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Asian Tigers Skinned Alive,
"Free Market" Exposed

by Mark Cook


Millions of people are about to realize that the collapse of Korea and the "Southeast Asian tigers" has just destroyed the whole justification for the New World Order.

The collapse seems to have taken the US corporate media by surprise. For years they had depicted the fast-growing Asian "tiger economies," South Korea, Indonesia, Malaysia and Thailand as the way of the future for the whole world.

In their obsession to promote the "tiger economic model," the corporate media ignored the signs of collapse until they became impossible to hide.

Readers of the Prism learned last April that South Korea, 11th largest economy in the world, was "at boiling point" and that "South Koreans feel their economy is collapsing" because of the government's extreme rightwing economic policies. But the US big business media kept these reports from American readers, even though our report was based on findings covered in the powerful London Financial Times, hardly a leftwing journal.

According to the US corporate media (and many economists), the US and Western European economic model was outmoded, because it was built on a tradition of worker rights, strong labor unions and even "enlightened capitalist" policies of paying decent wages to enable workers to buy their goods. The US economy was now declared to be successful only to the extent it copied the "Asian tiger" model of low wages and exports.

Cultural Centers into Casinos

The "Asian tiger" model was for the whole world. In Eastern Europe, kindergartens and day care centers were being closed, community cultural centers turned into gambling casinos, millions were being laid off or forced to work without pay, health care statistics were collapsing so fast after 1990 that the figures are scarcely believable.

No matter, the world was told. It was strong medicine, but the patient would be better in the long run. The Southeast Asian tiger economies were the proof of it.

In Africa and Latin America, cholera and other easily preventable diseases were spreading because of cutbacks in health care funds dictated by the International Monetary Fund, according to the health ministers of the affected countries. The economies of Central America were even worse off than during the war years of the 1980's, and the few jobs being created were "maquiladora" sweatshop jobs with brutal working conditions imposed by South Korean and Taiwanese factory owners.

But that's the Asian tiger model, The New York Times and other media explained, defending the sweatshops against charges by human rightsgroups. The Times sympathetically quoted a factory owner's explanation that such exploitative conditions were "tough love," aimed at making Central American countries successful, like Korea.

In the "victorious" capitalist industrial countries, where the population has been pressured to accept wage cuts, "downsizing," and reduced health care and social security benefits, it has become clear that the real winners of the Cold War are not the population of the countries but a group of international speculators who care for no country and sail under no flag, except the Jolly Roger.

But that's the idea, the corporate media explained. Over time, competition with the Asian "tigers" will make the economies of Western Europe, North America and Japan more, uh, competitive. Besides, it's the inevitable laws of economics.

Not Just Sneaker Billionaires

The "tigers," it was said, were enriching not only foreign bankers and local military despots but a new middle class. Not just sneaker sweatshop billionaires like the president of Nike, but a new working class that would eventually move from textile factories to heavy industry, computers, etc. It would be postwar Japan all over again.

Yes, it was all based on runaway shops, factories escaping higher wages in other enriching the factory owners and (supposedly) the exporting country, although most of the factories are owned by foreigners who "repatriate" the profits.

In theory, over time the workers will become better paid, join the middle class and so forth. In reality, the workers are overwhelmingly adolescent females, some of them only children. As workers grow older, they are dismissed, out of concern that they might have developed the skills and the relationships among fellow workers to organize a union.

China Enters Market

Things began to go wrong for the "tigers" when China entered the market, with highly educated but miserably paid workers. The Chinese entry showed that as soon as a cheaper labor force is found, the jobs will move there.

As the French monthly Le Monde diplomatique noted in January, the United States imported about $12 billion worth of shoes in 1995, of which 50% came from China, against 3% from Korea. Only three years earlier, the US had imported 25% of its shoes from South Korea.

In ten years, the Chinese share of clothing exports to the US has gone from 3% to 16%; South Korea's share has dropped from 15% to 3%. The market represents $40 billion.

The same with finance, which also followed cheaper labor. According to Stephen S. Cohen in Le Monde diplomatique, Thailand received 10% of investments in Asia, China 20%. By 1994, Thailand had fallen to 1.3% and China had reached a whopping 67%. Malaysia dropped from 20% to 8% in the same period.

Increasingly, the Southeast Asian economies became a Ponzi scheme for hot money, speculating on area stock markets instead of investing in real production. The stock market money could be pulled out at any moment, as it was.

But what happened to the theory that the South Korean and Indonesian textile workers were going to move on to higher paid, higher skilled jobs?

They didn't. As textile workers in the American South have found, the whole idea of a runaway shop is to abandon workers as soon as some cheaper ones are found.

There is a very different model from US industrial history. In April 1914, Henry Ford and James Couzens announced that they would pay their unskilled workers $5 a day and reduce the work day to 8 hours from 9, "because that is about the least a man with a family can live on these days," as Ford explained in an interview. Five dollars was about twice the prevailing pay scale in the auto industry at the time.

Ford added later that decent wages helped him sell more cars, in addition to gaining better, more committed workers and reducing labor attrition.

When Couzens left Ford Motor Company, Henry Ford turned to brutally reactionary policies, including violent repression of labor organizing. But by the 1940's and 1950's, with the victory of unions, Ford's 1914 policy was accepted as commonplace, "enlightened" capitalism that produced a market for the capitalist goods.

Once the capitalist economic crisis began in the 1970's, such ideas were thrown out the window. Increasingly, there is a desperate tendency to resort to fascist economic models: a growing mountain of debt based on fictitious values, the increased exploitation of labor worldwide, at lower and lower wages, and repressive measures to make it all work, as in Indonesia.

The truth is that the new fashions among economists are not inevitable laws of economics. Tariff laws have protected living standards historically. Education and health have been promoted.

As for "free" currency exchange, the US occupation authorities in postwar Germany did not consider freewheeling currency speculation to be good, much less inevitable. They nailed currency levels to the wall, and shot speculators.


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