virginiareviewofasianstudies.com · Web viewAlthough the Chinese population had little association with the PKI, ethnic Chinese were targeted too. At the least, several thousand were

Virginia Review of Asian Studies: 20 (2018) 166-180ISSN: 2169-6306Ellington: Chinese Cultures

CHINESE CULTURES AND WORLD HISTORY: PROSPERITY, RHETORIC AND INSTITUTIONS

LUCIEN ELLINGTON1 UNIVERSITY OF TENNESSEE AT CHATTANOOGA

But America is not the only bourgeois society. Germany is too, though one that in its intellectual circles wishes it was not. Italians are famous townsfolk. And China, having for centuries the largest cities, must have buried in its history a bourgeois tradition counter to the traditions of the peasant/landlord or of the scholar bureaucrat.

Deirdre McCloskey

Bourgeois Equality (p.600)

Since the end of World War II, no region of the world has been as dynamic as East Asia, where one nation after the other has created dynamic economic and political “miracles.”

Zhiqun Zhu

Understanding East Asia’s

“Economic Miracles” (p.1)

Introduction: Four Questions about Chinese-influenced Cultures and Prosperity

The inspirations for this article are four questions that have intrigued me for some time 1) Why was China the richest country or one of the richest countries in world history before the Industrial Revolution? 2) Why did pre-modern Japan, most notably from the 1500s-1853, realize high levels of pre-industrialization prosperity?) 3) Why, historically, have Northeast Asia diasporas been particularly notable for economic success throughout the world? and, 4) Why did Chinese-influenced nations’ economies (with the exception of the PRC in the Mao years, despite Chinas recent economic rise) catch or exceed most Western nations after World War II?

For those of us who teach world history, thoughtful reflection upon each one of these questions is critical in efforts to provide students with even a basic understanding of the quest for prosperity in human history and why the West, and then Sinocentric Asia, has done so well.

1Lucien Ellington is Editor of Education About Asia and is the Director of the Asia Program and UC Foundation Professor of Education at the University of Tennessee at Chattanooga.

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Gaining a deeper understanding of these questions has been a fascinating process that led me to reconsider conventional economics and economic history analyses as well as explanations that over-emphasized new (or old) imperialism as helpful in better understanding these questions, but too limited.

China and Chinese-influenced cultures were certainly affected by incentives and disincentives for wealth creation, legal systems, imperialism-both European and Asian-and (perhaps least of all), resource disparities. However, underlying ethical beliefs, and in a classical sense, the rhetoric they produce, that mold institutions and interpersonal relations between social groups in any culture are most important in understanding how some societies are notably prosperous and others are not.

Deidre McCloskey’s Bourgeois trilogy was enormously helpful to me in thinking about answers to the questions that constitute the framework of this essay; especially in thinking about how rhetoric affected wealth creation in Chinese-influenced cultures in negative and positive ways, including the economic achievements of diasporas of Chinese-influenced peoples throughout history. Readers who are not familiar with the 1,600-page three volume trilogy by McCloskey, who is a distinguished professor of economics, history, English, and com-munications at the University of Illinois at Chicago need succinct context. In volume one The Bourgeois Virtues, the author makes a powerful case that bourgeois should be praised, not condemned for the cultivation of a systematic set of ethics in an imperfect world that have profound positive effects on human action and achievements. In her second volume Bourgeois Dignity, note the subtitle “Why Economics Can’t Explain the Modern World,” McCloskey asserts that some of the more prominent economic explanations for growth, e.g. maximizing utility, which she labels MaxU, capital accumulation, and an overemphasis upon institutions and the incentives and disincentives they create, while important are simply insufficient in explaining the 16th century European roots, of the later rapid acceleration in human prosperity, beginning with the industrial revolution, that spread over time to much of Europe, North America, and then Asia. In her third volume Bourgeois Equality, McCloskey directly focuses upon the change in ethics and supporting rhetoric in Northwestern Europe by the 18th century that created the space for entrepreneurs not to be condemned by aristocrats and clergy, but to have more freedom to create wealth and technology. She attributes the major causes of the economic takeoff of the early 19th century that continues today in various parts of the world as the creation of liberty for ordinary people and the growth of attendant social dignity embodied in legal rights, for the middle class and those who aspire to improve their conditions.

Readers unfamiliar with McCloskey but more knowledgeable of David Landes or Rodney Stark should not erroneously categorize McCloskey as Eurocentric and are encouraged to read her work, especially volume three as well as reviews of the trilogy in a wide-range of academic journals and journals of opinion. Even McCloskey’s intellectual opponents applaud her erudition, breadth of knowledge and provocative conclusions.

