’s ability to withstand the crisis, must be understood within the context of its domestic politicaleconomy. While it was
arguably in China’s interest not to devalue the RMB during the height of
crisis, there are forces at work within the economy that may force China to
rethink this strategy in the future.
The economy: underlying strengths
Never in recorded history has an economy grown so rapidly and as extensively as that of post-Mao China. The Third Plenum of the Eleventh
Communist Party Congress in December 1978 saw the rise of the late Deng
Xiaoping as the paramount
, 1999, p. 177). The basis for the powers or
forms of behaviour commonly attributed to markets are consequently often
ambiguous: is it markets in the restricted sense that give rise to the effects of
interest, or markets when mediating between particular kinds of producers,
with certain kinds of property relations, and particular kinds of consumers?
Since markets can co-exist with different property relations and systems of
production, we cannot expect to read off an inclusive account from a
restricted focus. This is of critical importance in politicaleconomy for
Structure, New York and Oxford, Oxford University Press.
Evolution of the UK software market
Rosenberg, N. (1963), ‘Capital goods, technology and economic growth’, reprinted
in Rosenberg, N. (ed.) (1976) Perspectives on Technology, Cambridge, Cambridge
Stigler, G. J. (1951), ‘The division of labour is limited by the extent of the market’,
Journal of PoliticalEconomy, 59(3), pp. 185–93.
Young, A. (1928), ‘Increasing returns and economic progress’, Economic Journal, 38,
Appendix note on the data sources
Tables 1–7: The main source of
of Alexander Hamilton, New York, Harper Torchbooks.
Hayek, F. (1967), Studies in Philosophy, Politics, and Economics, London, Routledge
& Kegan Paul.
Hayek, F. (1973), Law, Legislation and Liberty, London, Routledge & Kegan Paul,
Hegel, G. (1967), Hegel’s Philosophy of Right, trans. F. M. Knox, London, Oxford
Marx, K. (1932), Capital, New York,Modern Library.
Mill, J. S. (1961 ), Principles of PoliticalEconomy, New York, Augustus Kelley.
Myrdal, G. (1960), Beyond the Welfare State, London, Duckworth.
Owen, R. (1991), A New View of
), Globalization, Growth, and
Governance, Oxford, Oxford University Press, pp. 3–29.
Best, M. (1999), ‘Regional growth dynamics: a capabilities perspective’, Contributions to PoliticalEconomy, Vol. 18, pp. 125–40.
Best, M. (2001), The New Competitive Advantage: The Renewal of American Industry, Oxford, Oxford University Press.
Bray, H. (1999), ‘Hub’s high-tech allure drawing Israeli firms’, Boston Globe, 7 April.
Chandler, A. (1977), The Visible Hand, Cambridge, MA, Harvard University Press.
Cringely, R. (1992), Accidental Empires, New York, Addison-Wesley.
Degman, C. (1998
markets when the seeds of doubt were ﬁrst sowed with the onset of the Thai
currency crisis, they triggered large-scale capital ﬂight from the region. They
also greatly compromised the ability of these economies to withstand the
shock of the large-scale outﬂow of foreign capital.
A politicaleconomy of the crisis
Behind the complex economic causes of the crisis lie the broader political
factors. First, why did the so-called Asian model of development, which
generated such high economic growth and equity for several decades, succumb to the crisis so quickly? The
a trigger. The trigger was provided
by a loss of conﬁdence on the part of the owners of short-term capital
in the Bank of Thailand’s capacity to maintain its ﬁxed exchange rate. Most
tragically, this convergence was neither foreordained nor sudden – but
had been building up since mid-1996, roughly one year before the baht’s
Thailand: crisis, reform and recovery
Why was this explosive convergence allowed to persist for so long? The
answer lies in the politicaleconomy of Thailand in the 1990s. Speciﬁcally, it
is well known that the governments of