“This economic institution could not exist without a high degree of social solidarity…”

In class today. Was heading to class today, but hey, still can’t find my keys. Nevertheless, here’s what I’ve been reading (various emphasis mine, for a reason):

Korean entrepreneurs, like Jewish and Japanese immigrants before them, are highly dependent on the social and economic resources of their ethnic community . Some immigrants managed to smuggle capital out of Korea, but most rely on individual thrift and ethnic credit systems. For instance, a Korean husband and wife may save their wages from several service and factory jobs until enough capital is accumulated to purchase a small business. This process usually takes 2 or 3 years. Rotating credit systems, which are based on mutual trust and honor, offer another common source of venture capital . This economic institution could not exist without a high degree of social solidarity within the ethnic community. There are more than 500 community social and business associations in Los Angeles, and nearly every Korean is an active member of one or more of them. In addition, Korean businessmen have utilized public resources from the U.S. Small Business Administration as well as loans and training programs sponsored by the South Korean government.

The ability of the Korean community to generate a self-sustaining entrepreneurial class has had a profound impact on intraethnic labor relations and patterns of ethnic property transfers. For example, labor relations are enmeshed in extended kinship and friendship networks. In this context of “labor paternalism,” working in the ethnic economy frequently entails the obligation of accepting low pay and long hours in exchange for on-the-job training and possible future assistance in establishing a small business. Hence, employment in the ethnic economy possesses a potential for advancement entirely absent from comparable low-wage labor in the secondary labor market.

This comes from “The Immigrant Enclave: Theory and Empirical Examples” by authors Alejandro Portes and Robert D. Manning. They try to establish a new procedural explanation of immigrant integration into American society, of which ethnic enclaves are a particular focus. Examples of both pre and post-WWII enclaves are discussed as way of illuminating a divergent viewpoint from historical assimilation theories, and the above is one of those contemporary selections.

Awhile back I wrote “The Market Picture” on inequality in America and the porous separation between the state and the economy. The thrust of my point there was that markets are embedded in non-market social relations — the fundamental lesson of economic sociology. Something like an ethnic economy is a more formalized aspect of this, but Portes and Manning helpfully provide an adequate example of that principle in West Coast Korean enclaves.


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