From Miracle to Crisis and Back: The Political Economy of South Korean Long-Term Development

Abstract

This article analyses the process of economic development and associated political transformations in South Korea since the mid-1960s. It claims that, as in the rest of East Asia, capital accumulation in South Korea has revolved around the production of specific industrial goods for world markets using the relatively cheap and highly disciplined local workforce for simplified labour processes, as appendages of the machine or in manual assembly operations. This modality of accumulation resulted from changes in the forms of production of relative surplus value on a global scale through the development of computerisation and robotisation, and the concomitant transformation in the productive attributes of the collective worker of large-scale industry. The article identifies the main characteristics of the political and economic relations through which the structural transformation of the Korean society came about throughout the period studied, as a form of realising the global unity of the process of capitalist development. This analysis not only supports the claims made about the specific characteristics of the East Asian processes of capitalist development. It also shows the intrinsic unity of seemingly diverse political-economy processes, as forms of realisation of the transformations of Korean society.

Key Words:

• South Korea
• long-term development
• late industrialisation
• political economy
• economic miracle
• economic crisis

Notes

¹ It must be stressed that this does not mean that the state develops independently and autonomously from the capital relation to become then functional to the latter. On the contrary, the capitalist state, it is argued here, is itself a concrete mode of existence of the social relation of capital.

² Wet-rice cultivation is highly “labour-intensive,” notably during implantation and harvest periods, and, crucially, whatever their extent and complexity, irrigation systems require – unlike dry-land agriculture or husbandry – the “cooperation at various levels between the farmers in a single water control unit” (Bray 1986, 67).

³ In its simplest determination, ground rent is surplus value appropriated by landowners, due to their monopoly over natural conditions of production that increase labour productivity in the primary sector, or permit production altogether, and cannot be controlled by normal capital. The surplus value that constitutes ground rent is thus rested from that available for capital accumulation. See Marx (1981, 779–916). To the extent that rent-bearing commodities are consumed overseas, ground rent constitutes an inflow of social wealth to commodity-producing countries.

⁴ The main problem with the approach to the NIDL in Fröbel, Heinrichs, and Kreye (1980), and the cause of their inability to grasp fully the transformations at stake, including its dynamics and the associated interregional differentiation, is that they failed to locate their origin in the increased mechanisation of large-scale industry and its impact upon the skills of the different segments of the industrial labour force. On the contrary, they located the origin of the transformations in the intensification of the manual division of labour.

⁵ This does not mean that the first group of countries has exclusively concentrated within their boundaries skilled workers. First, immigration from “Third World” countries has helped satisfy the increasing local demand for unskilled labour power. Second, the replacement of the “welfare” state with its neoliberal successor has also played its part in the increase in the local supply of this type of labour power (Sassen 1988; Iñigo Carrera 2008, 72–6).

⁶ See Jonsson (1995) on the development of the shipbuilding industry and the technical changes favouring its growth during the 1970s – the replacing of riveting with welding, which reduced skill requirements and facilitated block construction methods, and the spread of equipment mechanisation.

⁷ Exports accounted for a small fraction of total output and were made of “dated compacts of execrable quality dumped at below costs prices” (Noble 2005, 10).

⁸ See Auty (1991, 26) on the experience of the Korean petrochemical sector.