Until quite recently, it was common to observe that the
one area in the capitalist world that was in a strong position
to advance rapidly in the economic sphere without
suffering the social and political strains experienced in
the West was East Asia, where Japan and the so-called
Little Tigers appeared able to combine rapid economic
growth with a minimum of social problems and a considerable
degree of political stability. Pundits in the region
and abroad opined that the “East Asian miracle” was a
product of the amalgamation of capitalist economic techniques
and a value system inherited from Confucius that
stressed hard work, frugality, and the subordination of the
individual to the community—all reminiscent of the
“Puritan ethic” of the early capitalist era in the West.
There is indeed some similarity between the recent
performance of many East Asian societies and early capitalism
in the West. Some commentators in East Asia
have pointed with pride to their traditional values and remarked
that in the West such values as hard work and a
habit of saving have been replaced by a certain hedonism
that values individual over community interests and
prizes gratification over future needs. Some observers in
the West have agreed with this assessment and lamented
the complacency and rampant materialism of Western
culture.
As the twentieth century neared its end, however, the
argument suddenly became academic, as evidence accumulated
that the East Asian miracle itself may be a myth
or at least an overstatement of a more complex reality.
The financial crisis of 1997 demonstrated that the Pacific
nations were not immune to the vicissitudes of capitalism
and that overconfidence and lack of attention to fundamentals
could be as destructive on one side of the ocean
as the other. Mesmerized by the rhetorical vision of the
Confucian work ethic and less experienced in riding the
choppy waves of the capitalist business cycle, Asian governments
and entrepreneurs alike became too complacent
in their view that the bull market in the region
would never end. Banks extended loans on shaky projects,
and governments invested heavily in expensive infrastructure
improvements that exploded budget deficits
while promising few financial returns until the distant future.
When foreign investors grew wary and began withdrawing
their funds, the bubble burst. It has been a sobering
experience. As one commentator put it, “It was all
too Disneyland; so much glass that was too shiny. Now
they are going through a cultural crisis triggered by the
economic crisis. These countries have to become more
pragmatic.”1
It would be premature to conclude that the recent vision
of a “Pacific century” will fade as surely as Khrushchev’s
famous boast to Eisenhower four decades ago
that “we will bury you.” The economic fundamentals in
many East Asian countries are essentially sound, and the
region will undoubtedly recover from the current crisis
and resume the pace of steady growth that characterized
its performance during the last quarter of the twentieth
century. But the fiscal crisis of the late 1990s serves as
a warning signal that success—in East Asia as in the
West—is the product of hard work and can never be
assumed.
World History
