Misinformation reigns supreme
The author is an editorial writer at the JoongAng Ilbo.
The British 1865 Locomotive Act (Red Flag Act), which required a man carrying a red flag to walk in front of a moving vehicle, is often cited as an example of how draconian regulations can hurt industries to emphasize the need for deregulation in Korea.
It is often mentioned in the media and newspapers, as well as by the president and government officials. Did 19th-century regulations really make Britain lag behind the United States, Germany, Japan and Korea in automaking? What, then, explains the distinguished British brands — Rolls Royce, Bentley, Aston Martin, Land Rover, Jaguar and Mini?
It is true that the British automobile industry has crashed. The only car brand that remains a British entity is Aston Martin. Others have been sold to Volkswagen and BMW of Germany, and Tata Motors of India. But the doom cannot be entirely blamed on the Red Flag Act. Britain remained the No. 2 carmaker until the ’50s. It began to drop out of the race because of the rise of Germany, France and Japan in the ’60s. Their respective automobile industries flourished with strong backing from their governments following World War II. State-sponsorship accelerated the growth of their car industries.
In the meantime, British automakers were left to compete on their own. The British government stepped in to arrange mergers and nationalization from the ’70s but could not stop the downfall. It was not excess regulation, but policy and negligence that resulted in the collapse of Britain’s auto industry.
Tada is often touted as an exemplary ride-sharing model that has all the ride-sharing champions coming to its defense against Korea’s traditional taxi industry. Yet Tada vans can hardly fall under the sharing banner.
The argument that our income gap is the main cause of social inequality is equally misleading. In his book “Why We Have to Rage,” Jang Ha-sung — former policy chief for President Moon Jae-in and current ambassador to China — claimed that the majority of people in Korea live in economic hardship because of a gap in wages or income. He also said that income has become unequal because of employment inequality. The theory that Korea’s wealth inequality stems from wage disparity — not property ownership — was the basis for the liberal administration’s income-led growth policy.
Yet that is hard to comprehend. Except for a few professions — like medicine, law or entertainment — most wealthy Koreans are either born rich or accumulated wealth through a jump in stock prices or real estate assets. Jang, the former Blue House policy chief, claimed that assets do not entirely speak for income in Korea, where homes make up the bulk of assets. But what, then, about the landlords who live off expensive rents from buildings, and what about the countless shareholders who enjoy generous dividend payouts?
Many scholars have lately spoken up to argue against Jang’s theory. According to a study by Jeong Jun-ho, a real estate professor at Kangwon National University, the gap in disposable income has narrowed over recent years while the disparity in net assets has widened. His findings suggest that disproportionate asset wealth is a fundamental reason for economic inequality. Besides, asset inequality would become a fixture if everyone made similar earnings, as envisioned by Jang.
Too many misleading arguments are being spread. Even if they are incorrect, they claim to be right if they are made by people on the same side — and wrong if they are made by the opposition side. Instead of judging what is right or what is wrong, judging what is good or what is bad matters more in Korea: it is why there is so much nonsense here today.
JoongAng Ilbo, June 13, Page 29