Mafioso, Big Business and the Financial Crisis by Ingyu Oh

Author:Ingyu Oh [Oh, Ingyu]
Language: eng
Format: epub
Tags: Social Science, General
ISBN: 9780429834288
Google: 9PiADwAAQBAJ
Publisher: Routledge
Published: 2018-12-21T04:50:29+00:00

Conclusion

The rise and growth of the South Korean chaebol was an individualistic reaction to state hostility during the military regimes. Chaebol owners turned out to be very weak and split in the face of threats of imprisonment by the military coup leaders, despite the fact that many of them were related to each other through marriages. Consequently, those individual chaebol owners who established new relationships with military leaders occupied central positions not only in their own chaebols but in the South Korean markets as well.

On the other hand, that the growth of the chaebol was possible under one of the most repressive military regimes is a remarkable fact in and of itself. Indeed, most capitalist economies under military dictatorship recorded failures in modern human history, as was the case in most of Latin American, African, and South Asian countries. Chaebol’s growth through diversification was a solution to state hostility, as the leaders of the mafioso state could not easily destroy big firms with many divisions (i.e., octopus). Those who could not get access to the mafia network and those who could not have access to various sources of capital that was necessary for the diversification of their corporations perished whenever new regimes appeared.

Since 1987, democratically elected South Korean presidents have tried to destroy the mafioso state and its relationship with the chaebol. However, the government’s efforts at dissolving, or at least, reducing the chaebol proved to be futile (see Chapter 6). Given the conditions of the development of the chaebol (i.e., the hostility of the state and distrust between the state and business), no one seems to know the answer as to how to relieve the state from day-to-day economic activities without halting the pace of economic growth. Although much more liberalized than before, the South Korean market is still dominated by the state. Labour unions are still suppressed by the state.

Having discussed at length the chaebol phenomenon — the rise and the current status of the chaebol, I move to a very different economic organization that grew out of the ashes of the Second World War in Japan — the keiretsu.

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