Well, I think that it is the case that interest in Korean culture has boomed in the last few years. I wonder how many of you have watched Squid Game or perhaps seen the movie Parasite? Well, you might have been watching those on your Samsung Galaxy tablet as you were eating your kimchi. On the other hand, you might have preferred to turn on your Sony television to watch an anime movie as you were eating your sushi. On the other hand, you might have decided to go to cinema, getting into your Hyundai or Toyota car. Well, my point is that now the manufacturing exports and cultural exports from Korea and Japan are all around us. The growth of these two economies since the second World War career and Japan have been remarkable. The Gresham College lecture that you're listening to right now is giving you knowledge and insight from one of the world's leading academic experts making it takes a lot of time. But because we want to encourage a love of learning, we think it's well worth it. We never make you pay for lectures, although donations are needed. All we ask in return is this. Send a link to this lecture to someone you think would benefit. And if you haven't already, click the follow or subscribe button from wherever you are listening right now. Now, let's get back to the lecture After the Second World War. There was a choice, I think, in developing economies to adopt one of two policies. They were both economic nationalism, but of a different type. The first was import substituting industrialization that is replacing imported manufacturers from the advanced industrial economies, replacing those with local goods produced behind tariff walls. Such an approach was pursued particularly by Latin America since the Great Depression. It was economic nationalism based upon isolationism. I'm talking about that in my next lecture. In the lecture today, I'm talking about the other approach, which was export led growth. Now, this also often went with protection of domestic markets, but it was economic nationalism based upon expansionism upon exports, and that was the strategy adopted by Japan, by South Korea and the Asian Tigers. This graph shows you which of those two policies was most successful. If you look at the, um, green line there, that is Argentina import substituting industrialization, it's more or less flat. If you look at the, uh, red line, that's Japan and the blue line, that's career. And you see Japan slowed down from the 1890s career as continued to grow. So next time I'm going to look at why an Earth Argentina flatlines. Today, I want to ask why it was that there has been that success in Korea and Japan, but also if any of you have watched Squid game or what parasite, you will know that growth and success also has a dark side. I'll come back to that at the end. Now, in order to understand what happened after 1945, I'm a historian. We need to go back to the 19th century. We need to understand the historical background of this, which takes us back to Japan and the maji restoration of 1868, and its annexation of Korea as part of the Japanese Empire in 1910. So, let's go to Japan to start with. Japan was unique in Asia in that it is achieved modernization and maintained independence by its own efforts. But that was not a foregone conclusion. It could have gone another way. Japan could have become like China. It could have become like semi colonized. Japan had a very limited engagement with foreign traders until the arrival of the so-called Black Ships of Commodore. Matthew Perry of the United States arrived in Japan in July, 1853. He was sent by the United States to establish relations with Japan. Now, you might wonder what was meant by relations. Uh, what it meant was he was coming them to force them to open to American goods. The outcome was the US Japan Treaty of Amity and Commerce in 1858, which is modeled on the, on the Chinese example of the treaty ports, the forced opening up of, of China to Western goods. It was a, it was called an unequal treaty. And Japan was forced to negotiate other unequal treaties with, uh, France, with Britain, and so on. So the question here was how to respond to make sure that Japan did not go the way of China or India or Vietnam or wherever. The Taaka GBA regime, which dominated Japan since 1603, looked weak when Perry arrived, and the country it seemed, could descend the same way as China. So what was the nature of that Taaka Gawa regime? It was based upon what I would call neo-Confucianism. That is a rigid hierarchy, which limited change, minimal form contact. The idea here that, uh, it was all hierarchical like a household, a patriarchal household. The Emperor of Japan was based in Kyoto, and his role was ceremonial. He had no military or financial authority. Administration was in the hands of the Shogun, who was based in modern day Tokyo. What was then called ado. This aka Gawa clan held directly about a quarter of Japan, other local lords. The Damo pledged allegiance to the Shogun. Some of those DMO were hereditary vassals of the Taaka Gawa. They participated in the government. They were insiders. Others had been forced into submission. Uh, they were defeated. They were marginalized. They were called the toma. So you got this divide within the elite. The Toka gwa Shogun kept authority by requiring these DMO lords to spend every other year in Ado where their wives and children were to live permanently. It was a sort of hostage system, provided. The day Mo, when they went back to their local area, didn't threaten the the Shogun. In, in ado, they were given a fair degree of autonomy. So it's not a highly centralized system. Then the next group of the Samueli, the military elite who owed allegiance either to the Shogun, if they were part of AKA Gawa clan, or to these individual dimo, they wore swords. They had warrior values, but they didn't actually fight 'cause there was peace. They were basically bureaucrats. They provided bureaucratic services to the Shogun, and they collected taxes and so on. So