Marxist Perspectives on South Korea in the Global Economy

Martin Hart-Landsberg, Seongjin Jeong, Westra Richard

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351919579
• Edition: 1
• Topic: Business
• Subtopic: Finance
• Index: Business

This volume brings together work by international scholars to provide a unique analysis of the past, present and possible future trajectory of Korea's political economy from a distinctly Marxist perspective. The volume differentiates the Marxian approach to the political economy of Korean development from the Keynesian, social democratic approach that currently dominates the critical literature. In doing so the volume provides a unique view of the development of the South Korean Economy.

PART I
Marxian Method and South Korean Capitalism

Introduction to Part I

With the resurrection of Marxist theory across the various areas of the development field fecund debate has sprung up over Marxist methods analysis. To be sure, no single method has yet achieved paradigmatic status, yet great progress has been made in Marxism in this quest. The three chapters in Part I, then, all deal with questions of Marxian methods of analysis and the potential utility of these methods for the study of capitalist development in South Korea. Part I, therefore, makes an important contribution to the broad literature on Marxist theory and method as well as to the literature on thr Korean economy. The opening chapter of Seongjin Jeong, “Trend of Marxian Ratios in Korea: 1970-2003”, attempts to estimate key Marxian ratios, productive/unproductive labor ratio, rate of surplus value, and rate of profit, for the Korean economy during 1970-2003, by applying the method of Shaikh and Tonak (1994) and using macroeconomic data, including Input-Output Tables. Jeong finds that the increasing world economic trend toward growth of unproductive labor in capitalist economies commenced in Korea only in the late 1980s. He argues that the extraordinarily high level of productive labor during 1970-80s was crucial to the rapid economic growth of this period. Jeong further estimates that the rate of surplus value in Korea remained at a fairly stable level, around 140%, during 1980-2000, with a slightly increasing trend during 1990s. Unlike the rate of surplus value, the rate of profit of non-farm business sector in Korea is estimated to have fallen significantly since late 1980s, after maintaining a high plateau during the era of Park Chung Hee. Contrary to institutionalist-Keynesian consensus which argues that the economic crisis of 1997 was anything but the crisis of “fundamentals”, Jeong attempts to prove the hypothesis that Marxian tendency of rate of profit to fall was clearly behind it. Jeong also argues that recovery of the rate of profit since 1997 crisis was enabled by increasing exploitation of working class as well as by enormous devaluation of capital.

While Jeong’s chapter analyses the long-term dynamics of capital accumulation in Korea, by estimating various Marxian ratios, including the rate of profit, Dong-Min Rieu’s chapter, “Estimating Sectoral Rates of Surplus Value: Methodological Issues”, focuses on the methodological issues involved in the estimation of the surplus value in Korea. Although both Jeong and Rieu use same data of Input-Output Tables in order to estimate the rate of surplus value, they differ in that Jeong estimates the rate of surplus value for the whole Korean economy in terms of price, applying the method of Shaikh and Tonak, while Rieu estimates sectoral rates of surplus value in terms of labor time by applying the conventional procedure of ‘reversing’ Marxian transformation from value to price, originally submitted by Okishio. Rieu argues that the so-called “New Interpretation” empirical variants are not superior to the conventional method of “reverse” transformation in that the former ignores the problem of differential sectoral rates of surplus value and fails to reflect Marxian perspective of the labor theory of value.

Both of these chapters exemplify the empirical relevance and theoretical potentials of Marxism in the analysis of the contemporary Korean capitalism, totally neglected or rejected by Keynesian/statism as well as mainstream neoliberal economics.

In his chapter “State, Market, and Stages of Capitalism in South Korean Development”, Richard Westra operationalizes the Japanese Uno approach (Uno, 1980) to Marxian political economy to deal with two abiding methodological problems in Marxist theory that are of high relevance for understanding South Korean capitalism. First, it is striking, Westra argues, how, given the fashion in which the debate over South Korean development swirls around claims over the relative efficacy of market and state in the development process, market and state emerge as exceedingly reified concepts in the literature with scant attention paid to the historicity of their analytical separation. Westra subsequently maintains that it is only on the basis of Marxian analysis of the “ontological peculiarity” of capitalism that this analytical separation can be clearly understood. Second, the chapter expounds upon Uno’s work...