&#91OUTLOOK&#93To live better, work harder

The economic capability and living conditions of a country depend on how diligently the people of that country work and how much they produce. That is why gross national product is considered to represent national income. Whether the people of a country become lazy or work hard depends on the various political, economic and social institutions and national management systems that govern that society. South and North Korea, as well as West and East Germany in the past, are examples of how the same ethnic race with the same traditional culture and history can yield such a difference in their living conditions and production capability after 50 years of living under different economic systems.
The reason South Koreans live better than they did 30 years ago is not only because existing wealth was redistributed and real estate prices rose. The reason for South Korea’s high-speed growth in the 1960s and ’70s was the fact that the economic system and social atmosphere of that time made people work harder.
The financial crisis that came upon us in 1997 was the consequence of our economic system and national governance system during the late 1980s having made our people, as well as the government and financial institutions, irresponsible. South Korean society fell into a state of overall inefficiency and corruption. But this was not because our people’s way of thinking had been undeveloped and irresponsible. It was because the general national management structure, including the government’s economic system and institutions at the time, let this happen.
Our economy is going through a hard time now. The productivity and competitiveness of our economy are falling. Neither business nor workers are in the mood to work hard. For the South Korean economy to overcome the present difficulties and rise again, we must get rid of all the elements within the economic system and national governance that incite corruption and inefficiency.
The various reform measures taken in the name of “restructuring” after the financial crisis were directed at this particular goal. The implementation of a new layoff policy, the improvement of labor-management relations, the liquidation of insolvent financial institutions and jaebeol businesses, the privatization of public enterprises and reforms carried out in the public sector were measures to restore the fallen discipline of Korean society and to encourage Koreans to work as hard as they did before.
Unfortunately, bad habits of the past are coming back in our economy and society. Behind this unfortunate phenomenon are the new government’s “reform measures” that are not reforming but derailing all the reform measures that had been so painstakingly built since the financial crisis.
Reforms are carried out to change people’s behavior. The problem with the government’s reform policies is that they do not persuade people to work harder and become more productive but to work less and live comfortably on the labor of the others. No one opposes helping the needy and protecting the socially weak. But turning people more lazy in the name of redistribution and welfare, and to recompense egoistic interest groups with bigger voices in the name of equity and national unity is not true reform. This is neither a “gentle market economy” nor a progressive line. This is just competition where ultimately everyone will be pitted against everyone.
If we let this moral hazard and lack of discipline among the participants of our economy continue, our productivity and competitiveness will deteriorate further and we will all end up poor. If our economy gets worse, the weak and the working class will suffer first and even more than they do now. To manage the national economy requires a high level of expertise and ability.
Determination and a kind heart are not enough to manage a modern country properly. A government that encourages laziness and irresponsibility will bring its people to poverty, and a government that encourages people to work diligently will turn its country wealthy and strong.
South Korea is not an advanced country yet. There is still absolute poverty in our society, and the living conditions of the majority of the people do not reach those of the more advanced countries yet.
If we want more, we should produce more. If we allow this tearing and dividing atmosphere to continue, no one will want to work hard anymore. Our only way to survive is to work harder and to produce more.
Which direction is our society going now?

* The writer is a professor of economics at Hongik University.

by Kim Jong-seok