that's what was existing before the black ship arrived. But it was starting to have difficulties even before the arrival of the black ship, black ships. Now, what were those difficulties? Well, first of all, the Taaka Gawa in Ado had limited finances. They had income from their own lands. But the dimo in the individual territories, they collected tax themselves. They didn't give it to the central government in ado. So there's a lack of fiscal capacity. So if you're going to stand up to the Americans, how are you gonna pay to fight them? In fact, there was a lack of military capacity as well. The Shogun only had his own Samuel I, who were armed with swords. He couldn't rely upon the Samuel I of the individual lords elsewhere, and are they going to be able to stand up to Western military power? And finally, the rigid hierarchy of society was breaking down. The Dimo had started to borrow money from merchants. The Samuel I were hard up. There's inflation after trade opened up, but the Sam UI paid on a fixed stipend. So they're getting a little bit upset and annoyed at their status being, uh, eroded. And those outside law, the Zam, they are feeling excluded and un alienated. So Japan is highly vulnerable. So what's going to be done about it? There's a terminal crisis in the Taaka garba regime. There's a falling out within the taaka gaa themselves who's going to become the next shogun. So they're fighting with each other, which is not very helpful. Then you've got these unequal treaties being imposed upon Japan. One response to that is to say, isolationism, let's not allow these Western traders to come in. The phrase used was, let's just revere the emperor and expel the barbarians. Are you the Americans or the British? And that line was originally taken by some of the, uh, the key figures within these, uh, these lord ships, particularly by Aku Amichi of the Zuma and Ito Bumi of the, of the Zu clans. But they started to realize, you can't just fight the barbarians by staying the same. You have to adapt in order to fight. And how do you adapt? Well, I used to teach at the University College London, a great institution. You send your students to University College London. So this man, ITO I just mentioned, said, if we're going to beat them, you've got to join them. So he went to University College London, up the road in 1863. And the other clan, the Cho said, 19 students to study in British universities. At the same time, the imperial courtiers down in Kyoto are starting to become a center of criticism of the, uh, shogun up in, up in Ado. And that links up with the resentment by the Samueli, uh, who are feeling that they're losing their status, and these outside families of the zuzu also feeling they're being excluded. So there's an alliance between the courtier down in Kyoto and these, uh, excluded lords. And they say, what we're going to do is we're going to reimpose the rule of the emperor. We are going, they seize the palaces in Kyoto. They took power in the name of the emperor, and they then imposed this new maji restoration. The new emperor maji was put on the throne in 1868. It was a, a combination of court nobles and these excluded dimo lords from southwest Japan. In 1868, they signed a charter oath, which said they were going to unite together all groups injustice, welfare and prosperity, owning allegiance to the emperor and not to their individual Lordships, in order to make sure they didn't then follow the route of China being subordinated. The idea then was not to expel the barbarians and return to isolationism. It was to pursue rapid modernization by adopting western institutions, by creating a centralized and unified nation, which unlike the Taaka, GWA would have the political power over the whole country with the capacity to raise revenue. The barbarians could then be dealt with on equal terms within a global economy, within great power politics. It was a policy of building national strength through expansionist nationalism, export led nationalism. Now, in order to do that, there had to be some major changes in Japan's economy, politics, and society. So let me move on to, uh, on, onto that. So going, going ahead too far, first of all, after 1868, par largely remained were the leaders of the restoration. They did bring in the containers of the Taaka Gawa where administrative expertise was needed. But essentially it was this small group which took part in 1868, remains in control. They replaced loyalty to the individual domain with loyalty to Japan. The dmo, the individual lords agreed to return lands to the emperor, and they would then be appointed themselves governors of their local area under the, under the emperor. They were given noble status and a salary. The state then took over payment to the salaries of the samui. So their loyalty now is also to the emperor. And in 1876, that in that annual salary was replayed by a lump sum. They lost their warrior status, and a conscript army was created from 1872. So it all meant a major change, the creation of a nation state that, as you might imagine, uh, that led to, um, a degree of, um, annoyance, uh, and, and of, and of upset. I think that's got outta control. Here we are, um, the, there's a difference over how, how to proceed. And one approach was of I kava, Tom Toomi, who was one of the courtier who went on a mission, uh, to, um, to, there we are, to, uh, San Francisco and then to to London. There he is in the middle in judicial dress with the people from those clans I I I talked about. They're the Samuel. I, there's the emperor maji. So they go to negotiate in Europe and America in 1871 to try to renegotiate the unequal treaties in which they were unsuccessful. This led him to argue. Then coming back, I must push forward with domestic reform if I'm going to stand up to the barbarians, if he turned to, to, uh, to, to Tokyo in 1873. But the opposition from the isolationists, uh, still continued. Uh, when he, when he got back, there was a feeling that identity of the samurai