Imperial China’s Domestic and Global Economic Success

So what is the connection between McCloskey’s work and Imperial China? McCloskey agrees with most economic historian’s explanations of why the world’s leader in technological innovations for well over a thousand years prior to the 19th Century, Imperial China, failed to be

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the first country to have an industrial revolution. Although she notes that there was no incentive for Imperial China to engage in trade beyond the Indian Ocean she is much more interested in belief systems that formed that incentive.1 McCloskey keeps her attention on Chinese belief systems and rhetoric and speculates that in contrast to highly competitive European states, Imperial China’s unity, including rhetorical unity was-not necessarily a good thing- “….the way any large, boss organization….” might “….have no space for rational discussion….” on such issues as whether it was irrational to foster an insular attitude that impeded global trade or further develop already superior iron and maritime technology.2

The point of this particular essay is not to re-enter the interesting discussion about why China didn’t become the first country to initiate the industrial revolutions that changed much of the globe. Controversies remain, but there are broad elements of agreement between many, if not most, historians and economists on this topic with the exception of hide-bound Eurocentrics or the most dogmatic California School theorists. However, understanding China’s earlier commercial successes, and particularly the ethical systems that spawned these successes, is one important clue that helps to explain the cultural foundation of Zhiqun Zhu’s introductory assertion about East Asia’s post-World War II economic successes.

Although not an Asia specialist, McCloskey is an impressive world historian with an open mind and recognizes imperial China’s impressive technological achievements. For example, McCloskey indicates, citing another scholar, it would take Europe until 1750 to produce as much cast iron as China produced in 400 BCE.3 And even though it took the Europeans until the 19th Century to build ships as large as the Chinese possessed in the 15th Century, China neglected to compete against the rising 15th Century Portuguese for exploration of Africa although the Chinese had made occasional trips to that continent earlier.4 Unlike other economists who have a background in European history, McCloskey does not simply recognize early China’s vibrant economy, but thoughtfully ponders the beliefs that might have laid the foundation for traditional China’s achievements and precluded even more advances. She attributes Chinese disinterest in competing against the Portuguese to the middle kingdom’s riches and by its unconcern about imperial international economic ventures, but is intrigued by the middle kingdoms maritime capability and how and why it was created.

McCloskey clearly recognizes (return to the introductory quotation on page 1 of this essay) an ethical system(s) was clearly present within China that helped to create commercial practices and technology, and spawned China’s world leading wealth and great commercial achievements in the pre-industrial world. These imbedded value systems also helped make Chinese who immigrated to Southeast Asia and elsewhere, economically successful, and in the 20th century positioned Northeast Asian nations, beginning with Japan, to selectively combine a number of Chinese-based beliefs, institutions, and practices with western technology to achieve what Zhiqun Zhu succinctly described in the second introductory quotation.

McCloskey’s Bourgeois Trilogy includes evidence of the sophisticated configuration of Imperial China’s commercial, technological, agricultural, educational, and ethical accomplishments that made it in many ways the most advanced civilization in the world until at the least, the 17th Century. Even in the first volume of the Bourgeois Trilogy, the author hints that the presence of virtues that advance societal prosperity is no Western monopoly. Consider this quotation from The Bourgeois Virtues on Confucianism: “Philip Ivanhoe, from whom I have

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mainly learned the little grasp of all this, notes that Chinese ethical philosophy concerns itself much more with education and cultivation of character than with Platonic explorations of the Good.”5 While keeping in mind that elite Neo-Confucianism was a significant impediment for positive rhetoric about merchants, focus upon the concreteness of “education and cultivation of character” that trickled down to even some of the poorest peasants.

In her second volume, Bourgeois Dignity, McCloskey spends several pages describing numerous Chinese technological innovations: writing paper, soil science, paper money, the seed drill, the crank handle, drilling for natural gas, knowledge of the circulation of blood, the blast furnace, writing paper, paper money, and the compass that were in use in China from 200-2,000 years (in the case of silk production) before the West could produce them. She includes the renowned China specialist Joseph Needham’s quotation that succinctly frames the pre-industrial revolution China-West technology gap: “Francis Bacon had selected three inventions, paper and printing, gunpowder, and the magnetic compass, which had done more, he thought, than any religious conviction, or any astrological influence, or any conqueror’s achievement, to transform completely the modern world… All of them were Chinese.”6 It is important for readers with little or no background in China’s history to fully grasp the sophistication of Chinese technology and innovation, that despite turmoil from the 1830s until late in the 20th Century, was only truly threatened with extinction during the Mao era.

Early and particularly medieval Chinese was also extensively engaged in international and domestic trade. In Bourgeois Equality McCloskey draws on the work of global historians and East Asia specialists to depict Imperial China before 1800 as engaging in huge amounts of maritime trade in the China seas and Indian ocean. Through most of these periods, Imperial Chinese officials constituted almost no de-facto challenge to property rights of merchants, investors, and often peasants. Banks, canals, large firms, and commercial activities were robust in urban areas. For example, during the Southern Song Dynasty (1127-1279 CE) millions of merchants were able to sell goods and services throughout China without government interference. Although internal trade barriers existed in China, they were imposed by the imperial government and uniformly enforced, when, to use McCloskey’s words, “…bourgeois northern Europeans were still hiding out in clusters of a few thousand behind their tiny city walls, with barriers to trade laid on in all directions.”7

