Too weak, no passion and so flexible

SHIN BOK-RYONG
The author is a former emeritus professor of history at Konkuk University.

The country faces a difficult situation. The news about Korea’s rise in the global export ranking does not impress merchants in the traditional market. When they say, “There was no better time for ordinary citizens than the era of Chun Doo Hwan’s presidency,” is it a blessing or a wake-up call? People’s livelihoods are all about how people feel, but I rarely see passion or fighting spirit from the government in worrying about the country.

This reminds me of the advice of Adam Smith (1723-1790). As a philosopher, he published “The Wealth of Nations” in 1776, but people around the world only talked about the “invisible hand” he had mentioned. So, Penguin Publishing Company deleted Chapter Two of Book Four, where the invisible hand is discussed, in the 1970 edition.

Later, a movement to reinterpret “The Wealth of Nations” started. Notable scholars are Paul Kennedy, who wrote “The Rise and Fall of the Great Powers” in 1987, and Gregory Mankiw, who wrote “Macroeconomics” in 2007. According to their interpretations, the core of “The Wealth of Nations” is low tax, stable government and predictable law. They seem not too hard for the government to implement. If so, why are we struggling so much now?

High taxes are the poison that kills capitalists’ desire to produce. But Korea still insists on the world’s highest inheritance tax rate of 50 percent on assets worth more than 3 billion won ($2.25 million). Tax cuts can increase productivity. The cost of social conflicts has fallen sharply from 27 percent of GDP in the past, but losses due to labor disputes have not decreased.

While the big opposition party may be an obstacle, the government can pursue reform with its executive power even without cooperation from the opposition. Why isn’t the world getting any better? In short, the tax is too high, the government is too weak and has no passion, and the standard of the law changes depending on who the offender is. At this rate, the future of the country is bleak.