The International Environment and the East Asian Export-Oriented Economies

Abstract

According to mainstream political science, the rehabilitation of the capitalist world economy after 1945 was a smooth process. The mood until the mid-1960s was one of general euphoria. Even the catching-up of Europe and the recovery of Japan did not in the first postwar period prevent the United States from showing continuous trade surpluses combined with balance of payments deficits due to capital export. The United States still had a very real comparative advantage in the production of goods and technology, while US capital flowed into European production through the expansion of American multinationals abroad. Together with the dollar’s special status as reserve currency, the governmental foreign aid programmes and the international activities of corporate America contributed to provide the needed liquidity for the growth of the world economy.