Developmental Liberalism in South Korea by Kyung-Sup Chang

Author:Kyung-Sup Chang
Language: eng
Format: epub
ISBN: 9783030145767
Publisher: Springer International Publishing

Fig. 5.2Monthly wage by employment status (in 10,000 won). (Source: Created from data in Kim, Yu-seon (2014))

The structural disenfranchisement of an increasing proportion of ordinary citizens from the mainstream economy and their concomitant impoverishment are far from a unique phenomenon limited to South Koreans. Post-industrial societies in various regions have commonly been confronted with similar dilemmas. Nonetheless, the social costs of the South Korean restructuring have been particularly heavy due to, among others, the following reasons.

First, the suddenness, rapidity, and intensity of South Korea’s restructuring have been unparalleled even when compared with the recent experiences of other East Asian economies, not to mention the earlier experiences of Latin American economies (Chang, K. 1999b). On the eve of the so-called IMF crisis, both South Korean business and workers were still celebrating an economic boom fueled by sustained trade growth as well as debt-based (over)investment. Politically, the then incumbent president, Kim Young-Sam—a long-time political foe to Park Chung-Hee—wished to outperform Park developmentally by hastily adopting arbitrary measures for instant economic boosting. It took only one winter for the South Korean economy to diametrically turn around for unprecedented structural adjustments and financial austerities dictated by the International Monetary Fund (IMF) on behalf of global finance. The South Korean government would not remain simply dictated by outsiders. It immediately embarked on its own, mostly neoliberal, reforms such as politically coordinated labor reshuffling, administratively commanded industrial sectoral restructuring, unbound liberalization of capital markets, encouragement of overseas relocation or expansion of industrial production, and so forth. It took merely one year or so for the South Korean economy to reassume its vitality, however, of a fundamentally changed socioeconomic nature. Kim Dae-Jung, who had been elected into presidency as a troubleshooter in part thanks to the national financial crisis itself, ended up becoming earnestly praised by Wall Street, but harshly criticized as “the IMF’s man in Seoul” by Bruce Cumings (1998). The country’s developmental capitalism abruptly shed its socially inclusionary nature, leaving a major proportion of current and future citizens outside the mainstream industrial economy or the regular employment system (see Chaps. 3 and 4 for more details).

Second, as an inevitable trend, poverty has seriously intensified both in absolute and relative terms, but the notoriously ungenerous and underinstitutionalized social security system—even worrying the United Nations repeatedly—has failed to alleviate the inequalities and destitution meaningfully.7 South Koreans’ cherished “developmental citizenship” (Chang 2012a, b; see Chap. 4) based upon sustained full employment implicated a social governance principle diametrically opposite to the “decommodification of labor” in social democracy (Esping-Andersen 1990)—namely, livelihood entirely based upon secure market wage. According to Ku Inhoe’s (2006) calculation, as of 2000, the country’s Gini index changed, by taxes and pubic transfers, from 3.8 in market income only to 3.4 in disposable income. This indicated the most insignificant public correction to inequalities among all OECD countries. Moreover, as the country’s Continental European-style social security system used to be predicated on stable regular employment, the rapid and massive disappearance of regular jobs has only helped aggravate the hardships of the economically precarious citizens (see Chap.

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