Wealth and Freedom: Taiwan’s New Political Economy

When Chinese Nationalists retreated from the mainland to Taiwan in 1949-50, they governed a people barely recovered from the Japanese occupation and Pacific War. Wartime damage to factories, plants and buildings had not been repaired and food was barely sufficient to feed an increasing population. However, by 1997 Taiwan had entered the select list of wealthy nations. It is the world’s 14th largest trading nation, has the third largest foreign reserves and is the sixth largest outbound investor. The International Monetary Fund reviewed Taiwan’s economic indicators in 1997 and placed it for the first time among the world’s developed nations. This transition from poverty to affluence in less than 50 years constitutes an economic miracle , claims the author, and its explanation is one of the themes of this book. The book considers the negative factors along with the positive consequences of Taiwan’s economic and political development, but the main objective is to examine the conjunction of wealth and freedom. Specifically, to understand the impact that economic systems, forces, and changes have had on Taiwan’s political system and, conversely, the impact that changes in the state and democratization have had on economic fortunes. Seven chapters explore the onset of democratization, assess integration after the war, explore the stages of economic development, assess approaches to explaining the development of Taiwan, evaluate the organizational weapon and consider the nature of Kuomintang power in Taiwan and the way in which opposition to it developed, and was tolerated by the regime.