Pacific Optimism. Part I: America After Vietnam: Confidence Regained. Part II: Explaining Economic Growth: How Magic Is the Marketplace
By Donald K. Emmerson
Universities Field Staff International, 1982, 17 pp.
It is now generally recognized that the free market countries of the Pacific as a whole-and not just Japan-are growing more rapidly than any other region of the world. What is not well understood is why they have done so well. The answer will please neither the advocates of central state planning nor the "supply siders" who believe the government has no proper role in economic decisions. Emmerson points out in his very valuable study that "what is most impressive . . . is not their commitment to free-market solutions, but rather the different ways in which the . . . governments have tried to promote growth and deal with its consequences. The lesson here is not across-the-board abstention but sophisticated intervention." In a good introduction to the Hsiung book, Chalmers Johnson cites four elements in the Pacific success story: rule by a technocratic-bureaucratic elite that does not accede to political demands that would undermine economic growth; cooperation between public and private sectors under the overall guidance of a planning agency; heavy continuing investment in education for everyone; and a government commitment to market methods of economic intervention. Hofheinz and Calder concur with the assessment that the Pacific countries have benefited from government-business cooperation. They have a useful chapter on the dual role of public and private power. These studies should be widely read not only by those interested in East Asia. There are significant clues here on how to develop an alternative both to Keynesianism and Reaganomics.