[OUTLOOK]Trust in the marketIt was expected that the economy would recover after the general election. The market is averse to uncertainty and now that politics have been stabilized with the government party holding a majority of seats in the National Assembly, the economy was sure to recover, they said. Yet there are no signs of the economy getting any better. This is not only because of external factors such as oil prices. Japan, which had been going through a recession for more than 10 years, and the U.S. economy, which had been faltering since the Clinton administration, are getting better. Only Korea seems to face problems.
If the economy is to function properly, there must be a smooth flow of money. If money is spent and consumption increases, factories are operated which, in turn, increase the number of people who are paid and who then use their money to buy more things. This is how the economy works. Our biggest problem is the circulation of money, or the lack thereof. Department stores as well as small neighborhood grocery stores report a sharp decrease in sales. Where has all the money gone?
Money is spent by those who have it. How could someone without money spend it? We found ourselves in a mess by encouraging people without money to spend. More than 4 million people have become credit delinquents because of credit card debts. Even those with money do not spend it profusely. They only spend money when they have the hope that they can earn more money. They do not spend money when they are afraid that it will be taken away from them. There is a saying, “When there is no trust, money hides under the pillow.” How can we see increased investment and consumption if money hides under the pillow?
There are several factors, but the biggest reason our economy is in a difficult situation is because the rich are nervous. Businesses are nervous, so they are not investing. Even consumption on the part of the middle class is shrinking because the middle class itself is shrinking. More and more people are getting laid off, and young people are unable to find employment. Nobody is spending money. The first step out of this slough should be taken by the rich. The rich must start to open their billfolds.
The rich are sensitive to the market where money circulates. That is how they became rich. Only when they feel they are able to trust the market do they buy and sell things. Think of a small-town market. A market is a place where all sorts of people gather. There are merchants and speculators, food sellers and pickpockets. Money goes around and an order is formed naturally. If police officers with clubs are sent to clean the market because the authorities decide it is dirty, the market would lose its vigor. In the end, there will be no merchants, no shoppers and the only people left will be the police officers. And then who will pay the police officers their wages?
The last legislative elections functioned under the principle of a market called politics. No one was forced to vote and no central authority intervened in the campaign with plans. It was decided by the judgment of the people. The economy should also be decided by the judgment and common sense of the common people. That is the principle of a market. Ironically, the people that won in the marketplace of politics do not believe in the economic market. They are of a mind that the political elite can control the economy. The business owners only pursue profits, so politicians should step forward. Are business owners really evil and the political elite good? A free democracy is based on diversity. A society where the political forces control the economy, society and culture is a totalitarian one. Only when every sector retains its independence can we uphold our democracy.
This government has declared that it wants to reform the market. The problem is what kind of reform it is that the government pursues. The goal should be to give vigor to the market and make it grow and become more profitable. That is the reform of the market that we need. Driving sellers and buyers out of the market with clubs is not a reform. It is ruining the market. There is no use in saying that the reforms will bring changes in several years, when the market is slowly dying right now. President Roh’s comment that those who claim that this is an economic crisis are “trying to turn disadvantageous policies to their advantage in order to block reforms,” shows that he doesn’t trust the market. There are people who hate the rich for no reason, and they are gaining more power based on this hatred. It is now said that the U.S. forces will withdraw. How can the rich not feel nervous under these circumstances?
Our economic crisis is not an economic problem. It is a political and socio-psychological problem. Solutions suggested by economic bureaucrats and experts alone cannot save the economy. Unless we change this atmosphere, there is no hope for our economy. There have always been rich people since humankind started pursuing economic activities. Do not hate the rich. In a society where there are no rich, the party members act as the rich. Party members abolish the market and make everyone poor, but the rich save the economy. Trust in the market. That will make the economy come alive naturally.
* The writer is the chief editor of the editorial page of the JoongAng Ilbo.
by Moon Chang-keuk
More in Columns
Tales of Chairman Lee
Chinese way of tackling challenges
Time to step up climate action
Finding our place
Diplomacy is about trust