The paradox of affluence

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The paradox of affluence

Yeom Jae-ho
The author is an emeritus professor and former president of Korea University.

In his famous book “The Affluent Society” (1958), American economist John Kenneth Galbraith analyzed the contradictions of capitalist development. Capitalism enriches humanity thanks to its excellent efficiency and productivity, but encourages overconsumption via advertisements to help address the problem of having more supply than demand. But the low income class cannot buy much as it has weak purchasing power. A society may look affluent on the outside, but can possess worsening problems of unbalanced consumption and economic polarization.

In his book “The Price of Prosperity,” Todd G. Buchholz, a former professor of economics at Harvard University and former White House director of economic policy under President George W. Bush, also illustrates the paradox of affluence through the lens of world history. As the title of the book suggests, the more a country prospers, the more it loses patriotism and a sense of community.

The fall of the Roman Empire owed much to the luxurious lifestyle of aristocrats, but what about the collapse of Sparta? Prof. Buchholz attributes it to a sharp reduction of its population — up to 80 percent in the fourth century BC. The invincible Spartans were addicted to the spoils of war such as slaves and increasing wealth, but that led to low birthrates. If they had many children, they could not afford frequent travels or luxurious lifestyles, not to mention concerns about division of property. Sparta crumbled after its population precipitously declined to the point of being unable to maintain its military.

Generational conflict has reached a serious level in Korea. Pundits sarcastically say that people in their 60s and 70s lived in an underdeveloped country, people in their 40s and 50s in a developing country, and those in their 20s and 30s in a developed country. The first group were born in an impoverished country and worked and studied day and night to rise from the ruins of the Korean War and Japanese colonial rule. They believe they elevated the country into a top 10 global economy. The second group enjoyed the living standards of a developing country while longing for freedom and equality under the military dictatorship. The third group — the so-called MZ generation — not only enjoyed economic affluence their parents bequeathed them, but also are filled with confidence as members of a developed country. But they are the Me Generation and members of the YOLO club.

Korea is a country where more diverging generations than any other countries are living together after achieving rapid economic growth. It is not easy for them to understand one another. The division of our society by class, sex and region is being fueled by politicians seeking their own interest.

American society is no exception. Racial discrimination still festers across the country particularly after Donald Trump restricted immigration. As greedy capitalism, coupled with the digital transition, deepens the wealth gap, once-cherished values such as patriotism, protestant ethics, a sense of vocation, and republicanism are all dissipating. As pointed out by Harvard Prof. Robert Putnam in his book “Bowling Alone,” the selfie age of extreme individualism has arrived after the community collapsed. Instead, never-ending shooting sprees, refusals to accept election results, incitements by fake news, and extremist political fandoms are threatening the hard-earn democracy of America.

Japan also continues to dwindle after a “lost” 30 years. Many of the young generation are struggling to survive with minimum wage incomes from part-time jobs after losing hope in a better future. Unwilling to study abroad or work in other countries, they are satisfied with their paltry lives in Japan just like a frog in a well. Politicians have no interest in revamping societal systems except for extending their faction-based political power.

How should Koreans design the future of their country after a post-affluence era? Despite being a top 10 economy and a country with very high life expectancy, Korea faces the world’ highest poverty and suicide rates among senior citizens and the world’s lowest birthrate. What dreams can our political leaders implant in the hearts of the young? What can we expect from the previous Moon Jae-in administration, which was engrossed with depriving the prosecution of its investigative authority and giving it to the police, or the Yoon Suk-yeol administration, which was bent on creating a bureau aimed at controlling the mighty police?

We cannot sit on our hands after watching the concerning developments in America and Japan. Otherwise, we betray our ancestors’ endeavor to let their offspring taste a cornucopia they could not enjoy. Since the launch last month of the Presidential Committee of National Cohesion, the Yoon Suk-yeol administration must exert all efforts to come up new agendas to brace for the post-affluence era.
Translation by the Korea JoongAng Daily staff.
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