This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book presents the case studies of the individual countries: Thailand, Indonesia, South Korea and the People's Republic of China (PRC). It examines the factors behind the financial crisis and highlights the underlying similarities and the fundamental differences between the individual cases. The book provides a review of the competing perspectives on the new international financial architecture. It explains a number of fundamental issues and its implications for the emerging market economies. The book also presents a more nuanced picture of the International Monetary Fund's (IMF) policies and its socioeconomic impact. It assesses the IMF's efforts to reduce moral hazard. The book also examines the reasons behind Asia's remarkable economic recovery and the challenges that lie ahead.
This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book provides a critical evaluation of the idea of the market as the definitive form of co-ordination and of the socially embedded nature of market processes. It explores the idea of competition as an instituted economic process. The book focuses on an empirical study of cultural industries in East London. It also explores the instituted arrangements constituting the 'peculiar economics' of professional sports. The book presents an analysis of the emergence of one particular market in the UK, that for computer software. It examines some of the conditions which resulted in the UK coming to specialise in services to client companies rather than the production of software packages for an arm's length market. The book also provides an account of regional economic adaptation to changed market circumstances.
This chapter argues that Korea's financial crisis had both long-term and short-term causes. Weaknesses in both the financial and corporate sectors, especially inefficient management and imprudent lending among financial institutions, coupled with over investment and low profitability in the corporate sector, made them vulnerable to external turbulence. The Korean crisis also illustrated the fact that, although the alliance between the government, the chaebols and the banks had been in place since the 1960s, it was no longer compatible with Korea's integration into the global financial market. The Korean form of democratization most closely followed what Samuel Huntington had called 'transplacement', where the sitting government would make a concession and the opposition groups would accept the compromise in order to avoid the political gridlock or civil disorder. The president-elect cooperated with the outgoing government and the ruling party to get legislative backing for several important reform measures.
There has been increasing interest and debate in recent years on the instituted nature of economic processes in general and the related ideas of the market and the competitive process in particular. This debate lies at the interface between two largely independent disciplines, economics and sociology, and reflects an attempt to bring the two fields of discourse more closely together. This book explores this interface in a number of ways, looking at the competitive process and market relations from a number of different perspectives. It considers the social role of economic institutions in society and examines the various meanings embedded in the word 'markets', as well as developing arguments on the nature of competition as an instituted economic process. The close of the twentieth century saw a virtual canonisation of markets as the best, indeed the only really effective, way to govern an economic system. The market organisation being canonised was simple and pure, along the lines of the standard textbook model in economics. The book discusses the concepts of polysemy , idealism, cognition, materiality and cultural economy. Michael Best provides an account of regional economic adaptation to changed market circumstances. This is the story of the dynamics of capitalism focused on the resurgence of the Route 128 region around Boston following its decline in the mid-1980s in the face of competition from Silicon Valley. The book also addresses the question of how this resurgence was achieved.
This chapter develops a critique of certain approaches to markets and firm behaviour in economics and economic sociology. There are two main targets of the critique. The first concerns some common approaches to markets and the nature of firms in relation to them. The chapter argues that the diverse uses of the term 'market' in contemporary lay and academic discourse cause confusion. The second target of critique concerns literature on the socially embedded character of economic processes, on the nature of networks, and the role of trust. The chapter argues that their treatment has suffered frequently from being idealist, both in the sense of underestimating material aspects of economic life and in presenting an overly benign view which underestimates the instrumentality of most economic relations. It concludes with a reminder of the political significance of explanations of markets and competition.
The contemporary 'cultural turn' in thinking about economic processes has been deeply bound up with narratives of 'dematerialisation'. This chapter argues that characterisations of 'new economy' are based on the idea of dematerialisation are problematic because the distinction on which they are based misrepresents the issue of materiality. 'Dematerialisation', however, rests on a dubious distinction that has plagued much social theory: the distinction between objects and signs. This distinction equates 'materiality' with the physicality, or physical properties, of goods and social objects. In both economic and cultural theory, the social object oscillates wildly between an absolute, pregiven 'thingness' and an equally absolute indeterminacy, when it is treated as a sign. It is as if objects have to be 'black boxed' for fear that, once opened, they will behave like a Pandora's box, issuing formless spectres. Economic analysis categorisation provides a stable framework within which market analyses can be carried out.
The market organisation being canonised was simple and pure, along the lines of the standard textbook model in economics. This chapter considers the various virtues that purportedly characterise market organisation and elevates it over other kinds of governance structures. It concerns with 'market failure' theory, and other broad theories that point towards the desirability of a mixed economy. The chapter proposes that almost all activities in modern economies are governed through a mix of market and non-market mechanisms, with the relative importance of markets. The presumption and the fact that markets play a pervasive role in the governance and organisation of economic activity are relatively recent phenomena. To assess market organisation as a governing system, it is essential to widen the analytic context. The chapter focuses on strand of political philosophy, particularly Anglo-American political philosophy.
This chapter argues that the severe decline of 1985-1992 in Massachusetts can be explained in terms of the emergence in Silicon Valley of a new model of technology management that undermined Route 128's competitive advantage in a range of industries. It also argues that the return to regional competitiveness can be explained in terms of the emergence of a new 'focus and network' business model that established the institutional foundations for a regional 'open systems' model of innovation. Complex system products are training grounds for systems integrators, individuals who can speak in several technological languages. The chapter seeks to bring 'technology management' into the discussion of the reasons for regional growth and decline. Treatment of the notion bridges three institutional domains: business model, production system and skill formation. The notion of technology management is rarely invoked in discussions of competitive advantage and industrial growth.
This chapter analyses the economic and policy implications of some interrelated aspects of the corporate governance and regulation of professional league football that underlie the changing institutional arrangements. It deals with issues of corporate governance. The chapter argues that fan equity should be recognised as 'goodwill' in clubs' accounts and that supporter-shareholder trusts should be formed to solve the problem of misaligned incentives and the associated principal-agent problems between supporter shareholders and commercial investors. It also deals with issues of vertical integration between football clubs and broadcasters, and looks at the welfare implications of league collectivity and the exclusivity of broadcasting rights. The nature of the British footballing industry, with its local and community involvement, and its fan loyalty, creates public interest concerns and also makes the industry peculiarly vulnerable to anti-competitive behaviour.
This chapter argues that the Bank of Thailand (BOT) made two egregious policy blunders. First were the futile and costly defense of the baht during late 1996 and the first half of 1997. Second was the bleeding of the Thai government's Financial Institutions Development Fund (FIDF) to prop up failing financial institutions, while neglecting to take actions to remedy the underlying structural problems in the financial and banking sector. Drawing on the Bank of Thailand's published materials, the chapter suggests that Thailand's long period of economic boom had lulled the technocrats into complacency. Unlike earlier financial crises in the developing world, where governments over-borrowed until they were forced to seek a bailout from the International Monetary Fund (IMF), or a multilateral debt rescheduling from externally-based creditors, the Thai crisis was rooted in the private sector.