[Outlook]The moral foundation

Taking a look back at some of the highs and lows of the year 2008, the biggest event of the year was the turmoil in the world’s financial markets. A few days ago, a television program showed a bankrupt couple who slept curled up on the sofa and ate minimal amounts of bread and noodles. It also told the story of a father and his daughter who lived a miserable life in two tiny rooms. Their sad tales really drove home the fact that we are in a very difficult situation.

The history of Korea has been filled with many ups and downs. We stand here having survived countless crises. Therefore, we can rest assured that we will also find ways to overcome the obstacles that we now face. Every time we undergo troubled times, we should have the wisdom to gain valuable insights from the crisis.

So, what lessons should we learn from what we are going through now?

It is informative to take a detailed look at the rise and fall of strong nations. In order to become powerful, a nation first needs to achieve economic success. Once it does, it then seeks the firepower to protect its wealth.

However, what is more important is that a society has a sound moral foundation supporting the economic growth. If the moral power weakens, the ensuing economic collapse will lead to a nation’s fall.

There are historians who believe that the fall of the Roman Empire was mainly due to a sudden decline in the moral power supporting it.

Behind the prosperity of the Netherlands, which exercised hegemonic control over the world, was the spirit of the commercialists who did everything they could to sustain their reputation.

Many scholars believe that a major culprit behind the decline of the British Empire was the enfeeblement of the sound entrepreneurship that supported the British industrial society until the 1870s. With the drastic surge in foreign investment, the British economy finally degraded to the status of rentier state - meaning that a large part of their revenues came from renting out their resources.

Many people forecast that America will not continue to enjoy its hegemonic status, but that it will remain one of several strong nations after the current economic turmoil passes.

We may find that moral corruption was the culprit behind the decline of America, and thus a big factor in its social ruin. Credit appraisal companies ignored rules and regulations and undertook false examinations; chief executive officers of companies on the verge of bankruptcy received astronomical amounts of money; and Bernard Madoff, the former chairman of the Nasdaq stock market, is alleged to have cost investors upwards of $50 billion in a Ponzi scheme.

These are all prime examples of the weakening of the moral power that supported the economic prosperity of the world’s only superpower. Americans have great expectations that President-elect Obama will contribute to preventing the moral corruption of U.S. society.

How can we stop a society from straying from its foundation into the realm of greed, corruption and moral decay?

Numerous political philosophers, such as Montesquieu and descendents of the Puritan immigrants who founded American society, strove to disperse political power and draw institutional measures to ensure the mutual control of all organizations and economic transactions. America’s Constitution, its public institutions and its system of rules for monitoring financial transactions, were based on that same spirit.

However, such institutional tools failed to work properly, and global economic turmoil was the end result.

Such economic success is deeply related to the moral power of a society, and the successful operation of the institutional tools designed for mutual control and monitoring.

The same theory may be applied to Korea just as it can to the United States. So, where do we stand based on this perspective?

How strong is the moral power supporting our capitalist economy? Where does the moral authority come from? Does religion play an appropriate role? Does our society embrace widely divergent backgrounds and social classes? Isn’t it true that we generally accept the possibility of greed and corruption in our understanding of a capitalist market?

If the moral power of our society is weak, the system must be fixed. Does our system realize the principles of power dispersion, mutual control and monitoring? Korea should further promote the simultaneous development of democracy and a sound market economy by dispersing power and beefing up its monitoring mechanism. Looking back on the turbulence of the past year, we must answer these questions.

The writer is a professor of international politics at Seoul National University. Translation by the JoongAng Daily staff.

by Yoon Young-kwan