was being lost, that the, the, the di mos were losing their, their, their power. And you then have the sat sumer rebellion where disaffected samueli, uh, rising revolt. And they're put down by a cons, the conscript army, the, the modern, the modern army. So that was in 1877, effective end of the Samuel as a class, uh, the emergency of a highly centralized state with western style armed forces. So the strategy of competing with the barbarians through reforming Japan society is working. You have the defeat of China in the war of 1894 to five over Korea. Korea was seen as a dagger at the heart of Japan. If Korea could become dominated by China, it would not be a buffer against the Russians. So you need to fi make sure you keep the, the Russians and the Chinese outta career. And how do you do that? You go to Newcastle upon tine, and you order a few battleships, uh, which you see there being launched at, at, uh, the, the Armstrong works in, in Newcastle. And you also defeat the, the Russians in the war of 1904 to five. There's one of those ships, uh, that I just showed you being built in Newcastle, defeating the, uh, the, the, the, uh, Russian, uh, Navy and army. And this leads to the, uh, taking over of the, uh, career, uh, this year as a protector in 1905, and then by, uh, fully annexed as part of the Japanese empire in 1910. It means then that by the First World War, Japan is a great power. It becomes an ally of Britain, uh, in this, uh, in, in the First World War. It emerges a powerful economy and a player of great power rivalries. So how is, how is this achieved? Is achieved by, first of all, adopting a new civil and criminal code, an educational system. Financial institutions derived from, uh, the, uh, European example in 1885, Japan has a cabinet government in place of that post restoration oligarchy. I talk, I talked about a new constitution in 1889. The emperor is still there as an appeal to tradition, a sacred and enviable the father of the people. But it's now a bureaucracy, a cabinet, an armed forces answerable to him. It draw together this idea of an imperial past and divinity. With modernity, you can combine change, which could be upsetting and destabilizing with a, a continuity through this means with Japanese values. A constitution was created with an elected assembly, a diet, but with a very limited franchise of only about 1% of the population with an upper house of nobles. But the power of that parliament of that diet was limited because of the powerful status of the emperor, competing elites of the cabinet, the military, the privy council, the bureaucracy, and an unconstitutional, unofficial background group of these old oligarchs. When the diet started to flex its muscles, the government clamped down on mass politics. It suppressed mass politics in the peace police law of 1900 was all very authoritarian. It also means that the government has taxing powers. Now, the individual Lordships have been suspended, and now taxes created nationally could fund the army and the Navy, which I was just showing you. But the army and navy has considerable power, answerable only to the emperor, largely free of control by the legislature. And the bureaucracy was also very powerful. They could appeal over the head of the people and of the parliament to the will of the emperor. They could use that power against politicians. Now, all of this is very important for having a strategy of economic development. And this is what these people, these bureaucrats, army and the Navy embark on. Ja Japan embarks on industrialization. Let me just run through that, uh, quickly. Where you see the first railway comes in Yokohama, along with a postal system, education being built up. The Japanese were sent abroad to study it at universities in, in Britain and, and elsewhere. Foreigners were invited Japan to bring in new technology, but it was always under the control of the Japanese themselves, not foreign ownership and control. You pay for those goods that imported technology by exports, particularly of silk and then of cotton cloth. But also by squeezing savings outta the people domestically, very high level of savings, taxation, squeezing, domestic consumption, squeezing well, to invest in industry, you do, you ban foreign investment to make sure it's not taken, taken over of firms within Japan. Instead, the government borrows money on the London money market and through government bonds under its own control. So you're making sure that money is being brought in, but not leading to control by foreigners. And those funds are directed by the Bank of Japan to make sure that it's made, going to Japanese firms, not to foreign owners. The government itself directly invested in some industry, but mainly through buying licenses from overseas technology blueprints, prototypes, again, under Japanese control, and working with on the whole private enterprise, under government guidance. And as those government bureaucrats I mentioned, and businessmen coming from similar backgrounds are many bureaucrats moving into business. And what you have happening then is the growth of these big new business conglomerates. The tsu Bsui was one of the largest. It was a merchant family. Under the Taka Gawa, they grow into mining textiles, cement paper, real estate trading in this pyramid structure with one family owner at the top, holding company with subsidiaries below. They offer lifetime employment to workers with good conditions and training. But alongside them, there's a whole group of small firms dependent upon them. So if there is a recession, you lay off those small firms. The small firms are also supplying local markets with traditional goods. Now, by the 1930s, the power of these tsu, such as Mitsui, is considered to be getting outta control. It's a state within a state. In 1932, the managing director of Mitsui was assassinated by a right wing radical mitsui responds by trying to work with the military in invading Manchuria, providing loans and goods to Japanese expansionism. But