studwell how asia works
The author is Joe Studwell and the subtitle is Success and Failure in the World’s Most Dynamic Region. That’s an excessively bland title and subtitle, but so far this is perhaps my favorite economics book of the year. Quite simply, it is the best single treatment on what in Asian industrial policy worked or did not work, full of both analysis and specific detail, and covering southeast Asia in addition to the Asian tiger “winners.”
Studwell explains that South Korean policy was based in a notion of “export discipline” and that policymakers were quite ready to see leading chaebol go bankrupt, which indeed they did often. Everything was directed toward export capacity and they didn’t worry about what rate of price inflation, often in double digits, the cheap credit policies might create. It was a gamble on a world-historical scale, noting that South Korea engaged in much more borrowing than did the other Asian tigers. His p.111 account of how Park and his cronies started arresting most of the nation’s leading businessmen, to teach them a lesson and to skew corruption in nation-building directions, is sobering and thought-provoking reading.
Here is one instructive bit of many:
Thailand holds the record for the most consistent import substitution industrialisation (ISI) policy in south-east Asia, running from the early 1950s into the 1980s. Industrial policy also was led by probably the most competent, professional bureaucracy in the region. But, as the Japanese scholar of development Suchiro Akira observed, there was almost no pressure for favoured manufacturers to export…Unlike in northeast Asian states, the Thai bureaucracy never brought export discipline to bear because the Thai generals and politicians who ran the country did not prioritise it.
In other words, industrial policy has to work with the market and rely on market discipline, not try to circumvent such constraints. That is hard to pull off, although clearly it happened in South Korea.
It is also an excellent book on the agrarian pre-histories of East Asian industrialization and why South Korea, Japan, and Taiwan pulled off successful land reforms and Indonesia and the Philippines did not.
I would wish for more coverage of education and labor markets, and the final section on China still awaits me. Think of it as a kind of “tweener” book: too specific and analytic to be truly popular, too broad, historical, and anecdotal to count as formal economic research. That is not a complaint.
Definitely recommended, you will learn lots from it, and it will upset people of virtually all ideologies.
Addendum: Here is a good FT review.
I believe it was Dan Wang who loved the Robert Tombs book The English and Their History and asked for more books of that nature. Another reader wrote in and wanted to know what was the best book about each country.
To count, the book must have some aspirations to be a general survey of what the country is or to cover much of the history of the country. So your favorite book on the French Revolution is not eligible, for instance, nor is Allan Janik’s and Stephen Toulmin’s splendid Wittgenstein’s Vienna. I thought I would start with a list of some nominees, solicit your suggestions in the comments, and later produce a longer post with all the correct answers.
2. Germany: Peter Watson, The German Genius: Europe’s Third Renaissance, the Second Scientific Revolution, and the Twentieth Century.
3. Italy: Luigi Barzini, The Italians. Or David Gilmour, The Pursuit of Italy: A History of a Land, its Peoples, and their Regions.
4. Spain: John Hooper, The Spaniards.
5. France: Graham Robb: The Discovery of France: A Historical Geography.
6. Portugal: Barry Hatton, The Portuguese: A Modern History.
7. Ireland: Thomas Bartlett, Ireland: A History.
8. Russia: Geoffrey Hosking, Russia and the Russians. One of the very best books on this list.
9. Ukraine: Serhii Plokhy, The Gates of Europe: A History of Ukraine.
11. Canada: ????. Alex?
12. Mexico; Alan Riding, Distant Neighbors: A Portrait of the Mexicans. Even though it, like the Barzini book, is out of date.
13. Caribbean: Joshua Jelly-Schapiro, Island People: The Caribbean and the World.
I’ll give South America further thought, Africa and the Middle East too.
14. Cambodia: Sebastian Strangio, Hun Sen’s Cambodia.
16. Pakistan: Anatol Lieven, Pakistan: A Hard Country.
17. China: ???? I find this to be a tough call.
18. Singapore and Malaysia: Jim Baker, Crossroads: A Popular History of Malaysia and Singapore.
19. Japan: In the old days I might have suggested Karel von Wolferen, but now it is badly out of date. What else?
Joe Studwell, How Asia Works: Success and Failure in the World’s Most Dynamic Region gets tossed in somewhere too.
