The New Rich in Asia

Mobile Phones, McDonald's and Middle Class Revolution

David Goodman, Richard Robison

• Publisher: Routledge
• Year: 2013
• Topic: Social Sciences
• eBook ISBN:
  9781136157103
• Subtopic: Ethnic Studies
• Index: Social Sciences

This is the first volume in the The New Rich in Asia series which examines the economic, social and political construction of the 'new rich' in the countries and territories of East and South East Asia, as well as their impact internationally. From a western perspective the rise of the emergent business and professional class may seem very familiar. However, it is far from clear that those newly enriched by the processes of modernization in East and South East Asia are readily comparable with the middle classes of the West. For example, civil and human rights seem to play a different role in social, political and economic change, and the State is clearly more central as an agent of economic development. This volume is the essential introduction to the series, and identifies the 'new rich' phenomenon in Indonesia, Thailand, Singapore, Malaysia, Korea, China, Hong Kong and Taiwan. The contributors demonstrate that the key to understanding the 'new rich' is to realise that they are neither a single category or class, but in each setting a series of different socio-political groups who have a common inheritance from the process of rapid economic growth.

1	The new rich in Asia
	Economic development, social status and political consciousness
	Richard Robison and David S. G. Goodman

In recent years the imagination of the West, and indeed, of the East as well, has been captured by the dramatic emergence in East and Southeast Asia of a new middle class and a new bourgeoisie. On the television screens and in the press of Western countries, the images formerly associated with affluence, power and privilege in Asia – the generals, the princes and the party apparatchiks – however outmoded in reality, are being increasingly replaced by more recognisable symbols of modernity. Western viewers are now familiar with images of frustrated commuters in Bangkok and Hong Kong traffic jams, Chinese and Indonesian capitalist entrepreneurs signing deals with Western companies; white-coated Malaysian or Taiwanese computer programmers and other technical experts at work in electronics plants; and, above all, crowds of Asian consumers at McDonalds or with the ubiquitous mobile phone in hand.

It is as consumers that the new rich of Asia have attracted an interest of almost cargo-cult proportions in the West. They constitute the new markets for Western products: processed foods, computer software, educational services and films and television soaps. They are the new tourists, bringing foreign exchange in hard times. What has helped such an enthusiastic embrace of the Asian new rich is that they are emerging at a time when prolonged recession and low growth rates have depressed home markets in the West.

However, there are more subtle reasons that the new rich of Asia are looked at with such hope and expectation in the West. They are increasingly regarded as the economic dynamisers of the twenty-first century at a time when the old industrial economies of the West appear to be in decline. In this view it is they who can revitalise the world economy: they are the joint venture partners, the investors, the financiers, the fixers and facilitators whom Western companies increasingly need. They are also models of hard work and sacrifice juxtaposed by Western conservatives and the world of business to what they see as a process of decline in their own countries. For these observers they are the antidote to the march of the welfare state, the indolence of modem youth, the disintegration of society and its values, the rising costs of labour and the power of unions and special interest groups. In other words, they constitute a new mythology for some sections of society in the West, recapturing the capitalist frontier and its lost values.

But the new rich of Asia mean all things to all people. For Western liberals, there is an expectation that the rise of the ‘new rich’ in Asia will be, in cultural terms, a process of convergence. The burgeoning middle classes and entrepreneurs are seen as embodying universal interests which will create an Asia more like the liberal stereotypes: more rational, individualistic, democratic, secular and concerned with human rights, the environment and rule of law. There is certainly a range of evidence that something of the kind is happening. Middle classes and sections of business have played an important, some would say decisive, role in the political transformations that have recently taken place in South Korea, Taiwan and Thailand.¹ Middle-class students were seen to be at the heart of the Tiananmen Square protests in 1989. In cultural life too there is an increasing vigour. Chinese film-makers are producing films that compete with the world’s best at international festivals. Elements of the region’s press and media exhibit a vitality and incisiveness that is far from the stereotype of submission and avoidance of conflict.

In other words, for those who look for it there is plenty of evidence that the rise of the new rich in Asia is involving important challenges to the world of hierarchy and elitism. Traditional notions of honour, dignity and status and presumptions of virtue and self-righteousness are being confronted with a culture of law, merit, the rights of citizenship and private property.

However, there are also puzzling contradictions. In several instances, where elements of the middle class and the bourgeoisie have played a central role in the overthrow of dictators – in Indonesia in 1966, Thailand in 1973 and the Philippines in 1986 – they have been unable to construct democratic regimes in the place of authoritarianism and have been overtaken by military dictatorships or forms of oligarchic authoritarianism. There is, therefore, some question about the capacity of Asia’s new rich to carry out a genuine democratic revolution and, indeed, the depth of its commitment to such reforms. That is why all eyes are now on Korea, Taiwan and Thailand and the process of succession in Indonesia.