McCloskey, unlike almost all Western trained economic historians, is well aware that one Chinese-influenced culture, Japan, beginning in the 17th Century, also benefitted from an ethical foundation that helped create a political and legal system that facilitated economic growth most probably to a significantly greater degree than in the West until the latter part of the 18th or early 19th Century. McCloskey includes an instructive quotation from sociologist, world historian, and political scientist Jack Goldstein to emphasize her point: “In the eighteenth-century China and Japan had agricultural productivity and standards of living equal or greater than that of contemporary European nations …. Government regulation and interference in the economy was modest in Asia, for the simple reason that most economic activity took place in the free markets run by merchants and local communities, and was beyond the reach of the limited government bureaucracies of advanced organic societies to regulate in detail.”8

Why were Chinese bureaucracies relatively limited for much of the empire’s history? Daoist and Confucian ethical influences were at play even if many elite scholar bureaucrats

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would have liked more control. Significantly, in Bourgeois Dignity, McCloskey cites the work of several East Asia specialists including Frederick Mote, Evelyn Rawski, and, for Japan, Ronald Dore, to confirm the assertion that China had the world’s highest literacy rates until after the fall of the Ming Dynasty in 1644 and by 1800 both countries but especially Japan, still had literacy rates comparable to the most literate Western populations.9 Ethical systems and attendant supportive rhetoric supported learning.

Cultural Practices, Belief Systems, and Rhetoric

McCloskey in linking ideas and rhetoric to economic history avoids a serious error of most economic historians who have no little or no knowledge of Northeast Asia. Many scholars who are unfamiliar with imperial Chinese (or Japanese) history assume that emperors (or shoguns) and elite bureaucrats had something approaching absolute power over the rest of Chinese (or Japanese) society. This assumption often can lead to the notion that in these societies, sophisticated belief systems were not generating ideas that improved prosperity, or that all ideas originated with imperial governments and were absorbed by a mostly servile and compliant population. “The Mountains are High and the Emperor is Far Away” is a historic Chinese proverb worth considering for the first time or for most readers of this journal, again.

Even when, especially in China but in Japan as well, imperial officials wanted to implement policies to restrain international and domestic trade or constrain merchant/entrepreneurs, geography often prevented policy implementation. Although Confucian literati elite bureaucrats periodically attempted, sometime successfully, to disrupt international maritime trade, and were opposed to giving merchants formal power or status, as highly educated officials they were inculcated to perpetuate appropriate ethical behavior that would benefit the population and clearly recognized that the agricultural and commercial prosperity of Imperial China depended upon incentive structures to foster domestic economic achievement. They often (but not always) looked the other way or made clandestine mutually beneficial arrangements with merchants. And, the belief systems they embraced had the potential to empower individuals and especially families.

Two Chinese belief systems, Daoism (Taoism) and Confucianism, had profound effects on individual and group ideas, perceptions and rhetoric about economic activities. Both belief systems contributed to commercial success at home and strikingly effective overseas Chinese ventures.

David Boaz, in his 1997 Libertarianism: A Primer, identified Laozi (Lao-tzu) as probably the first known proto-libertarian tract. The alleged 6th Century BCE author of The Daodejing (Tao-Te Ching), the most seminal Daoist text, asserted: “Without law or compulsion, men would dwell in harmony.” Boaz describes the Dao or “Way” with its complementary opposites of Yin and Yang as follows: “It anticipates the theory of spontaneous order by teaching that harmony can be achieved through competition. And it advises the ruler not to interfere in the lives of the people.” 10

This belief system, with elements that go back to the dawn of China’s history, is part of the Chinese cultural landscape, imperial, totalitarian, and now authoritarian governments not-withstanding. Domestically, despite specific eras where conservative bureaucrats held disproportionate sway and managed to effectively repress economic activity, for much of

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imperial China’s history, a critical mass of scholar bureaucrats, who studied Daoism, realized that minimal government interference in the lives of ordinary individuals and families contributed to creativity and human progress. Overseas Chinese entrepreneurs when contrasted with non-Chinese were and often are competitive, resourceful, and almost inevitably unless jailed, killed, or exiled, successfully manage to get around government repression and take care of themselves and their families.

Confucius (551-479 BCE) created what would become a tradition, that is, along with Legalism, one of the three most important Chinese belief systems and the most important in shaping popular as well as elite perspectives on life. McCloskey, along with most historians of China, is correct in asserting that factions from the Imperial Neo-Confucian bureaucracy who won the support of the emperor were responsible for ending government support for international maritime trade in 1433 when the Ming Voyages of Chinese Admiral Zheng He were discontinued (private maritime commerce with Southeast Asia never ceased). In the mid and late 19th Century when younger top Confucian officials attempted to learn from the West and Japan so as to industrialize and re-gain military and economic resiliency to better manage Western and Japanese imperialists, the more conservative Confucian literati officials along with probably the Empress Dowager successfully prevailed to arrest this effort.