there's still a degree of skepticism about these. These are seen as a threat to the state. What happens is that a new group of tsu emerge, which are more dependent upon the military. And you've probably heard of NIS Nissan, their big factory. Now up in Sunderland, Nisan was a new tsu, which relocated his headquarters to Manchuria. The Inva in China, invaded by the Japanese, the headquarters in Manchuria and Nissan held a 50% stake with the Japanese government in the Manchu heavy industry development corporation. I'll come back to that again in a minute. So what you're having here is this development of heavy industrialization through with the army, with the bureaucracy. There's, there's still a sense of vulnerability here. The, the, the feeling that in order to be, to be successful, you have to expand. Japan lacks natural resource. You have to expand in ura, you have to expand eventually, of course, by, uh, going to war with, uh, with, with, uh, uh, the Americans, the British, the French, uh, taking, trying to invade those, um, those parts of the European Emper empires in, in, uh, Asia. So what you have, though, I think in this period of 1930s, and the war is very powerful, controlled by the army, the ministers to the army and the navy in the cabinet who were appointed by the army and the Navy. So they had a control of veto power of the cabinet. If the army navy refused to appoint the cabinet member, the cabinet couldn't work. So they had a veto power. There's emperor worship, sacred patriotism allied with the militarization of society to create national unity. The bureaucrats were aiming to reduce the power of at least the old tsu and control the economy for national defense. Now, all of that, of course, then leads on to the, um, invasion of China in 1937, the attack on Pearl Harbor in 1941, and the defeat eventually in 1945. In 1945. The question was, what would the American occupiers do? How do you reform this system? So what happens then is a process of reform, democratization reform of the Constitution of 1889, which was seen as the basis of militarism, land reform, break up the large land holdings, and which was seen as a basis of militarism, replace large owners with and with a poor tenant. Farmers with owner occupying farmers who would have a stake in society, break up the tsu, uh, which was attempted, um, in legislation in 1946 and 1947. But that policy was abandoned at the end of 1949 with the result that you have the emergence of a new type of business corporation called the Kaatsu. Again, biti hierarchical is more like a network affiliates. So it it's reshaping it as a more decentralized system of interlocking directors and shareholders coordinated by a group president who has a, a group of the presidents of each of these groups have having a lot, a lot of power. And that continues to run, run alongside small firms. So that's another part of the reform, labor, market reform, trade unions, but trade unions as part of the individual enterprise working with the firm rather than against the firm. And the next point I would make is a survival of those bureaucrats that I mentioned in Manchuria, that development, I was arguing about the Mitsui heavy industrial development corporation, the man who was the head of that was, uh, kisuki and working with the head of Nissan Akwa, Josh Suke. These people after the war move into the center of Japanese politics. Their experience in Manchuria, their long experience there, their planning of development there meant they continue to formulate and implement a coherent economic policy. They had close ties with the conservative parties and businesses. They maintained controls over trade and exchange to form an investment law of 1950 prevented inflows of private capital so that firms, American firms like Ford, the General Motors, couldn't come in and buy up Japanese businesses. So these people, I call the reform bureaucrats from the 1930s kept power. So Kii developed ideas about control over business from the 1930s in Manchu, where he was responsible for industrialization there, where he used brute forced labor, slave labor, and he worked there with Ikawa, Josh's Sukay of Nissan. Well, in 1955, KII was one of the founders of the liberal Democrat Party, which has dominated Japan ever since he was Prime Minister. From 1957 to 1960, those two men worked together in Manchuria. They continued to work together in Japan in the fifties. The next point I would make is the reform of public finances. What the government did after the war was give tax breaks to savings, which went into banks. The banks then invested in private business, high, very high levels of saving, held down inflation, and led a high investment, which could be used for exports. And those savings were deliberately encouraged by the National Salvation Savings Campaign. And Housewives were encouraged to keep household accounts, books. And there she says, I'll keep planning. Our household finances consumption was culturally devalued. You had to save, you had to save in order to invest, in order to encourage development. And that's linked with trade policy. Now, I said that this is economic nationalism. Japan does not open up its economy to outside, um, uh, investment or to outside goods. What it's trying to do, though, is to export. Initially it had a trade deficit covered by American Aid, but you don't want to have subordination to America. You want to make sure you escape from that dependence to, again, economic independence. You have to export, but also to keep import controls on the domestic market. And that leads to an industrial strategy. The government pushes exports in technologically advanced sectors. It gives priority in the, in credit, in subsidies and tax breaks to industries according to their export potential. There was close cooperation between those bureaucrats developing from that reforming bureaucracy of the 1930s with the Covet suit through the Ministry of International Trade and Industry, which is the successor