The creative economy fiction

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The creative economy fiction

President Park Geun-hye signature economic policy, the creating of a so-called creative economy, was a kind of super-supermarket. It claimed a very wide range, but it was hard to know exactly what it sold. Some said the term was borrowed from “creative destruction” coined by Austrian-American economist Joseph Schumpeter.

Whatever the origin of the term, it could have been instrumental in building the reputation of Cha Eun-taek, a creative director and favorite pal of the president’s controversial friend Choi Soon-sil. He spearheaded many of the state-sponsored projects under the rubric of creative economy and make it easy for former vice minister of culture Kim Chong to go around serving and collecting money for Choi.

Creativity became the slogan or label for every state project. Universities made sure the phrase was included in research titles to get government sponsorships and endorsements.

What was suspected from the start, and is certain now, is that the concept existed in rhetoric alone. It was a cover story for a president who ran the state in the most uncreative and outdated way possible. We should have sensed something was wrong by the scenes of endless cabinet meetings chaired by the president on the theme of promoting a creative economy.

In fact, Park’s ministers and members of a special committee invited to design an economy oriented towards creativity and innovation were busy jotting down every word the president said instead of having lively, open discussions. The president must have thought brilliant ideas could come out a court so obviously enthralled by the genius of its monarch. Obviously she was not aware that ingenuity is bred in an culture of equality, not a rigid hierarchy of a very old-fashioned kind.

The president wanted immediate results — demanded them, in fact. But control kills creativity. Conditioning corporate behavior through rewards and punishments to get desired results would only make companies work to please the government instead of trying to come up with their own ways to innovate.

Economic inefficacy stems from such state control. Companies spend their resources to collude with politicians. The economy loses its drive. This is why the country’s per capita income has been stuck in the bottleneck of $20,000 for so long.

Peter Wiles, an unorthodox British economist famous for his study of communist economies, asked me in the early 1990s how it was possible that South Korea, a capitalist economy, was able to control the service fees in public baths and barber’s shops, which even the Soviets could not do. I told him that Seoul makes a rigid law, and the president decides what companies to pardon or not. Companies then do whatever they are told.

When economic growth was possible through massive infrastructure spending and cheap labor, a domineering dictator could achieve an end for the public interest. President Park Chung Hee did that to drive the industrialization of the 1970s. But when the economy no longer runs purely on resources, innovation becomes the only means to drive growth. The Park Chung Hee model became less relevant when the economy had to shift to innovation.

Fairness and freedom breed innovation. When a livelihood hinges on one person, the other party simply has to please that person. The market economy model succeeded because the feudal order collapsed. People no longer needed to kowtow to a certain person or group as they could make a living by selling products to greater masses.

The new order spurred inventions and productivity. The growth model in Korea was incubated on a strange mix of horizontal capitalism and vertical nationalism. The Korean economy cannot move any further if it does not do away with its outdated top-down model. Growth may stop here without us ever reaching the $30,000 per capita income level.

The leadership style must be fixed first. The country has no future if its leader takes pleasure in lining up bureaucrats and supporters and make cabinet members take notes on whatever he or she says. A person with a fair and open perspective and someone who prizes expertise in appointing officials instead of their loyalty must become the next leader.

William Baumol, a professor at New York University’s Stern School of Business, said there are many brilliant entrepreneurs in America because the elementary schools taught poorly. American schools encouraged original and creative thinking instead of teaching students to get good grades.

Politics and classrooms are not the only areas that need to change in Korea. The public and corporate sector must build an open culture that respects the opinions of others. Creativity grows in a liberal environment.

Translation by the Korea JoongAng Daily staff.

JoongAng Ilbo, Dec. 15 Page 35
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