In Asia's Mirror: From Commodore Perry to the IMF

In Asia's Mirror: From Commodore Perry to the IMF

Mini Teaser: Asia has, in its moments of crisis, been forced to open up to the West before. These openings have been attended by an interesting kaleidoscope of moods, their usual pattern neatly captured in the life of just one man, both hero and anti-hero of t

by Author(s): Sebastian Mallaby

The Meaning of MacArthur

There is a famous analogue to the newspaper picture of the humbled
President Suharto, signing what amounts to a surrender of economic
sovereignty. After the Second World War, when MacArthur headed the
American occupation government in Japan, he had himself photographed
with Emperor Hirohito. In that photo, the general is huge, relaxed,
his shirt unbuttoned at the neck; the emperor is tiny, nervous,
imprisoned in a starched collar. The picture spoke volumes, and it
was meant to. It was taken at the start of the occupation in
September 1945, a time the Japanese remember as their Second Opening.
The victorious MacArthur had grand ambitions for the triumph of
Western ideas. The New Deal technocrats on his staff were drawing up
plans to remake Japan's economy and society along Western lines: they
drafted new school curricula, throwing out the nationalistic texts
used before the war and replacing them with American-style civics
lessons; they broke up the big conglomerates that dominated the
economy; they legalized trade unions and organized elections. To make
way for reform, the nationalist leaders of Japan's wartime regime
were purged from public life. Supremely confident in American power
and ideas, MacArthur likened Japan to a small boy: backward,
immature, but certain to grow up to be like America-the-father.

For a long time after the war, most American writing on Japan
accepted MacArthur's image. But, as Japan did grow to match American
prosperity, the first doubts surfaced. Mature Japan turned out to
resemble America less than many had hoped: its democracy was shallow,
its economy was closed to foreigners, its officials were suspicious
of America's laisser-faire orthodoxy. Moreover, this different Japan
was not always friendly to American interests. Starting in the 1970s,
Japan's trade surplus became a bogeyman for Western protectionists.
And so, around the same time, a new view of MacArthur arose, focusing
less on the success of his Westernizing reforms and more on his
failure to implement them fully. The photo of MacArthur, once an
image of Western triumph, became instead an image of its hubris.

This adjustment has been accompanied by a revision of MacArthur's
view that Japan would grow to resemble America. "Revisionists" urge
Americans instead to accept that Japan's economy follows rules unlike
those described in Western texts: its bureaucrats will never
relinquish their role in guiding the economy, its big firms will
always remain brutally focused on exports. The Japanesesystem, the
revisionists go on, has been more successful at producing growth than
the American one--so Americans should get used to the idea of Japan
as Number One, to Trading Places with the Japanese, in the title
words of two typical books espousing this view. And so America should
take a tough line in trade negotiations with Japan, resisting the
fantasy that Westernization will bring the automatic liberalization
of the Japanese economy and with it the harmonization of U.S. and
Japanese global interests.

Since the 1980s, the influence of this revisionism has been a good
measure of America's mood. After Wall Street's 1987 crash America
felt down, so glum revisionist warnings about the invincibility of
Japan found a ready audience. From the early 1990s, however,
America's fortunes rose and Japan's sunk, and the revisionist
influence sunk with them. To the extent that revisionist arguments
still carried weight, they did so by extending their argument from
Japan to the rest of East Asia, and by citing the region's economic
boom as evidence for the power of some composite Asian model. James
Fallows did this with his 1994 book, Looking at the Sun, concluding
that, "Western societies should concentrate on whether and how to
remake themselves."

The Asian crisis, one might think, would reduce revisionist influence
still further. Curiously, this does not appear to be happening. Even
though America is prosperous, and even though Asia has been laid low,
a new version of revisionism is gaining ground. This version resists
seeing the IMF in the way that I have done, as a kind of latter-day
Commodore Perry. Instead, it disparages the IMF and predicts that it
will fail. It suggests, in effect, a parallel between the IMF and
MacArthur--who, in the revisionist view of the world, was an abject

A Trio of Doubters

Some Western doubters are long-standing revisionists, and up to a
point their views can be discounted. It is only to be expected, for
example, that Chalmers Johnson, the academic father of revisionist
writing on Japan, should dispute the idea that Asia's crisis will
lead the region to Westernize. After all, Johnson made his name by
celebrating the merits of Japan's UN-Western industrial policy.
Writing in The Nation (February 23, 1998), Johnson insists that it
would be disastrous to prescribe Westernization as a cure for Asia's
current ills.