to the approach of Kii back in the 1930s. In 1960, the government announces a new policy. Kii resigned in 1960, is its successor announced a new policy, the national income doubling plan, driven by exports and government assistance, Kiki's allies at the that ministry. I mentioned a continuing role working in partnership with business through what they called administrative guidance. They relied upon business associations, the two, the minister exchanging information and the, uh, business complying with that. By 1968, Japan had moved to a very large trade surplus, but then it starts to go wrong. You have this massive surge in residential property prices, those savings, that easy credit, a surge heavy indebtedness by the correct suit. You get a bubble, it bursts. And as you saw from the, uh, chart I put up at the beginning of the lecture, you have the, so-called lost decade of the 1990s. Growth is low, but it then becomes three lost decades. Japan stops growing as rapidly as it had in the past. This is where I turn to Korea, because career starts off at a much lower base, but it continues to grow throughout the nineties up to the present. So let's have a look at career. Well, career didn't have anything like the major restoration. It had, uh, had a weak dynasty. Korea was being already, uh, made a client state of China. China was being threatened by Russia. And as I mentioned earlier on the, uh, Japanese take it over as a colony in 1910. So Korea was a Japanese colony. From 1910 to 1945, Korean culture was subordinated. The country was turned into a source of food and raw materials for Japan and of industrial production to support the Japanese invasion of China, even more than in Japan. The economy of Korea was dominated by the state and by the Army. Well, the Japanese, of course, retreat leave in 1945. At that point, career is divided at the 38th parallel between the Americans and the South, the Soviets in the north. There's also a communist threat within the South. So you have external threat above the 38th parallel, but also uprisings below the 38th parallel. And of course, you have the Korean War, uh, of 1950 to 53 as well. So you need to understand the development of Korea. Within that context of continued threat from communism. The Americans obviously were very eager to overcome South Korea's technological, uh, backwardness. And also in their view, cultural backwardness. The American occupies said The Koreans are the Irish of the Orient. They're fun-loving. They have an inferiority complex. They love a drink and a laugh. Um, but they're, they, they're dominated. They were dominated by the Japanese, and they don't have any self-confidence. In 1947, the American occupies tried to develop, uh, a program to reform Japan. In 1948, South Korea regained self-rule. There's General MacArthur, the American occupiers with President Singman, who was an anti-communist authoritarian. The Americans continued to give economic assistance, and in 1950, a new American dominated, United, United Nations body was set up the Un Korean Reconstruction Agency. But even in 1960, the United States State Department complained of a lack of leadership to provide, I quote, the imagination, vision, and energy to end the Korean spiritual and social confusion, and to give the country a sense of unity, direction, and destiny. So, up to 1960, there's still not a huge level of economic growth. Well, let's think, what was, what was this man re trying to do between 1948 and his fall in 1960? Well, first of all, like in Japan, there was a progress, a program of land reform, an attempt to break up the, the larger states. But that was dangerous because you needed the, you needed the elite of larger, larger Orlando to support the Americans against the Communists. But what you can do, of course, is you can take the former Japanese owned land and give that to small peasant farmers, so you could then build up support for the regime without alienating the elite Re embarked. However, also, on a program of import substituting industrialization, that was his initial strategy. And he was also highly dependent upon investment from United States Aid. About three quarters of investment was American Aid, which rec channeled to a group, which were a little bit like the s They were groups of industrial conglomerates called the Chabos. They were large business court conglomerates. Like Hyundai. It was a cozy relationship of corruption and isolation of the economy. Well, in 1960, he fell and was replaced by, uh, in, in May, 1961 by Park Chung. He who took part as the head of a military hunter. Now, park had trained as an officer in the Japanese army during the war where he served in Manchuria. After the war, he joined a South Korean army and was sentenced to death for, uh, opposing re He was, uh, the sentence was commuted. He rejoined the army, fought to the Korean War, took over in the military hunter, and then was elected president in 1963, and continued to serve until he was assassinated in 1979. So, what did Park do? This is where the success really takes off. He continued some of the elements of, of re's policy, but taking it in a new direction, which led to what has been called the miracle on the Han River. Han River is the major, major river. The miracle there was the transformation of South Korea into a major industrial power. Isolationist nationalism was strong because there was a dislike of the Japanese who had colonized the country. There was dislike of dependence upon the United States. There was dislike of the big conglomerates of the tribal. So Park has to take that on. If he's going to have success and export led strategy, he promised to end corruption, say the Thai ball, I'm now going to reform. I'm gonna stop them being so corrupt. I'm gonna stimulate national renewal. I'm going to renew Korean culture. But he also realized he couldn't do this if he didn't have the support of the chai ball themselves. So he pardons those who had been accused of corruption in return for