What Korea Needs from its New Prez: Liberalization

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ParkBefore President Park’s inauguration, the Korea Times asked me to participate in a forum of ‘foreign experts’ (don’t laugh too hard) on her incipient presidency. We were asked to make one direct suggestion for the new president. Here is the section at the KT website. I know several of the authors, and some of the op-eds are pretty good (too many are shameless pandering though). Unfortunately, my accepted submission was not published in this section, published after the inauguration, and edited far too heavily. (They never told me why; maybe this.)

Anyway, below is the original version of the op-ed, where I basically argue that Korean democracy is becoming a Seoul-based oligarchy of wealthy, intermarrying business and political elites – basically the dark side of Kangnam style. Someone in Korean politics needs to turn this around, or under-40s in this country are going to ‘drop out’ Timothy Leary-style. There’s a quiet crisis of youth alienation brewing, but no one in ‘Kangnam world’ seems to care.

ParkBefore President Park’s inauguration, the Korea Times asked me to participate in a forum of ‘foreign experts’ (don’t laugh too hard) on her incipient presidency. We were asked to make one direct suggestion for the new president. Here is the section at the KT website. I know several of the authors, and some of the op-eds are pretty good (too many are shameless pandering though). Unfortunately, my accepted submission was not published in this section, published after the inauguration, and edited far too heavily. (They never told me why; maybe this.)

Anyway, below is the original version of the op-ed, where I basically argue that Korean democracy is becoming a Seoul-based oligarchy of wealthy, intermarrying business and political elites – basically the dark side of Kangnam style. Someone in Korean politics needs to turn this around, or under-40s in this country are going to ‘drop out’ Timothy Leary-style. There’s a quiet crisis of youth alienation brewing, but no one in ‘Kangnam world’ seems to care.

 

“Liberalize Korea”

“Dear President Park,

Congratulations on your election victory –– and therein in lies your very first challenge: the alienation of young voters from the elitist, oligarchic world of Korean business and politics. A disturbing generational gap is opening in Korea, symbolized by the huge under-35 popularity of Ahn Cheol Soo in spite of an amateurish campaign. That you won overwhelmingly on the support of older Koreans is yet another marker of this generational division. Korea’s extremely low birthrate has left a hole of ‘missing voters’ at the bottom of the Korean demography.

Ironically this population skew toward the aged helped power your victory, but it should clearly be a red-flag. You cannot, as promised, return Korea to its ‘miracle’ growth days if the ‘gerontocratization’ of Korea continues apace. A rapidly aging population portends spiraling health and retirement costs, a slow-down in economic growth due to a contracting working-age population, worsening generational cleavages, and a sharp Japan-style trade-off between slow-motion decline or socially controversial mass-immigration.

As the very embodiment of the Korean establishment – descended from a wealthy, politically-influential family connected to all relevant players in Seoul – you are an unlikely figure to confront this brewing demographic/generational implosion. Indeed, your coalition sees in you nostalgia for Korea’s economic glory-days, and the left strongly suspects you ran for president to validate the past rather than lead the future. But politically, that leads nowhere.

You must surprise them all. If you do not challenge the social forces that have led Korea into this demographic/generational impasse – the insulation of the chaebol from accountability to regulators and shareholders, Confucian patriarchy, Seoul-centricity, and intense social elitism – you will be last, rear-guard defender of the old corporatist-elitist Korea, and not the first leader of the new, open liberalized Korea.

Among other policy initiatives, you might consider: at-work day-care to alleviate the work-family dilemma that all but forces Korean women to forego either work or motherhood; strict work-hour rules to curb the proliferation of the impossibly stressful 50-60 hour work- and school-weeks so common here; a major commitment to decentralization to give Koreans outside of Kyeonggi a chance to participate meaningfully in the country’s political, economic, and academic life; some anti-trust action against the chaebol to insure a measure of social mobility and equality to the rest of the labor force; and more FTAs to bring greater competition to Korean product markets.

The old cliché that Korean goods cost less in the US than they do here is disturbingly accurate. Liberalizing Korean markets, which would require chaebol reform, a proper currency float, and less cultural suspicion of ‘imports,’ would bring down prices and so reduce Korea’s staggering household debt (165% of income). I can think of few easier ways to reduce the stress on Korean families than the improvement in purchasing power that would flow from genuine market opening. Your predecessor started the ball rolling with two major FTAs. But prices in Korea for consumer goods – most disappointingly for those goods where Korea is competitive, like TVs or cars – are still far too high. I regularly suggest my students look at the Walmart website to price-compare with Korea, and they are astonished. There is still a long way for Korean consumer prices to tumble – if you are willing to push serious market deregulation, including a tougher line on chaebol oligopolization to incentive competition.

These suggestions would be disruptive, and few anticipate them from the conservative coalition your party represents. They will require you to challenge vested interests, most obviously the chaebol who benefit handsomely from the status quo of preferential access to decision-makers and the national budget. But the demographic challenge and generational cleavage will remain if you do not act. Previous presidents did little, as even Korean growth slowed. Early in the campaign you appeared to embrace a tougher stance on the chaebol and ‘economic democracy.’ In your inaugural comments, you spoke of making Korea ‘happier.’ This can be done, but it almost certainly means the liberalization of Korean politics, economics, and social life – re-incentivizing women and youth especially, that ‘success’ need not only mean expensive, punishing schooling for years in Seoul followed by a grueling, stressful corporate job at a chaebol, all while drowning in personal debt. There must be a better, more humane way.

The status quo may have served Korea well thirty years ago, but today it is an encumbrance. As you said yourself, Korea is not ‘happy.’ Divorce, suicide, alcoholism, depression are at record levels. Without change, Korea will eventually go as Japan is going now – social immobilism, gradual but obvious decline, fading geopolitical clout. The time to act is now.”

Filed under: Conservatism, Culture, Domestic Politics, Economics, Korea (South)



1 thought on “What Korea Needs from its New Prez: Liberalization”

  1. Re: What Korea Needs from its New Prez: Liberalization

    No…while I agree that there are certain issues with Korea, I disagree with your approach.

    Liberalization is not the way. In brief…

    By looking at the cost of goods, you are only perpetuating our out of control, consumeristic society in which we thrive by obtaining the 'best' and 'cheapest' items. By asking your students to look at, and thus focusing on, the prices of Wal Mart, you are completely ignoring the 'why' of Wal Mart…for example: their low food prices is caused by unfair and exploitative trade practices, as well as with their clothing industry. This has allowed them to profit via exploitation, and thus increase their purchasing power on electronics. Perhaps the out of control debt situation is not due to high costs of goods, but a result of societal norms making us believe that we NEED these goods. "Salesmanships law of mind rests primarily on the principle of deception." (Veblen)

    Dr. Kelly, I suggest taking a broader look at what our societal priorities have become, and stray from 'what is best for the consumer.' I would suggest focusing on income equality, gender/sexual equality and a stronger safety net. One way to accomplish this is by stregthening the domestic market by prioritizing Korean products. As well as focusing on the maximization of overal happiness + quality of living, rather than the maximization of savings.

     

    Cheers 

    Reply

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