A tale of two countries
Reading about the frenzy in the United States over a Powerball lottery that grew into the world’s biggest jackpot with a payout reaching $1.6 billion made me think of the word “mediocrity.” I was introduced to the magical and addictive world of Lotto by its pioneer in Korea, Kim Jung-tae, the first CEO of Kookmin Bank, which became the country’s largest retail bank after it merged with the state-invested Housing & Commercial Bank. Kim, who passed away two years ago, would hand out lottery tickets to banking beat journalists, chuckling that each was worth 100 million won ($82,700) or 1 billion won. Not surprisingly, none was ever worth anything. Kookmin Bank began selling Lotto tickets because of Kim’s keen interest.
But he did not like the tickets selling too much. He would often say, “Don’t hit a jackpot. Hit a half-pot.” He warned that too much was always bad. “If the payout goes up due to strong ticket sales, envy can turn to resentment. Then, it can turn dirty. In our society, it is best that everything goes just about halfway,” he said. He had hit the bull’s-eye on our inborn natures and quintessential obsession with “mediocrity.” He was also worried about jealousy from other banks and even the government after the popularity of the bank’s lottery tickets grew into a cultural phenomenon.
In Italian, lotto means luck. The first lottery involving public money is believed to be La Lotto de Firenze in Florence in 1530, a gimmick that quickly spread to other Italian cities. America’s Powerball and Korea’s Nanum Lotto both sprung from the ancient game. But the games of the two countries differ greatly. The payout scale, first of all, is incomparable. The Jan. 13 draw in the United States reached a historic high of $1.6 billion. That same week, the Korean winning number paid out 16.4 billion won. The U.S. jackpot does not have any cap: the money just piles up when there is no claimed winner. But in Korea, a rollover is allowed just twice. The odds in the American lottery are significantly lower. The chance of winning is 1 in 292,201,338. Winning is 584 times less likely than being struck by lightning, whose odds come in at around 1 in 500,000. Korea’s winning odds are 1 in 8,145,060.
At the beginning in 2002, the Korean lottery system was similar to America’s. Each game cost 2,000 won, and the prize money was rolled over up to five times. In just a couple of months, though, the system had to be modified. When the lottery had no winners for three consecutive drawings, there was an uproar about numbers being cooked up or winning tickets being distributed in certain areas.
The government and Kookmin Bank came under fire. The government immediately limited the rollover to two games. The price for each game was lowered to 1,000 won. Over the following 10 years, the prize money never reached the record of 83.5 billion won. Kookmin Bank handed over the license to NH Nonghyup Bank a few years later.
Kookmin Bank’s founder Kim was right. Korea’s lottery cannot flourish under the “mediocre” mindset of Koreans. Whether they admit it or not, Koreans simply hate anything beyond the ordinary. Elite high schools - designed to groom language and science wizards - flopped. The Korean banking sector still remains less developed than Uganda’s. Labor and financial reforms have made little progress - all because of Korea’s obsessive propensity to ordinariness. Korean companies cannot even employ a compensation system based on work performance because Koreans cannot tolerate anyone getting better treatment or being luckier than others.
As seen in the lottery, inequalities in the United States are much greater than in Korea. In America, the tickets are mostly bought by Tom, Dick and Harrys. People with less than a high school degree buy lottery tickets four times more than people with college degrees. Black Americans buy tickets five times more than whites. But in Korea, 55.3 percent of Lotto customers are from the high-income class earning more than 4 million won a month. The share of players with monthly incomes of less than 1.99 million won comes to just 5.9 percent.
The United States is back. It is regaining control over the global economy while the second-largest economy in the world, China, appears to be losing steam fast. Niall Ferguson, who in 2011 coined the portmanteau “Chimerica” - referring to the day when China and the United States would symbiotically and equally run the world - now believes such a future to be a chimera.
What is behind America’s resilience? Rewards for performance. According to Bloomberg, all 10 of the richest Americans earned their wealth. Koreans inherit it. Being poor and unfairly treated can be tolerated for the time being. But the despair of staying like this forever can never be tolerated in Korea. Koreans’ unrivalled obsession with averageness may be just another name for despair.
JoongAng Ilbo, Jan. 28, Page 30
*The author is an editorial writer of the JoongAng Ilbo.
by Yi Jung-jae