By Kim Tae-hyung
So-called “economic democracy” is a political hot potato these days everywhere in the country. For good or bad, everyone but chaebol is trying to make a federal case out of it. It is true that public sentiment about chaebol is bad. People’s frustration, resentment, and resistance toward the establishment exist, regardless of whether it is right or not. Whoever becomes the next president, it looks like a mandate that the new administration must do something about it.
An immediate question then is “what needs to be done about what?” The current focus of the economic democracy debate is on who is at fault and responsible without looking into the fundamental causes. Politicians have been pointing fingers at chaebol for perpetuating a highly polarized and divided society where the distributional inequality of income and wealth continues to worsen. Chaebol are therefore on the top of the responsibility list and reforming them, whatever that means, increasingly seems to gain groundless ground.
The central issue in the current debate of economic democracy is about an ever-deepening polarization of society as a result of the concentration of wealth and economic power. Off base, chaebol seem arguably the main culprit. An extreme view is that chaebol break-up is the only solution. But in substance the cause is the system we have chosen to adopt, not chaebol that have taken advantage of the system. The free market capitalism has been effective in creating efficiency and growth but proved ineffective in producing equity and stability. As a result, the contemporary picture of the system doesn’t look good from an ineffective side of the equation.
Chaebol have grown too big to ignore. Their influence is everywhere within society and across the borders, for good and evil. Samsung Electronics is now the number one mobile phone (now called smartphone) market leader. Nokia, once undeniably the number one for a long time, is number two now and way behind Samsung. This is a picture of a chaebol taken from a global lens of competition. Chaebol is a big and integral part of our economy and has functioned as a main driver of the economic development of the country. Their innovative spirit and global competitive advantages must continue.
Chaebol should not turn a deaf ear to the criticism of where frustration and resentment are coming from and get serious about the contemporary picture of where our society is. Society is polarized and divided and the picture is getting worse. We all are responsible but chaebol should realize why the public sentiment that their reform is the solution is gaining ground. Chaebol have been criticized for involvement in various unfair trade practices. Now is the time for real voluntary action before it becomes too late.
Yes, voluntary action. It’s already long overdue. So the real danger that chaebol is portrayed as a problem maker can be avoided.
At the same time, politicians should not exploit the current public sentiment. That might be good political momentum to pick up but is clearly not the healthy direction of the debate on economic democracy. The right direction, for the sake of all stakeholders, is to zero in on the dos and don’ts to make our system and rules fair, objective, transparent, and predictable. It is important to make it clear that politicians should be responsible if they fail to do their part in so doing. Chaebol should also face the music if they move in the wrong direction. Zero tolerance on this principle will only make a difference and go a long way. Finger pointing won’t do anything and should stop. There is no magic recipe. It’s a tough balancing act after all. But it’s time for real action for everyone.