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The Organization of Business in Taiwan: Reply to Numazaki

Ichiro Numazaki's comment on our article on the organization of business in Japan, South Korea, and Taiwan is insightful and highlights a key point in our argument, namely the nature of state/business relations in Taiwan and South Korea. Numazaki concludes that "the Taiwanese state is just as 'strong' as the South Korean state vis-a-vis business," that South Korean society shares with Taiwan some features of a "strong society," especially in regard to curb-market financing, and that "the 'strong society model' . . . does not adequately represent he state/business relationship in postwar Taiwan." Attempting to discredit our thesis, Numazaki then outlines some differences in the configuration of domestic and international power relations that supposedly better explain the differences in governmental policy between the two countries. Numazaki's comment is very important, not because it is correct, for it is not, but rather because it identifies a critical issue in the analysis of developing societies, particularly those in Asia. Numazaki follows the lead of many other scholars in arguing that such differences as may exist among East Asian states are unimportant when it comes to explaining Asian business success. They are all strong states, what Chalmers Johnson (1987) and Bruce Cummings (1984) call "bureaucratic, authoritarian" states, and it is precisely this kind of state that creates the conditions for rapid Asian economic development.2 Our thesis substantially differs from this line of reasoning. In this rejoinder to Numazaki, we present the reasons that this conventional depiction of the state is unsatisfactory for our purposes and then reply point by point to Numazaki's critique of our characterization of the Taiwanese state.