Emerging Countries:
The Marxism-Institutionalism Controversy
Sergio Ordóñez
Alternative Explanation of the Differences Between “Successful”
and “Lagging” Developing Countries ( ...continuation )

The neoliberal restructuring path in those countries was shaped by a complicated remaking of the corporate historical block, consisting of a new commitment with classes, groups and international institutions that supported neoliberalism, with the intention of compensating for the internal hegemonic function crisis of the ruling classes and groups in the following ways: (1) new international alliance between landowners and the agro-mineral-exporting bourgeoisie and international institutions that promoted neoliberalism and with the new financial capital and multi-nationalized productive capital; (2) break of the historical commitment with the industrial bourgeoisie and its set of political intellectuals to accrue earnings from the captive internal market; (3) break of the historical distributive commitment with subordinated classes and groups and their intellectuals; and (4) new commitment with intermediate groups in terms of new access to products and services imported at a low cost, insofar as the process was accompanied in the medium term by an overvaluation of the exchange rate. The reduction of state intervention in economic reproduction and development and a huge loss in the state’s management and regulation capacity follow, as the most palpable political-economic characteristics, which leaves the process of reproduction and internal capital accumulation total exposed to forces of the globalized world market.38

On the other hand, ruling classes and groups of the Asian countries confront international neoliberalism with an internationally competitive industrial base, exercising full hegemonic function in the national historical block (whether owing to their capacity to previously resolve the internal hegemony crisis or because there never was this type of crisis to start out with), which allows them the conditions to subject the new commitment with institutions, classes and international groups that promote neoliberalism to their internal terms of hegemony, and as a result, to control the ruling capacity of the national historical block to face the new international commitment. As a result, in these countries, the new international commitment does not imply the need to break with old commitments with allied groups or subordinated classes and groups, but rather allows for the possibility of development and innovation. In Korea and Taiwan, for example, following the 1997-1998 crisis, the distributive commitment with the economic surplus extended from operators of large forms to large and unflavored social groups, in a double dynamic that combined the rise of knowledge and added value intensive processes and, as a result, less dependent on industrial labor costs, with the social effects of the crisis and the intensification of relocating production processes, particularly in Taiwan (Huck-ju Kwon, 2005).39

The experiences of Asian countries40 have in common the fact that ruling classes and groups fully exercise hegemonic function in their respective national historical blocks, which allows them to confront the new alliance with international capital financing, multi-nationalized productive capital and international institutions that promote neoliberalism, in conditions of subordination regarding a national development strategy. This shapes a development path where, unlike the neoliberal path of Latin American countries, the State intermediates integration into the world market and globalization of reproduction and internal accumulation, using strong actions in reproduction and economic development, which explains the general guidelines of “success” for these countries in a new phase of development.

38 This is what occurred in the crisis in 1994 in Mexico, 1998 in Brazil and Russia and 2001 in Argentina. Reducing intervention and losing the State capacity to regulate and manage strengthened monopolies on land rents and country infrastructure.

39 Singapore and Hong Kong did not implement extensive and inclusive social reforms like those of Korea and Taiwan following the crisis, and they continue with development State trends with selective and exclusive social policies, inherited from their common era as British colonies (Huck-ju Kwon, 2005).

40 The most recent case of China is illustrative due to the fact that their choice to implement restructuring processes was not provoked by an external or fiscal debt crisis, nor by the historical block, but rather is taking place in the context of the decline of Statism promoted by Mao and the dispute between fractions of the ruling bureaucracy, which arose following the death of the historical leader at the end of the 1970s. Shirk proposes that “there was nothing inevitable about China’s market reforms” (1993: 21). In India, the process of restructuring was initiated as the result of the 1991 external and fiscal debt crisis, which obligated ruling classes and groups to negotiate a rescue package with the imf (in the context of increases oil prices derived from the first war in Iraq). This country implements an isi following independence in the context of strong State action in economic reproduction, which implies centralized development planning, expressed by the hegemony of the industrial bourgeoisie in alliance with ruling classes of the so-called village economy on a regional-state basis. That is, new large, medium and small farmers arose from agricultural reform in the 1950s, that “eliminated large landowners ( zamindars),” real-estate owners, rural and agricultural lenders without land, under the new direction of the industrial bourgeoisie (Maddison, 1971).