Dangers of centralized control

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Dangers of centralized control

Kim Byung-yeon
The author, a professor of economics, is the director of the Institute of the National Future Strategy at Seoul National University.

János Kornai, a Hungarian economist and emeritus professor at Harvard University, had been a top expert in socialist economies. He coined the term “shortage economy” in planned economies, reasoning that the excess concentration of government power leads to supply shortages and stagnation in technological development. Since the government pressures enterprises to achieve their target output, they are only interested in having enough supplies for output and have less interest in innovation. He settled in the U.S. after leaving his country at his mid-50s after working as a visiting professor at the Institute of Advance Study at Princeton University. Even as the institute paid for his research, it had not set a timetable for the progress and completion or specified any obligation to deliver the results in the contract. Such liberalism contrasted with his home, where research came under strict scrutiny and guidelines for petty reward. Envious of the liberal environment for research in America, he naturally grabbed the offer from Harvard University.

Sadly, Korea does not offer such appeal to people from overseas. A professor at a foreign university has recently given up a guest research offer at Seoul National University during the summer break. The admission required 12 types of documents according to the rules of public institutions. The files included under-and-post graduate degrees as well as an agreement to access to sex crime record and completion of gender equality education. His resume had been enough for him to apply for a professor job in the U.S.

The scholar expressed respect for the patience of Korean professors living with such an abundance of regulations. Korean universities are as strict with foreign nationals in documental procedures in hiring professors. Even after landing a professor job, he or she must receive gender equality and civil rights education each year. To become eligible to receive research subsidy, completion of research ethics education is also a must. There is no research whether these programs prove to be effective as designed.
During the regular audit of Seoul National University in the second half last year, the Ministry of Education required all professors to submit roll records of all of their lectures over the past three years. Those who did not fail students who had missed more than one third of their classes had to explain why. Lecturers including myself were appalled by the request. We had been required to check attendance for every class and keep the roll books for three years and reflect them in grading. Such strict and uniform auditing hampers creative and critical thinking, which is the core of higher education. No country can be innovative if nationalism and regulation dominate. Without innovation, a country is doomed. But Korea is walking such a path.

What had been worse than income-led growth under the previous government and National Assembly was regulatory excess. In the wake of a major issue, the National Assembly and government added new laws or regulations. In line with the growth of regulations, government employees also increased. When private-sector jobs shrank due to a steep raise in the minimum wage, the previous government ramped up public-sector jobs to make employment data look better. It did not stop to deliberate on balancing fairness and efficiency. The legislature turned into a factory of laws as legislator performance is rated by the number of bills they motion. The regulatory buildup has come to ruin universities, squeeze companies and choke the society. The ills of over-concentration of public power that had been singled out by Kornai as the culprit of the downfall in command economies of the Soviet bloc are evident in Korea.

Socialism ran on regulations and surveillance. Individuals, institutions and companies were under constant oversight and control. I had been shocked by a long list of regulatory regulations posted at the entrance of the residential building I stayed in Russia in the early 1990s. There was even a rule on the use of a certain carpet sanitized by a certain disinfectant at every hospital entrance. The law stayed intact even when the disinfectant and carpet were not produced in Russia. The central bank’s duty was to keep watch on all spending by companies. But laws and rules only increased, raising government control and fanning corruption to avoid it. Bribes became a lubricant to the society. Due to the top-down hierarchy, individuals and companies moved passively. Creative thinking and innovation could not be expected from such a society. In 1987, 70 years after the Socialist Revolution, Soviets output was one-fourth of that in the U.S.

The Stalin specter looms over university campuses and industrial sites in Korea. According to TMF Group’s Global Business Complexity Index of 2021, Korea ranked 11, behind China at 12. At this rate, universities will perish and companies will lose dynamics.

Korea’s hard-won freedom and democracy must not yield to nationalism.
Translation by the Korea JoongAng Daily staff.
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