[1] Ayn Rand, The Fountainhead (New York: Signet, 1971), p. 679.

          [2] These are Britain and America, states which never fully realized capitalist ideals, yet more closely approximated them than other countries.

          [3] David S. Landes, The Wealth and Poverty of Nations (New York: W. W. Norton & Company, Inc., 1999), p. 391.

          [4] These are South Korea, Hong Kong, Taiwan, and Singapore.

          [5] Japan “hired foreign experts” and dispatched “Japanese agents abroad to bring back eyewitness accounts of European and American ways.”  It borrowed much from statist Germany (Landes, p. 375), yet, early on, Japan recognized the need for “people of imagination and initiative, people who understood economies of scale, who knew not only production methods and machinery but also organization and what we now call software” (Landes, p. 379).  This was reflected in Japanese values (Landes, p. 391), and therefore – as the model employed in this paper would predict – in Japanese economic performance: Krugman recognizes that East Asian economic weaknesses plague Japan less than the four dragons.  Paul Krugman, “The Myth of Asia’s Miracle,” Foreign Affairs (November 1994), 12 October 2006, <http://web.mit.edu/krugman/www/myth.html>, p. 1.

          [6] Other European states – including Imperial Germany and Soviet Russia – took the same approach.  Interestingly, both governments boasted anti-individualistic value systems: until after the Second World War, German nationalism was deeply collectivist, while the USSR was officially communist.

          [7] Ayn Rand, Atlas Shrugged (New York: Signet, 1985), p. 936.

          [8] Ibid., p. 1010.

          [9] Confirming the hypothesis presented here about the impact of a collectivistic ideology, Krugman finds that the East Asian case more closely resembles that of Soviet Russia than the capitalistic West.  The former emphasized inputs – hardware – while the latter thrived on technology – the “software” from Landes’ quote above.  Krugman, p. 1.

          [10] Tu Wei-Ming, “Multiple Modernities: A Preliminary Inquiry into the Implications of East Asian Modernity,” in Culture Matters: How Values Shape Human Progress, ed. Lawrence E. Harrison and Samuel P. Huntington (New York: Basic Books, 2000), pp. 262-264.

          [11] Ibid.

          [12] Ibid., p. 262.

          [13] Ibid., p. 264.

          [14] David Halberstam recounts the tale of a talented Nissan executive who “was delighted” at “being banished” to a California posting.  “What his superiors thought was his exile he thought of as his liberation.  He had been struck even as a boy by the freedom that Americans, even young Americans, enjoyed.  They always seemed able to make their own decisions….Now, going back as a grown man and living in Los Angeles, he was truck even more by the freedom in America and the sense of possibilities.  Americans believed they could do whatever they wanted, the way they wanted, when they wanted.  The lack of ceremony and formality, symbolized by the absence of [Japanese] blue suits, cheered him.”  David Halberstam, The Reckoning (New York: William Morrow and Company, Inc., 1986), p. 419.

          [15] Pye lists several economically irrational behaviors: “The tradition of networking in Japan set the stage for…close informal ties among businessmen, bureaucrats, and politicians.  The patterns of mutual obligation and particularistic ties meant that huge accounts of credit could flow with minimum need for formal accounting or checks on the soundness of the projects.”  Culture discouraged government from strictly overseeing property rights and businessmen from trading on the basis of formal contracts.  This system worked “as long as the state guidance ‘got the prices rights,’” but problems arose with disclosures of the elite’s corrupt dealings.

          Additionally, East Asian culture “encouraged the idea that making short-term checks on the profitability of enterprises was unnecessary.  Rather, it was desirable to take a ‘long view’ and seek to capture an ever larger share of the market.”  This strategy reaped “[successes] when all the economies were on the rise,” but soon “indebtedness piled up,” and businesses accumulated “gross excesses in capacity.”  In Pye’s own words: “the approach provided no effective checks on whether capital was being allocated rationally.”  Lucian W. Pye, “‘Asian Values’: From Dynamos to Dominoes?” in Culture Matters: How Values Shape Human Progress, ed. Lawrence E. Harrison and Samuel P. Huntington (New York: Basic Books, 2000), pp. 251-254.

          The point is not that modern American culture is perfectly rational, nor that East Asian values are absolutely irrational, but rather that, by tautology: (a) to the extent that a culture embraces anti-rational values, and (b) to the extent that individuals embrace that culture’s values (or are forced to act on the basis of these values), then (c) people must embrace irrationality (or act irrationally).  Individualism and free market ideals are core components of U.S. political culture, just as collectivism, spirituality, and ritualism are of Confucian culture.  It is in terms of this disparity, then, that this paper has analyzed differences between Western and East Asian industrialization.

          [16] If an individual is willing to develop (or help develop) a car, but government informs him that, owing to the exigencies of the welfare state, the invention must bring a net loss rather than profit to its inventor – that, in addition to moving from place to place, the car must demonstrate its ability to preserve the traditional lifestyle – and that it must run on spirituality rather than oil – then for every car produced by this individual, how many thousands will be produced by his counterpart in a capitalist society?