ASIAN FINANCIAL CRISIS (of 1997-98)
A serious financial and economic crisis that struck many East Asian capitalist economies in 1997-98, and lingering in some countries beyond that period. Among the countries affected in a major way were South Korea, Taiwan, Thailand and Indonesia. It also expanded to Brazil and Russia, and briefly threatened to become a worldwide financial and economic crisis. This crisis destroyed a massive amount of “wealth” (a large part of which was actually ficticious capital).
“In the banking system alone, corporate loans equivalent to around half of one year’s GDP went bad—a destruction of savings on a scale more usually associated with a full-scale war.... The crisis brought an end to a then widespread belief that there was a distinct ‘Asian way’ of capitalism that might prove just as successful as capitalism in the United States or Europe.” —Matthew Bishop, Essential Economics: An A-Z Guide (2009), pp. 25-26.
Bourgeois economists cannot agree on the precise immediate causes of the Asian Financial Crisis. Among the proposed causes were the inadequate financial reserves that many of the affected countries possessed, the fact that some of them had their currencies pegged to the dollar, the loosening of controls on the movement of capital between countries (part of the changes related to the new wave of globalization), and the relatively weak and poorly regulated banking systems in many of the countries. Looking at the situation from a longer and more fundamental perspective, however, we see that the basic causes were the weakening international economy which was approaching a new acute phase of the long-developing overproduction crisis, and an attempt to make up for this through ever-expanding financial speculation across international borders.
A collective name for a number of capitalist countries in East Asia which during the late 20th century, and before the Asian Financial Crisis of the mid 1990s and the great rise of capitalist China, were considered to be an amazing example of the productive power of unfettered capitalism. The four countries (or regions) most often referred to by this name were South Korea, Taiwan, Hong Kong and Singapore, but Thailand was often also included and occasionally Malaysia. The brief, but severe, Asian Financial Crisis [see above] tarnished the reputations of the Asian Tiger economies, and the even greater rise of mainland China at their expense, together with the world economic crisis which took a major turn for the worse in 2008, has already led to their eclipse. Thus the term “Asian Tigers” is less commonly used now than it used to be, and when it is still used it often has a somewhat ironic connotation.
ASIATIC MODE OF PRODUCTION
[To be added... ]
[Intro to be added...]
“[I]t is more advantageous to capital to allow a shorter working day
with a maximum intensity of labor, than it is to have a longer day with a lower intensity,
for constant capital (particularly the fixed part
of it) is in this way better employed, because a certain section of expenditure, lighting,
heating, administration, supervision, etc., remains the same whether more or less is
produced per day.
“This explains the tendency of capital to employ a greater amount of labor power in the shortest time. To accomplish this, capitalism has founded a new science, that of scientific management. Piece wages take the place of time rates. The premium system takes the place of simple time rates—that is, an increase in piece rates if a certain height of production is reached. And in place of the premium system, or combined with it, the minimum system, every worker who does not reach a certain minimum of production is dismissed. This is combined with time studies, with the dissection of labor into separate, exactly determined and strictly circumscribed movements of the worker.
“All this refers to the pre-war period [pre-World War I]. The latest development shows a dialectical change: back to time rates, but in conjunction with the introduction of the travelling belt. The travelling belt in conjunction with ‘serial’ production [one task following serially after another] makes the Taylor system, with all its tremendous supervising and preparatory apparatus, time and movement studies, time cards for each kind of labor and for each worker, entirely superfluous. The travelling belt establishes an automatic control of labor productivity, keeps up the worker to the speed of the travelling belt, enforces a superhuman intensity in the expenditure of labor power. Its employment can be observed in all spheres. Motors and machines move along the travelling belt in just the same way as slaughtered animals in the packing factory, the ingredients in a confectionery works, or the incoming mail at an American sorting station.” —Eugen Varga, The Decline of Capitalism (London: 1928), pp. 26-27.
A major increase in the price of some asset, often very rapid and massive, based primarily on speculation that the prices will continue to increase. The asset could be anything, and there is even one early historical example where it was rare tulip bulbs! But most often the asset in question is real estate, homes and property, and mortgages and other securities which are backed up by real estate. Asset bubbles are usually associated with easy access to credit and the rapid expansion of debt as speculators borrow as fast as they can to get in on the “sure thing”.
See also: HOUSING BUBBLE
[In bourgeois economics:] The differences in knowledge about the real situation between the parties to an economic exchange or transaction. (This allows one party to in effect cheat the other, though bourgeois economists shy away from such characterizations!)
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