Race to the Swift: State and Finance in Korean Industrialization (review)

Book Reviews229 well-known example. Still, the recurring themes of human dignity and social propriety in his stories, far from being old-fashioned, are among the benchmarks of Korean culture. Moreover, Oh's stories, like much Korean literature of the twentieth century, succeed in reflecting the social realities of this extraordinarily trying period in Korea's long and stressful history such as the war figures in "Uncle," "Seaside Village," and "Migratory Birds." The status of outcasts in Korea's tightly structured society is depicted unsparingly in "A Death at the Mill." The traditionally subordinate position of women in Korea is reflected in "Nami and the Taffyman." Oh's fault, in the eyes of those would criticize him for being socially uncommitted, is that he chose to write literature that reflects social problems rather than social tracts that purport to be literature. Less ideological readers, though, will find in Oh's fiction a wealth of insights into the qualities whereby Korea and its people have endured so long. Bruce Fulton University ofHawaii Manoa Race to the Swift: State and Finance in Korean Industrialization. By Jung-En Woo. New York: Columbia University Press (An East Asian Institute study), 1991. Pp. xi, 280. $35.00 Professor Woo's thesis in Race to the Swift is that a strong state and government-dominated finance have accounted for Korea's economic success, and that "the Korean model limns its origins in the relatively ruthless neomercantilism of prewar Iapan" (p. 42). The state's economic goals, rapid industrialization, and attainment of competitiveness follow from political and strategic considerations, most recently "the perception of the decline of the United States as an hegemonic power . . ." (p. 11). Finance has been allocated by state-owned or dominated banks and by repayment guarantees on foreign loans to industries targeted for development. Such allocation has spurred the growth of the chaebol, a contemporary Korean version of the Iapanese zaibatsu. The system has begun to break down, however, with attempts by the state to liberalize finance to reduce the costs of bailing out bankrupt chaebol and by the chaebol 230Journal of Korean Studies themselves who, though hitherto creatures of the state, want more independence to contain "the cost of currying favor with the authoritarian state . . ." (p. 199). In an introductory chapter on "Theoretical Considerations," Woo argues that the theory of the state is unsatisfactory, that participants in the "statist-pluralist" controversy are only partly correct, and that relations to domestic constituents and the outside world define a state's role. In Korea the state has been relatively autonomous because it controls foreign capital inflows and allocates finance to the private sector. This autonomy, rapid industrialization, credit-based growth, and the government-c/zaeoo/ relation, or what Woo calls "Korea, Inc.," reveals a legacy of state corporatism so that "the Korean state of the 1970s ... [was] consanguineous with the earlier corporatist state" or Korea when it was a Japanese colony (p. 39). This is why colonial Korea is discussed in the next chapter, "Soldiers, Bankers, and the Zaibatsu," and why those who slight the period — such as economists mesmerized by "the immanent positivism and empiricism of idiosyncratic to [economics], today" (p. 16) — are doomed to misunderstand the political economy of contemporary Korea. In subsequent chapters on the Rhee era ("A Method to His Madness"), the 1960s ("In the East Asian Cauldron: Korea Takes Off"), and the 1970s ("The Search for Autonomy: The Big Push"), Woo examines the ways in which the state used financial means to pursue its economic and political goals and shows how these goals were shaped by external as well as by domestic forces. During the 1950s, for example, Syngman Rhee exploited U.S. foreign policy contradictions to promote import-substitution industrialization (ISI) and thus frustrate American efforts to "coordinate postwar reconstruction policy" that called for restoring the "classic pattern of unequal trade" in which Korea exported primary products to Japan in exchange for Japanese manufactures (pp. 54-55). Rhee also blocked attempts to liberalize finance because overvaluation and financial repression were needed to "build a powerful patronage constituency" among entrepreneurs who received state favors (p. 65). Economists, Woo says, "have difficulty explaining Korea's ISI phase..." partly because of...