Economics of Long Term Growth in Southeast Asia

How do whole countries become rich? South Korea and Chile did it. Southeast Asian countries can too. Probably not in the same way. This blog takes a detailed look at development problems and strategies for overcoming them.

Monday, September 04, 2006

Glasnost or warfare? Path-dependent timing or one size fits all political ideologies?

Brad DeLong treated his readers to a little repentencein writing by former Marxist apologists for Stalin:
"You [E.P. Thompson] and I [Leszek Kolakowski], we were both active in our respective Communist Parties in the 40s and 50s which means that, whatever our noble intentions and our charming ignorance (or refusal to get rid of ignorance) were, we supported, within our modest means, a regime based on mass slave labour and police terror of the worst kind in human history. Do you not think that there are many people who could refuse to sit at the same table with us on this?"


Since economic development is a path dependent process that edges along from one inefficient but workable equilibrium to another, like a QWERTY typewriter, only gradually improving, how relevant are grand political ideologies that are at a point so far away from any feasible equilibrium that can realistically be envisioned? And then to learn that these grand political ideologies were being supported by mass slaughter and Gulag slave labour?

Not E.P. Thompson, but British historian E.H. Carr was the most adept historian at "misreading dictators" including, most famously, Stalin (14 vols), but also Hitler before that. Contemporary historian of Korea Bruce Cumings certainly misread the history of Kim Il Sung in his monumental "Origins of the Korean War" but his history is so well-written and well stocked with objective fact that you could use it to build up quite a weighty defense of Edmund Burke. Modern South Korea was built on the foundations of Japanese colonialism which is consistent with Burke's liberal conservatism that "opposes the implementation of grand theoretical plans of radical political change but recognizes the necessity of gradual reform," i.e. recognizes that history is an imperfect path dependent process of evolution and that radically changing or rebuilding the institutions of a society-culture is a time-consuming and painful process(See Reflections on the revolution in France)

According to Niall Ferguson's conception of counterfactual or virtual history, the alternative worlds that decisionmakers envisioned, but rejected, as they forked world history with their decisions are an essential part of of that history. Furthermore, the timing of these alternative decisions is critical.

What was the correct response to Stalin's atrocities? Outrage followed by war? Outrage followed by economic sanctions and isolation? Or a calm measured policy of increasing trade and cultural exchange? The later based on a confidence that the western free market-democracy would overwhelm in the end. Does it matter when such accomodation is made? Carr argued that Hitler should be appeased on the eve of World War II. If he had argued much earlier for reduced German war reparations after World War I he would probably be vindicated.

Burma faces this dilemma now and the outgoing British ambassador to Burma-Myanmar has called for more creativity in solving these problems. What might be interesting for Burma is a Niall Ferguson-like counterfactual history of Glasnost applied now:

"...the main goal of this policy [Glasnost] was to make the country's management transparent and open to debate, thus circumventing the narrow circle of apparatchiks who previously exercised complete control of the economy. Through reviewing the past or current mistakes being made, it was hoped that the Soviet [Burmese] people would back reforms such as perestroika."

We're not in any way guaranteed success in such an endeavour, but we're likely to be better able to make the right intervention at the right time, and avoid the mistakes of the ideologues of yesteryear.