Introduction
The world-scale expansion of markets and market relations ranks among the most transformative developments of our times. We can refer to these processes by way of a generic if inelegant term—marketization. Globally, marketization has been associated with the expansion of trade and investment, the spatial reorganization of global industries, and capital accumulation on a vast scale, but also with surging inequality, widespread economic insecurity, and environmental destruction on a planetary scale. Among the most widely cited data regarding the last three decades of marketization are those that highlight its contributions to improvements in living standards in the developing world, particularly in Asia, and especially in East Asia. According to the World Bank, between 1990 and 2016 the share of East Asia’s population living in “extreme poverty” declined from over 60% to less than three percent. What conclusions are we to draw from East Asia’s experiences over the last three decades other than that marketization facilitates economic growth, poverty reduction, and significant if unequal improvements in living standards? Further, does it matter that leading accounts of East Asia’s transformation under marketization are produced and circulated by the very agencies that have most energetically promoted marketization?
In this book I contend that while growth, poverty reduction, and unequal improvements in living standards in East Asia over the last three decades are deeply associated with marketization, the association of marketization, poverty reduction, and unequal improvements in living standards is itself largely uninformative for the purposes of understanding and explaining patterns of social change in the region and patterns of welfare and inequality across and within countries in particular. While marketization has indeed facilitated growth, poverty reduction, and inequality, it has done so through a calculus more complex and interesting than prevailing accounts suggest.
Contemporary East Asia represents a particularly interesting setting in which to examine the historical progression of marketization and the ways in which it has reshaped social processes and relations affecting welfare and inequality. Globally and in East Asia, we observe that marketization’s progression has elicited an unruly and as yet not fully determined mix of outcomes, including economic growth, the intensification of socioeconomic inequalities, the generation of new economic opportunities, capital accumulation on the basis of both voluntary and coercive exchange, ever-intensifying social competition, the reorganization of households, firms, and entire economic sectors, financialization, heightened economic insecurity, environmental destruction, changes in state priorities and policies across virtually all policy fields, and changes in the relationship between states and the local and global social environments in which they are embedded. This book explores the manner in which marketization has registered across the countries of East Asia and its implications for welfare and inequality.
Taken separately, leading approaches to comparative political economy, development policy, and the analysis of welfare and inequality provide insights but not an adequate basis for understanding or explaining how marketization operates on social life, welfare, and inequality in East Asia or in other contemporary settings. This, I argue, owes to three features of literature on the subject. These include (1) the persistence of three distinct, non-overlapping, and contradictory perspectives on the nature of markets and marketization, each of which for different reasons fails to provide a fully satisfactory account of marketization; (2) the more general fragmentation that prevails in the social and behavioral sciences and, in particular, their tendency to view different aspects of social life as if they were separate disciplinary departments, thus understating their interdependence; and (3) the tendency of much of the policy literature to operate with an analytic framework lacking attention to features of power relations and institutions that that animate social histories and relations across and within countries.
The perspective developed in this book may be best characterized as social political economy—i.e. an approach that views politics, economy, culture, and other aspects of social life as interwoven and which carries the implication that inquiry into any one aspect of social life may only be understood in relation to the broader totality of aspects of social life and social relations in specific historical settings. A social political economy approach carries the advantage of addressing the interdependence of politics and economy and the significance of culture without losing sight of their dynamic and ultimately social foundations. Correspondingly it is assumed that the political and economic processes that animate social life are devoid of meaning without reference to each other and to broader sets of cultural meanings and social relations within which they transpire.
Sometime over a century ago, social and behavioral analysts began an ill-chosen path of dividing the analysis of social life into separate academic sectors. In its analysis of welfare and inequality in marketizing East Asia, this book explores ways around this habit with the aim of contributing toward greater theoretical holism. It does so by drawing on insights on welfare, inequality, and marketization drawn from different streams of political economy theorizing, from relevant policy literature, and a wealth of studies of various aspects of social life in East Asia. The overall aim is to furnish an understanding of how marketization has operated on welfare and inequality across East Asia through an approach that foregrounds welfare and inequality’s relation to the broader social processes and relations within which social life plays out.
