Money, Masks and Miracles: Reassessing South Korea’s “Miracle on
the Han River”
Mark Curtis Hoffman
1
Introduction
Up until the last few years, South Koreans tried to keep a low profile when it came to
the history of their economic development. Perhaps they were self-conscious about the
blemishes in their human rights record, the 1997 Asian Financial Crisis, and the uneven
reputation of their manufactured products. Although everyone was aware of their rags-toriches accomplishment of becoming the world’s 13th largest national economy, both the freemarket right and the egalitarian left looked with suspicion on their story of economic growth
through government-supported “chaebol” (corporate conglomerates).
This all began to change a few years ago. In January 2010, South Korea became a
member of the Development Assistance Committee of the Organisation for Economic Cooperation and Development. South Korea, which in the nineteen sixties needed substantial
foreign aid to feed its people and runs its government and which in 1997 needed an IMF
bailout package, was now a major donor country.
In the past decade, South Korean products have climbed the ladder of quality ratings
and are often now considered among the best in their class. The only drawback for the
Koreans is that western consumers often believe that Samsung, LG, and Hyundai are Japanese
brands.1 Korean popular music, referred to as K-pop, is making teenagers dance everywhere
from France to Peru. South Korea’s placement in the global music market rankings went from
23rd in 2007 to 11th in 2011.2 South Korea’s annual trade volume has now surpassed $US 1
trillion. Currently, only five other countries maintain this trade level: the U.S., Germany,
China, Japan, and France.3
1
“TNS Survey Shows U.S. Consumers Less Likely to Consider Purchasing Japanese or Korean Autos,” PR
Newswire, 14 April 2011, http://www.prnewswire.com/; Anderson Analytics, Brand & Countries: It’s From
Where? College Students Clueless on Where Favorite Products Come From (Stamford, CT: Anderson Analytics
LCC, 2007), http://www.andersonanalytics.com/reports/BrandAndCountries.pdf.
2
IFPI, Digital Music Report: Expanding Choice. Going Global (London: International Federation of the
Phonographic Industry, 2012), 22
3
“Korea Joins $1 Trillion Trade Club,” Korea JoongAng Daily, 6 Dec. 2011. http://koreajoongangdaily.
joinsmsn.com/
1
In November 2010, the G-20 leaders met in Seoul where they endorsed the “Seoul
Consensus” on economic development. The G-20 were now favoring more state intervention
in the economy and putting a greater emphasis on economic growth. They were moving away
from the emphasis on small government, free enterprise, and liberalized trade, the
cornerstones of the so-called “Washington Consensus.”4
With a newfound global confidence and a changing international attitude on economic
development strategies, South Korea is now promoting its development path unapologetically,
particularly to developing countries. It touts both its record of sustained economic growth and
its successful transition to democracy.
Besides pride, Koreans also have a commercial incentive to tell and sell their story.
Future Korean economic success depends, in part, on the success of Korean companies to
penetrate the markets of developing countries. South Korea has products to sell, investments
to make, and contracts to sign. Koreans want business ventures with them to feel better than
business ventures with countries that have geo-political agendas or exploitive colonial pasts.
From 2010 to 2011, exports to developing countries surged, especially shipments to the
Middle East (by 23.3 percent) and Southeast Asian (by 16.5 percent).5 Among many other
things, Korean companies own or partner in a nickel mine in Madagascar, an oil field in
Nigeria, a petrochemical complex in Kazakhstan, a coal mine in Mongolia, a garment factory
in Cambodia, a home appliance factory in Thailand, a heavy machinery factory in Brazil, an
auto plant in Slovakia, a steel plant in Vietnam, a solar power plant in the Philippines, and a
television assembly plant in Mexico.6 Korean contractors are building highways for India,
nuclear power plants for the Arab Emirates, and an e-government system for Peru.
Despite its impressive economic development record, South Korea is often rejected as
a practical model for other nations. The idiosyncrasies of its history and culture seem to make
it too different from the rest of the world. Before I spent a semester teaching public
administration in South Korea, I would have been comfortable hearing South Korea described
like this:
South Koreans are a studious and industrious people whose products in the
world market are of high quality, but lack noteworthy innovation. The
homogeneous Korean society is traditional, orderly, and hierarchical. National
4
"Complete Text: G-20 Seoul Communique," International Business Times, 12 Nov. 2010, http://www.ibtimes.
com/
5
“Korea Joins $1 Trillion Trade Club”
6
As of September 2010, the total number of Korean businesses operating in Poland stood at 128. The main
investment sites for Korean companies in Poland include LG’s cluster in Wrocław, Samsung’s center in Wronki,
and a complex of five electronics companies in Mława. They have created over 20,000 jobs. See “Korean
Business and Investment in Poland,” The Warsaw Voice, 2 September 2011, http://www.warsawvoice.pl/
2
policies emanate from an oligarchy of political elites and relatives of the
founders of Samsung, Hyundai, LG and a few other large corporations. The
Korean economic system inordinately benefits these oligarchs; however, their
leadership is secure because the Confucian-based ethics of Koreans gives them
high regard for authority, appreciation of the collective good over the
individual, and immunity to corruption. Although Korea’s success at achieving
G-20 status is admirable, it is not an example worth investigating or emulating
because Korean society is too idiosyncratic.
Specifically, I would have easily believed the following three reasons to dismiss South
Korea as an economic development model. I believe each has prima facie validity for most
westerners:
1. After centuries of influence by the Confucian tradition, a Korean technocracy was
adeptly able to implement the development plans of a strong, visionary leader.
2. The Korean polity is easily led because of the homogeneity of the Korean people.
3. The Korean economic model runs mostly for the benefit of a few elites.
My thesis is that these three statements, although widely accepted on face value, are
based on a lack of insight into Korean history and culture. Therefore, these ideas should not
result in premature dismissal of the Korean experience as a model for other countries. Please
note that I do not argue that South Korea should be an exemplar of economic development. I
only argue that it should not be dismissed on these intuitively plausible, but factually
unsupported reasons.
2
The Masks of Korea’s Economic Development
For centuries, Korea has existed in the shadows of its larger neighbors, Japan and
China. Today, westerner scholars and journalist pay close attention to the economies, politics
and cultures of Japan and China. However, South Korea, sandwiched in between, has been
given short shrift, and assumed to be merely a little China or little Japan. South Korea gets
more attention because of its proximity to the bizarrely theatrical and economically inept
North Korea regime than it does for its own achievements.
Because of this shallow knowledge, the story of South Korea’s “Miracle on the Han
River” has become like the stories told in the Dongnae Yaryu. Dongnae Yaryu is a traditional
Korean style of critical comedic dramas where the performers wear elaborate masks and
dance to rhythmic music. The themes of the plays ridicule the corruption and vanity of the
nobility, the debauchery and apostasy of monks, and the chauvinism and selfishness of
adulterous old men.
3
Ideological thought, class discrimination and male supremacy were the three
pillars of the philosophy of the ruling elite in medieval Korea. The mask dance
negates them one by one, calling for the unity of ideology and reality, the
elimination of social class distinctions, and gender equality.7
Dongnae Yaryu is now often performed for children and tourists. They can see the
dancing and hear the music, so they certainly can enjoy the colorful and dynamic
performances. However, they usually do not understand the meaning behind the performance.
As this paper examines the story of South Korea’s rise from poverty to prosperity, the
three reasons to dismiss the story as a product of South Korea’s supposed idiosyncratic history
and culture may be thought of as masks. Masks are part of the story, but not the whole story,
or even the most important parts of the story. The masks attract attention, but if they are all
ones see, then the moral of the story is lost.
3
Mask: “After centuries of influence by the Confucian tradition, a Korean
technocracy was adeptly able to implement the development plans of a strong,
visionary leader.”
Although Max Weber considered Confucianism an obstacle to Capitalist
development,8 it has frequently been cited as a positive factor in the successful industrial
development of South Korea, as well as the other “Asian Tigers” (Taiwan, Singapore and
Hong Kong).9
Confucianism is a large and diverse set of ideas. In general, it is a detailed code of
interpersonal behavior. All relationships should be predictable, and society should be
harmonious.10 If Confucianism dominates the Korean worldview, then Korean ethics should
exhibit a high regard for learning, loyalty, filial piety, and social harmony. Korean decisionmaking should exhibit technical rationality, and Korean individual identity should be
subordinate to a family identity that includes ancestors and descendants. If one looks for these
7
Dong-il Cho, Korean Mask Dance (Seoul Ewha Womans University Press, 2005), 82
Max Weber, The Religion of China, Transl. and ed. by Hans Girth (New York, NY: Free Press, 1968)
9
For example, see Lew Seok-Choon, “Yugyo Jabonjueuieui Ganeungseonggwa Hangye” Jeontonggwa
Hyeondae 1(1997), 74-93; Ezra F. Vogel, The Four Little Dragons: The Spread of Industrialization in East Asia
(Cambridge, MA: Harvard University Press, 1991), 92-101; Myong Oak Kim and Sam Jaffe, The New Korea:
An Inside Look at South Korea’s Economic Rise (New York: AMACOM, 2010), 179.
10
“The welfare of the social organism as a whole depends upon harmonious cooperation among all of its units
and of the individuals who compose these units. This means that every individual, however high or low, has the
obligation to perform to the best of his ability those particular functions in which he is expert and which are
expected of him by society. Thus the ruler should rule benevolently, his ministers should be loyal yet at the same
time ready to offer their frank criticism, the farmers should produce the maximum of food.” Derk Bodde,
‘Harmony and conflict in Chinese philosophy,” in Studies in Chinese Thought, Arthur F. Wright, ed. (Chicago,
IL: Chicago University Press, 1953), 45.
8
4
things in South Korea, they are easy to find. Thus, confirming the case for Confucian
influence.
If one looks beyond this mask, South Korea can seem a very un-Confucian place. For
every dash of Confucianism, one can find a pinch of cronyism, a drop of corruption, and a
sliver of conflict.
