How Asia Works at LAR

Maxfield Wallace

• 3 min read

Comprehension Questions

These are only about what the text says, not whether the text's claims are true (save that for the Discussion part).

Try to move through these briskly, and don't be afraid to nudge your group to the next question.

Please preface all of these questions with "according to Studwell"

Introduction

  1. What are the 3 critical interventions that governments can use to engineer a transformation within a country from low to high income? A different person should briefly describe each of the interventions.
  2. Are any of these interventions prerequisites for any of the others? Briefly discuss the extent to which these interventions coincide with different development "stages".
  3. Briefly, what is the problem with studying Hong Kong and Singapore as examples of east asian growth success stories, and why are they not discussed as such in this book?

Land Reform

  1. What is "The problem with agriculture in pre-industrial states with rising populations"? (page 8 / page 20) -- what happens "when market forces are left to themselves" and why?
  2. Explain the meaning of "gardening" in this context.
  3. Briefly, what were the political developments that led to land reform being instituted in Japan, South Korea, and Taiwan?

Manufacturing

When answering these questions, when possible, reference the examples of South Korea's cement and automotive industries.

  1. What is "export discipline"? Why are exports so important for economic development and wealth in general?
  2. Briefly review the historical trace of protectionist policy, as it passed from country to country in the west and then to east asia. Ending with South Korea, try to make a list of countries in the chain.
  3. Studwell writes "...the single most important commonality of all developing states in terms of manufacturing policy: that in most large-scale businesses the critical variable is the relationship between the state and private entrepreneurs" -- explain what this means, citing examples from South Korea's development.
  4. When I (Max) visited Taiwan in 2018, despite the plethora of domestic laptop manufacturers (ASUS, Acer, MSI, etc.) I was surprised to find that any given laptop cost more in Taiwan then in the USA. What was going on here?

Discussion Questions

General note: there are some interesting criticisms of How Asia Works in Scott's "highlights from the comments" post following his book review. Here's a selection:

  • HAW doesn't discuss examples outside of asia where land reform failed
  • HAW is overly critical towards the IFM, since the IMF is "the lender of last resort", there is some debate about the historical accuracy of Studwell's claims in HAW
  • Japan, South Korea, and Taiwan all had a political and financial (as well as export friendly) relationship with the USA during their massive development spurt, which may diminish the importance of domestic policy.

Frankly I have not read enough economic history (in particular histories of specific countries) to evaluate these claims. We should take How Asia Works with a grain of salt because these issues are so complex, it's impossible not to simplify them in a book of this length.

  1. Overall, what do you think the utility of this book is? Do you find it convincing? Do you have critiques of the parts that you read?

2. Voluntary trade is good for both parties in any transaction. So how could free trade be bad in a development context? Try to reconcile what you know about "standard" economics with the arguments from How Asia Works.

3. The most common criticism of How Asia Works I've heard is that it (intentionally) overlooks the role of culture.

In Q&A session on YouTube, Studewell responds to a question about culture by citing that Max Weber labeled China as a 'culturally non-developmental' country, which Studwell believes was true at the time-- however China's culture changed in tandem with economic development due to influence from Japan. Studwell believes that culture is too malleable and less useful than policy in this kind of analysis.

Do you agree or disagree? Why?

4. What do you think or feel about the issues of economic justice raised in this book? Some things to consider:

In the development regime Studwell advocates, some of the labor of farmers is harvested by the state to fund industrialization.

An economic model based on export discipline implies a worldview where economic power (and thus wealth) hinges on exports that outcompete substitute products on the international market. And economically powerful countries have an incentive to create (historically, often by force) export markets whenever possible, even if this means handicapping infant industry in another country. In what ways is this just or unjust? Do you think there are better models of international development?

5. How politically contingent (i.e. random) do you think the undertaking of the land reform policies discussed in the book was? What does this suggest about the evolution of history and our ability to change it?