Dominant Capital and the Transformation of Korean Capitalism: From Cold War to Globalization

After the 1997 financial crisis, the neo-liberal restructuring of the Korean political economy accelerated dramatically. While there is a general consensus that the reform has had negative consequences for Korean society, heated debates continue over the culprits of the 1997 crisis and the changes that followed in its wake. Major opinions have largely coalesced into two opposing camps: one, finding the cause in cronyism and the anachronistic management of the Korean chaebols, advocates market-centred economic reforms; the other, attributing the cause to the ‘unproductive’ nature of foreign financial capital, suggests that the restoration of statist development model, in which the economy is led by the state-chaebol nexus, is a better way for Korean society. The main reason for the asymmetry between the ‘progressive’ critiques and ‘conservative’ solutions of these two theoretical camps lies in their misunderstanding of the way in which power evolves in capitalist society. Their theories, which are premised on the dichotomy between ‘politics’ and ‘economics,’ are blind to the mutual transformation of capital and the state—to the historical changes in the nature of these institutions through the commodification of power. The central assumption of this dissertation is that it is necessary to understand the mutual transformation of capital and the state and the evolution of the capitalist ruling class in order to grasp the nature of the post-1997 social restructuring. For this purpose, it adopts Nitzan and Bichler’s perspective of capital as power. From this perspective, situating our understanding of the 1997 crisis and the post-crisis restructuring in the context of the half-century-long evolution of capitalist power in Korea and the transformation of the regimes of differential capital accumulation, this dissertation makes three interrelated arguments. It argues, first, that the post-1997 restructuring firmly entrenched capitalization as the creorder of Korean society. Second, it argues that globalization has incorporated Korea’s dominant capital into the global structure of absentee owners through the trans-nationalization of ownership and accumulation. Lastly, it argues that the reduction of green-field investment, relative to the pre-1997 period, is to be explained by the shift of the regime of differential accumulation.