[Viewpoint] ‘Equality’ a double-edged sword

Economic democratization has become a new buzzword among politicians, who are selling it as a panacea for a whole spectrum of economic problems ahead of this year’s presidential campaign, including easing inequality, finding ways to generate new growth engines and moving to ramp up welfare benefits.

Even though it remains doubtful whether such a remedy really exists, society has tacitly agreed to play along, because at least somebody, somewhere is trying to find a credible answer to the mounting economic challenges we face.

However, democratization - whether it means greater opportunities, justice, equality or freedom ? should be applied in accordance with the market economy’s rules of fair play.

Who would oppose the admirable idea of leveling the playing field so that everyone gets a fair chance to compete on an equal footing?

No wonder the concept is an easy sell.

As the Occupy Wall Street movement and its spin-offs have shown, we now live in an age of rage.

As anger against the mega-rich grows, Koreans have begun to turn against the chaebol like never before.

In fact, Koreans rank first globally in terms of their resentment of wealthy corporations and second when it comes to moaning about income inequality, surveys show.

Dissatisfaction at the gap between large companies and SMEs, capital income vs. labor income, and permanent vs. non-permanent work, is also prevalent.

Some fret that polarization is deepening, and has become entrenched. They believe the poor will survive by handing down their homes from one generation to the next, and they blame social inequality on unfair rules.

One survey showed that half of the population believes the gap between the haves and have-nots is so wide that people on the lower rungs of the ladder are doomed to stay there.

All of this resentment finds a natural vent in the form of chaebol owners, people who run large companies and, in general, the powerful and wealthy.

The fury directed at society’s elite has never been this potent, nor the longing for equality so distilled. Few pay attention to the argument that the country’s income gap is not as serious as those in many other countries, and that corporate governance in Korea is generally praised by the international community.

Conservative politicians are as avid champions of economic democratization as their liberal counterparts.

Park Geun-hye of the ruling Saenuri Party, who recently announced her bid to run for the presidential election in December, has also named economic democratization as a top priority of her campaign platform.

But it is not clear if she has studied the concept thoroughly.

The liberal camp also insists that economic democratization is required for greater equality.

But in the end, they would have to change the rules in order to uphold the basic incompatibility of democracy and capitalism.

Park, while heading the emergency leadership council of the ruling party ahead of last year’s legislative elections, pledged to concoct a framework giving everyone a fair share of opportunities in the market.

In announcing her presidential bid, she expounded on this with a promise to “revive dreams of the economically weak through democratization.”

What she is suggesting is that she will give the Davids of society more chances to challenge the Goliaths.

But to make the fight “fair,” the smaller players will have to bulk up in weight, or the larger party forced to fight in a straitjacket.

Couched in the terms of professional boxing, fighters are often encouraged to challenge beyond their weight division.

However, this can prove to be a risky and even fatal proposal, which is why politicians prefer the idea of imposing disadvantages on more experienced or simply bigger players. Contests featuring such handicaps also tend to draw more attention.

This is why politicians are trotting out various regulations to chain and constrain large conglomerates by capping their cross-share investments, segregating industrial and financial capital, and limiting their access to business segments where mid- and small-sized players are strong.

At this rate, lawmakers will eventually try to start meddling with corporate governance and decision-making by allowing workers to participate in management. This would cause society to become dangerously, and perhaps irrevocably, divided.

Economic democratization aims to generate new growth, but it could actually undermine existing growth engines and wipe out the seeds of innovation.

No matter how good it sounds on paper, we should think carefully about what means we employ to achieve a desired end and whether the sacrifices entailed can be justified.

We need economic democratization to revive the economy, not kill it.

We do not need an impassioned leader in this age of rage, but rather one who can keep a cool head when all those around him are losing theirs.

Only then will he or she be able to deliver what really is best for the people.

*The author is an editorial writer of the JoongAng Ilbo.
By Kim Yeong-ook