Spending Is Necessary for the EconomyThese days wherever you go you can find people worrying about the economy. The financial market is frozen, stocks are falling, and there are workers demonstrating against restructuring in many parts of the city. Anxiety about the short-term future of the Korean economy is quite high.
During the last economic crisis we saw Koreans become stronger in times of hardship. Foreigners who were working in Korea at the time were surprised by two things: First was the campaigns in which all people made efforts to decrease their spending. We were impressed by the sight of a mother with her baby on her back standing in line to turn in the baby''s gold ring. But the second surprise was the harsh criticism that was directed at wealthy Koreans and those who purchased foreign products. I''m sure all foreigners were uncomfortable about living in Korea when they saw imported cars being hijacked or refused service at gasoline stations.
So is now an appropriate time to be talking about spending money? The subject itself can be a target for criticism during a time when people are suffering economic hardships or without jobs.
But if everyone tries to save at once, spending will decrease drastically, which in turn will slow down production and result in a decrease in investment, making the situation even worse. In the end, we will be caught up in a vicious circle with no progress toward recovery. So when I say let''s spend money, it''s not addressed to those who are in hardship, but those who can afford to spend.
If everyone postponed purchasing a car during difficult times, what would happen to automakers such as Hyundai Motor? The drop in sales would not affect only the employees of Hyundai Motor, but also the workers at affiliates and vendors who work with Hyundai. What would happen if people did not purchase televisions or computers produced by Samsung Electronics because the economy was slow? What would happen to the farming industry if families stopped consuming apples or pears?
Consumption according to one''s own purchasing power serves the role of stimulating production to lubricate the economy like oil on a wheel. But less consumption slows production and thus the economy. We should not overlook the fact that decreased consumption is one of the main factors contributing to the long depression of the Japanese economy. We must also note that active spending has contributed to the prosperity enjoyed by the United States for many years.
Many Koreans believe deep down that saving is a virtue while spending is corruption. But Korea is a leading industrial nation with excellent production facilities. If those facilities are not supported by appropriate spending, the economy cannot improve. Therefore, those persons who can spend money must spend according to their economic power.
In times of difficulty, it is important that we think with our head and not our heart. Just because I''m experiencing hardship, it is irrational to criticize others who spend money. Such an attitude does not help the nation''s economy as whole. If everyone lived the same way because the economy was in trouble, this would not be a capitalist society. If no one played golf during these times, the golf courses in Korea would have to shut down and the caddies would be jobless. If people were again criticized because they drove imported cars, consumers would lose their freedom of choice and another barrier to the Korean auto industry would go up.
If many people cannot spend money during the current hardship, those who can should do so to stimulate the economy. Many Koreans I meet have said that although they are in a position to spend, they are fearful of their neighbors'' reaction. We are at a point that calls for active spending. Let''s encourage those who have the ability to spend. Koreans should have the freedom to spend the money they earn.