3.1
Confucianism and Park Chung Hee
The Chinese sent their armies and Confucian administrators into the Korean peninsula
in 108 BC. The Chinese were gone by 313 AD, but Confucianism remained as an important
influence. Subservient to Buddhism for 1,000 years, the new Joseon dynasty made
Confucianism its official ideology in 1392 and “administrative, political, and even social
progress became marked, and Korea's institutions were almost revolutionized under its
influence.”11 This dynamic did not last. Rather, Korea became more and more a closed,
stagnant society.
Korea's lack of swift progress in the last centuries of [Joseon] rule, her inability
to adapt herself successfully to the radical changes of the late nineteenth
century or, ultimately, to retain her own freedom, are valid symptoms of the
weakness and failure of the Confucian institutions of the [Joseon] dynasty.12
In 1905, Korea became a protectorate of Japan; in 1910, it was annexed into the
Japanese Empire. Colonial Japanese authorities allowed Confucianism to remain an
instructional presence, although it was stripped of its civic raison d'être with the loss of the
Korean monarchy. The Japanese military gradually assumed authority in colonial Korean and
in the neighboring puppet state of Manchukuo. The Japanese military had their own style of
authority. One of the students of this style was a Korean named Park Chung Hee, who
graduated from the Manchurian Xinjing Officers School in 1942 and the Japanese Military
Academy in 1944.
Park was proud of being a graduate of the academy and championed its spirit
of discipline, leadership, and loyalty. His Japanese education shaped his
personality and his weltanschauung. He emphasized attention to detail,
precision, and decisiveness, and preached the value of self-sacrifice for the
nation. Park was thoroughly militaristic in mentality, in the fashion of Japan of
the 1930s and early 1940s. … The identification of Japan as a valuable source
to learn from and imitate also meant that it was the target to catch up with and
even surpass. The respect for Japan’s accomplishments coexisted with Park’s
11
Key P. Yang and Gregory Henderson, “An Outline History of Korean Confucianism: Part II: The Schools of
Yi Confucianism,” The Journal of Asian Studies 18 (1959): 274
12
Ibid.
5
distrust of and enmity toward Japan. The two were two sides of the same
coin.13
In 1961, General Park Chung Hee was the ringleader of a cabal of generals and
colonels who seized power in a coup d'état against the eight-month-old Second Republic.
After eliminating his rivals in the military junta, Park won the presidential election of March
1962. In 1973, he declared martial law and promulgated the "Yushin System,” a single-party
state without presidential term limits or direct presidential elections. In 1979, Park was
assassinated by the director of the Korean CIA. It was under Park’s regime that the “Miracle
on the Han River” began. South Korea's exports rose from $US 55 million to $US 12.4 billion
and per capita GNP rose from $US 87 to $US 1,242.14
It was late in Park’s rule, under the Yushin system, that his regime adopted its
Confucian aura. Park, a Buddhist, had previously shown little respect for Confucianism.
Throughout the 1960s, he had persistently condemned the Confucian tradition
as the root cause of factionalism, formalism, flunkeyism, and impractical
discourse, all of which he believed “deformed” political development, caused
social stagnation, and retarded progress in science and technology. In 1969, to
weed out the Confucian tradition, he had even promulgated new family ritual
codes that severely restricted South Koreans’ practice of Confucian rituals.
Reversing himself in 1977, Park asserted that the “tradition of loyalty and filial
piety [was] rooted in love of, and dedication to, the community to which one
belongs.” … Park thus became a born-again Confucian, instructing the
Ministry of Education to incorporate the traditions of loyalty and filial piety
into the school curricula in 1977. The Academy of Korean Studies, modeled
after the Academia Sinica of Taiwan, was established in 1978 to serve as the
intellectual infrastructure for research in Korean studies and the dissemination
of traditional values and historical ideas throughout society.15
It is hard not to suspect that Park’s belated attraction to Confucianism was a way to
conflate authoritarian rule with Korean tradition. By comparison, the democratic ideas that
threatened his continued rule were western and alien. The cloaking of Park’s regime in
Confucianism was as self-serving as Mobutu’s contemporaneous claim that the traditional role
of a Bantu chief made his despotic rule culturally authentic.
As leader, Park did have a goal: puguk kangbyong (rich nation, strong army); and he
did have a strategy: do what works, and force everyone else to do the same. As for ideology,
his recent biographers note: “For someone trying to undertake a revolution, Park was
13
Byung-Kook Kim and Ezra F. Vogel, The Park Chung Hee Era (Cambridge, MA: Harvard University Press,
2011), 117-118, 120
14
Fuji Kamiya, “The Korean Peninsula after Park Chung Hee,” Asian Survey 20 (1980), 744.
15
Kim and Vogel, 124.
6
surprisingly free of ideological hang-ups.”16 His ideal Korea might have resembled
Manchukuo in the 1930s, with the Korean military playing puppet master instead of the
Japanese military. Thus, upon Park’s death in 1979, Japanese Ambassador Okazaki Hisahiko
lamented “the death of the last soldier of Imperial Japan.”17
3.2
Cronyism Corruption and Conflict
Park Chung Hee’s admirers picture the martyred President as a fierce protector of the
Korean technocracy against the destructiveness of political factions. He preserved the
technocracy’s independence to serve the greater good and its power to plan the economic
miracle. In this version of the story, there is a choice between democracy, liberty and human
rights on one hand, and leadership, prosperity and rational planning on the other. Park Chung
Hee realized that the latter was the smarter choice, because democracy, liberty and human
rights could be obtained later, after achieving prosperity. However, the reverse was not true.
Beginning with democracy would forever forestall rational planning and prosperity.
What undermines this story is the lack of evidence that Park valued the decisionmaking power of the technocracy. First, to stay in power, Park’s government used policy to
reward its friends and punish its enemies, rather than defer to cost-benefit analysis. Second,
Park and a small circle of confidants made most important policy decisions, leaving the
technocrats to carry out, not make, the policies. Third, Park preferred bold and risky plans
even though the technocrats usually recommended incremental and conventional plans. The
image of an insulated technocracy making optimal decisions for the greater good is more or
less a fiction.
Most of the evidence points to the bureaus in Korea as being the implementers
of political decisions over policy, and not the primogenitors of such policies.
… The influence of the FKI [Federation of Korean Industries] makes it clear
that the Korean bureaucracy’s role was to justify and implement economic
choices made for political reasons. In an interview, Han-been Lee told me that
“of course the political leadership made all the major decisions about projects.
We were there to provide a rationale for the decisions the regime had already
made, and then to implement them. The approval guidelines were there to help,
but were not strictly enforced.” … A former director in the Ministry of
Commerce and Industry in the late 1970s told me that when one of the chaebol
chairmen called, “he was transferred directly to the Minister, bypassing any of
16
17
Ibid. 87
Quoted in Kim & Vogel, 117.
7
the bureaucratic layers. Then a decision at the top level would be reached, and
we would get new directions from our boss depending on the result.”18
Defenders of the Korean civil service could argue that even if its technocrats were
primarily the policy implementers, rather than the policy primogenitors, the fact that it was a
model meritocracy could partially explain the success of the regime’s economic development
policy. After all, implementation is just as important as decision-making. Unfortunately, there
is little evidence that the Korean civil service, even with its 1,000-year-old roots in
Confucianism, was anything more than a paper tiger.
Under Confucian influence, the first Korean civil service exams were established in
788. In 1894, near the end of the Jeseon Dynasty, the exams were abolished as part of a
reform program aimed at eliminating obstacles to Korea’s modernization.
About the beginning of the sixteenth century, … the administration of the
examination system became corrupt; its effectiveness declined and did not
recover. Passing the examination became more dependent on the political
background of the aspirant than on his intellectual attainments. Moreover,
tutoring at the house of the right official in Seoul proved more efficacious than
study at even a government school: if the official were highly enough placed,
the subject matter he taught often proved rather closely related to the
examination questions and it was frequently suspected that the questions
themselves were sometimes divulged through such judicious contacts.19
The exam system was revived in 1949. Despite the exam, entrance into the public
service was plagued by regional favoritism and nepotism.20 Furthermore, the bureaucracy of
the Republic showed the same lethargy as its Joseon Dynasty predecessor. Once selected and
placed, seniority became the key factor of promotion and pay increases. This increased
cooperation and decreased rivalry within a Ministry, and thus promoted the harmony coveted
by Confucians. However, what to some observers was Confucian harmony was to others
merely complacency and chronic ritualism, “the tendency to focus on criteria, forms, and
procedures rather than on substance or actual results in administrative activities.”21
Furthermore, the harmony within ministries did not result in harmony between ministries.
18
David C. Kang, Crony Capitalism, Corruption, & Development in South Korea & the Philippines. (Port
Chester, NY: Cambridge University Press, 2001), 90-92
19
Key P. Yang and Gregory Henderson, “An Outline History of Korean Confucianism: Part I: The Early Period
and Yi Factionalism,” The Journal of Asian Studies, 18 (1958), 95
20
Pan Suk Kim, “Public Bureaucracy and Regionalism in South Korea,” Administration & Society 25 (1993),
227-242;
Sunny Lee, “Nepotism's a no-no in a 'fair society,'” Asia Times, 22 Sept 2010, http://atimes.com/
21
Chun-Oh Park and Jaehyun Joo, “Control Over the Korean Bureaucracy: A Review of the NPM Civil Service
Reforms Under the Roh Moo-Hyun Government.” Review of Public Personnel Administration 30, 192.
8
Because most bureaucrats made and implemented public policies from a
limited perspective, they could not cooperate well with people in other
organizations. Senior civil servants were not exceptions to this general trend,
although they played important roles in the policy processes.22
In recent decades, a very high proportion of successful exam takers have come from
Seoul National University (SNU).23 Coincidentally or not, the faculty members at SNU’s
Graduate School of Public Administration often served as consultants in creating the exam
questions.24 In an example of history repeating itself, the South Korean government is
currently phasing out the exam, replacing it with a multi-faced open recruitment system by
2015.25
As a last stand, a defender of the Korean civil service might concede its impotence in
policy decision-making and lethargy in policy implementation, but give it credit for being
incorruptible. Corruption is often blamed for the failure of development plans in poor
countries.26 In and of itself, South Korea’s economic success is evidence that corruption is
minimal. Therefore, the “Miracle on the Han River” may be attributed to the Confucian
penchant for honest work. Unfortunately, the evidence does not support this story either.