which they have to support his strategy of export led growth. Now, what is he going to do then? I think he does two things. One, create Japanese Korean pride in its culture through what was called the Cultural Heritage Protection Act of 1962, which had a committee for erecting patriotic forefathers. So you got massive statues of people who, even whom you could have pride. The biggest one in the middle of, of soul was a statue of Admiral Ye and Xi, who defeated Japan in the war of 1592 to nine. Now, not just Gresham is important, but also, uh, history was being remembered here. So pride in culture, but also authoritarianism, sense of the media limit, freedom of expression, and then turn to export led growth as a way of ending dependence on American aid. So it was a combination of oppression, cultural policies, allowing a to turn away from nationalist, economic isolationism to nationalist expansion. Now, how do you do that? How do you create this policy of export led growth is often said it rests upon Park as a military authoritarian. You wouldn't mess with him, would you? Well, I wouldn't, but it's not just that. The South Korean state under Park, has been described by one leading authority, Korean authority, as authoritarian bureaucratic. It provided effective coordination and growth with highly skilled technocratic, uh, officials who introduced institutional reform, improved planning, and followed the economic model of Japan. The state owns some, um, factories, uh, steelworks itself, but its major role was to support private enterprise. The state, like in Japan, providing guidance through five-year plans, starting in 1962, supporting heavy industry exports. And those plans were very close to what Kii had done in Manchuria. In fact, KII as, uh, as, uh, prime minister in, in, in Japan was rather embarrassed. When Park turned up and they started, you started reminiscing about all the wonderful things they had done in Manchuria in the 1930s, which is not something that you would mention in polite company in the 1960s. But skilled bureaucrats in the Economic Planning Board and the Ministry of Trade worked with a few of these tribal business groups such as Hyundai, Samsung, lg, that dominated the economy and spread risk across a wide range of industries through cheap loans, licenses, tax benefits. It was a very interconnected group of family firms of fa sorry, family members like you see there. Uh, in the, the, the Samsung, uh, uh, tribal, they expanded to increase market share. They weren't necessarily driven by profit, but dominating the market by borrowing success depending on their ability to make deals with the state. The government provided support through loans, permits, tax cuts, subsidies on condition that you were successful in exports. And if you were not successful, you would lose those, those perks. It was an aim of shifting the industrial structure to heavy industry capital intensive, high value added, technologically advanced, and also, again, making sure that export growth did not lead to foreign involvement. So during this period of park, the chibo became ever more powerful. They, uh, increased from 15% of total sales, uh, as a percentage of GNP to 67% by 1984. So it was a state business alliance in a governed market, or what is rather more critically being called crony capitalism. Now, of course, the danger there is that reliance upon cronies, uh, could lead to unpopularity. So Park also tried to do, uh, did two other things. One was to create a coalition with the countryside and farmers through the new village movement launched in 1970, modernize the countryside. And secondly, labor repression. You repress workers, which allowed him to ignore anti-Japanese views. You hold down wages to allow the, the tribal to compete on international markets. Now, problem with that, of course, is at some point it's going to explode, which it did. So you have growing populist opposition to corporate power favoritism, protests against low wages and repression park indeed was fascinated. In 1979, the new president also suppressed a pro-democracy uprising in 1980. And suppression continued alongside a new policy, used popular culture as a distraction, keep the workers happy. This was called the policy of the Three S's. Sports, sex, and screen Green didn't altogether work. Here's the mass uprising in 1987, led to the end of military rule. The new civilian government, which came in after that saw a potential in cultural industries, is invested in the internet information and in communication technology. But the government also continues to support the tribal. But like in Japan, a move now towards more, uh, if you like, cooperation with them, trying to make them more transparent, make them specialized, rather than just have this wide range of diverse, uh, industries, uh, but are now going forward, in fact, soft repression rather than hard repression. So this attempt to, uh, remove, uh, that the tribal a or the form the child wasn't entirely successful. There continued, uh, use of, of the childs continued crony capitalism. The form then form attempts falters, uh, uh, against the, the entrenched power, uh, of, of these people. Crisis then hits in, uh, 1997. This is partly result of the fact that currencies in Korea and elsewhere in in Asia were pegged to the US dollar. The US has got a lot of money to invest. If there's no exchange rate, uh, risk, you might as well put it into these countries with a very, very high rate of return, great, until the point emerges at which there's a fear that the currency will be devalued, which is people withdraw their money. And at that point, money is withdrawn. In 1890, in 1997, it exposed the risk of its high reliance upon loans to large business groups over investment, the price of computer chips, one of the largest exports of Korea collapsed. Banks were left with large loans. The IMF then intervenes and orders reform of the corporate structure, uh, reduce the role of credit and the banks. But so then