[EDITORIALS]Roh’s errant view of propertyPresident Roh Moo-hyun showed a strong stand on curbing real estate speculation by saying, “All the profits from housing market should be shared by the public. The government will never recognize speculative income, but will allow creative income.”
Mr. Roh’s comments support a dangerous idea that could shake the foundation of the Korean economy. First of all, the idea of sharing profits from housing market sounds like Mr. Roh is denying private property ownership. The public interest aspect of housing should be discussed in a way that should not harm private property ownership. All housing except for government housing is private property. The Constitution guarantees that owners have the right to use and sell it. Profits and losses are also the complete responsibility of the owner.
If the public has to share the profits from housing transactions, the public also has to share in the losses. To say it in an extreme way, the government should own all the housing in the nation or it has to completely control housing transactions. How is that different from socialism?
Mr. Roh’s comment that the government will not acknowledge speculative income also could cause misunderstandings. Although the word speculation has a negative connotation, speculation is the driving force that keeps the market economy alive. Economic decisions made in the face of risks is speculation. Risk and challenge are hallmarks of capitalism. And the market judges the result of speculation. Unless it is illegal, speculation is not a problem at all.
Not only is it difficult for the government to classify income into whether it is “creative” or “speculative,” there is no reason for it to do so. Nothing changes, although the term speculative income means unearned income. Will the government deny the income from stock market investments because a person didn’t work hard for it? If a company earned a lot of money thanks to rising semiconductor prices, is it creative income or unearned income? The government doesn’t need to classify income but impose taxes fairly on all income.
A Blue House spokesman said Mr. Roh’s comment meant “that the speculative demands should be removed.” But the comments can spark repercussions if the president is viewed as being against the market economy or private property. That’s why people have to watch their mouths.