Rather, public and private corruption was rampant before, during and after Park’s rule.
Not only was corruption extensive, but political connections overrode
economic criteria and allowed for overcapacity and bailouts of indebted and
poorly managed firms. The process was simple: business and political elites
exchanged bribes for political favors. Politicians used these political funds to
buy votes and also to satisfy their basic greed. Businessmen used the rents for
cheap capital to expand their companies as rapidly as possible, thus ensuring
the businessman’s continued political and economic importance. … Money
permeat[ed] the normal politics of elections, economic policy making, taxation,
and day-to-day running of the country.27
22
Ibid.
Lee Hyo-sik, “SKY Graduates Dominate State Civil Service Exams,” Korea Times, 7 Sept. 2010,
http://www.koreatimes.co.kr/
24
Kang, 61
25
Lee Hyo-sik, “Applicants for State Exams Up in Arms,” Korea Times, 8 Sept 2010, http://www.koreatimes.
co.kr/
26
“Economic theory and empirical evidence both demonstrate that there is a direct causal link between
corruption and economic growth. Corruption impedes economic growth by discouraging foreign and domestic
investment, taxing and dampening entrepreneurship, lowering the quality of public infrastructure, decreasing tax
revenues, diverting public talent into rent-seeking, and distorting the composition of public expenditure.” Eric
Chetwynd, Frances Chetwynd, & Bertram Spector, Corruption and Poverty: A Review of Recent Literature,
(Washington, DC: Management Systems International, 2003), 3, http://www.eldis.org/vfile/upload/1/document/
0708/ DOC14285.pdf
27
Kang, 97
23
9
Quantifying corruption is difficult; and so is cross-national comparison. The first
cross-national comparisons on perceptions of corruption did not start until the mid-1990s. The
following are some qualitative and quantitative data on corruption in South Korea after the
Park era.
•
•
•
•
•
•
•
On the first Corruption Perceptions Index in 1995, South Korea scored 4.3 (where 0
means that a country was perceived as highly corrupt and 10 means that a country was
perceived as very clean) and was ranked 26th among the 37 countries listed: just below
Spain; just above Hungary.28
On the 2000 Corruption Perceptions Index, South Korea scored 4.0 and was ranked
48th among the 90 countries listed: just below Poland, Malawi, Belarus, Lithuania and
El Salvador; just above Brazil.29
In 2001, Kang concluded that South Korea’s corruption was at about the same level as
the Philippines.30
In a 2005 meta-study, You concluded that South Korea has been more corrupt than
Taiwan but less corrupt than the Philippines.31
The number of officials found to have broken the public-service ethics code almost
doubled between 2008 and 2010.32
On the 2011 Corruption Perceptions Index, South Korea scored 5.4 and was ranked
44th among the 182 countries listed: just below Poland; just above Brunei.33
A study has estimated that if corruption had been reduced to the level of Japan, the
annual economic growth rate could have been pushed up by 1.4 to 1.5 percentage
points.34
Rampant corruption does not fit the Confucian hypothesis. Avoiding the obvious
contradiction, many scholars ignore or underplay the corruption. For example, Kim and
Jaffee’s The New Korea: An Inside Look at South Korea’s Economic Rise mentions
“Confucianism” on six pages, but “corruption” on only one.35 Vogel’s 139-page The Four
Little Dragons: The Spread of Industrialization in East Asia devotes a nine-page subsection to
28
“New Zealand best, Indonesia Worst in World Poll of International Corruption” [press release], Transparency
International, 15 July 1995, http://www.transparency.org/content/download/2915/18031/file/cpi1995.pdf
29
Transparency International, “TI Corruption Perceptions Index 2000” [web page], 13 December 2000,
http://www.transparency.org/policy_research/surveys_indices/cpi/previous_cpi/2000
30
Kang
31
You Jong-Sung, “Embedded Autonomy or Crony Capitalism? Explaining Corruption in South Korea, Relative
to Taiwan and the Philippines, Focusing on the Role of Land Reform and Industrial Policy,” (paper presented at
the Annual Meeting of the American Political Science Association, Washington, DC, 1-4 September 2005.
32
“Rotten Shot,” The Economist, 21 July, 2011, http://www.economist.com/
33
Transparency International, “Corruption Perceptions Index 2011” [web page], 1 December 2011,
http://cpi.transparency.org/cpi2011/
34
The Korean Economic Research Institute, quoted in Young-Iob Chung, South Korea in the Fast Lane (Oxford,
UK: Oxford University Press, 2007, 191
35
Myung Oak Kim and Sam Jaffee, The New Korea: An Inside Look at South Korea’s Economic Rise (New
York, NY: AMACOM, 2010.
10
Confucianism, but the word “corruption” appears on only five scattered pages.36 One book
that deals specifically with corruption, Kang’s Crony Capitalism, Corruption, & Development
in South Korea & the Philippines, concludes that South Korea’s success in economic
development was because of, not despite of, corruption. Kang argues, “If there is a balance of
power between a small and stable set of government and business elites, money politics can
actually reduce transaction costs and make long term agreements and investments more
efficient.”37
It would seem that the perception that Confucian ethics enabled South Korea’s
economic success is groundless. That is, unless Confucianism is the root cause of the
corruption. Some people believe this is the case.
But what is it, Koreans often ask themselves, about their society that makes
corruption at the highest levels so appealing when so often people wind up in
jail? "It has to do with the culture," said Kim Sung-hak, a Hanyang University
scholar, wrestling with a response. "Corruption is condoned at the highest
level. Korean culture is a social relationship, not a written contract." Scholar
Kim goes back to several thousand years of dynastic rule tempered by
Confucianism. "Confucianism was the governing social philosophy," said Kim.
"Family and regional ties are very important. Here the personal guarantee
carries more weight than an employee contract. Employees are not supposed to
betray the president of the company." Or the president of the country, the
ultimate father figure, to whom the "envelope", whether passed through a
relative or friend or aide, should assure a full return on the investment - until or
unless jealous foes get suspicious and manage to publicize and destroy the plot
in their own drive for power.38
If Kim is correct that Confucianism spawned corruption, and Kang is correct that
corruption spawned economic development, then there is some small but twisted truth behind
an assertion that the Korean civil service, imbued with a Confucian ethic, guided South Korea
toward the “Miracle on the Han River.”
3.3
Compromise
As argued above, Park Chung Hee, not a technocratic civil service, was responsible for
directing the government’s stewardship of economic development between 1961 and 1979.
Therefore, it is reasonable to assume that Park was a leader with extraordinary vision.
36
Ezra F. Vogel, The Four Little Dragons: The Spread of Industrialization in East Asia (Cambridge, MA:
Harvard Unversity Press, 1991).
37
Kang, 3
38
Donald Kirk, “Confucianist Corruption in South Korea,” Asia Times, 14 May 2009, http://www.atimes.com/
11
However, Kim and Vogel describe Park’s greatest leadership quality not as superior vision,
but the ability to learn from mistakes and not allow ego to inhibit needed course changes.
Rather than a story about a leader’s personal vision, the story of the “Miracle on the
Han River” could be about the institutional negotiations among a triangulation of powers: the
Park regime, the chaebol, and the United States. In this story, compromise, not vision, resulted
in the policies so fortuitous for the Korean economy.
On his own, Park would have booted the Americans and squashed the chaebol,
establishing a military dominated state with central control over economic and cultural
institutions. Upon seizing power, Park’s first instinct was to arrest the chaebol leaders and
charge them with corruption and profiteering. He attempted to secure capital for his heavy
industrialization plan by lobbying the US government, establishing a rigged stock market, and
passing a mandatory savings law coupled with a currency conversion to draw out unbanked
savings. After these endeavors failed, he accepted the chaebol as the next best thing to
government-owned corporations. They were limited in number and each had a single family
that owned and managed. With the chaebol as clients / partners, Park did not need enough
capital to start new companies, just enough to incentivize his directives to the existing ones.
In another places and time, the chaebol would have been able to capture the
government and raid the government coffers with no strings attached. However, in the 1960s,
the chaebol were still relatively modest in size and limited in resources. In contrast, Park’s
power derived from the military and Korean CIA, from massive US financial aid, and from
the nationalized government banks. Thus, the chaebol accepted Park’s directives in exchange
for a monopoly on available credit, protective tariffs, and other uses and abuses of
government power to help their bottom line. This does not mean that the chaebol were
powerless and passive in policymaking. They had many formal and informal ways to
influence government policies. In a conflict, they could refuse cooperation, but mostly they
would leverage higher incentives. The chaebol’s ace card was that only they could possibly
deliver the quick economic progress that Park coveted.
Given South Korea’s dependence on US aid, the Americans had de facto veto power
over Park’s policies. However, their main objective was to maintain a stable government that
could resist internal or external Communist threats. Park recognized and played on the fears of
his Americans benefactors. The United States constantly pressured Park for democratic and a
free market reforms, but he usually gave only lip service. Park lobbied for American aid to
fund his heavy industrialization plans, but the American were annoyed by the grandiosity and
12
pessimistic about the potential, so they gave little.39 The relationship between Park and the
Americans was often acrimonious. Both sides knew there were lines not to cross. The
Americans demanded a civilian government, even if that only meant that the generals wore
suits. They demanded a private, competitive business sector, even if that meant only a few
dozen government-allied conglomerates. They demanded US command (nominally UN
command until 1978) of the South Korean military, even though South Korean troops
participated in coups and civil actions without US authorization. Park could not nationalize
the chaebol, he could not crown himself emperor, and he could not invade the North.
Everything else was negotiable.
