[Outlook]Invisible damage

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[Outlook]Invisible damage

It is dispiriting to write during today’s times. A man of law, principle and morals has drastically changed and is about to break them all. What difference could I make by pouring my words into the dark sea of power and ambition? Nevertheless, a writer must keep writing.
We all dream about establishing a country in which everyone is happy and prosperous. The election is meant to choose the best candidate to do that job. Presidential hopefuls have presented goals such as “Lower, Relax and Reestablish” ― meaning lower taxes, relax regulations and reestablish law and order ― as well as “747,” aiming at 7 percent economic growth to attain a national income of $40,000 per capita and become the seventh-largest economy in the world.
However, the problem is the methodology. When asked how they would accomplish those visions, the candidates give ambiguous answers. All they say is, “Trust me with the economy,” or “Corporations come first.” People are not very interested in their goals anymore. The center of attention is now focused on who has the better poll numbers and who will give up. An election that resembles a horse race is far from a positive national development.
Not too long ago, I said that becoming a first-class nation is like riding in first class in an airplane or a train together. When a country is first-class, every citizen is a first-class passenger. That’s why we must create a first-class nation.
By putting in the same amount of labor, you can make five times more in salary in the United States than in Mexico. What makes the difference?
The World Bank has published a report titled “Where Is the Wealth of Nations?” on this matter. The report finds that the nation’s wealth makes the difference. The United States is a wealthier nation than Mexico, therefore, its people are paid higher wages.
Wealth means capital. Capital enhances productivity, and with the same effort, you can be more productive and get paid more. The brilliance of this report is found in its refreshing approach to capital.
There are three kinds of capital: natural capital, such as land, oil and natural gas; produced capital, such as machines, equipment and social overhead capital; and intangible capital.
To become a developed nation, the most important kind of capital is the third kind, intangible.
In a developed nation, natural capital makes up 1 to 3 percent of a nation’s wealth while produced capital such as roads, harbors and machines take up about 17 percent. The rest, about 80 percent, is intangible capital.
The things that make up intangible capital include trust among the members of the society, an efficient legal system, law and order, clear private property rights, an efficient government and a transparent governing structure. These values are invisible and intangible, but they enhance productivity and create a nation’s wealth. No matter how much oil a country has, no matter how large its diamond mines, even with paved roads throughout the countryside and a grand canal across it, a country can never become a developed nation without intangible capital. The World Bank defines intangible capital as the wealth of the 21st century.
If we fail to become a developed nation soon, we will get squeezed between China and Japan. Therefore, Korea must have a 21st century strategy to build its wealth. However, we still remain in the tangible capital of the last century. The “innovative city” promoted by the Roh Moo-hyun administration and Lee Myung-bak’s promise to build a grand canal are the tangible projects. Discussion about intangible capital, however, gets neglected.
Moreover, the intangible capital that we have already accumulated gets damaged every time there is a presidential election. Fair competition is the foundation of law and order.
How can we accomplish law and order when the rules of the game are not respected in elections? Ironically, the people taking the lead in undermining law and order are former justices. President Roh broke up the Constitution, and Rhee In-jae refused to accept the party’s primary result and left it.
Now Lee Hoi-chang is about to break the rules of fair competition.
In a country where elite judges think lightly about the law, how can you force anyone to abide by it?
We must produce intangible capital. That’s why I find Lee Hoi-chang’s recent moves regrettable.

*The writer is the vice publisher and chief editor of the editorial page of the JoongAng Ilbo.

by Moon Chang-keuk

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