[VIEWPOINT]Pride integral to productivity

The British bank Standard Chartered’s acquisition of Korea First Bank is the latest talk of the town. While the Korean government lost over 5 trillion won ($4.8 billion) in public funds, Newbridge Capital, which holds a controlling stake in the bank, pocketed 1.15 trillion won from the sale.
Despite concerns for the speculative nature of the foreign capital and criticism of the Korean government’s incompetence, the media shared the premise that privatization of public corporations is an inevitable trend. The media coverage gave more of an impression that Korea’s private capital should have played a leading role in this process of privatization, than criticism.
On the day that the sale of Korea First Bank was announced in the morning papers, local government officials appeared on the main evening news of major TV networks to convey the problems of the third sector companies under joint management by the government and private sector. The Board of Audit and Inspection’s report on these companies reminds us of the structural corruption of the socialist system. The news segment confirmed the negative image of public corporations, reassuring that they wouldn’t work on a national level nor even on a local community level. Now that the enemy of “planned economy” has disappeared, the market is the invincible force in terms of economic efficiency and rationality. However, the justification of the market no longer holds when we question for whom the market rationality was devised.
A German friend of mind teaching at the University of Sussex in England told me he was considering buying a car because of the inconvenient railroad system. The German railroad system is far more convenient than the privatized British rails, he said. Another British friend calls the Privatization Committee of Tony Blair’s government a “committee of lies.” If you have ever ridden the privatized part of the Tokyo subway, you might have experienced the inconvenience of buying more than two tickets to ride several stops. After the railroad privatization, riders have to buy different tickets to transfer to another local line.
Of course, the citizens have to expect a certain inconvenience in order to mitigate the burden of the chronically deficit-ridden national finance. For example, the budget set to bail out the public corporations from deficits can be used for public welfare. Unconditional opposition to privatization is not convincing.
Privatization is supposed to satisfy the instrumental logic of the market. But as it does not always satisfy the legitimacy of life, the system of public corporations, whose chronic deficits are bailed out with taxpayers’ money, does not always guarantee social justice.
The precedence of the public transit system operated by the city of Geneva, Switzerland, provides a valuable standard of judgment. Over a decade ago when the debate over the privatization of British public corporations was heated, a British Labor Party legislator visited Geneva. On top of the superb system and facility, he was startled by the accurate service of trains and buses and the fact that the transit authority generated profits with a cheaper fare than London. After talking to a few drivers and operators, he found out the secret. From the conversation, he could tell that the bus drivers and train operators had civilized manners, were highly educated and had the ethics and sense of public service for Geneva, a community they belonged to. Naturally, the age-old tradition of autonomous local governments in Switzerland helped as well.
What is important in the debate over privatization is the labor culture, not the productivity of labor. The public corporations, that lack labor culture, would not only have low productivity but also disguise the interests of the power in the name of social justice, and justify the inefficiency and incompetence. When we discuss privatization of a public corporation, a study on the culture of the company, and furthermore the society it belongs to, is necessary.
After all, what pulls the market economy with the “face of a man” is not the power of economy but the power of the social culture.

* The writer is a professor of history at Hanyang University. Translation by the JoongAng Daily staff.

by Lim Jie-hyun