If Park had absolute power, unfettered by the chaebol or the Americans, it is likely that
South Korea would have developed a Soviet-style central-planned economy with many stateowned enterprises, perhaps legitimized by a Neo-Confucian ideological facade. At the end of
Park’s presidency, South Korea would have resembled Poland circa 1979.
If the chaebol had effectively manipulated government policy, they would have
maximized their rent seeking and become profitable, family-owned businesses using cheap
labor to manufacture textiles and foreign-licensed products. In 1979, South Korea would have
resembled the Philippines.
If the Americans had their way, South Korea would have been a supplier of
agricultural products and cheap labor to the Japanese economy. In 1979, South Korea would
have been Japan’s Mexico.
Practically the only thing Park, the chaebol and the Americans all agreed upon was the
need to keep wages low. Ironically, it is the increase in wages and the attainment of middle
class status by most Koreans that makes the “Miracle on the Han River” so enviable.
4
Mask: “The Korean polity is easily led because of the homogeneity of the Korean
people.”
There is truth in describing South Korea as a homogeneous county. Almost all citizens
of Korea, both North and South, are ethnically Korean, and recognize themselves as part of a
single people. With the possible exception of Jeju Island, there are no regional populations
with desires of special autonomy or independence. In this respect, South Korea is like
Portugal and Denmark, rather than like China and Spain.
39
In 1963, the New York Times quoted an unnamed American official as saying the Park regime’s development
plans were “a Korean illusion – the illusion that a land of mud huts can be transformed into a modern country in
a decade or two.” Quoted in “Effects of U.S. Aid Debated in Korea,” New York Times, 26 May 1963, 3.
13
All Koreans speak the Korean language. Although there are dialects in the Korean
language, and Koreans can often tell the origin of a person based on their speech, everyone
can understand each other. Thus, South Korea is like Poland and Italy, rather than like
Ukraine or Switzerland.
Koreans have no doubt that they are a separate people from their neighbors. Although
Korean has many Japanese loan words, and formerly used Chinese characters for writing,
Korean is not related to either Japanese or Chinese languages. Most linguists either consider
Korean to be a “language isolate” (not having an ancestral language in common with any
other extent language),40 or part of a dispersed Altaic language group spoken by various
peoples in central Asia, Siberia, and Mongolia.41 Thus, Koreans feel no affinity for their East
Asian neighbors as might be felt among Arab, Latin American or Slavic peoples. Koreans are
more receptive to claims of genetic or linguistic connections with the Finns or American
Indians than to claims about such connections with the Japanese and Chinese.
While two governments claim the legitimacy to govern Korea and hold exclusive
territory, the split is entirely an artifact of external influences. Koreans see the split as
unfortunate and temporary. There was no cultural divide at the 38th parallel, just an agreement
of convenience between the USA and USSR. Although enthusiasm and optimism about
reunification has faded among the Korean youth,42 there is no open sentiment to make the
split permanent, as there is among some in Taiwan. In this respect, South Koreans are like the
pre-unification Germans and Vietnamese.
Koreans came out of their 35-year colonial experience with a strong sense of
nationalism. The Japanese attempt at forced assimilation created a defensive reaction among
Koreans. Ardent nationalism was further nourished by the division of the country and by the
presence of foreign troops. South Korean governments also encouraged nationalist feeling
whenever they wanted support or asked for sacrifice. Some evidence suggests that the
nationalist sentiment has become even stronger since the advent of democracy.43 Public
displays of nationalism are periodically triggered by such issues as the Japanese claims over
the Dokdo islets (Liancourt Rocks),44 the opening of the Korean market to U.S. beef,45 and the
40
Jae Jung Song, The Korean Language: Structure, Use and Context (London: Routledge, 2005), 14-17.
Jennifer Jung-Kim, "Korean Language," in Encyclopedia of Modern Asia, Vol. 3, ed. Karen Christensen and
David Levinson, 395-397 (New York: Charles Scribner's Sons, 2002).
42
Andrei Lankov, "South Korea Harbors Unification Heresy," Asia Times, 9 Sept. 2011, http://www.atimes.com/
43
Philip Bowring, "A Potent, Troubling Nationalism," New York Times, 16 June 2008, http://www.nytimes.com/
44
Dong-Joon Park and Danielle Chubb, "Why Dokdo Matters to Korea," The Diplomat, 17 August 2011
http://the-diplomat.com/
45
Moon Ihlwan, "Korea's U.S. Beef Brouhaha," Bloomberg Businessweek, 9 June 2008,
http://www.businessweek.com/
41
14
publication of articles by Chinese scholars arguing that Korea is historically derivative of
China.46
Homogeneity is something that a visiting Westerner can sense in South Korea. When I
first arrived, I was overwhelmed by a sense of sameness. Everyone has a three-syllable name.
Over half have the family name of Kim, Lee, Park, Choi or Jung. University students all wear
the same style of clothes and have the same hairstyles. Adults drive white, black or silver
sedans. Businessmen wear dark blue or black suits, white shirts, and a neckties with very
simple patterns. Families prefer to live in the large complexes of rectangular, white, high-rise
apartment buildings that overwhelm the urban skylines.47 Psychological research confirms “to
feel good about one's choice in East Asia, one has to have the sense that the preference
expressed is agreed on and approved of by others.”48
It is inarguable that South Korea is ethnically and linguistically homogeneous and
Koreans derive pleasure from conformity to social norms. However, it would be a mistake to
conclude national consensus on important issues is easy to achieve. South Korea’s modern
history exposes social fractures larger than in most European nation-states, including modern
Poland.
4.1
Regionalism
The most apparent social divide is along geographic lines. A 2003 New York Times
article noted that “Nowadays, what region one comes from is as crucial in marriage decisions
for many Koreans as is profession or income, and people widely attribute distinct character
traits to people of different regions, both good and bad, from hard-working to
untrustworthy.”49 Region has also been a strong determinant of voting behavior, before, and
especially after, the advent of full democracy.50
South Korean regionalism is based on the borders of five historic provinces plus the
island of Jeju. There is a Korean language dialect associated with each region.
46
"S. Korea-China history dispute over ancient kingdoms," The Hankyoreh, 6 Sep. 2006,
http://english.hani.co.kr/
47
In Korea, apartment living is not viewed as an unfortunate necessity, but as a preference over lower-density
alternatives. See Valérie Gelézeau, Ap'at'ǔ Konghwaguk [On the Republic of Apartments], Kil Hye-yon, trans.
(Seoul: Humanitas, 2007).
48
Heejung Kim and Hazel Rose Markus, "Deviance or Uniqueness, Harmony or Conformity? A Cultural
Analysis," Journal of Personality and Social Psychology 77, no. 4 (1999), 797.
49
Howard W. French, "South Koreans Seek Affirmative Action to End Regional Bias," New York Times, 27 Apr.
2003.
50
See Choi Young-Jin, “Regionalism and Crisis of Democracy,” National Strategy 7, no. 2, 2002; David C.
Kang, "Regional Politics and Democratic Consolidation in Korea," in Korea's Democratization, ed. Samuel S.
Kim, 161-180 (Cambridge: Cambridge University Press, 2003); Woojin Moon, "Decomposition of Regional
Voting in South Korea: Ideological Conflicts and Regional Interests," Party Politics 11 (2005): 579–599
15
In Korea’s southeast is the Yeongnam region (North and South Gyeongsang, Daugu,
Busan, and Ulsan) which has the reputation for being blue collar, politically conservative, and
the birthplace of many ambitious generals and industrialists. Yeongnam was the center of the
old Korean kingdom of Silla. Silla is notable for having its third royal dynasty last for about
1000 years (from 57 BC to 935), making Buddhism the state religion (in 527), unifying the
Korean peninsula politically and linguistically for over two centuries (from 668 to 900), and
introducing Confucian institutions and ethics, including a civil service examinations system
(in 788).51 The Yeongnam Koreans are proud that Gyeongj is the historical capital of a united
Korean kingdom, just as Malapolska Poles celebrate Krakow as the medieval capital of
Poland.
Yeongnam regional pride does not irk other Koreans. Rather, it is that six of the ten
heads of South Korea’s government have come from the Yeongnam region, and some of these
men did not achieve this status by the full consent of the governed. Furthermore, many
Koreans believe that these men directed a disproportionate amount of government largess to
their home region.
Korean development policy has long prioritized building Seoul, in the northwest, into
a world-class capital and southeast area, around the port of Busan, into the center for the
export industries. A transportation corridor of modern rail lines and highways was built to
connect these hubs. The strongest economic development has occurred along this corridor,
which runs through the heart of Yeongnum. High-profile government investment in the
Yeongnam region include the Pohang Steel complex, the Ulsan and Onsan oil / petrochemical
complexes, the Masan Free Export Zone, the restoration of Gyeongju’s historic sites, the
Busan International Film Festival and the southern half of the KTX high speed rail line.52
Likewise, an inordinate number of government jobs have gone to people from Yeongnam.
During Park Chung-Hee’s eighteen-year rule, the people from Yeongnam were more than two
and a half times over-represented in the civil service.53 Regional favoritism was as strong or
stronger during the subsequent Chun Du Hwan, Roh Tae-Woo and Kim Young-sam
administrations.54
51
Ki-Baik Lee, A New History of Korea, 3rd ed. (Cambridge, MA: Harvard University Press, 1984), 66-87; KiMoon Lee and S. Robert Ramsey, A History of the Korean Language (Cambridge, UK: Cambridge University
Press, 2011), 47.
52
Michael E. Robinson, Korea's Twentieth-Century Odyssey: A Short History (Honolulu, HA: University of
Hawaii Press, 2007), 169.
53
Myung Oak Kim and Sam Jaffe, 16.
54
Choi Young-Jin
16
Yeongnam is the base of the conservative political party, which traces its roots back to
the supporters of the Park regime. It is currently known as the Saenuri Party (or New Frontier
Party). “Conservative,” in this context, usually means business-friendly, with an appreciation
of the chaebol, pro-American, with a hard line on North Korean relations, and growth
oriented, with support for free trade policies. However, the party is often personality driven
and politically pragmatic rather than strictly ideological.55
In Korea’s southwest is the Honam region (North and South Jeolla), which has the
reputation of being underdeveloped, disgruntled, and the birthplace of political dissidents.
