In the last chapter, we offer what we believe is a new hypothesis for the industrialization of South Korea and Taiwan: A primary force driving not only the emergence, but also the divergence of these two economies is the development of intermediary demand growing out of the U.S. retail revolution, to which Korean and Taiwanese firms were able to respond successfully, but in different ways. This claim will certainly be controversial because the existing explanations for East Asian industrialization consistently ignore factors relating to demand. To be more specific, existing explanations do not consider the interconnectedness of global markets in explaining industrialization. They do not consider how changes in the growth and organization of one economy, the U.S. economy, can shape the growth and organization of other economies, the Asian economies. The possibility of this proposition is implicit in our revised Walrasian perspective that we outlined in Chapter 1. Insofar as markets are interconnected, then a change in one market should result in changes in other markets. Within this perspective, theoretically speaking, markets should not be confined artificially to only markets within a national economy. Rather, the test of the extent of interconnectedness is empirical: Are markets actually linked in fact, and if so, with what consequence for all markets so linked?

We demonstrated in the last chapter that changes in the organization of retailing in the United States is directly related to changes in the composition of international trade between the United States, on the one hand, and South Korea and Taiwan, on the other.