[OUTLOOK]Plan policies holisticallyPresident Roh Moo-hyun’s approval rating has plummeted because his policies are under attack from both sides, conservatives and liberals.
Conservatives criticize his policies as left-wing and designed to gain popularity while liberals complain that he has taken a neoliberal stance. The labor organizations and civic groups that used to be Mr. Roh's major supporters often use the word “neoliberalism” when they criticize the current government’s policies on opening the market.
The term neoliberalism is used more in a negative way than a positive way. Political academics also use the word more often than economists or sociologists.
Those who use the term in a negative sense repeat their argument that neoliberalism will result in polarization between classes and industries. That means that the rich will grow richer and the poor will grow poorer.
I wonder if they truly understand what neoliberalism is and if it is true that neoliberal policies will result in increased polarization. I also want to ask if President Roh promotes neoliberalism in its true sense.
As a matter of fact, neoliberalism is not clearly defined even among economists. Its origin may be John Williamson’s 10 suggestions for Latin America’s reform in 1990. His theory promoted efficiency of economy by stimulating and opening the market, which bolsters potentials for growth.
Contrary to what people often think, this theory doesn’t emphasize unlimited competition and the entire opening of the market without any consideration for the underprivileged. Rather, this theory stresses a state’s responsibilities in education and public health. It says that markets for trade and investment should be opened but that the short-term capital market should only be opened gradually and carefully.
In a nutshell, neoliberalism is not just about unlimited competition without any consideration for the poor and the needy, as people commonly believe.
It is not true that neoliberal policies can cause an imbalance in distribution. Under neoliberal policies, temporary restructuring is required due to the fierce competition. However, the economy then becomes more efficient and develops even further, therefore in the mid- and long-term, poverty and unemployment decrease, which induces balanced distribution.
The most common misunderstanding is that neoliberal policies do good only to multinational companies in developed countries.
For the past 20 years, China and India have been the major beneficiaries of these policies. The two countries have rescued at least 500 million people from absolute poverty.
Among advanced nations, Ireland and Australia are regarded as two countries that have achieved growth and better distribution thanks to neoliberal policies.
Based on these facts, the Korean economy should do its best to employ neoliberal policies in the truest sense.
However, the current government's stance is at odds with this proposition. The government is growing bigger, real estate policies are full of regulations, privatization of state-run companies is no longer discussed and the education system blocks fair competition.
Fortunately, the administration has changed its stance on the issue of free trade, but it seems it will be hard to carry out that policy because of the strong protest against it.
The current administration's economic policies are a mixture of everything: some neoliberal policies, some policies aimed at public support and some left-wing policies. When all the policies head in different directions, they are unlikely to show any useful results.
Policies should be designed based on objective facts and verified theories, not ideologies, and should be carried out in a practical manner. Otherwise, we will face a worst-case scenario ― that is, to endure all the side effects without enjoying any of the benefits that neoliberalism can give.
* The writer is an editorial writer of the JoongAng Ilbo.
by Kim Du-woo