Convergence ― Divergence in Capitalism Revisited

Abstract

Recently, there has been a surge of interest in analyzing the market as a social structure. One of the major issues is whether the industrialization paths in various countries have become divergent or convergent. In this paper, we attempt to compare South Korea and the United States. Research questions raised are: first, what are the main characteristics of the structural change in the market; and second, whether the evolving Korean industrial structure is converging toward the structure exhibited by advanced economies such as the United States? Because of active interventions of the Korean government in industrial development, we originally expected that the Korean Industrial Input/Output structures would differ from those of the United States. However, we found that Korean I/O structures are moving towards the U.S. structure as the Korean economy develops. We interpreted that the convergent path may have resulted from technological imperatives of inter-industry relations. During the market's evolutionary process, however, we found that the government participated in the evolution of such a market structure by selectively supporting key industries with its policy loans.