The Politics of Marketising Asia

T. Carroll, D. Jarvis, T. Carroll, D. Jarvis

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137001672
• Topic: Economics
• Subtopic: Economic Policy
• Index: Economics

Economic growth continues to transform the economic and political landscape of Asia. Equally the policies now being adopted to promote private sector participation, re-structure state entities, and reduce the presence of the state in the provision of public goods and services, are tied to fundamental transformations in Asia's state-society relations. The global cast of contributors present a timely analysis of the impact of neo-liberalism on Asia's developmental policies and the organisation of Asian states and markets. Ironically, the "developmental state" that has historically driven Asia's rapid economic transformation is now threatened by an increasingly dominant neoliberal agenda that aims to roll back the state in the name of market fundamentalism.

1

Theorising Asia’s Marketisation under Late Capitalism: Risk, Capital and the New Politics of Development

Toby Carroll and Darryl S.L. Jarvis

This volume brings together twelve contributions stemming from a series of three workshops held at the National University of Singapore. The three workshops – each of which focused upon a different set of stakeholders – explored the political economy of Asia’s transformation amid an evolving set of neoliberal policy agendas. Uniquely, these workshops and the perspectives of contributors were deliberately designed to be interdisciplinary, recognising that the manifestations of neoliberalism in developmental contexts are wide and varied. Scholars from the fields of political economy, legal studies, sociology, public policy and international relations participated in the workshops.

In establishing this research agenda, we put out a call for analyses of what we described as “market building” – a deliberately technocratic-sounding term that we use to denote a range of largely technocratic (at least in their conception) marketising policies and processes oriented towards continuing the diffusion of market discipline to state and society (Gill 1995, 2000). With the research agenda we were particularly intent on sourcing contributions that moved beyond the dominant characterisations of Washington consensus/post-Washington consensus (PWC) marketisation, and on focusing instead on the novel and less understood array of actors and processes currently involved in embedding neoliberalism in late capitalism. Moreover, taking cues from the more engaging work within critical political economy and political geography, we wanted researchers, working from the various methodological tendencies of their respective disciplines, to look at the political dynamics – the relations of power – accompanying these policies and processes at and across various levels (the transnational, national and local).

As a result, we designed a research programme based around three key groups of stakeholders involved in the market building agenda (the state; the private sector; citizens and social movements) and posed specific questions for researchers to respond to. Why had the current market building agenda taken the precise form it had? Who was pushing the agenda and why? Who was resisting? What shift in the standing of various interests – for example, between classes and the state – resulted from the instantiation of the agenda under investigation? To what extent did market building involve cooption, coercion, cooperation and conflict? What was happening to both the (“developmental”) state and the nation-state in Asia? And what of the broader trans-nationalising qualities associated with market building processes?

We should be clear here that the research project was not simply interested in “mapping” the relevant actors and processes involved in contemporary market building (“mapping” seemed all too benign in the current era). Rather, we were concerned with understanding the precise material and ideological interests driving and resisting attempts to constitute markets in a neoliberal image (to be sure a mapping exercise of sorts) while examining the forms of conflict, cooperation and other dynamics attending these processes. This, we felt, would allow us to make some concrete assertions about the changing patterns of power associated with market building under late capitalism.

Moreover, we felt that it made sense to undertake an investigation of market building in the contemporary era – replete as it is with crises and rapid shifts (particularly evident in the new market building modalities which this volume focuses on) – with a geographical focus upon Asia. While we are now embarking on the fourth decade of efforts to extend market principles to all facets of state and society – efforts that collectively define neoliberalism (Rodan et al. 2002: 2–3; Robison 2006a: xii), neither neoliberalism nor capitalism have had the luxury of stasis. Indeed, both have been altered and jolted considerably (and sometimes desperately) in response to what Marxists would describe as their inherent contradictions, while at the same time impacting state and society on an unprecedented scale. And nowhere is the evolution of both capitalism and neoliberalism perhaps more interesting or deserving of critical scrutiny than in Asia, a region that commentators place at the centre of a new “multipolar world” existing within what is frequently described as “the Asian century” (Lin 2011: 27; Rosser 2012).