The remainder of this chapter discusses key themes, establishes the world historical context of this study, and introduces the setting: East Asia from the 1980s through to the present. Below, I begin this discussion by way of an introduction to the concept of marketization, discussion of the theoretical and policy literatures addressed in this study, and a preview of the analytic approach to be developed in this volume, whose focus falls on varieties of social orders. I conclude the chapter with an overview of the layout of the book.
Marketization
Marketization is a generic term that is talked, written, and understood in different ways. It has been used in a narrow sense to describe the process of exposing public sector entities (Riggs 1961; Çalışkan 2009; Crouch 2009; Hansen 2010) or economic institutions within planned economies (Murrell 1991; McMillan and Naughton 1992) to market forces. In recent years the term marketization has been employed in a broader and more encompassing sense, in reference to the expanding role of markets, market relations, market institutions, and market ideas in social life. Thus Ebner (2015, 369–370) defines marketization as “a politically shaped process of institutional change” entailing “both the expansion of market mechanisms into non-market coordinated social domains as well as their intensification in already market-dominated settings.” Studies that define marketization along these lines draw on classical and contemporary studies of political economy that have sought to understand marketization’s origins and effects, and this book aims to build on such studies. In what follows I expand on the narrower and broader understandings of marketization and reasons why, in the broad sense, marketization may be preferable to alternatives such as “integration” and “neoliberalism.”
In neoclassical economics, analysts interested in aspects of economic life that fall under the narrow and broader understandings of marketization as defined above are more apt simply to use terminology such as privatization (in the narrow sense) and the development and integration of markets (in the broad sense). With respect to use of the term marketization in its narrow sense, it bears noting that it is not in particularly wide use in disciplinary economics. Where marketization is used within the field of economics or allied fields (such as public administration) it tends to refer to the imposition or intensification of price-based competition (Greer and Doellgast 2017), reforms whereby public organizations or state owned organizations in planned economies adopt market principles and operate on the basis of them (Riggs 1961), or increasing time is spent in labor markets versus household labor (Freeman et al. 2005). In the field of public administration and social policy, critics have used the term marketization to sound alarm bells over the hazards of the “new public administration” (NPM) and its agenda of exposing public administration and public services to market principles (e.g., Ferlie 1996; Eikenberry and Kluver 2004; Hsiao 1994). In this volume, we are interested in these aspects of marketization. But not only, these marketization in this volume is understood as a broader and more multi-faceted social phenomenon.
Marketization understood in sociological terms is about much more than markets: it is a process of social transformation centred on the development and construction of markets and its attendant effects on numerous facets of social life. While markets are nothing new in human history, historic waves of marketization that have accompanied the expansion of the world economy over recent centuries are distinctive for their speed, scale, and scope, and their transformative affects on social life around the world.
World scale processes of marketization as they have played out are not seen as the ‘natural’ outgrowth of voluntary exchange relations. On the contrary, marketization is best understood in the Polanyian sense, as a deliberate strategy of social transformation pursued by actors and interests intent on ordering social life in a particular way to serve specific instrumental goals (Polanyi 1944[ 2001]). Literature that has addressed marketization in this way—i.e., as a politically motivated and socially transformative process—has been developed most vigorously within the fields of critical political economy and economic sociology. Drawing variously on the works of Polanyi, Gramsci, Marx, and others, analysts in this field have construed market-based societies as particular kinds of social formations distinguished by particular patterns of social relations, institutions, and compliance procedures (Crouch et al. 2000; Crouch 2009; Jessop 2012; Block 2014; Streeck 2016). The departure point for this book is the observation that, commencing in the 1980s and advancing to the present, the world has seen a steady uptick in the intensity of marketizing, market-building processes on a world scale (e.g., Gill 1995; Gill and Cutler 2014; Carroll and Jar...