Re: Heavy investment
There are of course different interpretations of the East Asian experience. When the growth success of these countries first became clear, many neo-classical economists (for instance, Bela Belassa) said that it was evidence for the superiority of laissez faire. When it became undeniable that these countries did not follow laissez faire principles, then the argument became that the countries grew in spite of their interventionism. That is still the argument from that camp, although the support (beyond the fact that they deviated from a model assumed to be superior) is questionable. For example, it is simply a fact that right now there is no prominent and accepted theory in the field of economics that satisfactorily explains economic growth. Endogenous growth theory is the closest, but it is very amorphous. So how are these economists then supposed to say "Well 2% of the growth came from this, 2% from that, etc?"
I'm not saying that interventionism is superior. I'm just saying that everything is contextual and that the very pursuit of "universal truths" about economic policy that avoids political, social, and world-historical context is a dead end. Economics has produced some of the most important tools we have for looking at the social world. But they're just that - useful tools constructed upon problematic assumptions. They can help us greatly understand the social world, and they can help us greatly think about policy, but beyond some very basic things, but they will not reveal some kind of "truth" because social science is not physics.
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11-24-2005, 02:46 PM
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