Still, and McCloskey’s observations about bourgeois Chinese tendencies, and the Confucius emphasis upon education and character give clues, critical elements of the belief system when practiced by individuals and especially families, dramatically increase the prospects for economic prosperity. Beginning in the 11th Century the Neo-Confucian formal state designation of merchants, particularly impeded China’s economic development by the 18th

Century, but even among the literati there existed serious opposing views whose proponents valued technology and sought to improve China’s capacity to make better use of it. However, the transmission, both in schools and through activities that were intended to be morally instructive for the general population, of Confucian values of self-cultivation, education, hard work, and the critical responsibility of sustaining the families’ material welfare, was continually and consistently reinforced at an organic and grassroots level.

A key to understanding Confucianism’s effect on individual and familial behaviors is to keep in mind the educational levels of Chinese cited earlier and to particularly focus upon the most widely utilized educational text in early education in imperial China from the 13th Century well into the 20th Century, The Three Character Classic .11 This was by far the most popular primer that young children beginning at the age of 5-6 used to learn and read Chinese charac-ters.12 The text is easy to read and easy to recite and much of its focus is upon self-cultivation, and the critical importance of education to not only self-cultivation but for the perpetuation of familial economic prosperity. Consider the following four translated excerpts from the text:

If foolishly there is no teachingthe nature will deteriorate.

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The right way in teachingis to attach the utmost importance in thoroughness. To feed without teachingis the father's fault.To teach without severityis the teacher's laziness.

Make a name for yourselves,and glorify your father and mother,shed lustre on your ancestors,enrich your posterity.

Dou of the Swallow Hillshad the right method.He taught five sons,each of whom raised the family reputation.13

It is difficult to overestimate the influence of this primer in shaping the values of literate Self-cultivation, Confucian rhetoric, and the responsibility for familial economic survival was also transmitted to literate and non-literate alike through maxims of two influential Qing Emperors in the 17th and early 18th centuries that were formally known as the “Sacred Edicts.” Men of authority were supposed to explain the edicts on formal occasions throughout China in towns and villages; common themes of the edicts included fidelity and filial piety. Popular story tellers would take the themes and often imbed them into stories that were told, chanted, and sung. Variants of these attempts at oral education began as early as the 12th Century in the Song Dynasty and the founder of the Ming Dynasty experimented with the same approach to moral education.14

Although the Confucian values described were integrated into tales about ancestral Gods, myths, and popular action stories, they reached millions of people who could not read.15 The economic ramifications of the values expressed in The Three Character Classic and attempts to influence popular values and beliefs will become more specifically understood as the third question posited in the introduction to this essay is considered; why were overseas Chinese so successful?16

Chinese Diasporas in Asia: Case Studies

Introduction

A former king of Siam (now Thailand) allegedly once referred to the overseas Chinese as the “Jews of Asia.” This is probably not correct because historical and contemporary evidence in several Asian countries, including Thailand, the Philippines, Indonesia, Malaysia, Taiwan, and Singapore, indicate that overseas Chinese have been far more successful in dominating many of Asia’s economies than is the case with the Jews in Europe. Perhaps the king should have labeled the Jews as the “overseas Chinese of Europe.”17

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Chinese maritime traders were doing business throughout southeast Asia hundreds of years before 1000 C.E., and diasporas of Chinese who moved to various southeast Asian countries had already begun by, at the latest, the beginning of the 12th Century. Although, the cultures of the areas where Chinese settled, as well as geographic and historical developments, caused some diversity in the Chinese communities’ economic developments, when diaspora histories are compared, the commonalities of historical economic activities of the Chinese seem to outweigh the differences.

Individual Chinese and Chinese families who chose to live in other Asian cultures tended to almost all come from Guangdong and Fujian, which are both southern coastal provinces. The Chinese city of Guangzhou (Canton), Hong Kong, and the island of Taiwan are all located in or near this region of China. Since well before the first millennium, this area southern coastal China has been famous for business and entrepreneurial activity and for loose government control in comparison to China’s northern regions.

A large number of Chinese who left the mainland were poor, but they followed similar patterns in the countries where they relocated. Chinese immigrants often faced discrimination, so they engaged in independent business activities and relied heavily on family members and networking with other Chinese businesses, both in-country and in other Southeast Asian cultures.18 For much of the time, historically, government was to be avoided if possible. Often, intermarriage with the locals was a good survival strategy and in most southeast Asian cultures, a significant number of Chinese males tended to marry females from the indigenous cultures. Probably the highest percentage of intercultural marriages occurred in Thailand, but whether overseas Chinese married other Chinese or not, Chinese style business practices were the norm. Everywhere overseas Chinese located they were famous for thrift, the struggle for wealth in order to preserve family continuity, and a tendency to engage in business interactions, if at all possible, with other Chinese or to quickly become middle men with non-Chinese; which made marrying locals a major economic advantage. Though this trend later changed to a large extent, contractual Chinese-Chinese business relations were historically the significant exception instead of the rule as entire business networks were based upon trust.