Honam was the core of the old Korean kingdom of Baekje (18BC – 660). Of the three
old Korean kingdoms, “the Baekje Kingdom is remembered for its artistic sophistication.”56
Because of proximity, cross-cultural influences existed between Baekje and Japan. For
example, in the sixth century, Buddhism was transplanted from Baekje to Japan and the
mother of Japanese Emperor Kammu was a descendant of an exiled Baekje prince.57 Baekje
was sometimes an ally and sometimes a rival of neighboring Silla. In 660, Baekje was invaded
by Silla, then in alliance with China. Baekje, and its ally Japan, were defeated and Baekje was
annexed into the Silla kingdom.
Honam remains South Korea’s most productive agricultural region, while its
industrialization has lagged that of Yeongnam. Only one South Korean head of government
has come from Honam. While Yeongnam natives have historically been overrepresented in
government service, Honam natives have been under-represented.58 Two anti-government
uprisings occurred in the Honam region during the country’s authoritarian years. The October
1948 Yeosu-Suncheon Rebellion was a revolt by soldiers against the new Syngman Rhee
regime and their orders to suppress anti-government protests on Jeju Island. The rebellion was
eventually crushed, leaving between 439 and 2,000 civilian dead, according to Truth and
Reconciliation Commission. The Commission also confirmed the recklessly arrest and torture
of civilians.59 The May 1980 Kwangju Uprising was a civilian revolt against the military coup
of General Chun Doo Hwan. The rebellion left between 500 and 2,000 dead.60 In 1996, Chun
was convicted of mutiny, treason and corruption in connection with the 1979 coup and the
Kwangju massacre, although he was subsequently pardoned.
55
"Korean political parties shifting policies leftward," Korea Herald, 30 Jan. 2012, http://www.koreaherald.com/
Yoon Yong-hyuk, Professor Kongju National University, interviewed in "Reviving 1500 Years of Baekje
History: Gongju" [transcript], Arirang TV, 17 Sept. 2010. http://www.arirang.co.kr/
57
Jonathan Watts, “The Emperor's New Roots,” The Guardian, 28 December 2001, http://www.guardian.co.uk/
58
Choi Young-Jin
59
"439 civilians confirmed dead in Yeosu-Suncheon Uprising of 1948," The Hankyoreh, 8 January 2009,
http://english.hani.co.kr/
60
Becky Branford, "Lingering Legacy of Korean Massacre," BBC News, 18 May 2005, http://news.bbc.co.uk/
56
17
Kim and Jaffe describe anti-Honam social prejudice in Korean culture:
In television dramas set during the Joseon Dynasty, the farmers, thieves,
murderers, and other low-class characters speak with a Jeolla [Honam] accent.
Some people from Jeolla use a Seoul accent when they apply are looking for
work. In Seoul, Jeolla people tend to be heavily concentrated in the poorer
suburbs. Some residents in apartment buildings try to stop Jeolla people from
moving into their building because of they fear a drop in property values. 61
Honam is the strongest political base for the main reformist party, which is currently
known as the Democratic United Party. In this context, “reformist” means support of labor
unions, vigorous prosecution of corruption, small business development, reform of the
Chaebol system, decentralization of power to local governments, social equity, expansion of
the social welfare system, and dialog with North Korea. However, like its rival, reformist
politics is often personality driven and pragmatic rather than ideological.
In South Korea’s northwest is Sudogwon, or Seoul National Capital Area (Seoul,
Incheon and Gyeonggi). It has the reputation for being cosmopolitan, expensive, and is where
young Koreans want live. About 22.5 million people live there, which is about 46 percent of
the South Korean population.
In South Korea, the local Sudogwon dialect is considered standard Korean. Many
people in Sudogwon are originally from somewhere else and still identify with their or their
parent’s home region. Because of this, Seoul has not been a “power base” for South Korean
regimes, democratic or authoritarian. Only one head of government, Prime Minister Chang
Myon of the short-lived Second Republic, was native to this region.
Young people in Sudogwon are increasingly developing an identity as Soulites and
voting for the interests of the region, alternating allegiances between the political parties.62 In
2011, Seoul elected an independent, Lee Myung-bak, as mayor.
In the west, sandwiched between Sudogwan and Honam is the Hoseo region (Daejeon,
South Chungcheong, North Chungcheong). Hoseo’s South Chungcheong province is the
wealthiest in South Korea. The Seoul-Bussan transportation corridor runs through Hoseo.
Hoseo is considered a swing vote region between the two main parties. In 2004, the Korean
government under President Roh Moo-hyu announced that a new national capital city would
be built in Honam. The stated intent was to balanced regional development and reduce the
concentration of political and economic resources in Seoul. However, the plan was very
61
Kim and Jaffe, 16
Andy Jackson, "New Regionalism in Korea," The Korea Times, 30 December 2011,
http://www.koreatimes.co.kr/; Choi Byung-muk, "How Seoul Is Eroding Regionalism," The Chosun Ilbo, 5 April
2012, http://english.chosun.com/
62
18
controversial and politicians have had to dance around strong opposition, which could cost
votes in Hoseo, and strong support, which could cost votes in Sudogwan. The original plan
was declared unconstitutional by the Supreme Court, which held a constitutional amendment,
was necessary to move the capital. The plan then morphed into moving administrative offices,
then into a new high-tech hub of education and commerce, and then back to an
“administrative capital.” Sejong will officially open in July 2012 with 36 agencies and about
ten-thousand civil servants moving into the city by 2014.63
In the northeast is the thinly populated, mountainous Gangwon region. Half this region
lays in North Korea. The South Korean half accounts for only 3.3% of the South Korean
population. South Korea’s limited coal reserves were located in Gangwon. When the coal
mines closed in the 1990s, tourism became the region’s main industry. Historically, Gangwan
has been loyal to conservative parties. However, since 2010, the governorship has been held
by the reformist party.
Jeju is a 1,848 sq. km. volcanic island 85 kilometers southwest of the Korean
peninsula. Because of its subtropical climate, active volcano, and beautiful scenery, it is
nicknamed “the Hawaii of Korea” by South Korea’s tourist industry. Jeju has the most
distinctive dialect among the Korean regions. However, a decline in the dialect’s use among
younger islanders has placed it in UNESCO’s Atlas of the World's Endangered Languages.64
Jeju was home to the independent Kingdom of Tamna until 476, and was nominally an
autonomous kingdom until 1404. From 1270 to 1272, Jeju was the base for resistance to
Mongol dominance on the Korean peninsula. After the Mongol conquest, it became a
Mongolian stronghold used for breeding war horses.
Mongolian influence still remain to this day. Tamna residents had long been
intermarrying with Mongolians, absorbing their language and culture. The Jeju
dialect, so distinct from standard Korean, was heavily influenced by
Mongolian. Islanders also took to Mongolian dress, and adopted their custom
of wearing leather and furs. Even the practices of carrying babies in baskets (as
opposed to on their backs) and transporting water by stringing large pots over
one’s back come from Mongolia.65
63
Kim Soyon, “New Prime Minister's Office Complete in Sejong City” [transcript], KBS World Radio News, 4
April 2012, http://world.kbs.co.kr/
64
Anne Hilty, "Distinct Dialect of Jeju Threatened with Extinction," Yanhap News, 14 Oct. 2011.
65
"When Mongolia Ruled Jeju," Jeju Life, 13 Sept. 2008, http://jejulife.net/
19
After Jeju’s political integration into Korea, it became the home of dissident artists,
poets, writers, and statesmen sentenced to exile under the Joseon Dynasty. Jeju islanders
instigated tax revolts against the Joseon Dynasty in 1862, 1898 and 1901. 66
On 28 September 1945, the US military formally accepted the surrender of Japanese
authorities on Jeju. The islanders quickly established a de facto government organized under a
leftist People’s Committee. On the mainland, American authorities refused to recognize such
People’s Committees because of their Communist sympathies. However, on Jeju they chose to
cooperate.67 In 1948, when the first national elections approached and the Americans
authorities desiring a strong victory for the conservative political factions, their relationship
with the leftist Jeju People’s Committee grew hostile. Eventually, a rebellion broke out on the
island. After the election, South Korean troops serving the new Syngman Rhee regime
squashed the rebels. In 2003, a special investigative committee estimated that there were
between 25,000 and 30,000 deaths, 86 percent dying at the hands of the government security
forces and 13.9 percent dying at the hands of the rebels. The report concluded:
The most tragic part of the incident occurred due to the strategy adopted by the
9th and 2nd Regiments that allowed wanton destruction of the villages situated
in the middle of the Halla Mountains. Ninety-five percent of the villages were
burned down and completely destroyed and most of the villagers were killed.68
On 1 July 2006, Jeju was granted the special status as a “Special Self-governing
Province,” giving it more autonomy than the other cities and provinces. Both conservative and
reformist parties have found support in Jeju, but the reformist parties have dominated in the
last decade. Currently, Jeju is the scene of protests against the building of a new naval base
and the Jeju provincial government has requested a delay in construction.69
4.2
Religion
Religion has become a second source of deep fractures within the Korean polity,
rivaling regionalism as a source of internal social conflict. Traditional Korean religion is a
mix of Shamanism, Buddhism, Confucianism, and Daoism. Although there have been
historical conflicts over religion, Koreans usually blended religious beliefs rather than
66
Boudewijn Walraven, "Cheju Island 1901: Records, Memories and Current Concerns," Korean Histories 1, no.
