State and Society in the Taiwan Miracle by Thomas B. Gold

Author:Thomas B. Gold [Gold, Thomas B.]
Language: eng
Format: epub
Tags: Social Science, Ethnic Studies, General, Sociology, Regional Studies
ISBN: 9781317459415
Google: NmimBgAAQBAJ
Publisher: Routledge
Published: 2015-02-12T05:02:24+00:00

Rapid Social Change

Capitalist social relations continued to evolve as the economy industrialized. One could feel a palpable energy in Taiwan at this time as people of all walks of life sought opportunities to get in on the boom. It was vibrant and anarchic, “Everyone wants to be chairman of his own company” serving as the motivating credo. As investors learned more about foreign goods and styles, their initial impulse was to imitate these items, down to the copyrighted and often hilariously misspelled logo. Chinese pedagogy is based on copying and memorization; in the culture, selection of a model for emulation demonstrates respect and flattery. This fundamental characteristic of Taiwan’s bourgeoisie facilitated their adherence to foreign contractors’ models and specifications without a sense of inferiority (though they sometimes shirked on quality or sold themselves under someone else’s brand name). It also got them into a great deal of legal trouble.

Not only did more people enter the ranks of the bourgeoisie, but that class began to stratify as well. In the early 1970s, successful enterprises and individuals began to form business groups (kuan-hsi ch’i-ye) to invest in new companies or each others’ firms. Investors saw this as a way to spread risk and integrate production. But laws restricting the amount of capital one firm could invest in another, tax incentives favoring new firms, capitalists’ fears of growing too large and thereby attracting government attention and exactions, and moving capital about rapidly to evade creditors also stimulated this trend. A final reason for the appearance of such business groups lay in the paternalistic chairman’s desire to let each of his sons be chairman of his own firm.

Textilers, as the first big capitalists, created many of the groups. Far Eastern Textile, a Shanghainese company with close government connections, vertically integrated its cotton and synthetic production to garments, then hived off a chain of department stores and a cement company. Another Shanghainese enterprise associated with the KMT leadership, Tai-yuen Textile, vertically integrated its textile operations under the chairman’s wife, while the chairman himself, Yen Ch’ing-ling, established Taiwan’s first automobile assembly plant via technical agreements with Willys and Nissan. The result, the Yue Loong, enjoyed protection and monopoly rights—and unremitting criticism from its purchasers—until the 1970s.

The politically connected Taiwanese firm Tainan Textile built an enormous group of more than twenty enterprises in cement, food, and plastics in addition to textile-oriented companies. The numerically smaller group based on Y. C. Wang’s Formosa Plastics Company limited its sphere of investment, concentrating on integrating production of plastics and synthetics and dominating those sectors at the intermediate level.

As Taiwan’s economy grew more complex, parvenu enterprises without political connections followed the expansion trend. By 1976, observors distinguished about 100 such groups, but they were but a shadow of their East Asian cousins, Japan’s zaibatsu and Korea’s chaebol, in terms of capital, scale, control of their own trade, and government connections.17

Taiwan’s industry, both local and foreign owned, utilized labor-intensive technology, so employment opportunities expanded rapidly. Urban dwellers as well as peasants flocked to factories, which were dispersed in all of the major cities and in the countryside.

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