Thailand

In what is today Thailand, Chinese immigrants began arriving just north of present day Bangkok by at least the 13th Century.19 The Southeast Asian cultures that the Chinese entered often had noticeably different mores than the newcomers. For example, G. W. Skinner, a China specialist and anthropologist who closely studied Chinese migrants to Thailand, contrasted these values by describing the indigenous population as quite willing to simply take advantage of fertile land and be content with subsistence level farming. They did not value thrift and viewed work, for its own sake, as irrational.

The Thais frowned upon excessive interest in wealth accumulation. The Thai dominant proverb was, “Do not long for more than your own share.” The Chinese proverb was, “Money can do all things.”20 Chinese in Thailand expanded their influence as European and American firms in the 19th Century who, located in Thailand, were almost always managed by a Chinese merchant who had a high reputation in the Chinese community and would work closely with other Chinese business groups. Overseas Chinese managed to dominate not only businesses in

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Bangkok, but also took over much of the rice trade, including processing mills that westerners had originally built but found unprofitable; this was not the case with the well-connected Chinese.21

Today, ethnic Chinese and especially mixed blood Thai-Chinese make up an estimated 10-14 percent of the population of Thailand (6 million-9 million people) although because of generations of intermarriage the numbers are hard to ascertain .22 Thai-Chinese own a significant number of commercial and industrial firms, including major department stores such as Central World and banks such as Kasikorn. In the 1970s, overseas Chinese owned about 75 percent of all shops, banks, and factories in Bangkok and a majority of the city’s commercial banks. Although the Chinese community was hit hard by the 1996 economic downturn, Thai-Chinese continue to play a disproportionally high, for their share of the population, economic role in Thailand. The children of Thai-Chinese merchants have gone on to become some of the most well-educated Thai citizens and are well represented in government and their professions.23

The Philippines

Although Chinese contact with the peoples whose descendants make up the majority of residents in the Philippines almost certainly occurred earlier, the first written record of contact appeared in 1225 when Chao Ju Qua, Fujian Province Superintendent of Maritime Trade, included inhabitants of present-day Mindoro in his chronicle of various “barbarians” with whom the Chinese traded. In the Song Dynasty (960-1279), Chinese traders were regularly doing business with Filipino coastal communities. Chinese mariners, traded a wide array of goods: most notably porcelain, but also iron, tin mirrors, coins, silk, and lacquerware, and acquired goods such as beeswax, cotton, betel nut, coral, pearls, and sandalwood.24

By the 16th Century, shortly after the arrival of the Spanish, present day Manila became a lucrative place where the Spanish, who the imperial government did not allow to enter China, could trade with Chinese merchants. Spanish galleons brought silver and chocolate from Mexico while Chinese junks landed large amounts of silk and porcelain on the shores of Manila for trade with the Spanish. This trade became a key economic mode of survival for the Spanish and Filipino populations. Also, Chinese settlements began in the Philippines.25

Spain politically wielded power over the peoples of the Philippines, but the Chinese developed significant economic clout in the archipelago. By the latter part of the 18th Century, the Spanish government wanted to make the Filipinos completely dependent upon two-way trade with the Spanish empire. The Spanish tried to end Chinese economic influence by isolating Chinese residents of the Philippines in ghettos and deporting them. However, deportation of the Chinese created opportunities for Chinese mestizos who had the economic expertise of their fathers, and the extensive local contacts of their mothers. Later, further Chinese immigration to the Philippines made the presence of Chinese dominated business practices permanent.26

Today, Filipinos of Chinese descent and ethnic Chinese continue to be highly successful economic actors. Because of sporadic hostility throughout recent history against overseas Chinese in the Philippines and a significant amount of intermarriage, it is difficult to determine the percentage of Filipinos of Chinese origin. Yale law professor Amy Chua, in a 2002 book titled World on Fire, estimates that Chinese Filipinos are about one percent of the archipelago’s population, but other estimates are higher based upon assumptions that anyone that is at least one

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third Chinese should be considered Chinese Filipino. What is much more certain is that Chinese Filipinos exercise economic influence that far exceeds their population numbers. Estimates vary, but Amy Chua asserts that directly or indirectly Chinese Filipinos control sixty percent of the economy. This is almost certainly on the high side, but a more recent article in the financial section of the South China Morning Post asserts that ethnic Chinese and Chinese Filipinos control about half of the economy.27 An examination of Forbes 2017 rankings of the ten richest Filipinos included at least five Chinese Filipinos, including the number one ranked Henry Sy. Examples of Chinese Filipino companies owned by these Chinese Filipinos include: SM Investments, LT Group sales (tobacco, spirits, banking, and property development), banking, hotels, a multinational restaurant chain, and gaming.28

Despite periodic violence directed at Chinese Filipinos, including deliberate targeted kidnapping of affluent Filipinos of Chinese descent, several prominent politicians, including the current president Rodrigo Duterte, have Chinese Filipino family origins.