At the same time the rise of industrial capitalism has hardly been accompanied by the encouragement of free markets. Protectionism, tariffs, dumping, corruption and cartels have been central elements in this process and quite contrary to the liberal mythology of free competition within strictly defined common laws.

Nor, it seems, can the new entrepreneurial classes of Asia be entirely regarded as the bearers of a bourgeois culture of rationality and secularism. One impact of the rise of the new rich in China, Taiwan and parts of Southeast Asia has been the rapid increase in the demand for such products as tiger penis and rhinoceros horn. Wealth, in these instances, has simply enabled peasant dreams to be fulfilled and brought the endangered species of the world closer to extinction. In Japan, the spectacle of well-dressed businessmen, on their way home in the underground, reading, not the financial press or even the sporting press, but pornographic comics, appears incongruous to Western observers.

What the West sees, therefore, is a set of mixed signals. The new rich in Asia appear as likely to embrace authoritarian rule, xenophobic nationalism, religious fundamentalism and dirigisme as to support democracy, internationalism, secularism and free markets.

Some Asian leaders, notably Singapore’s Lee Kuan Yew and Malaysia’s Mahathir, seek to explain the apparent contradictions of modernisation by claiming that Asian societies are travelling a different path. In their view there is no universal secular culture inherent in the new rich of industrial capitalist societies. Instead, national cultures are seen to transcend the processes of social and economic change. Secularism and liberalism are not, in their view, the cultures of industrial societies but the cultures of the West. They have mounted public campaigns exhorting their citizens to resist the decadence of Western culture, to look to the Confucian heritage or simply to ‘look East’.

However, the apparent contradictions of contemporary Asian modernisation might also be explained by a fatal flaw in the mythology through which, at least, liberals in the West approach the question of convergence. This mythology applies not least to its own history: it is, after all, difficult to reconcile the rise of the great robber barons of US and British capitalism in the nineteenth and early twentieth centuries with notions of rational secularism, rule of law or a concern for human rights. Indeed, it is extremely difficult to understand the US and Australian corporate carpet-baggers of the 1980s in the context of that liberal mythology.

A key feature of the arguments presented here about the new rich, and one that helps explain many of these contradictions of modernisation, is that they are far from homogeneous in any respect. The middle classes and bourgeoisie may be lumped together in one monolithic category as the bearers of ‘modernity’ by contemporary Western observers of Asia and by many scholars, but they are in fact a diverse and fractured social force. It has been a concern for social philosophers from Mill and de Tocqueville to Schumpeter and Veblen that those same elements that carry the dynamism and creativity of bourgeois society, its entrepreneurial capitalists, at the same time embody its unself-reflective and potentially destructive nature. This is in contrast to the middle classes or the professional and managerial bourgeoisie whom the same philosophers regarded as both the civilising influence upon unrestrained capitalism and the element that blunts its dynamism by imposing regulation and control.²

A first task for the contributors to this volume is therefore to disaggregate and unravel the new rich. The fact may well be that there is not one convergence but several. What offends and surprises Western liberal observers is what delights Western conservatives. Capitalist society has several cultures. Pressures for the ascendancy of the unrestrained interest of the individual over society manifest in laissez-faire forms of capitalism contend with other models aimed at achieving the common interests of all capital through rule of law. Different elements of the new rich in the one society may favour different forms of social and economic organisation: oligarchy, corporatist authoritarianism, or liberal democracy.

The precise configuration of social power and ideological predisposition in capitalist societies and the nature of political and economic regimes depends upon the specific historical circumstances in which they were formed. Just as there were many variations and models in the European processes of transition to capitalism, so there are in Asia.

If it is possible to identify a common theme in the Asian transition it is that the state has generally played a central role. The new rich in Asia, particularly East Asia, emerge, not from societies where the tradition of the urban burgher and merchant and trade guilds were strong, even in earlier, more traditional eras of rule, but from agrarian pre-capitalist and colonial bureaucracies and sometimes from communist party rule. Civil society has been traditionally weak. The state may be compared more with the absolutism of Germany and France that produced the Bonapartist and Bismarckian paths to industrial capitalism than with the liberal transition of England.

In the first European transitions the development of capitalist society was predicated upon a rolling back of feudal absolutism, to secure the rights of property, citizenship and the individual against the state.³ In Asia, as was the case in Germany and Eastern Europe, it has tended to be the state that has acted as the midwife of capitalism. It has not been in the freedom of laissez-faire but in the incubator of dirigiste regimes that the chaebols and zaibatsu and their equivalents have flourished. Where laissez-faire capitalism is now emerging after a period of dirigisme, it is the state that has provided the political conditions for this to take place.

