“The New Asian Capitalists” by Calvin W. Lew November 8, 1995 The economic success of
Asian countries and the New Industrializing Economies (N.I.E.s) are due to a combination of
Confucian principles, business-government relationships, and other factors
rather than one of these factors alone.
Although Confucian principles and government intervention in business
are contributing factors, they provide the basis and the supporting environment
for the Asian business traits of entrepreneurial spirit, a dedicated work
ethic, and continued ingenuity. Confucian principles
are probably the main factor in providing an environment for these successful
business ethics and behaviors; but a causal relationship cannot be said to exist
because Confucian ethics alone do not make one a successful capitalist. After all, Confucian ethics have
existed in Asia for over two millennia, but only recently has the
entrepreneurial economic boom occurred. And skilled
bureaucracies using business-government relationships alone do not cause
economic prosperity and advancement.
In fact, these types of economic systems more often than not fail. Examples of failed business
environments with government involvement include many European countries and
most communist and socialist countries. Only in tandem would
these and other factors help the Asian countries’ national efforts toward
economic success. Thus, one major
reason Asia’s efforts towards nationally directed economic development succeeded while other countries have failed is
due to the Asian people’s deep-rooted belief in Confucian principles and
philosophy. These principles
include emphasis on education and family ties, guidelines for proper ethical
behavior that place individuals in hierarchical relationships, social harmony,
and loyalty to the state. The many tenants of
this philosophy and the influence of it on the people and culture of Asia have
provided a favorable environment towards the development of the entrepreneurial
spirit. The Confucian principle of
education for example has greatly benefited Asian society as well as the
economy. Asian societies have
historically favored and encouraged education. Education has been a priority not only for the virtue of
knowledge, but also as an avenue for social advancement and mobility. Many government bureaucracies required
strict examinations for advancement or promotion. The contemporary implications of this is a work force that
is well-educated; and arguably more ingenious, hard-working, and capable. Family ties and values
is another important aspect of Asian culture that has had economic
benefits. While the primary family
and economic unit of families in many other countries is the nuclear family;
the main unit in Asia is often the extended family. This is beneficial because members of the family have a
wider base of economic and social support. Resources (economic and otherwise) are often pooled to help
support the parts of the family where the need is greatest. This socialistic concept works because
it is on a small scale (rather than national) and is close to the problem. This contrasts with societies where the
nuclear family is prominent. If a
member of a nuclear family is in need of economic support and his family is
unable or unwilling to provide it, then his needs are often provided for by the
state. Not only does this drain
the state’s resources, but this person often becomes a wasted economic
resource himself. These family ties in
conjunction with Confucian principles indirectly promotes and fosters ethical
behavior that place individuals in hierarchical relationships. This system of behavior in turn
provides for social harmony. Thus,
a socially harmonious society is a better environment for concerted national
economic advances than a chaotic and disruptive society; where individuals
primarily pursue their own interests, no matter the concerted efforts of the
state or national interest. Attributes of these
Confucian behaviors as well as the principle of loyalty to the state directly
affect the effectiveness of the second major economic factor; that of
nationally directed business-government relationships. At the citizen and worker level, the
social structure and principle of loyalty to the state provides for a workforce
that is willing to accept and strive for specific national directives. Thus, national efforts can be more
easily coordinated in this mostly uniform Confucious society than in a more
pluralistic one. At the corporate and
management level of business, the idea of loyalty to the state also holds
true. While individual
corporations and companies in other countries compete against one another for
their own bottom line interests, Asian corporations often cooperate with each
other in their individual countries (along with government) to further their
national interests. Again, this is
possible not only because of national loyalty, but also because of the societal
structure. These factors have
contributed to the recent rapid economic growth of Asia; but entrepreneurship
has always existed in Asia. From
the earliest times; albeit on a less grand scale. Entrepreneurs have always bartered and traded their wares
and services. A monetary system
has also existed from earliest history. But, despite these
roots, Asia only rapidly achieved industrialization resulting from Western
pressure and influence. And from
the West, Asia had a model to emulate; a model to emulate and to make purely
Asian in nature and character.
Soon, the characteristics of entrepreneurial spirit, dedicated work
ethics, and continuous improvement and ingenuity became associated with the
Eastern character of business; areas where the West was seemingly sometimes
lacking. It is these Asian
traits that have predominately catapulted Asia into world market
equivalency. True, these virtues
hold true in other countries; but in the Asian environment, the results
appeared “miraculous.”
The Japanese Miracle occurred out of the ashes of a destroyed and
defeated enemy. Small third world
countries like Taiwan and Singapore have become “Tigers” on the
Pacific Rim that are towering economic giants compared to their geographical
size. And China is a Sleeping
Dragon that has awaken and has only begun to rumble. While free market enterprise in the West was built on
laissez-faire and the seemingly forgotten Puritan work ethic; the “New
Asian Capitalism” is emersed in centuries-old Confucian faith that is
very much alive today. |