For the purposes of understanding the embedding of neoliberalism in a political sense, Asia is also home to a diverse array of political economies, including democratic (South Korea, Japan, Taiwan, Philippines, India), “soft” and “hard” authoritarian capitalist forms (Singapore, Myanmar, China), “transitioning” socialist states (Vietnam), small nascent “frontier” states (Cambodia, Laos), highly industrialised (though still in many ways “developmentalist”) advanced economies (Japan, South Korea) and (still) significantly agrarian economies (Indonesia, Myanmar, Cambodia, Laos, Vietnam).¹ Furthermore, the region has been a veritable laboratory for many “cutting edge” neoliberal experiments over the years and a site for key battles not only between state forms (between the developmental state and the neoliberal regulatory state, for example) but also between the very interests that undergird these institutions. To be sure, the nature of the state in Asia is diverse and, indeed, far from static. However, the more important point here is that none of the respective incarnations of the political economy typologies noted above have escaped being impacted by the often tumultuous trajectories of either increasingly global patterns of capital accumulation or the promotion of neoliberalism, with each connected to the other in complicated and uneven ways. This reality makes Asia ripe for analyses of the neoliberal market building project – a project that might be seen as one designed to displace that most discussed state form in the Asian context: the developmental state (Stubbs 2009; Hayashi 2010) – which seeks to both embed the regulatory state (Jayasuriya 2000) and establish market relations as widely as possible through a variety of state-based and non-state-oriented modalities.

Methods, theory and analytical approaches to understanding marketisation under late capitalism in Asia: bringing politics back in

The contributions to this volume unashamedly assume a political economy framework of one shade or another – with many deploying a critical political economy lens – to assess and understand the practices of marketisation under late capitalism in Asia. Following Beeson and Robison (2000: 3), we see explanatory power in adopting a position that takes into consideration “the integrated nature of political and economic factors” when seeking to understand the trajectories of state, society and capitalism. Indeed, conceiving this project as a necessarily interdisciplinary one if the multifarious processes and trajectories of neoliberal marketisation are to be understood, necessarily supposes an overtly political emphasis on the political economy of late capitalism. The increasing tendency towards disciplinary specialisation within the social sciences, and indeed the tendency towards the “scientisation” of social science, is a practice that we think limits a more perspicacious understanding of the interests which neoliberal marketisation serves. Scientised social science tends to marginalise political analysis for methodological homogeneity that reifies explanation in ostensibly objective, value neutral, apolitical and descriptive ways. The rise of rational choice theory, the rush towards analytics as a subject exclusively of empirical, testable and objective problem-based social science, is a case in point. Indeed, the personification of such approaches, most notably in disciplines such as economics, where political economy is now the exclusive domain of (overwhelmingly) orthodox (liberal) economists, denudes the investigative space of politics to the margins or more obviously attempts to make it illegitimate.

However, alarmingly, apolitical/depoliticised methodological tendencies have also emerged in disciplines ostensibly engaged in political analysis. The adoption of the idiom “political science” by many university departments of “government” or “politics” also signals a strong methodological shift towards scientised and descriptive cognitions. Within political science, the growth and wide adoption of “new institutionalism” over the last two decades, for example, represents the continuing sublimation of politics and its redefinition in ways that make it inherently depoliticised. By ascribing rational motifs to actors and institutions in respect of decision points (framed as “choices”), neoliberal institutionalism presents a political economy approach that sees actors engaged in instrumental games, making decisions that collectively can be analysed through methodologies designed to predict outcomes and behaviours. Actors and institutions as self-interested entities engaged in competition for scarce resources become the “political” component of political economy, but where the substantive methodological framework resides in a form of apolitical economic rationality. We see such “political economy” approaches as diminutive in that they cast aside or, at a minimum, underplay some of the most crucial political aspects pertaining to institutional form and function – aspects such as the conflict and struggle between classes in shaping particular institutional outcomes and, indeed, state–society relations.

In contrast, we maintain that such approaches are ill equipped to address, if not blind to, basic and central questions that inform the neoliberal agenda and its manifestations in social, economic and political relations: how resources are allocated, who benefits from material capture and, in doing so, what this allocation of material benefit does to the broader project of development and inclusivity in development. These issues, we contend, are age-old issues of politics. It is, then, important that we clarify that this is a volume that draws together contributors, albeit from various disciplines and perspectives, who are largely united around the central importance of politics – understood as the social relations of power – in both prioritising and describing social phenomena. For contributors to this volume, this means that the analysis of economics demands that we move beyond the narrow confines of liberal macro- and microeconomics (typically taught in most universities) to understand economic realities as deeply immersed and mediated by politics existing at different levels – the local, the national and the international. It also suggests that understanding politics demands not only simply focusing on the state (especially in an instrumentalist sense), but also on the constituent social relations that preside over processes of social change and which work on, through and around the state (Berger 2004: 10; Beeson and Robison 2000; Carroll 2012a).