1 (2009): 3-24
67
Jay Hauben, "People's Republic of Korea: Jeju, 1945-1946," Jeju Weekly, 20 August 2011, http://
www.jejuweekly.com/
68
The National Committee for the Investigation of the Truth about the Jeju April 3 Incident, "Truth-finding
efforts and Recommendations," http://www.jeju43.go.kr/english/sub05.html
69
Angela Kim, "Seoul rejects provincial appeal to re-examine naval base construction at Gangjeong," Jeju
Weekly, 23 March 2012, http://www.jejuweekly.com/
20
identifying with only one. As Donald Seekins notes, “there is nothing contradictory in one
person's visiting and praying at Buddhist temples, participating in Confucian ancestor rites,
and even consulting a shaman and sponsoring a kut.”70 Protestant Christianity and Roman
Catholicism challenged this dynamic, as these western religions demanded more
exclusiveness among adherents.
According to the Korean Census, in 2005, almost half the population (47.2%) claimed
no religious affiliation. However, this may not indicate a low level or decline in spirituality.
The first time anyone tried to count the number of religious Koreans was soon
after Korea fell under Japanese colonial rule. In 1916, Japanese authorities
counted approximately five hundred and thirty thousand Koreans who were
enrolled in various Christian, Buddhist, sectarian Shinto, or Korean indigenous
new religious organizations, out of a population of between fifteen and
seventeen million. That was only around 3 percent of the Korean population at
that time. As recently as 1964, the government of Korea calculated that only
3.5 million out of its 28.2 million citizens had a specific religious affiliation. …
In premodern Korea, the only people we would label religious are religious
“professionals” such as Buddhist monks. … It was only over the last couple of
centuries, and particularly over the past fifty years, that large numbers of
Koreans came to believe that negotiations with spiritual beings or the
cultivation of better moral character was best done within a clearly defined
institutional structure. This rise in religiosity reveals itself in the growing
percentage of the Korean population claiming a particular religious
affiliation.71
A 1996 Gallop survey found that among Koreans who claim no religious affiliation,
29.5 percent believed in an absolute being or God; 36 percent believe in spirits; and 47.7
percent believe in miracles.72
American, Canadian, and Australian-supported missions introduced Koreans to
Protestant Christianity in the late nineteenth century. Like everywhere else, South Korea’s
Protestant Christians are a theologically and politically diverse faith community. The largest
denominations are the Presbyterians, Methodists, and Pentecostals. Regardless of
denomination, much of Korean Protestant Christianity leans toward evangelical beliefs and
practices,73 megachurch organizational structures,74 and conservative political engagements.75
70
Donald M. Seekins, “The Society and Its Environment,” in South Korea: A Country Study, Andrea Matles
Savada and William Shaw, eds. (Washington, DC: GPO for the Library of Congress, 1990), 128.
71
Don Baker, Korean Spirituality (Honolulu, HI: University of Hawaii Press, 2008), 3-4.
72
Reported in Andrew Eungi Kim, “Characteristics of Religious Life in South Korea: A Sociological Survey,”
Review of Religious Research, 43 (2002), 295;
73
“In terms of numbers and church influence, Evangelicals overshadow their non-Evangelical counterparts. In
fact, Evangelicalism so predominates the Korean church, its success or growth so influences Korean
Protestantism as a whole, that Evangelicalism and Protestantism are more or less synonymous in Korea.”
21
In September 1945, when the American military assumed control of the southern
occupation zone, only four institutions could possibly assist their nation building efforts. First,
there was the Japanese colonial bureaucracy. After a brief flirtation with using this existing
structure, the Americans decided to repatriate all 70,000 Japanese officials. Second, there was
the network of newly formed People’s Committees. For the most part, the US military
government suppressed these groups because of their suspected Communist sympathies.
Third, there were the Buddhist Jogye Order of monks and nuns. However, upon liberation
from Japanese supervision, the order degenerated into vicious infighting between celibate and
married monks. Fourth, there were the Protestant Christian churches. Protestant Christians
were avidly anti-Communist, particularly those that had fled the Russian occupation zone in
the north. Rather than tainted by Japanese collaboration, many Protestant Christian churches
enjoyed the reputation of being centers of the independence movement.76 Most importantly,
Protestant Christians had often learned English at their missionary schools. Bi-lingual
assistants were essential for the English-speaking military government, which became known
among Koreans as a “government by interpreters.”77 Thus, the Korean Protestant Christians
were the only acceptable and functional partner for the American military government
between 1945 and 1948.78 Although only about 3 percent of the South Korean population was
Protestant Christians,79 they came into the new Korean public service in large numbers.
Most of the Koreans serving in the Shanghai-based government-in-exile had been
Protestant Christians and they became the early post-liberation political leaders. Syngman
Rhee, who became the first President (and first dictator) of South Korea, was a Methodist
church elder who had lived in the United States for most of his adult life. In Rhee’s
Timothy S. Lee, "Beleagured Success: Korean Evangelicalism in the Last Decade of the Twentieth Century, in
Christianity in Korea, Robert E. Buswell and Timothy S. Lee, eds. (Honolulu, HA: University of Hawai'i Press,
2006), 330.
74
In 1999, Hong found fifteen Korean churches with over 10,000 adult Sunday worshipers and 400 more with
over 1,000 adult Sunday worshipers. Young-Gi Hong, "Encounter with Modernity: The 'McDonaldization' and
'Charismatization' of Korean Mega-Churches." International Review of Mission, 92 (2009), 239-255
75
This meant support for the authoritarian governments of the past. In 2011, this meant opposition to a tax law
change that would facilitate Korean banks issuing “sukuk” bonds, financial instruments acceptable to Muslims
who reject earning or charging interest. See Na Jeong-ju, "Will Lee go ahead with sukuk bill?" The Korea Times,
3 March 2011, http://www.koreatimes.co.kr/ ; Mushtak Parker, “Korean sukuk law rejection is a wake-up call,”
Arab News, 27 Dec. 2010, http://arabnews.com/
76
Jung Han Kim, "Christianity and Korean Culture: The Reasons for the Success of Christianity in Korea.
Exchange 33 (2004): 137-139.
77
Kim Eun-gyong, "English Education Under US Military Government (IV)," The Korea Times, 12 Aug. 2009,
http://www.koreatimes.co.kr/
78
Chung-shin Park, "The Protestant Church as a Political Training Ground in Modern Korea," International
Journal of Korean History, 11 (2007): 47
79
Don Baker, “Sibling Rivalry in Twentieth Century Korea: Comparative Growth Rates of Catholic and
Protestant Communities,” in Christianity in Korea, Robert E. Buswell, Jr. and Timothy S. Lee, eds. (Honolulu,
HA: University of Hawai`i Press, 2006), 283–308.
22
administration, Christians assumed 40 percent of leadership positions and in 1952, Christians
were 25 percent of the National Assembly.80 Besides Rhee, three other South Korean
presidents have been Protestant Christian and Protestant Christians remain overrepresented
among elected and appointed officials.81
Protestant Christians are also overrepresented among Korean business leaders. One
source (in 2007) claims that 42 percent of corporate chief executives were Protestant
Christians.82 A 1999 study found that 31 of the top 100 Korean company presidents were
Protestant Christians.83 A 2004 survey found that 42.7 percent of Koreans believed Protestant
Christianity had been the most instrumental religion in their country's modernization.84 Some
Protestant Christian churches, especially the popular megachurches, endorse the association
between prosperity and Christianity, attracting a congregation of the “upwardly mobile.”85
Much of the megachurch preaching and prayer features “kibok,” a wish for blessings in this
life.86 For example, Seoul’s Yoido Full Gospel Church, the largest of the megachurches,
connects wealth with divine blessing based on 2 Corinthians 9:8: “God is able to make all
grace abound toward us so we always have sufficiency in all things.”87
Undoubtedly many South Korean Christians see the growth of Christianity and
the growth in material blessings as two sides of the same coin – and their
historical experience lends weight to this argument. In Korea, business and
faith are close bedfellows, and the mainstream churches do not criticise the
capitalist system. It is very difficult to portray poverty as a virtue, as some
other forms of Christianity have done.88
With a high profile in Korean politics and business, Protestant Christianity was
associated with both individual success and national prosperity.89 This image, coupled with
aggressive Protestant evangelism, won many converts. According to the Korean Census, by
2005, about 18 percent of the population identified itself as Protestant Christian.
80
Chung-shin Park, "The Protestant Church as a Political Training Ground in Modern Korea," International
Journal of Korean History, 11 (2007): 55
81
Timothy S. Lee
82
Hahn Meerha, a professor at Hoseo University, quoted in "O come all ye faithful. God is definitely not dead,
but He now comes in many more varieties," The Economist, 1 Nov. 2007, http://www.economist.com/
83
Pulgyo sinmun [Buddhist newspaper], 9 May 2000, cited in Timothy S. Lee, 14
84
Cited in "O come all ye faithful.”
85
"O come all ye faithful.”
86
Andrew Eungi Kim, 291-310;
James Huntley Grayson, Korea: A Religious History (London:
RoutledgeCurzon, 2002), 165
87
“Core Message,” David Cho Evangelic Mission, http://www.davidcho.com/neweng/bb-1.asp [retrieved 15
April 2011]
88
Kirsteen Kim, "Christianity and modernization in twentieth-century Korea: perspectives on new religious
movements and the revitalization of society" (paper presented at the Conference on Religion & Development,
Amsterdam, 14-15 June 2007), 13
89
Jung Han Kim, 134.
23
In 1784, a Korean diplomat converted in China founded the first Catholic organization.
In 1836, the first French Catholic missionary arrived in Korea. Catholics were sporadically
persecuted until 1886, when France intervened with the Korean government. From this period,
Catholics count 8,000 martyrs, over 200 of who are now canonized saints. Although the
Catholic missions had a head start on the Protestant Christians, the Catholics were fewer in
number at the time of independence, less than 1 percent of the population.
Immediately after independence, the Catholic Church grew more slowly than the
Protestant churches. Unlike the Protestant Christians, the Catholics had not developed the
same reputation for resisting Japanese authority. Many Catholic schools had taught French
rather than English. Although enjoying a good relationship with the American military
government, Catholics lacked the subsequent patronage of President Rhee. Over time, the
Catholic Church became associated with reformist politics in a similar way that the Protestant
Christians became associated with conservative politics. Both the Prime Minister and
President of the democratic, but short-lived, Second Republic were Catholic. Catholic
Cardinal Kim Su-hwan and Bishop Daniel Chi Hak-sun were public in their disapproval of
human rights abuses under the dictatorships.
