Innovation, Economy and Social Democratic Process (혁신과 경제, 민주주의)

How have regime changes in Korea’s political landscape affected Korea’s economic path along with its innovation apparatus and the social democratic process?

Are they more of the same: quasi-democratic corporate capitalist regime stemming from the kletocracy?

Those are the fundamental questions to ask.

I have stressed that the economic growth model Korea has pursued was flawed from the start because it is at the mercy of forces beyond their control.  The same is true for Japan and China.  Their mercantilist stance has fundamental flaws.  One has to beware the long-term tendencies of this approach.

Korea should have converted its economy to a more balanced, sustainable economy and strengthened economic fundamentals since the 1997 financial crisis because it was a blessing in disguise.  Instead, they have engaged in the financialization of the economy, blowing asset bubbles, while its export engine was working due to global boom.

Under the Park Chunghee regime, civil liberty was repressed and oligarchs formed although Korea advanced its economy rapidly at this stage.  At least, the state imposed heavy regulation on finance in this period.

A sudden market liberalization and globalization drive without the proper regulatory structure under the Kim Youngsam administration triggered the 1997 financial crisis largely due to insolvent banks and overleveraged chaebols.

During the Kim Daejung regime, further adoption of the so-called free market principles as a part of the austerity package in the wake of the 1997 crisis continued the malicious trends by exposing the nation to destructive economic forces.  In a sense, a different form of oppression began.

Nations differ in their economic and social democratic success due to their different institutional arrangements including economic, political, and academic institutions, the rules and regulations.  Even if a nation has a free enterprise system, it has to be overseen by the regulatory structure.  It has to educate, empower, and enrich a large class of people to provide the checks and balances.  This is the core of the social democratic process and why the role of education and mass media gets so important.  Once these processes and systems are in place, individual rights, civil liberty, and distribution of wealth and opportunity (education, free economic choices, the provision of public services, etc.) can be nurtured.  In this way, innovation can be a constructive force for generating wealth for the most people, not a means of implementation for the political expediency.  It will create incentives for citizens to gain necessary skills, make investments, and pursue technological innovation.