Within this broad political framework of analysis, the volume engages and extends two main bodies of overlapping literature – one defined by the application of particular theories to understanding Asia, the other defined by its interest in variously theorising, promoting and critiquing neoliberal market building measures generally. The first body of literature we somewhat conveniently demarcate for the shared interest of its diverse contributors in analysing the ostensible specificities of “Asian development” and/or explicating particular patterns of development via analyses of the Asian context. In the tradition of several thorough efforts to theorise these subjects (see Beeson and Robison 2000: 19–22; Rodan et al. 2002; Berger 2004), we identify three key branches to this literature as important for our purposes here. These branches can be variously categorised as neoliberal/neo or new institutional (“neoliberal”), developmental statist/historical institutionalist (“statist”), critical/radical political economy (“critical”). Each of these camps aligns (respectively, and sometimes, a little unevenly) with core lineages within Western social theory: liberalism/neoliberalism, Weberian institutionalism (and to a certain extent the work of Polanyi) and, finally, Marxist or neo-Marxist (in which, following Berger (2004: 8) we also, for the sake of economy, include dependency and “world systems” analyses – despite the consternation that this might cause to some).²

The second body of literature that this volume relates to has strong intersections with the first but has focused more directly on efforts to specifically understand the constitution of neoliberalism as a project.³ Here, the various “development” literatures, both orthodox and critical, that deal with the work of the multilaterals – in particular the World Bank and the International Monetary Fund (IMF) – and the bilaterals and others that often take their lead from these, are worthy of note, as are those works that tackle the regulatory state as part of the neoliberal agenda (Jayasuriya 2000; Jarvis 2012). Within this wide body of literature, contributors have taken “normative” (read “prescriptive”) and critical positions on neoliberal policy typically captured under the monikers Washington consensus and PWC (Williamson 1990, 2000; Stiglitz 2001a, 2002; Carroll 2010). Each of these monikers denotes a particular phase of neoliberalism – a different combination of paradigmatically confined policy sets and modalities operating within specific time periods which scholars have attempted to characterise and assess.⁴

What ties these two literatures together for our purposes is their focus on the attempt to embed neoliberalism, viewed as a normative good (neoliberal), normative bad (statist) and/or crucial element in fomenting contradiction, inequality and social conflict (critical). Similarly, these literatures are also united in their often common attempt to understand Asia’s relationship with neoliberalism, its geopolitical role in a broader mode of capitalist relations of production structured under Western (American) hegemony and Asia’s role at the epicentre of an expansive global capitalism and crucial geographical site of Western foreign investment. One need only be reminded of the various accounts behind the “Asian” miracle and the subsequent “Asian” crisis of 1997–1998 (“the first crisis of globalisation” (Higgott 1998: 334)), to understand this connection. Indeed, it is useful in a volume analysing the latest impact of marketisation in Asia to sketch briefly marketisation’s history in the region, making reference to the key historical junctures and the way in which these have been conceptualised by the literatures we identify above. Doing so helps situate the chapters of this volume in greater theoretical and historical context.

History, context and Asia’s developmental narratives

For neoliberals and statists, the impressive economic performance exhibited by the high-performing Asian economies (HPAEs) prior to the Asian crisis of 1997–1998 became the subject of debate over the precise reasons behind the somewhat anomalous and geographically concentrated phenomenon. Led by the dominance of Japan – which by the 1990s was the world’s second largest economy, a global leading manufacturing hub, and the repository of a massive 50 per cent of net global savings (Wade 2001: 4–7) – Asia was now home to an array of impressive, if also sometimes disconcerting, and exceptional realities. A volley of statistics in the World Bank’s now-famous East Asian Miracle report in 1993 encapsulated the exuberance over Asian development:

East Asia has a remarkable record of high and sustained economic growth. From 1965 to 1990 the twenty-three economies of East Asia grew faster than all other regions of the world. Most of this achievement is attributable to seemingly miraculous growth in just eight economies: Japan; the “Four Tigers” – Hong Kong, the Republic of Korea, Singapore, and Taiwan, China; and the three newly industrializing economies (NIEs) of Southeast Asia, Indonesia, Malaysia, and Thailand. ...