Seoul’s Myeongdong Cathedral became a
sanctuary for anti-government activities.
In the 1970s, especially, Catholic leaders established themselves as fearless
human rights advocates, standing up to the military regime and distinguishing
themselves not only as churchmen, but in the fields of letters and politics as
well. The Catholic poet Kim Chiha became a virtual martyr for the cause,
imprisoned for writing poetry critical of the Park Chung-hee regime. The
Catholic politician Kim Dae-jung became famous for his quiet strength,
campaigning for president against President Park and nearly winning, then
suffering periods of imprisonment, exile, attempts at assassination, trials for
sedition, and even a death sentence. Kim Dae-jung became “Korea’s
Mandela,” eventually prevailing in 1997 to be elected president himself.90
After 1970, the Catholic Church attracted many converts. This is attributed to postVatican II reforms that made the Catholic liturgy more accessible, and to its strong human
rights stance that gained respect from political reformists. According to the Korean Census, by
2005, about 11 percent of the population identified itself as Catholic.
Buddhism came to Korea in the fourth century. By the sixth century, it was the state
religion throughout the Korean peninsula. This lasted until 1393, when the Joseon Dynasty
90
Donald N. Clark, "Christianity in Modern Korea" Education About Asia 11, Number 2 (2006), 38
24
replaced it with Confucianism. Under Japanese colonial tutelage, there was a revival of
Buddhism, a religious tradition that both countries shared.
After the liberation from Japanese rule, there was a violent rift in Buddhism between
monks who wanted to follow historically Korean traditions (including a celibate priesthood)
and those who wanted to keep changes introduced under the influence of Japanese Buddhism
(such as married priests).91 President Syngman Rhee, always anti-Japanese, ordered the
married monks and nuns to leave their temples. They resisted and chaos ensued.
The behaviors of both sides was non-Buddhist. They used violence, and some
disemboweled themselves and intruded into the court, and broke the harmony
of the Buddhist community. They even employed gangsters to attack the
opposition and to take the temples.92
The confrontation lasted until 1970, when the married monks established a separate
order. This very public controversy decreased the prestige of Buddhism. For young Koreans,
Buddhism became increasingly anachronistic, a religion to for the poor classes and older rural
women.93
Buddhism enjoyed government favor under the eighteen-year authoritarian rule of
Park Chung-Hee, who was a Buddhist. However, Buddhists complaints against Protestant
Christians and about non-Park government favoritism toward Protestant Christians began with
the American military government and continue to the present day.
The general picture of the Buddhist-Christian relationship in Korean society
today is gloomy and, more often than not, even ugly. To give just a few
examples, a number of Buddha statues that were standing outside had red signs
of the cross painted on the foreheads, and some of the stone statues were
partially destroyed. One army officer closed a Buddhist dharma hall in his
compound and disposed of the Buddha image somewhere in the mountains.
Groups of Christians have marched carrying placards and shouting ‘‘Jesus
Heaven; Buddha Hell’’ or ‘‘Buddhist temples are headquarters of devils’’ and
the like. There have even been cases of Buddhist temples burned down by
Christian arsonists. In June 1998 a Christian called Kim Sujin cut off the heads
of 750 statues of the buddhas at Wonmyong Sonwon in Cheju [Jeju] Island.94
Other common complaints center on these incidents:
91
Chanju Mun "Purification Buddhist Movement, 1954-62: The Recovery of Traditional Monasticism from The
Japanized Buddhism in South Korea," Hsi Lai Journal of Humanistic Buddhism 8 (2007), 262-294
92
Ibid., 264
93
L. Robert Kohls, Learning to Think Korean: A Guide to Living and Working in Korea (Boston, MA:
Intercultural Press, 2001), 40; Andrew Eungi Kim, 291-310;
94
Kang-nam Oh, "The Christian Buddhist Encounter in Korea,” in Christianity in Korea, Robert E. Buswell and
Timothy S. Lee, eds. (Honolulu, HA: University of Hawai'i Press, 2006), 384.
25
•
•
•
•
•
•
•
•
In 1945, the American military government made Christmas a national holiday (while
Buddha’s birthday was not).95
From 1945 to 1948, the American military government assigned many confiscated
Japanese buildings and Shinto shrines to Christian organizations for uses as churches,
schools, and orphanages.96
In 1948, Syngman Rhee, a Methodist elder, took the presidential oath of office with
his hand on a Bible.97
Rhee’s 1949/50 land reform policy transferred ownership of much temple-owned
farmland to tenant farmers.98
In 1980, the authoritarian government of Chun Doo Hwan, a Presbyterian, ordered a
brutal crackdown on Buddhist monks whom the Chun government considered as
dissidents. Police and soldiers searched 5,731 temples nationwide and arrested more
than 150 monks. Many of the arrested monks were tortured and forced to resign from
their posts.99
In the 1980s, the Chun Doo Hwan government seized monastic estates and converted
them into national parks. Thus, the temples became mere tourist attractions, without
the resident monks receiving the tourist revenue.100
Since the mid-1980s, hundreds of incidents of arsons and vandalism against Buddhist
buildings and statues have been documented. Most are suspected to be the work of
zealous Protestant Christians attacking perceived idolatry (although the culprits are
rarely caught). 101 This perception was reinforced when a video circulated of a 2006
evangelical rally where a speaker is heard to say, "Lord, let the Buddhist temples in
this country crumble down."102
The original 16-person cabinet of Lee Myung Bak, the current President and an elder
in Seoul’s 70,000-member Somang Presbyterian Church, reportedly consisted of 13
Christians, one Buddhist and two other non-Christians. In 2011, it was reported that
Buddhists accounted for only 7.7 percent of Lee’s Cabinet appointments, 12.5 percent
of his appointments to senior presidential secretary, and 4.8 percent of his other Blue
House secretaries.103
95
Chung-shin Park, Protestantism and Politics in Korea (Seattle, WA: University of Washington Press, 2003),
169
96
Choi, Jai-Keun, "MacArthur’s Religious Policy in Japan and its inqiuence in Korea," Theological Forum, 46
(2006): 75
97
Ibid. 173
98
Mun, 274
99
The events were confirmed in 2007 by a fact-finding panel of the Ministry of National Defense. See Jung
Sung-ki, “Former President Chun Directed Oppression of Buddhist Monks in 1980,” Korea Times, 25 Oct. 2007,
http://www.koreatimes.co.kr/
100
Henrick H. Sorensen, “Buddhism and Secular Power in Twentieth-Century Korea,” in Buddhism and Politics
in Twentieth-century Asia, Ian Harris, ed. (New York, NY: Continuum, 2001) 140
101
Frank Tedesco, “Questions for Buddhist and Christian Cooperation in Korea,” Buddhist-Christian Studies 17
(1997), 179-195; Yuánzhì Dàoqīng, “Continued Vandalism in Buddhist Temples,” Zen Mirror (blog), 25
November, 2011, http://zenmirror.blogspot.com/
102
Sunny Lee, “A 'God-given' president-elect,” Asia Times, 1 Feb. 2008, http://www.atimes.com/ ; “Korean
Buddhist monks, nuns say conflict with Protestants 'serious',” Union of Catholic Asian News, 22 October 2009,
http://www.ucanews.com/
103
“Buddhists set to protest against President Lee’s religious bias,” The Hankyoreh , 22 Aug. 2008,
http://english.hani.co.kr/
26
•
In 2008, a new online public transportation map of greater Seoul omitted famous
Buddhist temples while marking the locations of even minor Christian churches. (The
government apologized for the mistake.)104
In August 2008, tens of thousands of Buddhists marched in Seoul, protesting the bias
of Lee’s government. 105 In 2011, the Jogye Order briefly banned government officials and
politicians in Lee’s conservative party from entering its temples.106
According to the Korean Census, in 2005, 22.7 percent of the population identified
itself as Buddhist. The Buddhist orders clam a larger following of 33 to 40 percent of the
population.107 Recently Korean Buddhism leaders have begun to change the religion’s image
and actively seek new participants both inside and outside South Korea.108 The public
confrontations between the Lee Myung Bak government and the Buddhist hierarchy have
made Buddhism a center of government opposition, taking the role formerly held by the
Catholic Church.
Homogeneity is in the eye of the beholder. No matter how homogeneous the South
Korean population may seem, it would be a mistake to assume it is not factional based on
region and religion. Creating a story that Koreans are easier to govern because of their
homogeneity is not supported by history.
5
Mask: “The Korean economic model runs mostly for the benefit of a few elites.”
A long-term government policy of favoring a few dozen family-owned businesses
would seem, by definition, to be a system that favors a relative few. Fifty-eight families run
the chaebol.109 Thus, they are inarguable few and elite.
Chaebol are similar to conglomerates found in other countries. However, they consist
of legally separate companies operating in unrelated industries. There are no central holding
104
“Seoul Transport Map Omits Names of Buddhist Temples,” Chosun Ilbo, 24 June 2008, http://english.
chosun.com/
105
Kim Rahn, "Buddhists to Hold Rally Against Gov’t" The Korea Times, 26 August 2008,
http://www.koreatimes.co.kr/ ; Ahn Chang-hyun, "Lee draws bipartisan criticism for public kneeling," The
Hankyoreh, 7 March 2011, http://english.hani.co.kr/
106
“Buddhist order, GNP Strife May End,” Korea JoongAng Daily, 19 April 2011,
http://koreajoongangdaily.joinsmsn.com/
107
Baker, 284; A. Charles Muller, The History and Development of Korean Buddhism: A Brief Overview,
Orientalia Journal of Eastern Philosophy and Culture, http://www.orientalia.org/article351.html
108
Do Je-hae, "Korea's Isolated Buddhism Opening Doors," The Korea Times, 27 December 2011,
http://www.koreatimes.co.kr/ ; Lee Minji, “Mobile Apps, a New Way to Meet Buddha in S. Korea,” Yonhap
News, 28 Jan. 2011. http://english.yonhapnews.co.kr/
109
Shin-Kap Han, “Breadth and Depth of Unity among Chaebol Families in Korea,” Korean Journal of Sociology,
42, No. 4 (2008): 9
27
companies, as there would be in the US,110 nor an affiliated bank, as there would be in Japan.
