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Kwoh Ting-Li

Kwoh-Ting Li (traditional Chinese: 李國鼎; simplified Chinese: 李国鼎; pinyin: Lǐ Guódǐng; 28 January 1910 – 31 May 2001) was a Chinese economist and politician best known as the "Father of Taiwan's Economic Miracle" for his work in transforming Taiwan's economy from an agrarian-based system into one of the world's leading producers of information and telecommunications technology. He is renowned as the "Godfather of Technology" in Taiwan.

Biography

Li was born in Nanjing, Republican China, on January 28 1910 and died in Taipei, Taiwan on May 31, 2001.

He graduated from National Central University (Nanjing University) in 1930 and studied physics at Cambridge University in 1934. He returned to Mainland China and spent many years in politics and economics before he fled from the Chinese Communist Party to Taiwan in July 1948 with the Nationalist Party. He became the president of the Taiwan Shipbuilding Corporation in 1951 and was appointed as a member of the Industrial Development Commission responsible for the planning and economic and development of Taiwan in 1953. In 1959 he became the head of the Industrial Development and Investment Center under the Council for United States Aid.

He held a number of leadership positions in industry and government in Taiwan, including that of economic minister from 1965 to 1969 and finance minister from 1969 to 1976. After 1976 he was appointed "Minister without portfolio" and promoted science and technology in Taiwan. In 1968, he received the Ramon Magsaysay Award for Government Service. He created a policy that helped attract entrepreneurs in the tech industry and helped fund Taiwan's electronics companies, which led to Taiwan's primacy as a producer of computer parts. Li also helped build an industrial park in the port of Hsinchu, which later became known as Taiwan's "Silicon Valley." He was also a senior adviser to the former President of Taiwan, Chen Shui-Bian.

His residence in Taipei is now a museum. In 2011, an asteroid (239611 Likwohting) was named after Li.

Four professorships at Stanford University are named for Dr. Li in the fields of economic development, engineering, medicine and Chinese culture. As of 2014, the holders in each field are: economic development (Xueguang Zhou), engineering (Yinyu Ye), medicine (Stanley N. Cohen) and Chinese culture (Mark Edward Lewis).

Economic Policy

In sum total Li was a government official for 40 years, 10 of which he spent in Mainland China before the Chinese Communist Party won the civil war. Tony Fu-Lai Yu speculates that the time Li spent in Mainland China, as well as his science-based university education, greatly influenced his policy-making in Taiwan. Li had no formal training in economics, thus most of his knowledge of economic management was gained from practical experience and working with other economists. Thus, as Yu claims, his policy was insulated from popular economic ideology and instead was driven by pragmatism. Li himself also claims that the purpose of his writings is to reveal his policy-making experiences for the future reference of other developing countries, and did not engage in writing about economic, administrative, or political science theory.

Yu argues that Li's policy-making can be explained by evolutionary economics. Two Yale economists, Gustav Ranis and John C.H. Fei, wrote the introductory essays to Li's 1995 book The Evolution of Policy Behind Taiwan's Development Success. Thus it can be interpreted that Ranis and Fei's views on economic policy are representative of Li's.

Fei claims that two main types of forces govern policy evolution: objective and subjective. Objective forces are predetermined conditions, encompassing physical environments, external economic conditions, etc. Subjective forces include personal beliefs, economic knowledge, memories, experiences, and "common sense." Fei believes that political beliefs and ideology are the strongest factor in shaping economic policy-making, and thus is an ongoing process. In following with the concept of evolutionary economics, Fei believes that economic policy must change to suit new and ever-changing situations. Thus policy should not be static when created and instead evolve and be improved on to adapt to new situations. Li himself claims that the liberalization of the Taiwanese economy was a gradual process rather than an abrupt one following the international fad of free market ideology in the 1960s and 1970s.

Pragmatic Economics

Li argues that there are two types of issues central to analyzing policy evolution. First is the economic impact of a policy, second is causation, or why a certain policy is appears and is implemented at a certain time.

Li believes pragmatism should supersede ideology in terms of policy-making:

“(Policy innovation should be based on) the anticipation of impending problems and conflicts, rather than be purely ideologically motivated . . . The very notion of an evolution of policy suggests that the timing (or timely appearance) of a particular policy is important, and a good policy innovation is one that does not arrive prematurely. Ideological considerations often get in the way of appropriate timing as, for example, with so-called welfare state legislation that the economy simply cannot support. What can almost be called a rejection of ideology lies at the heart of a healthy pragmatism that has guided policymakers in Taiwan and has supported a social consensus for growth and economic liberalization.” (Li, 1995, p. 251; italics added)

He argues against ideology-based policy-making because it often interferes with the timing of certain policies, and all too often change too quickly. He believes such policy is “motivated by goals considered larger than people’s actual well-being,” which is a scathing review of ideology-based policy. Thus, rather than ideology, Li believes the economic environment in which policies are made are more important and policy should not be restricted by the ulterior motives of ideology-based economics.

Policy Revision

Li’s trial and error policy making was made possible by Taiwan’s flexible government policy. Li claims that it made it possible to abandon or modify ineffective programs and easily create and implement new ones in reaction to new situations.

Li’s policies were often influenced by his experiences as part of the Kuomintang in Mainland China. Hyperinflation was one of the major reasons that Chang Kai-Shek lost Mainland China to the Communist Party, and thus Li abhorred all inflationary finance during his management of Taiwan’s economy.

His aversion to relying on inflation is apparent in his claim:

“Taiwan’s experience shows that fiscal reforms (tax legislation) and monetary reforms (moving toward central bank autonomy) are major evolu- tionary steps taken by a responsible government . . . What underlies both reforms is a rejection of the insanity of relying on the printing press to create purchasing power for the government to use in an effort to solve socioeconomic problems’’ (Li 1995, p. 233).