The purpose of this paper is to show how industrialization of Korea in the 1930s was influenced by the preceding agricultural development plans for increasing rice production (1920-34). Until now the rapid industrialization has been explained mainly by Japan's armaments-expanding policy in the 1930s. However this paper emphasizes internal factors created in the process of agricultural transformation in the 1920s. On the one hand, increase in rice production and its export to Japan at relatively high price produced an enormous surplus in the agricultural sector. This, in turn, enabled Korea to increase imports of manufatured goods. Through the agricultural development and trade with Japan, Korean economy could rapidly expand markets for manufactured goods beyond her production capacity. Later this expansion stimulated new rise and growth of many small-scale factories owned by Koreans or Japanese residents in Korea. Also it induced private direct investments from Japan to the manufaturing industry in Korea. This process promoted import substitution for manufactured goods. On the other hand, most of agricultural surplus fell into the pockets of large landlords and merchants who took the lead in rice production and export under landlord-tenant system. In order to examine whether agricultural surplus remained within the agricultural sector or was transferred to other sectors, we made access to the available lists of large landlords and stockholders, and examined the relationship between them. The results of this examination revealed that a lot of landlords not only took actively part in stock investment, but also established their own companies in non-agricultural sectors. In case of the companies owned by Koreans, it is estimated that more than one third of their capital was invested by landlords and one forth of their owners were also landlords. In short, agricultural development in the 1920s provided favorable conditions for the industrialization in Korea in the next decade in terms of domestic market expansion and capital formation.

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In the German Revolution which gave birth to the Weimar Republic in November 1918, R. Hilferding (1877-1941) played indeed a significant role as chief editor of the German Independent Social Democratic Party newspaper, as member of the Socialization Commission and as speaker in party conferences and the Workers' and Soldiers' Councils, but his political and economic position has not been made fully clear. Criticizing the Bolsheviks who had dissolved the parliament and oppressed other parties in the Russian Revolution, he insisted that parliamentary democracy must be firmly established instead of permanent Councils dictatorship in Germany and supported the coalition government with the Social Democratic Party on the principled base. In a party conference he arranged a resolution that the Independents should prepare for the National Assembly, avoiding "waste of time" in the severe political reality and advance reforms in the government to prevent a bourgeois coalition. Then he protested against his party's boycott of the Central Council, a new supreme organization, and although he accused the Social Democrats for the "People's Naval Division Mutiny" which directly caused the collapse of the joint cabinet, he tried to maintain it in vain. In regard to economic reforms, he advocated gradual socialization correspondent to economic "ripeness" and social control over private monopoly, a very product of capitalistic organization, and big landownership. He also recommended "more practical" indirect bank-regulation, as he considered the need of economic stability. In the Socialization Commission he drafted the "Proclamation" which claimed national ownership of natural resources, forcing concrete actions, and planned to make use of the remaining War Economy System to socialization. Finally in a letter to 0. Bauer he appreciated coordinative Management Councils composed of workers, consumers and state, and yet feared their cartel-like "false" price policy at the same time. He rejected both bureaucracy and centralization and argued for autonomy and competition of socialized enterprises, and conceived a new "Economic Parliament". He noticed so early that the mere change of ownership-forms could not solve all problems and that other managerial difficulties would come about even after socialization. Well aware as he was, that realization of reforms depended on political power, the breakdown of coalition at the end of 1918, the failure of "January Uprising" and the defeat in the election of National Assembly obliged him to form the movement again.

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