Indonesia

Imperial Chinese merchants conducted extensive maritime trade with various polities who now constitute contemporary Indonesia well before 1000 CE. The Song Dynasty shipwreck (one of more than a dozen that have been identified in southeast Asia) off the coast of Java remains indicate that the Chinese ship contained silk, ceramics, copper cooking cauldrons, and cotton for southeast Asian merchants that the Chinese purchased from India. In return, the Chinese were importing aromatics, perfumes, benzoin, and a number of spices from southeast Asia.29

Chinese apparently first began to immigrate to present day Indonesia shortly after the Dutch took over Jakarta in the eighteenth 18th Century. Chinese traders served as middlemen between Dutch colonial authorities and indigenous peoples. Neither the Dutch, nor the local peoples, seemed to have trusted the Chinese because of apparent fears of losing trade and profits to Chinese competitors. Discrimination against Chinese that often ends in violence has a long history in what is now Indonesia. In 1740, locals massacred approximately 10,000 Chinese in Batavia with the cooperation of the Dutch governor general. Nevertheless, the Chinese persevered in Indonesia. Between 1870 and 1930, due to a significant extent because both Australia and the United States passed Chinese exclusion laws, Indonesia’s Chinese population grew to approximately 1,250,000 which then constituted about two percent of the archipelago’s total population.

In Indonesia’s early independence era in the 1950s, discrimination against Chinese increased again. Teaching Chinese language in schools was forbidden and Chinese who weren’t Indonesian citizens were deported. The remaining Chinese were required to learn Bahasa Indonesian or they were deported. In 1960, Indonesian dictator Sukarno banned Chinese from doing business in rural areas. Almost 100,000 Chinese were forced to close their businesses, but a number of Chinese who moved to the cities attained much more wealth in urban areas than they had enjoyed in rural retail trade. In 1965, the Indonesian government used the military to purge the Indonesian communist party (PKI). Although the Chinese population had little association with the PKI, ethnic Chinese were targeted too. At the least, several thousand were killed. It is difficult to even accurately calculate the number of Indonesians killed in the PKI

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purge, but the probable total is around 300,000, making this government action the bloodiest domestic military action in post-war southeast Asia until the Khmer Rouge regime in Cambodia.30

When Indonesia’s second dictator Suharto took power in 1967, he attempted to wipe out Chinese identity in Indonesia by forcing all Chinese to become Indonesian citizens and the regime banned Chinese New Year celebrations and other Chinese cultural displays.31 Resentment among common people about Chinese economic success remained and in May 1998, riots occurred in which hundreds of Chinese stores were burned and Chinese women were raped and murdered. Many Chinese Indonesians left the country and the subsequent capital flight further damaged an already weak Indonesian economy. In 1999, Abdurrahman Wahid became the first democratically elected president and, presently, Indonesia remains the world’s third largest democracy. Many Chinese Indonesians returned in 2005. Although their situation is better, popular resentment of Chinese Indonesians remains present as evidenced by the 2017 election loss of an effective first term governor of Jakarta (popularly known as Ahok), and his subsequent imprisonment on charges of blasphemy against Islam. Ahok, like numerous Chinese Indonesians who are Christian, is a double minority in a country with the world’s largest Muslim population.

Even though they experienced perhaps the most consistent anti-Chinese pattern of discrimination and violence in southeast Asia, Indonesian Chinese founded corporations and numerous small businesses. Chinese small firms are more economically successful in general than small businesses owned by other Indonesians although Indonesians who have no Chinese heredity tend to overestimate Chinese business success. Chinese Indonesian success stories are more striking when large and multinational corporations are considered. An examination of the 2017 Forbes ranking of the ten most affluent people indicated that at least seven of the top ten individuals are of Indonesian Chinese descent.32

Taiwan and Singapore

Most readers are perhaps more familiar with the two nations in which overseas Chinese played a major role in developing market-oriented economic powerhouses. It is important to note that in the case of both Taiwan and Singapore (the post-1949 Taiwan mass immigration is an exception since the defeated Nationalist were from various areas of China), the original Chinese immigrants from the mainland to these locales also came from the southern coastal provinces of imperial China. In the 2017 IMF GDP (PPP) per capita world rankings, Taiwan ranked 19th out of 187 countries, and Singapore ranked 3rd.33 There is little question that the overseas Chinese who moved to these areas were influenced by Confucian and to a lesser extent Daoist-related values that helped them eventually create significant amounts of wealth. What is different about Taiwan and Singapore is that historically Anglo-American belief systems, institutions, and rhetoric affected economic development to a greater extent than in the earlier case studies (despite the fact that the Philippines was an American possession for approximately 50 years).

In Taiwan’s case, imperial Japan, already significantly influenced themselves by the Americans and British, played a major role in raising educational levels and beginning industrial development during Taiwan’s 1896-1945 colonial period. Subsequent American inspired post-World War II land reform that Nationalist leader Chiang Kai-shek and his advisors embraced

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created a large number of small capitalist farmers; agricultural produce was Taiwan’s first post-war export success. In both successful Nationalist land-reform and economic policies that stabilized the currency, some of Chiang’s closest advisors who were architects of economic and political reform were graduates of American universities. Although an autocrat, Chiang Kai-shek was no Mao and helped to sow the seeds of eventual democratic reforms.

