital accumulation) remained the same, hierarchical dynamics
became much more fluid. No longer grounded in explicit colonialism, the system had no
built-in mechanisms to prevent nations from growing in power (Cummings 1984).
Externally, U.S. hegemony was threatened by the Soviet Union. Emerging from the war
battered, bruised, but ultimately victorious, the power hierarchy of the Eastern Bloc
provided a legitimate ideological and practical (i.e. political-economic) alternative to
global capitalism (Cummings 1999).
Though Washington’s ultimate goal was to organize the practical neoliberal trade
structures that would allow total access to the resources of developing nations and quash
their capacity for domestic power-building, rivalry with the USSR forced it to make
compromises (Cummings 1999). In order to combat the USSR, ideologically and
militarily, the U.S. had to present itself as a desirable hegemon, one that rewarded those
who chose its world hierarchy over that of the Soviets. Consequently the U.S. defaulted
to goals of more appealing “general industrialization” rather than its preferred neoliberal
focus on exploiting “comparative advantage” (Cummings 1999). This mixture of
economic and security concerns facing the U.S. resulted in the launch of a project of
“dual containment;” a two-pronged approach aimed at stopping the advance of
Communism while simultaneously limiting the power of other capitalist nations
(Cummings 1999).

16. First Containment: Constraining Communism
The first mode of containment focused on molding a few nations into “paragons
of noncommunist development;” powerhouses of capital accumulation that could entice
the broader global community to buy into the world capitalist system (Cummings 1999).
To affect this end, the U.S. spent the late 1940s stripping all Axis nations of conventional
geopolitical power by decimating their military capacities but, much to the dismay of
Europe (especially the previously hegemonic Britain), reformed, rather than destroyed,
Axis economies (Cummings 1984).
In East Asia, this process involved the elimination of most centralized forms of
Japanese power. The empire was eradicated as all official political bonds between Japan
and its previous colonies were dissolved, leaving Taiwan and Korea under the control of
weak military governments (Cummings 1984). Japan’s central economic drivers were
fragmented as the assets of the Zaibatsu were broken up and the formation of unions and
leftist parties was fomented to create a countervailing force against future consolidation
(Cummings 1984). This move, totally anathema to the elite-centric model of practical
neoliberalism, made evident U.S. desperation to gain control of the region.
While such extreme reform put an end to Japanese Imperialism as such, Japanese
compliance opened the door to a dramatic explosion of American-led development. This
development began to occur in Japan during the Korean War, but it wasn’t until the early
1960s that U.S. reshaping of regional geopolitics set off the region-wide meteoric growth
that Chang refers to as a “miracle.”
Though many of the political-economic assets accrued in East Asia over the
course of Japanese Imperialism (especially military and plutocratic resources) were

17. destroyed by the new U.S. hegemon, two important structures remained; bank-centric
finance and semi-mercantilist legal structure (Cummings 1999). With these resources at
hand, it became clear that the most effective way of developing the region was by the
same mercantilist capitalism that first brought the empire to power. Putting its neoliberal
aspirations aside, the U.S. hegemony set to work on this project.
Bloated and blatantly coercive, the military governments of Taiwan and Korea
relied heavily on U.S. aid to fuel the economic growth that kept them in existence
(Cummings 1999). By leveraging this dependence and the leftover imperial bureaucratic
and financial infrastructure, U.S. interests in East Asia spent the 1950s reconstructing the
imperial mercantilist bloc (under very different auspices of course) with the more than
willing Japan at its head (Cummings 1984). This bloc also functioned on a centrally-
managed schedule of import-substitution and protection of nascent industry, but it had the
benefit of direct U.S. financial support (Cummings 1984).
Second Containment: Constraining Capitalism
Even more than with the Japanese Imperium after which it was modeled, the new,
American-charged East Asian mercantilist engine began rapidly accumulating capital and
speeding through the product cycle. The Korean economy, with a 10% growth rate
throughout the 1960s, was a strong indicator for the success of the project (Cummings
1984). However, there were still U.S. concerns about internal threats to its hegemony.
Under the new world-system the U.S. was unable to protect any economy, including its
own, from competition. While the first mode of containment necessitated that the U.S.
intentionally exert its power to make other capitalist nations more competitive, this move

18. made the hegemon vulnerable in a new way. In order to counteract this potential threat to
its power, the U.S. deployed the second mode of containment: a mixture of economic and
military constraints on the very nations which it nurtured through the first mode.
Economically, the U.S. fostered a series of dependence relationships in its East
Asian targets. Direct foreign aid and financing were significant loci of hegemonic control
in addition to being huge economic drivers. Closely administered by the federal
government, caveats ranging from policy requirements to diplomatic concessions were
attached to packages sent to Japan, Korea, and Taiwan to make sure East Asia stayed in
line with U.S. interests (Cummings 1999). Dependence on American food and oil
production was also used as leverage to support these interests (Cummings 1984).
In addition to these somewhat more subtle modes of control, the U.S. also
enmeshed East Asia in a network of military control. While the internal disciplinary
function of the Japanese military evaporated as the institution was gutted, it was replaced
by a reliance on the U.S.-funded Taiwanese and Korean dictatorships to keep production
up to par (Cummings 1999). Furthermore, the U.S. deployed many of its own troops, on
land and at sea, throughout the region, as much to keep Japan under control as to patrol
Soviet borders (Cummings 1999).
The outcome of this mode of containment was that “the central experience of
Northeast Asia in the post war period, in short, has not been a realm of independence in
which equality and autonomy reign, but an alternative form of political economy [(i.e.
mercantilism)] enmeshed in a hegemonic web” (Cummings 1999). This is not Chang’s
self-driven Korea, but a Korea, a Taiwan, and a Japan that are merged and developed for