Yet these companies make investment and planning decisions collectively because they are
cross-invested and members of the same family dominate the boards. Although the chaebol
ownership has passed to a second and third generation of family members, professional
executives have not usurped the families’ managerial power.
The five largest chaebol were founded between 1938 and 1953. They were modest
companies until the Park Chung Hee regime nationalized the banks and offered them
favorable lending rates and tariff protections in exchange for cooperation with Park’s
economic development ambitions. From that point on, the chaebol pursued a diversification
strategy. This was because the Park regime pushed them into new export-focused industries.
In addition, because they monopolized the available credit, they could move into profitable
areas of the domestic economy with little completion from new start-ups. These profitable
areas became quite numerous as the majority of Koreans joined the middle class.
In 1938, Lee Byung Chull founded Samsung as an export company selling fruits,
vegetables, and dried fish. The first Samsung-branded products were dried noodles. After the
Korean War, Samsung expanded into sugar and textiles. In 1969, it entered the electronics
field. It also expanded into ship building, aircraft, automobiles, construction, armament, life
insurance, theme parks, and advertising. Samsung will be investing $2 billion through 2020 to
break into the pharmaceutical industry.111 (Samsung's European R&D Center is in Warsaw,
employing 700 IT engineers to adapt Samsung telecommunication and software products for
the European market.)
In 1947, Chung Ju Yung founded Hyundai as a construction company. In the early
1970s, it entered the shipbuilding business. It also expanded into elevators, shipping services,
tourism, automobiles, department stores, gas stations, armament, and steel. Hyundai’s latest
expansions have been into offshore oil facilities, solar power and wind turbines.112 (Hyundai
operates car plants in Slovakia and the Czech Republic, but not Poland. Hyundai/Kia has a
10.9% market share of Polish auto market as of February 2012.113)
110
Holding companies were illegal until 1998. Some chaebol now use holding companies, but they are not
intrinsic to the organizational dynamic.
111
"Is Manufacturing Prowess Transportable to Vastly Different Industries," Manufacturing Executive, 18 April
2012, http://www.manufacturing-executive.com/
112
Christian Oliver and Song Jung-a, "Evolution is crucial to chaebol survival," Financial Times, 2 June 2011,
http://www.ft.com/
113
Calculated from data provided at “Carmarket.com.pl Ranking” [online database], Carmarket.com.pl, accessed
11 April 2012, http:// carmarket.com.pl/ranking.php. The original data source is the Centralnej Ewidencji
Pojazdów (Central Register of Vehicles).
28
In 1947, Koo In Hwoi founded Lak-Hui to manufacture toothpaste, facial cream and
soap. In 1958, a sister company, Goldstar, was founded to manufacture plastic products. The
chaebol then became known as Lucky-Goldstar. It also expanded into electronics,
telecommunications, household appliances, engineering, soft drinks, and batteries. In the mid1990s, it abbreviated its name to LG. In 2010, LG entered the wastewater treatment field.114
(In 2007, LG Display opened an LCD manufacturing cluster in Wroclaw, Poland.)
In 1948, Shin Kyuk-Ho, a Korean living in Tokyo, established Lotte as a candy
company. In 1967, Lotte started its South Korean branch. Lotte expanded into other food
products, grocery stores, finance, apartment management, fast food, construction, amusement
parks, movie theaters, film distribution, hotels, petrochemicals, and department stores. In
2012, Lotte announced plans to become a major beer producer with a new $US 600 million
brewery in Chungju.115 (Since 2010, Lotte owns Poland's E. Wedel confectionery company.)
In 1953, Chey John-hyun purchased Sunkyong Textiles. In the late 1950s, it began
manufacturing synthetic fiber. In the 1970s, it became a refiner of petroleum. It also expanded
into telecommunications, chemicals, pharmaceuticals, batteries, construction, and marketing.
In 1997, Sunkyong abbreviated its name to SK. In 2012, SK became a manufacturer of
computer chips through its purchase of Hynix Semiconductor, formerly a part of Hyundai.116
(SK owns SK Eurochemicals of Poland.)
Seventeen of the twenty richest Koreans, as listed by Forbes in 2010,117 were members
of the families running the five largest chaebol: five Lee (Samsung), four Koo (LG), four
Chung (Hyundai), three Shin (Lotte), and one Chey (SK). In terms of corporate power, the
five largest chaebol are behemoths, accounting for 70.4 percent of the South Korean GDP in
2010. 118
The chaebol and their ruling families are quite controversial in South Korea. While
many Koreans are grateful for the chaebol’s role in raising the country out of acute poverty,
they criticize them for “exerting excessive control over the local economy and preying on
smaller competitors.”119 Former Prime Minister Han Myeong-sook expressed her feelings
114
"LG Announces Intention to Enter Water Treatment Business" [press release], LG Electronics, 16 Sept. 2010,
http://www.lg.com/global/press-release/article/lg-announces-intention-to-enter-water-treatment-business.jsp.
115
"Lotte Ventures into Beer Brewing," Chosun Ilbo, 11 May 2012, http://english.chosun.com/.
116
"SK Telecom Completes Hynix Takeover," Yonhap News, 14 Feb. 2012, http://english.yonhapnews.co.kr/.
117
BeoDeul Shin and Yongseok Son, “South Korea's 40 Richest,” Forbes, 28 April 2010,
http://www.forbes.com.
118
Kim Jin-cheol, “Chaebol Control Pervades Life in Korea,” The Hankyoreh, 13 February 2012,
http://english.hani.co.kr/
119
Lee Sun-young, "Korean Political Parties Shifting Policies Leftward," Korea Herald, 31 Jan. 2012,
http://www.koreaherald.com/
29
more bluntly, criticizing “the monopoly ... enjoyed by chaebol that has become the poison in
the Korean economy,"120 In a recent poll, 74 percent of respondents disagreed with a
statement that the chaebol were moral.121 In a Korea Times commentary, author and reporter
Andrew Salmon charged: “They run their firms like fiefdoms. The chaebol’s subjects ― their
shareholders ― are among the most discriminated against in the capitalist world. They have
virtually no oversight, receive low dividends and are rarely granted even a glance at their
august leaders.”122 Both major political parties are supporting chaebol reform of one sort or
another.123
Ironically, the limiting of the ownership class has produced a comparatively egalitarian
society. The vast majority of Koreans fall into the middle class, with relatively few rich and
few poor when compared to most other countries. South Korea’s Gini coefficient (.344),124
before taxes and transfers, indicates that South Korea has the most income equality of any
OECD country. Korea’s social welfare system is undeveloped compared to most European
countries. Thus when taxes and transfers are considered, South Korea’s score (.315) is close to
the average score of the 34 OECD countries (.314).125
One development theory suggests that income equality is the product of a low
unemployment rate. In most western countries, inequality rose during the development period,
but then started to fall. This inverse U-shaped income inequality pattern is called the Kuznets
curve. Several East Asian countries did not follow the Kuznets curve. Rather, their inequality
fell continuously throughout their development period.126 This may be because preindustrial
inequality was lower than in western countries, and the labor market was tight, leading to low
unemployment rates that kept wages increasing and inequality falling. In South Korea, the
unemployment rate was kept artificially low because the chaebol were pressured by the
government to hire more then they needed. The intent was not to increase wages or reduce
inequality, but to produce social stability, that is, lower opposition to the dictatorships. After
the 1997 financial crisis and the subsequent economic reforms, the chaebol’s inefficient
120
"S. Korea's Resurgent Opposition Takes on Powerful Chaebol," Asiaone, 30 Jan. 2012,
http://www.asiaone.com/
121
Cited in Jack Kim and Ju-min Park, "Analysis: South Korea's Unloved Chaebol," Thomson Reuters, 5 April
2012, http://www.reuters.com/
122
Andrew Salmon, "Kings, Kims and Chaebol," Korea Times, 9 January 2012, http://www.koreatimes.co.kr/
123
Lee Sun-young
124
OECD.StatExtracts, Organisation for Economic Co-operation and Development, accessed 9 May 2012,
http://stats.oecd.org/.
125
Ibid.
126
Acemagula and Robinson label this alternative to the Kuznets curve “the East Asia Miracle path.” See Daron
Acemagula and James A. Robinson, “The Political Economy of the Kuznets Curve,” Review of Development
Economics 6(2).
30
employment practices were reduced. This resulted in more unemployment and thus, growing
income inequality.
The Korean economic system should not be criticized for benefiting only a few elite.
In comparison to other developed countries, the economic system produces the highest level
of income equality. The Korean welfare system, rather than the economic system, should be
disappointing to those concerned about the poor and elderly.
6
Conclusion
Stripped of its masks, the story of the Miracle on the Han River becomes more
fascinating, and potentially more worthy of emulation. When examined, cultural
idiosyncrasies do not make South Korea so different. Furthermore, the high profile of the
chaebol families does not negate the enviable level of income equality produced by the
Korean economy.
Could the South Korean story be a lesson for other countries? Once the masks have
been removed, one can at least begin to ask the right questions.
•
Would even the new “Seoul Consensus” allow for developmental / protectionist
policies that South Korea employed in the 1960s, 1970s and 1980s?
•
What were the costs and benefits of the government’s control of the credit market?
•
How did South Korea attract investment in indigenous companies, rather than foreign
ownership or co-ownership?
•
Was Korea’s authoritarianism necessary to sustain its long-term development?
•
Once wages began to rise, why did Korean companies upgrade their products rather
than flee to lower wage countries?
•
Why didn’t rampant corruption devour the resources needed for development?
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Author data:
Mark Curtis Hoffman
Ph. D.
Grand Valley State University
School of Public, Nonprofit & Health Administration
USA
36