Page 298 - Cultures and Organizations

Yesterday, Now, or Later? 267

Council of Economic Advisers of two Republican U.S. presidents, said:
“Economists have been unable to answer this question. Our savings quote
. . . has always been lower than elsewhere. . . . It is most likely a refl ection
of the American lifestyle, although this is no explanation.” 75

Economic Growth and Politics

Along with the economic conditions for growth discussed in the previous
section, growth also depends on the political context. The growth of the

Dragons started only after 1955, when for the first time in history a truly
global market developed. The need for a supportive political context was
met in all fi ve Dragon countries, but in very different ways, with the role
of government varying from active support to laissez-faire. Labor unions

were weak and company oriented in all five countries, and a relatively
egalitarian income distribution meant that support for revolutionary social
changes was weak. The Confucian sense of moderation affected political
life as well, in spite of occasional outbreaks of unrest and violence.
The infl uence of the political context was evident in the country that
was the cradle of Confucianism, mainland China. Overseas Chinese were
at the core of the economic miracles in Hong Kong, Singapore, and Tai-
wan and contributed to the emerging economies of Indonesia, Malaysia,
Thailand, and the Philippines. They seem to have been able to use their
entrepreneurial skills better than their relatives who stayed in the mother
country.
In 1970 the Chinese currency was not convertible, which led to an
overestimate of 1970 GNI per capita and an underestimated 2000/1970
ratio. China’s economic growth also suffered from political events: the
disasters of the Great Leap Forward (1958–59) and the Great Proletarian

Cultural Revolution (1966–76) and the backlash after the dramatic sup-
pression of student demonstrations at the Square of the Gate of Heavenly
Peace (Tiananmen Square) in Beijing in 1989. On the other hand, tight
political control, by enforcing a one-child family policy, prevented a popu-
lation explosion that would have diluted per capita growth. From 1975
to 2007 the Chinese population grew by 42 percent from 930 million to
1.32 billion, an average of 1.3 percent a year. The forecast for the period
extending to 2015 is 0.7 percent a year. With a less effective population
control, the population of India in the same period grew by 81 percent from
620 million to 1.12 billion, an average of 1.9 percent a year. Without any