[lbo-talk] SK vs. NK

Luke Weiger lweiger at umich.edu
Sun Jan 9 15:57:45 PST 2005


----- Original Message ----- From: "Doug Henwood" <dhenwood at panix.com> To: <lbo-talk at lbo-talk.org> Sent: Sunday, January 09, 2005 1:09 PM Subject: Re: [lbo-talk] SK vs. NK


> Luke Weiger wrote:
>
> >Citation?
>
> I don't need a citation to say that free balance of payments
> financing in the range of 5% of GDP made a crucial difference in
> development - it's just a fact. Without it, SK would have had to
> impose domestic austerity or borrow large gobs of money abroad.
>
> Doug

Didn't say you needed it, though I would've appreciated it. However, as I suggested before, even if you're right (which I never claimed to be in a position to doubt), the argument you need is still incomplete. Of course it's a plain fact that the two Germanies and the two Koreas all needed a lot of foreign aid _at some point_ to get back on their feet (what doesn't seem so plain to me is why a 5% reduction in 1960s GDP would've doomed SK, but I'm no economist). The question is whether the differences in aid can explain the differences in outcomes. I don't think they can. Even if the Soviets and Chinese had been both able and willing to keep up with the Western Joneses, I think NK would've squandered the additional resources. (You could rightly note that my argument is also incomplete.)

-- Luke



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