The timings of the transition are also critical. Whereas in Britain the pace of industrialisation was relatively slow and proceeded incrementally upon the basis of technologies that could be produced in small workshops, the rate of change in Asia today compresses what took centuries in Britain into mere decades. The era of an industrialisation based upon low-wage labour lasted only fifty years in Korea and Taiwan. Industrialisation in the late twentieth century requires large capital investments, high technologies, international joint ventures, and access to international financial networks and markets.

The analysis of the impact and significance of the new rich in Asia thus extends well beyond the boundaries of any single country to address some very large comparative and historical questions. These questions examine not only how we live in industrial societies at the end of the twentieth century, but also how we conceptualise those processes and that existence. The most important is probably the extent to which there is a universal process of modernisation and a role for the new rich which it engenders. Concepts such as the middle class, the bourgeoisie and capitalism certainly seem to embody universal factors, and have real meaning, if only and not inconsiderably as motivational ideas. At the same time each example of the process of modernisation has certain unique characteristics derived from historically specific conjunctures.

The New Rich

The term ‘new rich’ is a starting point for examination, and by no means a precise analytical tool. It is used as a broad brushstroke to encompass those new wealthy social groups that have emerged from industrial change in Asia, particularly during the past two decades. The common basis of their social power and position is increasingly capital, credentials and expertise rather than rent or position in the state apparatus or a feudal hierarchy, although state power and capital ownership are often not as clearly differentiated as they are assumed to be in the cases of Europe and North America.

As with all broad brushstrokes, a term like ‘the new rich’ includes within it elements that are quite different. A most important distinction is that between the bourgeoisie and the professional middle classes, between owners of capital and the possessors of managerial and technical skills.

Other distinctions are also critical. There is a vast difference in interest between the family directors of the corporate conglomerates of the region and the small regional or local traders or retailers. As in the West, the populism of the petty bourgeoisie is in sharp contrast to the secular world views of many of the larger, urban corporate bourgeoisie. Similarly, the middle classes range from highly paid professionals and managers to the village school teacher and postal clerk.

Because the new rich is neither a cohesive category, nor one that springs from a common historical experience, its impact may differ from one country to another and be the consequence of different sets of conflicts of interest, not least within the new rich itself. There may be one pattern, or more likely several, to the way that the emergence of the new rich has influenced the cultural, social, economic and political life of the societies of East and Southeast Asia. However, this is not to say that anything can happen. There are certain basic common and non-negotiable interests that must be met and expressed within the political, ideological and social arrangements that the new rich constructs for itself. These non-negotiables derive from the need to protect the new bases of their social and economic position: capital, contracts, property, rule of law.

The words ‘new’ and ‘rich’ are perhaps most appropriate to the new social strata of wealth emerging in those command economies, such as China and Vietnam, now in transition to market systems of economic organisation. In those societies, where economic power has long been embodied within bureaucratic hierarchies of the state apparatus, the emergence of individuals with private control of investment capital, and often unprecedented amounts of private disposable wealth, has had a dramatic impact. The most publicised of such developments has been the emergence of private entrepreneurs. These range from the new capitalist farmers and private sector traders to much larger-scale industrial capitalists, often entering into partnerships with foreign investors. Less obvious but perhaps more important in the development of capitalism are the new kinds of managers who control the entry of huge state enterprises into the market. However, even where these new rich emerge from within the state and remain officially part of it, their increasing independence from the central structures of the command economy and the increasingly market-based calculations upon which they operate marks them out as a major departure from the previous order.

While corporate capitalists and the middle class have been part of the social fabric of the capitalist economies of East and Southeast Asia for several decades, there are interesting and important parallels ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of tables
• List of contributors
• Preface
• 1. The new rich in Asia: economic development, social status and political consciousness
• 2. Class transformations and political tensions in Singapore’s development
• 3. Growth, economic transformation, culture and the middle classes in Malaysia
• 4. The middle class and the bourgeoisie in Indonesia
• 5. The Philippines’ new rich: capitalist transformation amidst economic gloom
• 6. Emerging social forces in Thailand: new political and economic roles
• 7. Hong Kong: post-colonialism and political conflict
• 8. The new rich and the new middle class in South Korea: the rise and fall of the ‘golf republic’
• 9. Taiwan: a fragmented ‘middle’ class in the making
• 10. The People’s Republic of China: the party-state, capitalist revolution and new entrepreneurs
• Index