<p>This paper starts its discussion by examining the Foreign Affairs article by Paul Krugman. Krugman goes over the growth-accounting studies by Alwyn Young and others, who found relatively low growth-rates of total factor productivity for the East Asian NIEs. Krugman took Young's finding of high growth-rates of labor and capital input as representing a lot of “perspiration” and “sacrifice of present satisfaction,” and judged that these economies will not be able to catch up and overtake the West.</p><p>The present paper finds (1) that the growth-rates of total factor productivity in East Asia were not low, if properly interpreted. It also finds (2) that the “perspiration” was largely the result of effortless changes in the age-composition of population towards a more productive ages. Thirdly, the effect of capital deepening, not based on suppression of the present satisfaction, will continue to be felt, and the diminishing return to a higher capital-labor ratio will not be felt soon.</p><p>So, much of the economic growth of East Asia was judged to be sustainable, and in fact it was sustained until 1997, when Singapore took over the United States as the highest income country of the world, repudiating Krugman's prediction.</p><p>Then, it is found historically and analytically that the East Asian growth was almost totally neoclassical. Historically, industrial policy was practised only in the Republic of Korea, whose performance turned out to be inferior to Taiwan's in terms of the growth-rate of total factor productivity and in terms of income distribution. In other regions, a more or less neoclassical policy resulted in a high growth-rate of total factor productivity.</p><p>Policies adopted were found to be similar to those of Japan's Meiji government in the emphasis on the protection of private property right, more or less free trade, staying largely away from industrial policy, sending student abroad for the importation of foreign knowledge, and spending resources on research, development, and extension activities for the digestion of imported knowledge, and emphasizing education on primary and secondary levels, even though foreign direct investment was substituted by model factories and expos in Japan. Analytically as much as 97% of the total economic growth is accounted for neoclassically.</p>