Chapter 3: Can the global neoliberal regime survive victory in Asia? The political economy of the Asian crisis
Jim Crotty and Gary Dymski* The Crisis consists precisely in the fact that old is dying and the new cannot be born; in this interregnum, morbid phenomena of the most varied kind come to pass. (Antonio Gramsci, Prison Notebooks, 1996) 3.1. INTRODUCTION The sequence of events that is still denoted the ‘Asian’ ﬁnancial crisis has now produced a global economic crisis. It began with the destabilization of several Southeastern Asian currencies in summer 1997. By summer 1998, Wall Street had lost momentum. The IMF’s inability to stop Russia’s midsummer crisis then turned the cracks in Wall Street’s dizzy consensus concerning the end of history into gaping holes. Traders worldwide ran for safety, leading to spasmodic new rounds of currency and equity-market collapses in Latin America and Asia. Merely documenting what has happened will ﬁll volumes. We focus here ﬁrst on the architecture of the crisis as a whole, and then on one case: South Korea. There are several reasons for choosing Korea. First, it occupies the pivotal place in the sequence of events: the tsunami that built up in Southeast Asia hit the Republic of Korea with full force in autumn 1997, and lingered there through the spring before assaulting New York, Russia and Latin America in summer 1998. Second, Korea is perhaps the prototype for the Asian developmental model. Third, we have observed the Korean situation ﬁrsthand. In eﬀect, Korea provides us with a lens for viewing the innumerable layers of crisis in the current situation. Our central...
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