Preliminary version

MARK T. BERGER
Bringing History Back In: The Making and Unmaking of the East Asian Miracle

East Asia's phenomenal economic development has often been interpreted in the West as the fruits of an economic policy which allowed market forces to take their full effect. Others emphasised the dominating role of the intervening "developmental state". Both explanations lack historical foundation and ignore the decisive fundamentals which permitted the "economic miracle". It was the particularly virulent Cold War in the Pacific area which moved the USA to set a course that led to the economic rise of Japan, Taiwan, South Korea and later Thailand, Malaysia and Indonesia. This involved massive financial aid and the largely one-sided opening of the US market to Asian exports. The background to the Cold War also explains the political configuration which gave rise to the authoritarian "developmental states". These were firmly anticommunist dictatorships with American blessing. The Korean War and later the Vietnam War created extremely favourable economic conditions - the former for Japan and the latter for the emerging East Asian economies. The cases of Vietnam and the Philippines also showed, however, that the syndrome created by the anticommunist American strategy was not alone enough to generate economic miracles. From the late eighties, the Asian success story was increasingly taken as the basis for the concept of a state-centred Asian alternative to the neoliberal Western economic model. Although this idea was moved into centre stage in some political circles (particularly in Japan and Malaysia), it did not achieve any policy-determining momentum in the region. An additional factor was that the inherent weaknesses of the "Asian model" became increasingly evident, particularly in Japan. The great financial crisis which originated in Thailand in 1997 offered the USA an opportunity to limit the Asian challenge and consolidate the dominance of neoliberal principles of economic order. Today more than ever for a very long time, the USA determines the limits of what is possible in terms of economic policy. Neoliberalism has won only a Pyrrhic victory, however. The prolonged decline of capitalist economies which started in the seventies has not been stopped. On the contrary, the Asian crisis signals an impending crisis for the entire world capitalist economy. The time is ripening for alternatives to both the neoliberal model and the authoritarian Asian economic model.