Michael Schuman:

"The Miracle" (2009)

(Copyright © 2011 Piero Scaruffi | Legal restrictions - Termini d'uso )
This is a study of how Asian economies managed to progress from the starvation of the 1960s to the top tier of development and wealth. In 1981 East Asia had the highest poverty rate in the world, higher than Africa. In 2011 two of the top three economies in the world are from East Asia, and very soon they might have three out of four including the number one.

Schuman focuses on the simple question: "what caused the Asian miracle?" Obviously there is no single cultural/political answer because the countries of Asia spanned a broad spectrum of philosophies (Confucian, Shinto, Buddhist, Hindu, Muslim) and of political systems: fascism (South Korea, Singapore, Taiwan, Thailand), communism (mainland China), socialism (India), democracy (Japan, Hong Kong).

From the very beginning Schuman advances the thesis that government intervention was crucial to the development of these economies: they all boomed under the supervision of a benevolent dictatorship that nurtured and guided the private sector.

Most of the political leaders of the first boom came not from the aristocracy but from the very poor class. Schuman emphasizes that these leaders ignored Western economic theory: they used common sense and traditional values. They nonetheless became enlightened leaders who somehow made all the right choices to turn their starving countries into economic tigers. That's not as unusual as it may sound: Hitler, Mussolini and Stalin were really bad people but didn't do what they did to enrich themselves or start a dynasty. They in fact greatly improved the economies of their countries.

All the early boomers lacked natural resources. In order to pay for them, they had to focus on exporting. The big market was the USA. These countries focused on exporting to the USA. The USA gladly accepted (mostly because of the logic of the Cold War, to create a buffer against the Soviet Union). The USA also provided the military protection that helped these countries focus only on the economy. Security was guaranteed and paid for by the USA. The simplest answer to Schuman's question is: the USA. What they had in common was not a cultural or political background but that they were all allies of the USA during the Cold War. Schuman mentions it in the introduction but doesn't emphasize it loud enough.

The chapters of the books are inside stories of how the various economies developed, mainly focusing on the men who led them at the time.

It is always good science to study both the positive and the negative samples of your experiment. Schuman doesn't investigate the East Asian countries that did "not" experience that kind of economic boom: Philippines (Catholic, USA ally), Pakistan (Muslim, USA ally), Bangladesh (Muslim, neutral), Vietnam (Buddhist, USA enemy), Laos (Buddhist, USA enemy), Cambodia (Buddhist, USA enemy), North Korea (Buddhist, USA enemy), Mongolia (Buddhist, USA enemy). Each of them shares either the cultural or political background with one of the booming economies, but did not experience a boom. Some of them were very close USA allies (especially the Philippines).

That said, the book is an invaluable source of information, well presented and carefully researched. I have used it to assemble this timeline of the Asian Miracle.