Table Of ContentKorea Under Siege, 1876–1945:
Capital Formation and
Economic Transformation
YOUNG-IOB CHUNG
OXFORD UNIVERSITY PRESS
Korea under Siege, 1876–1945
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KOREA UNDER SIEGE, 1876–1945
Capital Formation and
Economic Transformation
Young-Iob Chung
1
2006
1
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LibraryofCongressCataloging-in-PublicationData
Chung,Young-Iob.
Koreaundersiege,1876–1945:capitalformationandeconomictransformation/
Young-IobChung.
p. cm.
Includesbibliographicalreferencesandindex.
ISBN-13978-0-19-517830-2
ISBN0-19-517830-0
1. Savingandinvestment—Korea—History. 2. Korea—Economicpolicy. 3. Korea—Economic
conditions—1864–1910. 4. Korea—Economicconditions—1910–1945. I. Title.
HC467.S3C582005
330.9519'09'041—dc22 2004019149
1 3 5 7 9 8 6 4 2
PrintedintheUnitedStatesofAmerica
onacid-freepaper
To my parents,
who have lived behind the 38th parallel
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preface
Korea is a small, peninsular country with rugged terrain, few natural resources,
and dense population.1 Until modern times, it attracted little interest in the
outsideworld,sinceittraditionallylanguishedintheshadowofthemajorpowersof
Asia, namely, China and Japan. In many people’s minds, it was no more than an
appendage to Sino-Japanese civilizations. In recent decades, however, Korea has
become a household word. South Korea has gained a reputation as an underdevel-
opedcountrythathassuccessfullyundergonespectaculareconomicgrowthsincethe
Korean War, while North Korea remains as only one of two or three surviving
communist countriesthat are isolated from the outside world.
Theso-calledmiraculouseconomicgrowthinthesouthernhalfofthepeninsula
hastransformedSouthKoreafrombasicallyanagrarianeconomytothatofamajor
industrial power in a very short time period, and it is now considered one of the
dozen or so industrialized countries in the world. During the three decades before
the economic crisis of 1997, its real gross national product expanded more than
8 percent a year on average, while export earnings increased, often by more than
30 percent annually. Also, by 1988 South Korea took its place on the world stage
when ithostedthe summer Olympics,followed by the World Cup Soccer finalsin
2001. In short, South Koreans have achieved what many people, including most
Koreans, once thought impossible,2 and this has attracted much interest in the
country’s achievements.
Witnessing such accomplishments, an increasing number of scholars and jour-
nalists have begun studying, writing, and reporting about South Korea’s phe-
nomenal accomplishments in economic development in the last four decades.
Notwithstanding such efforts, there has been little careful analysis, especially by
Western scholars, of the heritage of the Korean economy in the traditional and
transitional periods, from which the southern half of the country launched into
viii Preface
a phenomenal modern economic success. This was the period when the hermit
kingdom of Korea came under siege by the world powers in the last half of the
nineteenth and the first half of the twentieth centuries, before South Korea had
climbed out of its economic doldrums. No study had been undertaken to examine
how the traditional and closed Korean economy and a people under siege re-
spondedtotheonslaughtofforeignpowersandtheIndustrialRevolutionandwere
able to enter the market-oriented era with a bang.
The time has come to assess and reassess Korea’s economic heritage of trans-
formation and economic development fairly, objectively, and with an open mind.
One of the major weaknesses of a few studies, by both Korean and Japanese
scholars, evaluatingtheKoreaneconomy intheseventy-yearperiod between1876
and 1945 often has been their one-sidedness, their lack of objectivity. They fre-
quentlyhavepreconceivednotionsandaredogmaticanddoctrinaire.Koreanschol-
ars frequently have taken traditional and politically correct positions, condemning
the aggression and harshness of Japanese rule,3 while their Japanese counterparts
havetendedtoblindlyjustifyJapan’shandlingandcolonialruleofKorea,pointing
outonly the achievements inthe former colony under Japanese rule.
These difficulties hopefully may be overcome by someone who was reared in
Korea under Japanese colonial rule but who was trained and has conducted his
entire professional career abroad. An impartial examination of the development of
Korea during this early modern period, considered from a global perspective and
based on empirical data, is long overdue. This perhaps ‘‘politically incorrect’’ and
more detached approach toward Korea’s development, which might have been a
liability in the past, eandeavors to illuminate the truth through analysis, compari-
son, metaphor, and perspectives that reflect on the objective of human welfare in
the long run.
This book has been in the making for many years. In spite of deliberate effort,
my teaching and academic administrative responsibilities did not leave much time
forresearchandwriting,makingspeedyprogressdifficult.Therestillremainareas
in which more time could have been spent to make this study more definitive, but
I am happy that this volume is seeing the light before the follow-up volume on
capital formation and economic development of South Korea is in print and avail-
able for public scrutiny.
Overtheyears,Ihavebenefitedagreatdealfrompioneersinthefield,andIam
indebtedtomanypeopleandorganizationsinthecompletionofthisbook.Iwould
liketoexpressmyappreciationtoEasternMichiganUniversity,whichassistedme
through sabbatical leaves and faculty research fellowships as I carried out this
work, the Korea Foundation for their financial support under its Faculty Research
Fellowship program, and the Academy of Korean Studies for allowing me the use
of its facilities, as I undertook research in Korea under its Research Residency
program. I would also like to take this opportunity to express my gratitude to my
colleagues in the economics department at Eastern Michigan University for their
understandingandforallowingmetoconductthisstudywhenagreaterdedication
toaccommodatingtheirneedswouldhavebeenwelcomedbythemduringmylong
tenure as an administrator.
Description:The so-called miraculous economic development in the southern half of the Korean peninsula has transformed from basically an agrarian economy to that of a major industrial power in a very short time period, and it is now considered one of a dozen or so of industrialized countries in the world. Howev
