The paradox of new traditional confucian economics in the two koreas

The Emergence of New Traditional Confucian Economics

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The Emergence of New Traditional Confucian Economics

Confucianism originated in China and is most influential in societies that either have substantial Chinese populations or were strongly influenced by Chinese culture, with the most important of those lacking large Chinese populations being Japan and Korea, with Korea having historically served as the transmission bridge for Chinese cultural influences to pass to Japan, not only Confucianism, but Buddhism even earlier. Indeed, all three nations have traditionally had three main religions: Confucianism, Buddhism, and a local one emphasizing multiple nature gods and magic, although in South Korea Christianity has come to have about a quarter of the population adhering to it during the past century. While Confucianism started in China and spread to Korea and then Japan, Buddhism was an international religion that began in South Asia, entering China from Central Asia first of the three from where it spread through Korea to Japan. The local religion of China is Taoism, of Japan is Shinto, and of Korea is the less well-known and less well organized Sinkyo (Osgood, 1951; Conn, 2005).7

Traditional Confucianism has long had a strong familistic groupism aspect to it. Social harmony and hierarchy are emphasized, with the father of the family to rule the family, and the emperor or national leader to lead the nation like the father leads a family. Seniority and rank based on educational attainment form the basis of this social harmony, as well as the rule of men over women. However, even as the hierarchical and non-democratic aspects of Confucianism are often emphasized in discussions of Confucian influence in modern Asian societies, Confucius himself and many of his followers always made clear that a leader who did not rule justly or well could lose the Mandate of Heaven, which could justify his overthrow by his subjects. In the 10th century, neo-Confucianism appeared and came to dominate in China by the 12th century, which had a more authoritarian view and also sought to suppress competing religions, even as it incorporated elements of Taoism and Buddhism. It was this form of Confucianism as it was formulated by Chu His (Zhu Xi) in the 12th century8 that would come to dominate in Korea with the coming to power of the Choson dynasty in 1392, after several dynasties during which Buddhism had dominated, but had come to be viewed as corrupt.

That Confucian influence might aid economic development was only first noticed by Kahn (1979), with this then becoming a widely recognized possibility (Hung-chao, 1989; Rozman, 1991; Rosser and Rosser, 1998; Zhang, 1999). Earlier, drawing on characterizations by observers such as Weber (1930 [1915]), elements of Confucianism were focused on that seemed antithetical to economic growth, particularly the denigration of mercantile activities,9 along with a certain tendency to prefer to close up a nation or society to external influences, including trade.10 After Kahn, those that supported economic activity came to be focused on more, such as the admiration for education and how emphasizing harmony could reduce transactions costs.

Indeed, it could be argued that the first new traditional economy was Japan after the Meiji Restoration. After being forcibly opened up by Perry’s “black ships,” Japanese policy after 1868 consciously sought to integrate outside modern influences in science and technology while seeking to preserve Japanese culture, with this being enforced through a more strongly asserted Confucianism reinforcing traditional Shinto emperor worship, with the role of the emperor newly emphasized after the overthrow of the rule by the shoguns during the Edo period of isolationism. This approach was symbolized by the phrase Wa-kon Yo-sai, “Japanese spirit and Western ability.” Japan’s ability to do this and become the first non-European nation to industrialize could be argued to be the first success of the new traditional economic system in practice, and many continued to see such a pattern in the post-World War II Japanese economic system, despite the many political and institutional changes brought about by the period of American rule.

Curiously, somewhat related to the differing interpretations of Confucianism we find in the two Koreas, there also appears to be different interpretations of Confucianism in the two Chinas, the communist-ruled Peoples’ Republic of China (PRC) and the largely market capitalist Republic of China, or Taiwan. A difference is that in both of these there is more official acceptance of Confucianism than in the two Koreas. Starting in the early 1990s after the Tienanman Square uprising, Confucian temples have been allowed to reopen in the PRC, with public officials more openly using Confucian doctrines to argue for the authority of the state against liberalizing political movements, although the status of Confucianism in the PRC remains a matter of ongoing dispute and controversy. In Taiwan, Chiang Kai-Shek long officially argued for a Confucian basis for his regime.

A recent study by Liu et al. (2014) shows based on laboratory experiments in the two Chinas that people appear to react quite differently to exposure to Confucian values. In mainland China they seem to become less Confucian and more risk loving, less loss averse, and more impatient, whereas in Taiwan they tend to become less present-based and more trustworthy. This might fit with the idea that in still officially Communist China, Confucianism becomes a vehicle for introducing more market capitalist attitudes, whereas in already strongly market capitalist Taiwan, it works against such attitudes. Needless to say, these results will need further confirmation, but they may not appear to translate all that well to the two Koreas, although as long as North Korea remains so closed, such a comparative lab experiment for the two Koreas will be impossible anyway.

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