you, again, you have an attempt by career to regain its authority and regain its, uh, autonomy. People hand in their gold, uh, jewelry in order to pay off the IMF loan. I think that this is, um, actually very important for when the crisis hits. Then in 2008, the global financial crisis, the Korean state, we are not going to put ourselves in that same position again, of being dependent upon outsiders. The International monetary Fund, they build up a reserve. They're not hit by the global financial crisis of 2008. A lesson was learned. Also, though were lesson learned that the, that investment in the internet pays off. Cultural industries expand. The government aim to quadruple its exports in the cultural industries. Squid game is a sign of the success of that policy growth. Unlike in Japan, returns, exports grow rapidly. Exports as a percentage of GDP were about 26% of GDP in 19 95, 50 6% in 2012. So research and development investment, uh, was very high. Great success. But was it, we should also look at weaknesses. A leading Korean sociologist as referred to South Korea as experiencing compressed modernity. Very rapid, very condensed growth. But he says that was anchored in the family. The family dominated business, welfare and education. It's what he calls family centered modernity, which overloaded the family with too much, with providing welfare, with paying for education, paying the savings to go into the investment, which led to very high levels of suicide, divorce, violence, low fertility, delayed marriage burden upon women and on the young, and high pressure on poor people with a very high level of household debt. Lemme just mention a few things about that. Uh, very quickly in conclusion, by looking at some tables here, Korea is a highly educated society, very high proportion going into tertiary education like in Japan. But a large part of that was paid for by individual families. Large part of the cost of education fell on families rather than the government. And that is true of welfare generally. You should see there in that table on the screen, a low level of government spending with a high level of alliance upon familial self welfare. There's also the same domination of the family in business, in those tribal problems of cronyism continue to exist. In 2017, the president of Korea, who was Park's daughter, was ousted and accused of demanding money from the three leading chibo. She was sent to prison for 20 years, uh, was actually released in 2021. The chairman of Samsung was also sent to prison, but was pardoned in 2022. So this continued domination of families and crony capitalism, which brings us back to squid game. Squid game is, I hope you've all realized when you were watching it, a critique of South Korean capitalism and inequality. For those of you who have not watched it, and you need to have quite a strong stomach to watch all of it. The premise is that 456 players of the game are in debt. They're playing for huge money prize in children's game, but losing the game means you are killed. The players are dressed in green, which is the uniform of the new village movement. I talked about the park setup. They're being watched by red masked guards for the gratification of rich foreigners. Hmm. Could that be the international monetary fund? I wonder. The script was written in 2009, and the author refers to a strike at a motor plant in 2009. The main character in the squid game, the one who wins the game refers in, I think his episode five. Perhaps I'm wrong, uh, to losing his job and taking part in this strike Squid game is a, it shows the success of the Japanese cultural exports. It also a critique of some of the downside of it. Squid game like parasite deals with people who are experiencing inequality and marginalization while others prosper. So measured by growth of the economy. Japan and Korea have been remarkably successful since 1945, not through fee market capitalism, as was advocated by the United States and the International Monetary Fund, but through state direction. The contrast with Argentina, which I started is striking There, the economy stagnated South Korea escaped from underdevelopment to become a developed economy, Argentina regressed from being one of the world's most prosperous economies to a state of underdevelopment. Although Latin America secured political independence from Spain and Portugal in the 1820s, they became economically subordinated to foreign capital in a way that both Korea and Japan avoided. What went wrong in Latin America is what I will talk about next time. Thank you. Uh, you mentioned a lot about tsu. Yeah. How many of those still exist today? And if so, how powerful are they? Um, well, Mitsui still exists today. Um, uh, Mitsubishi still exists today, uh, so that they, they were the two biggest ones. Uh, so they, uh, they, they've transformed themselves from being tsu to these tsu. So, uh, the, these big conglomerates are, are still there. Uh, I mentioned Nissan. I think there was, there was an issue, um, after the war that the Americans, uh, didn't quite understand the fact they reflect the old TSU and the new Zsu. They thought they were all bad and supporting militarism, not quite realizing perhaps some of the, uh, the ones like Mitsui were a bit ambivalent, at least about relationship with the, uh, with, with, with the military. Nissan, uh, was actually much more complicit, complicit, very complicit, um, in, in, uh, the what one might consider to be war crimes in, in, in Manchuria. Uh, so, um, they, they, they do, they do still, they do still exist, uh, in this new form that if fact devolved networked form, uh, of the Kaatsu. Um, I'll, I'll take one from, uh, from SDO next. Um, the, uh, uh, a very interesting question of, uh, what are the lessons for UK government economic planets from the experience of the economies of Asia? Well, that's is a very, very good, I didn't know We had That's a good, that's a good, that's a good question. Um, well, you might, uh, have noticed that what