In his view, the Asian crisis has nothing to do with the flaws of the
region's economic model. In 1994 China devalued its currency by 35
percent. Between April 1995 and April 1997 the yen fell 60 percent
against the dollar. According to Johnson, these devaluations, rather
than any deeper structural cause, landed the rest of Asia in trouble.
Export growth in South Korea and in ASEAN fell from 30 percent in
1995 to zero by mid-1996. Given that the whole region had borrowed
lavishly in the expectation of a continued export boom, a temporary
liquidity crisis was inevitable. None of this, Johnson goes on,
should obscure Asia's strengths. Cooperation between governments and
firms, now derided as "crony capitalism", has served Asians well for
most of the postwar period. Governments identified which Western
technologies to import and apply, and organized consortia of private
firms to do the work. This central planning prevented firms from
duplicating each other's efforts.

Johnson goes even further than this: he claims that the Asian crisis
has actually strengthened the case for some aspects of the Asian
model. The economies of Northeast Asia have been hostile to inward
investment. The Japanese, with their famously high savings rates,
financed their investment from their own cash, while Koreans and
Taiwanese tried to emulate this model by cranking up savings rates
through a variety of pro-savings policies. As Johnson sees it, the
region's current financial crisis shows the virtue of this way of
doing things: if you depend on foreigners for capital, you can never
tell when they will suddenly rise up and holler for repayment. The
lesson is to redouble devotion to the autarky that is central to one
version of the Asian way. Greater Western-style economic openness, of
the sort the IMF prescribes, would only store up future trouble.

While Johnson's views may not come as a surprise, he is nonetheless
in surprising company. For his attack on Western triumphalism finds
support from a broad swathe of American conservatives. Trent Lott,
the leader of the Republican majority in the Senate, spoke for many
in his party when he denounced the IMF's efforts in Asia and called
for the removal of its managing director. With a few exceptions,
conservative intellectuals have taken the same view. The most
prominent economist in this group is Harvard's Martin Feldstein,
chairman of the Council of Economic Advisers under Ronald Reagan,
that most triumphalist of presidents.

Writing in Foreign Affairs in the spring, and speaking at a recent
National Interest dinner, Feldstein has agreed with Johnson that
Asia's problems reflect incidental shocks such as Chinese and
Japanese devaluation, rather than anything more profound. And he has
gone beyond Johnson in painting the IMF as the agent of MacArthurian
Western hubris: "A nation's desperate need for short-term financial
help does not give the IMF the moral right to substitute its
technical judgments for the outcomes of the nation's political
process." Rather than trying to restructure Asian economies along
American lines, Feldstein would prefer the IMF to restrict itself to
demanding sensible budgets and monetary policy. For, like Johnson, he
is unpersuaded that the Asian crisis reveals Asia's need to adopt
Western ideas. The "current structure of the Korean economy", he
contends, "may now well be suited to Korea's stage of economic and
political development and to Korean cultural values stressing thrift,
self-sacrifice, patriotism, and worker solidarity."

If it is surprising to find Feldstein in this camp, it is even more
intriguing to find Francis Fukuyama there. Fukuyama is, famously, the
author of "The End of History?", an essay published in these pages in
1989. In that article, he sounded as confident of Western supremacy
as MacArthur ever was. "The triumph of the West", he wrote on the
article's first page, "is evident first of all in the total
exhaustion of viable systematic alternatives to Western liberalism."
And yet buried in Fukuyama's robust phrases, there lurked an
interesting footnote in which he recalled that Alexandre Kojeve, the
French Hegelian who had himself declared the end of history half a
century before, later revised his views. "I use the example of Japan
with some caution", Fukuyama is forced to confess, "since Kojeve late
in his life came to conclude that Japan . . . proved that the
universal homogeneous state was not victorious and that history had
perhaps not ended."

Essay Types: Essay