Since 1960, the HPAEs have grown more than twice as fast as the rest of East Asia, roughly three times as fast as Latin America and South Asia, and five times faster than Sub-Saharan Africa. They also outperformed the industrial economies and the oil-rich Middle East-North Africa region. Between 1960 and 1985, real income per capita increased more than four times in Japan and the Four Tigers and more than doubled in the Southeast Asian NIEs. ...

The HPAEs have also been unusually successful at sharing the fruits of growth. (World Bank 1993a: 1–2)

Within this narrative of Asia’s developmental transformation, countries such as South Korea, with a per capita income that increased tenfold between 1965 and 1995 and which exhibited a degree of industrial advancement approximating that of the long-industrialised countries, often came in for particular attention and generated a spate of literature all focused on examining and explaining its “miracle” transition (Amsden 1989; Hart-Landsberg et al. 2007: 2).

Coming at this empirical reality from very different perspectives, the statists and neoliberals pushed their respective theoretical carts to explain Asia as economic exception. Given the ascendancy of neoliberal ideology throughout the 1980s and early 1990s – an ideology that like neoclassical economics underpinning it claimed to be describing “natural laws” – the Asian growth story had to be explained by neoliberals, if somewhat awkwardly for some onlookers. As Berger (2004: 4) notes, by the 1980s the conclusions of neoclassical economics – in particular that the market was the best mechanism for allocating resources – were orthodoxy within the World Bank, the IMF and the Organisation for Economic Co-operation and Development (OECD). Indeed, a veritable “counter revolution” in development policy had taken place that had witnessed various neoliberal positions become more prominent, subsequent to the declining growth rates and the various crises of the 1970s in the developed world, a third world debt crisis and, importantly, the rise of conservative governments in the United States (Reagan) and the United Kingdom (Thatcher) (Toye 1987: 22; Carroll 2010: 40–41). While the precise positions of the intellectual figures behind this neoliberal counter revolution varied, as Colclough has noted the neoliberal position given voice in the counter revolution was relatively harmonious in echoing (albeit, often rather selectively) the liberal market elements of Adam Smith and Alfred Marshall and, critically, an agenda of freeing the market and rolling back the state (Colclough 1991: 6–7).

Applied to the underdeveloped world, this meant that the dire conditions observed were readily attributed to state intervention and the “rent seeking” and other distortions that state action seemingly wielded against the ostensibly “natural” efficiency of the market and “getting the prices right” (Wade 1990: 5). While the influence of neoliberalism was less directly apparent in Asia than elsewhere – the structural adjustment programmes applied in sub-Saharan Africa or the agenda of Margaret Thatcher are more famously emblematic of the 1980s neoliberal push – and while the Asian developmental state was antithetical to neoliberal positions, nevertheless neoliberals enlisted Asia’s rise and development to bolster their narrative and tout the benefit of their prescriptions (Wade 1990: 4; Hart-Landsberg et al. 2007: 3). In particular, the shift f...

Table of contents

• Cover
• Title
• 1  Theorising Asia’s Marketisation under Late Capitalism: Risk, Capital and the New Politics of Development
• 2  Risk, Social Protection and the World Market
• 3  The International Finance Corporation’s Transformation of Development in the Asia-Pacific: Working on, through and around the State
• 4  Regulatory States in the South: Can they Exist and Do We Want them? The Case of the Indonesian Power Sector
• 5  State-Building and Primitive Accumulation in Solomon Islands: The Unintended Consequences of Risk Mitigation at the Frontiers of Global Capitalist Expansion
• 6  Into the Deep: The World Bank Group and Mining Regimes in Laos, the Philippines and Papua New Guinea
• 7  Building Neoliberal Markets and Other Agendas: The Politics of Risk Management at AusAID
• 8  Market Building and Risk under a Regime in Transition: The Asian Development Bank in Myanmar (Burma)
• 9  Reforming the Chinese Railway Sector: The Role and Limits of International Governmental Organisations in Building Markets
• 10  Institutional Design and Quality as Determinants of Market Building: The Markets for Corporate Control in Asia
• 11  The Market Turn in Jakarta’s Water Supply: Vested Interests and Challenges of Realising the Regulatory State
• 12  Problems and Obstacles to Market Building in the Indian Energy Sector
• Bibliography
• Index