Securing the Home Market: A New Approach to Korean Development

Since the eclipse of neoliberalism in the late 1990s, the developing world’s industrial policies have begun to be rediscovered as something ‘new’. There is, in fact, always something new about an industrial policy because it has no deductive theory to fix it analytically. Unlike a free trade policy, for example, an industrial policy cannot be defined abstractly with predetermined assumptions; its mix alters with new users, applications, constraints and policy tools, whereas the free trade model stays stationary through time and space. To capture the essence of an industrial policy (in both the short and long run), it must be examined empirically, as in the decolonized world, through the eyes of the great role models that have used it intensively, one for manufacturing — the East Asian role model — and one for natural resources — the Organization of the Petroleum Exporting Countries (OPEC) developmental role model. From the vantage point of market theory, industrial policies correct market failures. From the viewpoint of the decolonized generation’s role models, they secure the home market on the road toward overseas expansion; they are fundamentally nationalistic and vary by country, starting with the overhaul of foreign property rights — for example, the nationalization of foreign oil concessions in the Middle East, seizure of Japanese overseas investments in the Far East, velvet privatization in Brazil and appropriation of German properties in post-colonial Europe.