Game of monopoly
The author is a writer and publisher of children journal Goreya.
Class struggle may be less debated these days, but is nevertheless raised by some. Investor and billionaire Warrant Buffet is one. “There is class warfare all right, but it’s my class, the rich class, that is making war and we’re winning,” he said. Class struggle exists in modern society, but we are less aware of it as one side has always been triumphant and undefeatable.
“My class” as referred by Buffet is the super-rich, or 1 percent in the top income class. Also, the entire working class is no longer struggling or dying as the top 20 percent of them are a different class. In Korea, the 300 biggest companies pay employees 80 million won ($71,365) a year on average. Of them, 30 companies pay over 100 million won. The annual pay is similar at public corporations. Their fat pay and job security causes imbalance with most other lower-paying and less-secure jobs.
That is the results of the so-called “socialization of capital” for more than two decades. Since Adam Smith famously wrote of humanity’s “propensity to truck, barter and exchange on thing for another,” economists have lauded free market. But the free market that opened at the onset of capitalism scared capitalists, which triggered the socialization of capital to address the dangers and insecurity posed by the market. Corporations, or companies limited by shares, were the first byproduct. They earned more than private enterprises thanks to their bigger scale and capital, while spreading the market danger.
But capital became dominated by monopolies in the late 19th century. Monopoly capital evolved into state entities after the Great Depression in the 1930s. The state came to control finance, monetary and economic policies to back centralization of capital and industries. Capitalism now cannot survive outside a state. Keynesianism and neoliberalism are just two variations of the movement. As it turned out, a neoliberal government championing a smaller role of a state was more eager to support dominant capital in the face of a crisis.
In a genuine context, the free market remains solely for the self-employed or mom-and-pop stores that run on cheap family labor to survive and compete. As Alfred Chandler wrote, the “Invisible hand” is replaced by “visible hands” in modern capitalism. In Korea, chaebol, or monopoly capital backed by the state, dominates over smaller capital in the value chain and has achieved a “planned economy” to substantial scale. Under such structure, discrepancies of income and living standards of workers on the payroll of dominant capital, large companies and partnering public sectors and the rest workers are inevitable.
The top quintile, whether they are blue-color or white-collar workers, make up the voting base for the ruling Democratic Party (DP). Many had been supporters of the progressive party, but liberal politics have become meaningless for the class whose attention has shifted to stock and real estate. Their flight has ruined liberal politics. The DP’s only hope is that they do not back the conservative People Power Party (PPP) by habit. Die-hard supporters of former justice minister Cho Kuk could think differently, but the fact does not change.
The lower 80 percent in terms of income, including small self-employed, cannot afford the luxury of engaging in politics as they are too busy surviving. The division in the working class translates into the division in education. Economic power defines the competitiveness of their children in entering college. People in the working class have given up hope even as they do whatever they can to support their children. They send kids to after-school academies, but the tutoring hardly is in the same league attended by children of the better-off.
Covid-19 has been more brutal to 80 percent of the population. The better-off 20 percent dominate the internet and social media. They leisurely wage a political debate over the DP and PPP or the liberals versus the conservatives. Politics must reflect the general thoughts of members of a society. We cannot complain that politics are a wreck. It may be better for us to attribute it to our inability to see the reality or turn a blind eye to the essence of problems.
Translation by the Korea JoongAng Daily staff.