I'm stressing in this is how the role of the state is so important, um, that in, in, in 1997, when you have the, uh, the IMF coming in, um, they come in and they say to say to Chris, look, you should, you mustn't behave like this. All this state directed stuff, you know, you've gotta be like America, food markets and, and so on and so forth. And, um, a a, a leading economist, um, white wing economists, uh, pointed out, it's not the role of the army. We have to come in and tell people what, what to do. And anyway. Do you think there's not crony corruption in America, <laugh>? Um, so I think that, um, that there's an interesting if ideological debate there about how far should you one, have state, state directed, um, development. Now, I don't think one wants to have state direction by, um, somebody who is a military dictator, an authoritarian regime. And I've been pointing out some of the downsides of it. Uh, what I would say picking up, um, on recent book by Mariana Mascato, is that we tend to downplay how important the state has been in, uh, both United States and Britain in, in development by providing money for the internet, which is coming outta Nassau and the, um, uh, the American Defense Department and so and so forth. So I think that, um, the, the lesson I would take here is that, that a sighted state directed, uh, development can be a good thing, but you don't need to have that alongside authoritarianism and repression. And I've been pointing out that's part of the problem in the, in the economies here. I was gonna ask, considering that both China and Japan have new Confucian, um, philosophy. Yeah. Why did Japan succeed in becoming economically independent and China kind of collapsed under the shackles of colonialism? Yeah, well, that's, uh, OO obviously, I suppose you could say what one of the issues that I've been pointing to is that Japan has seen what had happened to China and wanted to, wanted to make sure that that, uh, didn't happen to, to them. Um, I think that, I think it's partly a matter of, of scale. Perhaps it's, it's, it's easier within, within Japan, uh, to create this, um, like a modern nation state, if you like. The process that I, that I was outlining, um, I think it was very difficult to, to do that in, in, in the, in the size of China. Uh, and of course, it, it's, um, the, it, it was very difficult for the, um, the dynasty there to, uh, to modernize. Uh, when you have the fall of the, uh, Chinese, um, emperor and sun becomes the, um, the, the, the, the leader, uh, in China, uh, and failed, he goes to Japan as a, is that the way we should, we should try and proceed. So I think it's interesting that the Chinese were trying to learn from Japan in, in how to create that sense of, um, in fact, unity and modernity. Um, I think then what Soen is, is trying to do in, in that is to link a sort of new Confucianism with, um, working with international agencies to come in, bring in capitals, then we can't get the capital otherwise. So I think the, the, there's an interesting interplay between Japan and China, uh, China, if I didn't have the, the lessons in Japan until later after the incursion by the, by the Europeans, um, in the concessions that were, that were forced. And then I think it's also interesting that India tried to learn from Japan as well during the Second World War. So I think there's, there's another lecture lurking there, which is about what, what happens in, in, in India. But, uh, yeah, that's another very good question. Um, if I can maybe ask, um, one final question. Mm-Hmm. We, we, we were talking before the, uh, uh, before the lecture. Um, where do you see the, we've seen this incredible EE export driven growth in a number of countries in Asia over the last, uh, uh, decade. What's the next tiger? The next tiger. Gosh. Well, I, by the way, I, I hope that nobody turned up thinking there's a lecture about tigers <laugh>, um, in which case you've learned something you didn't think you were going to learn, um, the next tiger. Well, I think that obviously we got growth in Malaysia, in and in Vietnam. Obviously elected didn't have time to go through every single country, and I wouldn't have enough knowledge, uh, about it. The, the only countries that I know in this area is my personal experience is Japan and Korea. I think actually the one to watch is India, uh, which is not really nation tiger. I, I, my suspicion is that, that China has got serious problems. Now, I was talking last time about why did China succeed and Russia fail in economic modernity. I think this serious issues now within China, with the capacity ever grand of property company, there's the levels of debt, uh, uh, et cetera, et cetera. Uh, but I think India is, is growing. And that's an interesting one because India, after the war embarked on import substituting industrialization, a very tight state control, the license barrages, as it was called, you had to have a permit to do, to do anything, but in a way which held back development rather than encouraged development. Now, uh, one doesn't necessarily agree with, uh, Modi's, um, Hindu nationalism. Uh, well, you know, I don't want to go into, uh, other people's politics, uh, but he is trying to break down those licenses. Now, I think that's an interesting question in terms of what Irene talking about here. Can you actually modernize by building a cultural identity, which can be pretty awful. So I think that's, if I were giving another lecture, four lectures, which would rather three this year, it would be to look at what's going on in India. Um, but I, I'm afraid time marches on. I, well, I'm, I'm conscious that there being many more questions we could have taken from the floor and, and, and more on Slido, which might have to lead to a podcast later on. Right. Um, however, uh, ladies and gentlemen, it's been a delightful insight, um, into, uh, these, uh, Asian tiger economies. And would you join me in thanking our visiting professor of economic history, professor Martin Norton. Thank.