In this chapter I will examine the development of the capitalist world system after World War II, building a new framework of capitalist development.1 The capitalist world system fell into a structural crisis in the 1970s. In the new capital accumulation regime the center of capital accumulation shifted to Asia. Asia’s world share of the GDP including India was 60 percent in 1820. It fell to 15 percent in 1950 (Maddison 2007). It is now growing to 35 percent and may return to 60 percent by the latter half of this century at the expense of Europe and North America. In the first section I build a new flying geese theory incorporating dynamic comparative advantage theory and financial instability hypothesis with Akamatsu’s flying geese theory within Kozo Uno’s three-level analysis of the capitalist economy (Yokokawa 2001; 2012; 2013). Uno’s threelevel analysis is still a useful analytical framework. The first level comprises the basic principles. The next level develops a “stages theory of world capitalist development” which involved the concrete examination of the historical development of the leading industries, together with their main policies. At the third level of research, individual capitalist economies in their concrete historical situation are analyzed (Sekine 1975). In my framework, I call these three levels the basic theory, intermediate theory and historical analysis (Yokokawa 2001). I am especially interested in rebuilding intermediate theory which is a long-running institutionalist analysis. It can incorporate Marx’s theory of forces of production (dynamic industries in this chapter) and relations of production (combinations of production and finance), theory of financial instability and theory of industrialization (flying geese theory). I argue that Akamatsu’s flying geese theory is a proto-dynamic comparative advantage theory, and that Minsky’s intermediate and open financial instability theory is indispensable to analyze capitalist development where finance plays crucial roles. In the second section, long waves and super long waves are examined using the new flying geese theory. In the third section, I follow the flying geese pattern of industrialization and re-emergence of Asia after World War II, and examine new dynamic industries comparing Japanese closed integral architecture and US open modular architecture. Then, in the fourth section, I answer the three questions: (1) why did a structural crisis occur in East Asia in the 1990s; (2) is an open modular architecture of global value chain (GVC) with core chipsets a new dynamic industry; and

(3) is the world financial crisis since 2007 a systemic crisis of the present capitalist world system?