1. Global South 2007-8 Lecture 7: November 9, 2007 Corporate Power and the Developmental State

2. Large Corporations  What specific qualities of large corporations produce wealth?  Economies of scale  Recruiting and development of human capital  Networking  Research and development

3. But the key is…  Complementarity between ‘physical’ and ‘human’ capital  Between ‘tangible’ and ‘intangible’ capital  This is what brings about increasing returns to scale  Google’s growth http://blog.searchenginewatch.com/blog/0 61026-091240 http://blog.searchenginewatch.com/blog/0 61026-091240  http://investor.google.com/fin_data.html http://investor.google.com/fin_data.html

4. Growth of Facebook FB Year 1 (Dec. 31, 2004) — 1 million FB Year 2 (Dec. 31, 2005) — 5 million FB Year 3 (Dec. 31, 2006) — 12 million FB Year 4 (Apr. 26, 2007) — 20 million FB Year 4 (Aug. 1, 2007) — 30 million

5. What does this lead to?  Monopolies and oligopolies  GM versus Toyota  http://news.bbc.co.uk/2/shared/spl/h i/guides/457000/457029/html/default.stm http://news.bbc.co.uk/2/shared/spl/h i/guides/457000/457029/html/default.stm

6. The big assumption here is…  Corporate profitability = national economic growth (and implicitly equal to development)

7. The South Korean chaebol  http://www.sjsu.edu/faculty/watkins/chaeb ol.htm#SAMSUNG  Samsung ($89.1 billion), Samsung  Hyundai Motor Company ($57.2 billion), Hyundai Motor Company  LG ($50.4 billion), LG  SK ($46.4 billion), SK  Hanjin ($16.2 billion), Hanjin  Hyundai Heavy Industries ($10.5 billion Hyundai Heavy Industries

9. How did this happen in Korea?  Two views:  “Free market”  State intervention

10. What did the Korean state do?  “get prices wrong”  Reciprocity  Cheap loans  Quotas  Rewards and punishments

11. Key features of Korean capitalist development  Sever the link between colonial and ‘national’ capital (recall Cardoso and Faletto)  Focus on growth and not profitability  Highly extractive (rise in incomes but low on political rights, leading to the labour movement

12. YearIndex of Industrial Production (1936=100) Index of Profitability (1936=100) 1939-40114590 1940-41117617 1941-42123896 1942-43109926 1943-441081044 Prices And Profits In India, 1940-44

13. 1969-751976-791981-84 Total Manufacturing Avg4.074.381.94 Large Manufacturing Avg3.994.241.67 Small Manufacturing Avg6.185.173.49 Export Industries Avg4.992.002.43 Domestic Industries Avg5.465.581.62 Profitability of Korean Industry: 1969-1984

14. Developmental state A developmental state on the other hand actively shapes society, social relations and social goals. What distinguishes it from a predatory state? Simply put, a developmental state develops society; a predatory state extracts from society

15. Who gains? In a developmental state? In a predatory state?

16. The context of emergence of developmental state  Autonomy  Coordination  Authoritarian political structure  Weak social formations

17. Condition for its success?  Alliance with elite interests?  Authoritarianism?  What happens to it after “classes” develop and “elite interests” consolidate?

18. Nature of autonomy  Embedded – what exactly does this mean

19. India  Growth but not ‘development’  What does the author mean?  Did East Asia see development?  Main argument

20. Historical structures (Cox) Social forces Land relations? Industrial capitalism? Forms of state Democracy/dictatorship “developmentalism” World Orders Hegemonic/non-hegemonic