An obscure middle of the road
The author is the editor of economic news at the JoongAng Ilbo.
I had interviewed Kim Sang-jo, who headed a civic activist group called the Solidarity for Economic Reform ahead of the presidential election in 2012. The phrase “economic democratization,” a call for more fairness in the economy, had been a dominant campaign platform for both conservative and liberal candidates.
By the minimum principle in methodology, he suggested that reforms should start incrementally from the area where all members of our society agree on the need for changes. Since everyone was chanting “economic democratization” at the time, Kim — an outspoken champion of chaebol reforms — felt himself pedestrian. He pointed out that metadiscourse alone could not change the world and that Korean policymakers lacked the ability to make and execute specific actions.
The progressive economist also stressed respect for constitutionalism, a term favored by the conservatives. “There should be a strict principle that the society should reward those who faithfully abide by the rules and punish those who disobey them out of selfishness. Without such principles, no reforms and progress can be made,” he said.
Two weeks ago, I interviewed the same man, who has been serving as the policy chief for President Moon Jae-in for nearly seven months. His speech was as eloquent and smart as ever, but did not show the same candor as in the past. Of course, a speech as the head of a civic group and as a presidential policy chief should not be the same. He defended government policies, mostly devoted to real estate measures.
During the interview, I was curious if he believed the Moon administration was keeping to the “minimum principle” he had championed. I believe the government has stepped out of line in economic policies through steep increases in the minimum wage, forced conversion of part-time workers to permanent status and a universal cutback in working hours.
So why were the government’s policies so “pro-union?” I asked. He claimed that the Moon administration “aspires to establish a society appreciating labor. It is pro-labor, not pro-union. It is pro-corporation, but not pro-large-company.”
Despite his remarks, the government is seen as being overly attached to the militant Korean Confederation of Trade Unions. Why is that? Let me just quote former Labor Minister Kim Dae-hwan, who argued that the government must play the mediator in labor-management affairs and government policies should be directed to help the ordinary workers, and not to please the union leadership.
Kim Sang-jo went on to say that his job as presidential policy chief is broad, yet he cannot take responsibility for everything. As the head of the Fair Trade Commission before taking the job at the Blue House, he did his best to fulfill the role of the antitrust agency and now he was doing the same as the policy chief.
Past senior policymakers on the economy have made similar complaints that economic policies fall behind the importance given to political and civil affairs. Top economic bureaucrats must mainly settle for a supplementary role when they join the Blue House.
Things are no different in the incumbent government. The “reasonability of an economist” that Kim mentioned would be limited. The government has changed the rhetoric of its slogan from “income-led growth” to “inclusive growth.” But its policies are little changed. The government has moderated its pace of hikes to the minimum wage and taken supplementary measures to make up for policy failures in its relentless push for a cutback in our working hours.
Of course, the government needs to lessen the living cost for the people and expand social security. But the government’s economic policies are attacked because they go directly against the market. An economist surely should know this.
JoongAng Ilbo, Jan. 28, Page 27
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