Chaebol-bashing not the solution, says economist

Home > Business > Economy

print dictionary print

Chaebol-bashing not the solution, says economist


Chang Ha-joon

Economic democratization, a hot-button issue in Korean society, should be considered a separate matter from the need to reform chaebol, according to Chang Ha-joon, a professor of economics at Cambridge University who is known for espousing his anti-neoliberalist views.

Chang was speaking to scores of CEOS as a guest lecturer at Samsung’s headquarters in southern Seoul’s Seocho District yesterday. The meeting, a regular event for Samsung CEOs, sees experts and academics from various fields invited to give their views on a range of topics.

Chang chose the broad theme of “the direction the Korean economy should take.”

“I don’t agree with those who argue that economic democratization is equal to reforming chaebol by relying on shareholder capitalism,” he said, adding that “fostering a welfare-centered country” was much more important. He said the idea of economic democratization, a recently coined term, has arisen from the perception that conglomerates could not have grown without the support and sacrifice of citizens and smaller firms.

Liberal politicians and civic groups have become more vocal lately in calling to impose tighter controls on the governance structure of large conglomerates amid their growing influence. Among other demands, they advocate banning the circular shareholding system and cross-investment between commerce and finance. They also support an idea billed as shareholder capitalism, a doctrine that places shareholders’ dividends as the top goal of management, rather than the company’s profit.

Despite being labeled as a liberal, Chang showed yesterday that his views differ from those held by most other liberal economists.

“There are some criticisms against chaebol diversifying their business portfolios, but such a phenomenon can be found in all advanced capitalist countries,” he said. “If they were supposed to run only their core businesses, Samsung should still be producing textiles and sugar, while Hyundai should be leveling the ground for construction.”

The 48-year-old described conglomerates’ controversial cross-shareholding system as an “inevitable choice” in the past, because the government at the time prohibited the establishment of holding companies.

The Korean-born academic has written several provocatively titled books, including “Bad Samaritans” and “23 Things They Don’t Tell You About Capitalism.” In them, he famously argues that today’s economic powers became rich on the back of protectionism.

By Seo Ji-eun []

More in Economy

Gangbuk beats Gangnam

600,000 jobs added last year, but many public or welfare

Consumer price gains pick up speed in November

Life expectancy up 7 months for Koreans born in 2019

OECD knocks tenth of a point off Korea's 2020 growth

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now