It should be noted, however, that even before Chiang Kai-shek and his defeated Nationalists fled to Taiwan, the Chinese who had lived on the island since at least the 13th Century, came from the same southern coastal areas that other overseas Chinese who immigrated to southeast Asia originally lived. This is important for reasons already described but also because the Nationalists spoke Mandarin Chinese and top military, government, and state-subsidized corporate positions created by the new Nationalist government were at first exclusively reserved for the 1949 immigrants. Taiwanese Chinese from the southern coastal areas whose ancestors left China in the 17th, 18th, and 19th Centuries like overseas Chinese elsewhere spoke several other dialects but not Mandarin. Chiang Kia-shek’s Nationalists by and large at first treated Taiwanese like second-class citizens. What these long time Chinese residents of Taiwan achieved in a legal/economic environment that allowed them to do so without the levels of discrimination of other Southeast Asian cultures toward Chinese, was creation of the most vibrant small and medium (SME) post war enterprises in Asia. Chiang Kai-shek deserves partial credit for this development because when he realized by the 1970s, the potential dynamism of Taiwanese SMEs, Chiang helped to nurture their growth through establishing export-oriented enterprise zones where Western and Japanese investors could link with SMEs. This helped a number of SMEs to become not only national, but also international enterprises.

Singapore is a particularly interesting example of the interaction of English belief systems, institutions, and rhetoric with those of overseas Chinese. First founded in 1819 by British Lieutenant-Governor of West Sumatra, Sir Stamford Raffles, by the eve of World War II, Singapore was already heavily involved in maritime trade, but the Chinese Malays and South Asians who lived there were generally quite poor. With Singapore’s 1965 independence and Lee Kuan Yew’s accession to prime minister, the nation took a course of action that resulted in its citizens becoming some of the most affluent people on earth. Lee Kuan Yew embodied an integrated Chinese-Anglo perspective on the potential for human prosperity and how to improve it.

A brief biography of one of the most famous post-war Asian political leaders justifies the description of Lee Kuan Yew in the preceding sentence. Born in 1923, he was a third generation Singaporean whose Chinese ancestors had come from the southern coastal areas in the 19th Century. Lee’s family was part of the Straits Chinese community who could speak Chinese, Malay, and English. World War II and the Japanese occupation of Singapore shook Lee’s faith in colonialism and the abilities of the British to protect Singapore. Earlier, as a young boy, he also experienced his family losing most of their business fortune during the 1930s depression. Graduating at the top of his class from a Singapore college established by the British, Lee Kuan Yew managed to scrape the money together to go on to graduate from and earn top academic honors at Cambridge University Law School in the UK. He also lost his brief attraction to socialism by experiencing the economically abysmal situation in Great Britain of the late 1940s and developed a lifetime distaste for the welfare state. When Lee and his advisors assumed the

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leadership of the new nation, he firmly believed that education must be meritocratic and that economic incentives needed to be, in critical ways, diametrically opposed to collectivism. To quote Lee:

Friedrich Hayek’s book The Fatal Conceit: Errors of Socialism expressed with clarity and authority what I had long felt but was unable to express, namely the unwisdom of powerful intellects, including Albert Einstein, when they believed that a powerful brain can devise a better system and bring about more “social justice” than what historical evolution, or economic Darwinism, has been able to work out over the centuries.34

When other developing nations throughout the globe embraced import substitution, Singapore’s political leaders enthusiastically supported international trade based upon export of valuable goods and services.

Lee’s Confucian side was also prominent. Although he was an admirer of western, and especially American, innovation and creative entrepreneurship, he was a serious critic of western overreliance on utilization of government to solve familial problems. Again, to quote Lee:

Westerners have abandoned an ethical basis for society, believing that all problems are solvable by a good government…. In the West, especially after World War II, the government came to be seen as successful and that it could fulfill all the obligations that in less modern societies are fulfilled by the family…. In the East, we start with self-reliance. In the West today, it is the opposite. The government says give me a popular mandate and I will solve all society’s problems.35

Lee also exhibited the overseas Chinese propensity to attempt, when useful, to effectively function in a multicultural environment. Although Chinese constitute the majority of Singapore population (74.3 percent), Malays (13.4 percent) and Indians (9.1 percent) are significant minorities.36 Before Lee’s accession to power, several violent race riots had occurred.

