East Asian philosophy meets economic theory

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East Asian philosophy meets economic theory

Lee Ho-chul, a director at the Ministry of Finance and Economy, has found a way to fuse Eastern elements and Western economics. His most recent work, a 300-page paper titled “Asian Philosophies and Economics: Application of Yin-Yang Theory to the Korean Economy,” is being reviewed by the University of California at Berkeley for publication.
In the last two decades, Mr. Lee, 47, has published six books on economics. “Ideas are best shared,” Mr. Lee said.
He came up with the idea of adapting yin-yang theory to the economy during his three-year stint as an adviser to the World Bank. In the paper, Mr. Lee argues that the traditional economic cycle and the Asian economic crisis of the late 1990s can be interpreted through the yin-yang and the “five elements” ideas in East Asian philosophy.
Yin falls in the same category with darkness, earth, femininity and night, while yang stands for brightness, sky, masculinity and day. Just as the universe functions well only when yin and yang are balanced, the same can be applied to economics, Mr. Lee said.
The five elements ― metal, wood, water, fire and earth ― each stand for a certain cycle, in his interpretation.
Wood symbolizes spring, or an expansion in the economy. Fire stands for summer and the peak season; metal for deflation, and water for a low season. Earth, which is between fire and metal, Mr. Lee said, symbolizes a bubble economy.
“The state when people think it’s still summer, even though summer has already gone, comes under the category of earth,” Mr. Lee said. “In this sense, we can understand where the bubble economy is placed in the whole cycle, which is generally not smoothly explained in orthodox economic theories.”

by Kim Young-hoon
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