All of those are subject to revision.
Do leave your suggestions in the comments, and at some point I’ll publish an expanded and updated version of this post, with additional countries too, or perhaps split into multiple posts by region.
Here 22 ambassadors recommend one book to read before visiting their country, mostly mediocre selections. Here is a suggested list of the most iconic book from each country. Don’t take me as endorsing those.
There were more strong candidates this year than usual. The order here is more or less the order I read them in, not the order of preference:
Jeremy Adelman, Worldly Philosopher: The Odyssey of Albert O. Hirschmann.
Daniel Brook, A History of Future Cities.
Lawrence Wright, Going Clear: Scientology, Hollywood, and the Prison of Belief.
M.E. Thomas, Confessions of a Sociopath.
Emile Simpson, War from the Ground Up: Twenty-First Century Combat as Politics.
William Haseltine, Affordable Excellence: The Singapore Health System.
Clare Jacobson, New Museums in China. Good text but mostly a picture book, stunning architecture, no art, full of lessons.
Mark Lawrence Schrad, Vodka Politics: Alcohol, Autocracy, and the Secret History of the Russian State.
Scott Anderson’s Lawrence in Arabia gets rave reviews, although I have not yet read my copy. From the UK I’ve ordered the new Holland translation of Herodotus and Richard Overy’s The Bombing War and have high expectations for both.
If I had to offer my very top picks for the year, they would all be books I didn’t expect to like nearly as much as I did:
Mark Lewisohn, Tune In: The Beatles: All These Years, volume I.
Peter Baker, Days of Fire: Bush and Cheney in the White House.
Apologies to those I left out or forgot, I am sure there were more.
2. Insight into the bankless, and Jon Hilsenrath on Yellen’s management style. People, I say it’s time to think twice on this one. It’s showing multiple classic signs of “employee who should not be promoted.”
6. Stanley Fischer opposes forward guidance from the Fed. Let’s face it: right now we are living under pure monetary discretion. From the article: “You can’t expect the Fed to spell out what it’s going to do,” Mr. Fischer said. “Why? Because it doesn’t know.”
A month ago I [Cardiff Garcia] asked Diane and Tyler each to choose five books released this year that would be fun to discuss. Then I narrowed that list of ten down to five:
1) Worldly Philosopher: The Odyssey of Albert O Hirschman, by Jeremy Adelman
2) The Undercover Economist Strikes Back, by Tim Harford
3) Giving Kids a Fair Chance, by James Heckman
4) How Asia Works, by Joe Studwell
5) America’s Assembly Line, by David Nye
(Worldly Philosopher was the one book included on both lists.)
We discuss these five in the first part of the podcast. In the second part we discuss Tyler’s new book, Average is Over, which is out this week in the US. We then close with some general thoughts about trends in economics books and a teaser of Diane’s own forthcoming book, A Brief and Affectionate History of GDP, scheduled for release early next year.
Here are some of Cardiff Garcia’s thoughts on my own new book, Average is Over:
From Average Is Over, what has stayed with me is that success in the future increasingly will be about managing comfort levels, those of oneself and of others — especially regarding the discomfort that comes with sacrificing personal judgment in favour of better, externally-offered judgment, perhaps submitted by a machine or an algorithm.
The reality of our inferior human judgment will first be resisted, but eventually it will be accepted. The transition won’t be smooth. It won’t be natural. It will lack the romance of the stories we now tell ourselves but will soon disbelieve. Those who do make the transition early will have an advantage over the rest. Trust will be a blurry concept for a while.
In more and more situations, “letting go” will be a better strategy than thinking independently. Sometimes both will be needed. Choosing from these options will be the one (meta) judgment that still matters. With time we’ll get better at it, but only after a period of intense emotional confusion.
I eagerly await Diane’s own work on gdp, as I have been wanting a good book on that topic for some while.