Lee realized early in his political career that if Singapore was to be a cohesive and an economically affluent nation, a common language was essential. In a tough political battle, Lee managed by 1966 to create a bilingual policy where English is the official language of schools, but students also learned their mother-tongue languages. In Singapore, English is the language by which children learn subject matter content and skills and converse with each other. The language of instruction in tertiary education is solely English, unless students are studying subjects directly related to other languages. This policy has proven to make a nation with no natural resources highly effective in a global economy.37

Conclusion: Western and Eastern Rhetoric and Prosperity

Deirdre McCloskey’s three Bourgeois Volumes, especially the third, transcend many economists and economic historians useful but narrow emphasis upon institutions creating prosperity or the lack thereof through close attention to the underlying belief systems and rhetoric that shape institutions. Hopefully, this essay is helpful in aiding understanding that early Chinese did not simply excel in technology and commercial success because of incentives and disincentives but because of the power of belief systems and resultant rhetoric in creating institutions where pre-industrial revolution prosperity was created. These same foundations also influenced overseas Chinese to realize, despite at times untenable and dangerous political and social circumstances, prosperity through acting upon those ideas. After 1945, a fusion of both Anglo-American and traditional Chinese belief systems helped to create unique advancements in prosperity since World War II. Hopefully, East Asians and Westerners can take justifiable pride in our own rich fountain head of ideas and rhetoric while understanding that the moral

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underpinnings of entrepreneurship and economic success is perhaps most creative when it is multi-cultural.

NOTES1 Deirdre N. McCloskey, “And Other Exploitations, External or Internal, Were Equally Profitless to Ordinary Europeans,” in Bourgeois Dignity, (Chicago and London: University of Chicago Press, 2010), 241.2 Deirdre N. McCloskey, “Bourgeoisies Precarious,” in Bourgeois Equality, (Chicago and London: University of Chicago Press, 2016), 480. 3 McCloskey, Bourgeois Equality, 414-15. 4 McCloskey, Bourgeois Equality, 479.5 Deirdre N. McCloskey, “Eastern and Other Ways,” in Bourgeois Virtues, (Chicago and London: University of Chicago Press, 2006), 387.6 McCloskey, Bourgeois Dignity, 103-04.7 McCloskey, Bourgeois Dignity, 479. 8 McCloskey, Bourgeois Equality, 480-81.9 McCloskey, Bourgeois Dignity, 479 and 316.10 David Boaz, Libertarianism: A Primer (New York: The Free Press, 1998), 27-38.11 William Theodore de Bary, Sources of East Asian Tradition: Premodern Asia (New York: Columbia University Press, 2008), 405-06.12Ibid.13 “Three Character Classic,” Chinese Text Project, accessed March 25, 2018, https://ctext.org/three-character-classic. 14 William Theodore de Bary, Sources of East Asian Tradition: The Modern Period (New York: Columbia University Press, 2008), 45-46.15 de Bary, Sources of East Asian Tradition: The Modern Period, 55-56. 16 Chinese Text Project, “Three Character Classic.” 17 “The World’s Successful Diasporas,” Management Today, April 3, 2007, https://www.managementtoday.co.uk/worlds-successful-diasporas/article/648273.18 “Chinese Diaspora,” Encyclopedia.com, accessed March 28, 2018, https://www.encyclopedia.com/social-sciences/applied-and-social-sciences-magazines/chinese-diaspora#A.19 Paul Richard Kuehn, “Who Are the Thai-Chinese and What Is Their Contribution to Thailand,” HubPages, December 29, 2017, https://hubpages.com/travel/The-Thai-Chinese-Origins-Way-of-Life-and-Contribution-to-Thailand.

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20 G.W. Skinner cited in Thomas G. Rawski, “The Rise of China’s Economy,” Foreign Policy Research Institute 16, no. 6 (June 2011). 21Ibid.22 “Chinese in Thailand,” Facts and Details, accessed March 26, 2018, http://factsanddetails.com/asian/cat66/sub418/entry-4306.html.23 Kuehn, “Who Are the Thai-Chinese.”24 Damon L. Woods, The Philippines: From Earliest Times to the Present, (Ann Arbor: Association for Asian Studies, Inc, 2018), 6-7.25 Woods, The Philippines, 14-15.26 Woods, The Philippines, 17-19.27Minnie Chan, “Amid Tension in Philippines, a Chinese Enclave of Powerful Influential Businessmen Thrives,” South China Morning Post, November 22, 2015, http://www.scmp.com/news/china/money-wealth/article/1881853/amid-tension-philippines-chinese-enclave-powerful.28“Philippines’ 50 Richest,” Forbes, August 23, 2017, https://www.forbes.com/philippines-billionaires/list/#tab:overall.29 Stewart Gordon, When Asia Was the World (Boston: Da Capo Press, 2008), 57-73.30 Facts and Details, “Chinese in Thailand.”31 Ibid. 32 “Indonesia’s 50 Richest,” Forbes, November 29, 2017, https://www.forbes.com/indonesia-billionaires/list/#tab:overall.33 “World Economic Outlook Database,” International Monetary Fund, accessed on March 27, 2018, https://tinyurl.com/y8qa9nte.34 Graham Allison and Robert D. Blackwill, Lee Kuan Yew: The Grandmaster’s Insights on China, the United States and the World (Cambridge and London: The MIIT Press, 2013), 130.35 Allison and Blackwill, Lee Kuan Yew, 113.36 “The World Factbook,” Central Intelligence Agency, accessed March 27, 2018, https://www.cia.gov/library/publications/the-world-factbook/.37 Lee Kuan Yew’s Educational Legacy, eds. Oon-Seng Tan, Ee-Ling Low, and David Hung (Singapore: Springer, 2017), 58.

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