[Viewpoint]Profits should be the priority

There are women who have a “nice-girl complex.” This term has been used to explain the psychology of women who are under the influence of social controls prescribing that women should be good and virtuous.
Once the term prevailed in the society. As the social achievements of women grow nowadays, however, the term can not prevail any more.
In its place, another “goodness complex” prevails in Korean society: the “good-economics complex,” meaning that economics should work for good.
But should economics play the role of doing good in our society? No.
What does economics mean, anyway, but to make money?
It is not right to demand that people keep doing good deeds in business deals. If they want to make money, they should be highly competitive.
For businessmen, making money comes first and good deeds come next.
Bill Gates, the chairman of Microsoft, makes a lot of money through the sales of Windows, the standard operating system for most personal computers.
Consequently, he has accumulated a fortune of more than $60 billion and has been the richest man in the world for the past 14 years. Ignoring demands to make Windows an open-source program, both from the business world as well as computer users, he still controls about 90 percent of the world’s operating systems market.
This is what a shrewd businessman does and should do.
When it comes to spending money, however, he can be a completely different person.
Chairman Gates is a world-renowned philanthropist. Through their foundation, Bill and his wife, Melinda Gates, spend hundreds of millions of dollars for medical and educational projects in poor developing countries every year. They spend the money they earned ― despite criticism that it came from a monopoly ― in meaningful ways.
When people make money, they should concentrate all their efforts on making a profit.
In business, we should not apply the standard of good or evil, because making profits should be the first priority in business.
Knowing all that, we still find people who try to apply such wrong standards in our society.
Recently, we heard that Kookmin Bank and Shinhan Bank, the top two banks in Korea, are not good financial companies because they apply lower interest rates than other banks on salary workers’ accounts.
This criticism has to do with these banks’ practice of paying almost no interest to salary workers’ accounts, to which their monthly wages are transferred automatically from company accounts.
As the two banks pay an interest rate of 0.1 to 0.2 percent per year, it is almost like keeping those accounts at their bank without paying interest.
If the banks lend the money in the accounts of salaried workers to businesses at an interest rate of 6 to 7 percent per year, it would be quite a profitable business for the banks.
This why even the securities companies are eager to induce these workers to open salary accounts with them.
The banks have started to respond to the securities companies’ inducement activity.
Now, Hana Bank and Woori Bank are trying hard to retain the accounts of salary workers by offering to pay 4 to 5 percent interest if the balances in the accounts exceed certain levels.
Some people call banks that apply high interest rates to the salary accounts of workers good banks.
They criticize Kookmin and Shinhan banks for not applying higher interest rates to salary accounts, saying they are bad banks.
People are highly critical, saying that the two leading banks are making money by lending businesses funds accumulated through the salaries of wage earners deposited with them.
The basic business of banking institutions is borrowing money at low interest rates and lending it at high rates.
Criticizing them for making profits from money lending is tantamount to asking banks to shut down. No one has the right to demand that banks, which are allowed to engage in the money-lending business, stop taking profits from the balance between the rates of deposit and lending.
There is a very simple way to respond to a bank’s profiteering from salary accounts. That is by closing your account at that bank and opening another at a bank that pays a higher interest for your salary account.
That is a legitimate means of punishment that consumers can take against a bad bank. If the banks realize that they are losing business due to the closing of salary accounts, they will take necessary actions to keep the salary accounts of workers at their banks. They know what to do to make money.
After all, if a monk does not like a temple, he should leave that temple. If there is no other temple to go to, it will be a problem for the monk, but there are so many temples scattered around us nowadays.
There is no need to preach to a bad bank to become a good bank. You can leave the bank without a word.
That is action that an economics-savvy customer can take.

*The writer is the business news editor of the JoongAng Ilbo.

by Shim Shang-bok