The strongPolitical Economystrong of the Asian Crisis - UMass Amherst.pdfVIP

Can the Global Neoliberal Regime Survive Victory in Asia? The Political Economy of the Asian Crisis Jim Crotty and Gary Dymski∗ November 1998 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) I. 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 mid-summer 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 fall 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 point is that the essence of the current crisis is its inherent structural complexity;