19. the gain of the hegemon. The truth of this can be seen in the rapid slowdown these
economies experienced after the end of the Cold War.
Afterward: Post-Cold War
The collapse of the Soviet Union did not drastically alter the structures built up by
the U.S. during the course of the Cold War, rather it removed the last countervailing force
to total American hegemony. The 1990s saw a rapid shift from direct enmeshment of the
East in military and dependence relationships to the deployment of trade and financial
enmeshment more in the vein of practical neoliberalism. The “Clinton Doctrine” of 1993
was perhaps the most explicit example of this policy shift. In addition to generally
expanding the concept of what constitutes a “national concern” for the U.S. (effectively
expanding the legitimate scope of U.S. hegemony) it aimed to break down barriers to
foreign trade and finance as well as support systems for domestic industries in targeted
economies across the globe (Cummings 1999).
The success of this agenda in Eastern Asia can be seen in the playing out of global
responses to the 1997 Asian liquidity crisis. As regional debt began skyrocketing, Japan
scrambled to create an “Asian fund,” a financial institution independent of the U.S.
controlled Bretton Woods institutions. This move, in addition to helping ameliorate the
effects of the crisis, could have potentially been leveraged to close financial loops within
the region, reducing dependence on hegemonic forces and making it more autonomous.
Instead, the U.S., by positing the crisis as a “threat to American security,” circumscribed
this option, forcing East Asia to turn to the World Bank and its own federal government
for assistance. (Cummings 1999)

20. Conclusions
It is clear from even a cursory examination of the analysis presented here that
Chang’s account of Korea as the perfect mercantilist state is misleading. While
mercantilism certainly played a critical role in Korea’s development, and indeed the
development of the whole region, this strategy never operated on the level of a single
nation and was anything but self-driven. Since its emergence under Japanese
Imperialism, mercantilism in East Asia has been a regional project, a strategy to make all
of East Asia stronger, not a specifically Korean plan to bolster itself. While Cummings’
account may play down Korean agency in the project too much, it is clear that the nation
was never the primary driver and its interests were never the primary concern.
Contemporary Korean development has always been catalyzed and perpetuated
by an outside force. First it was Imperial Japan, motivated by the need to protect itself
from foreign intervention in the wake of restoration and the shadow of British hegemony.
Then it was the U.S., a more active hegemon motivated by the need to protect its desired
global hierarchy from the opposing world system of the USSR. The processes of
development brought on by both of these drivers have hierarchy built into them; they
don’t allow for the kind of mobility that Chang’s account suggests is possible, at least not
within their boundaries. Additionally, both of these processes occurred before the
explosion of fully-formed neoliberalism onto the scene after the end of the Cold War.
The logical next question for anyone who found hope in the consequences of
Chang’s account is whether or not the Japanese Empire could be substituted in for South
Korea in his model. Could it be that a power bloc as substantial as this could be what is

21. required for perfect mercantilist development within the world capitalist system? While
nothing in this analysis automatically disproves this possibility, the historical context it
provides makes it seem very unlikely. Certainly, Japan advanced the relative power of
itself and its colonies within the world-capitalist system (albeit at the cost of extreme
coercion and social devastation), but the hierarchy of that system is markedly different
than the one we see today.
This first wave of Korean development, the only wave that was regionally based
and limited to a relatively small geopolitical sphere, occurred in the absence of a strong
global hegemonic presence. While Britain was considered the western hegemon at the
time, it exerted far less influence in East Asia than we see with the U.S. post World War
II. Under Britain, Japan had essentially free reign to build its own regional hegemony.
This changed dramatically with the onset of the strong hegemony of the U.S., but the
onus of struggle with the USSR necessitated that the East Asian bloc be resurrected and
even empowered to some extent. Today, with global communism dead and global
neoliberalism at its peak, the picture has changed completely. International politics
finally resembles Chang’s account of it; world capitalism is vastly more pervasive and
the U.S. is far more powerful and ruthless in the service of its own agenda. The
likelihood of another rise within the world capitalist hierarchy like that of Imperial
Japan’s seems negligible in the absence of another massive external pressure on that
system like that exerted by the threat of world communism.

22. Works Cited
Alexander, Arthur. "Japan's Slow Motion Transition." Current History (2007): 268-74.
Web.
Chang, Ha-Joon. Bad Samaritans: The Myth of Free Trade and the Secret History of
Capitalism. New York, NY: Bloomsbury, 2008. Print.
Cummings, Bruce. "The Origins and Development of the Northeast Asian Political
Economy: Industrial Sectors, Product Cycles, and Political Consequences."
International Organization 38.01 (1984): 1. Web.
Cummings, Bruce. "The Asian Crisis, Democracy, and the End of "Late" Development."
The Politics of the Asian Crisis.: Cornell, 1999. Print.
Evans, P. "Is an Alternative Globalization Possible?" Politics & Society 36.2 (2008): 271-
305. Web.
Gilpin, Robert, and Jean M. Gilpin. Global Political Economy: Understanding the
International Economic Order. Princeton, NJ: Princeton UP, 2001. Print.
Gowdy, J., and J. Erickson. "The Approach of Ecological Economics." Cambridge
Journal of Economics 29.2 (2005): 207-22. Web.
Loy, David R. "The Religion of the Market." Journal of the American Academy of
Religion 65.2 (2015): 275-90. Web.
Stiglitz, Joseph E. Globalization and Its Discontents. New York: W.W. Norton, 2002.
Print.
Wallerstein, Immanuel. Historical Capitalism. London: Verso, 1984. Print.