[Opinion] Economy Education

The CEO seat of company H has been transferred from the founding owner to the founding owner’s brother, from his nephew to his son. In contrast, company Y is well known for being one of the first in Korea to introduce and establish a professional manager system. If the textbooks on the economy are true, if professional management is more effective than ownership systems, then Y should be more successful than H. However, the reality is different. Established 78 years ago, Y posted sales of 285 billion won, with a net profit of 45.7 billion won in 2002. With a 37-year history, less than half of that of Y, H sold 26.3369 trillion won worth of cars to post a net profit of 1.4436 trillion won.

Y is run under slogans that strongly advocate public good such as “faithful tax payment” and “return company profits to society.” On the other hand, H proclaims the goal of becoming “the world’s top automobile company,” suggesting that it strongly looks after the company’s own interests. Does this mean that Y contributes more to the nation’s economy than H? While Y handled few exports, H earned 12.1824 trillion won in exports during 2002. H is also paying 539.9 billion won in corporate tax, 12 times more than Y. H’s contribution is also prominent in job creation, the “best welfare.” H has 45 times the number of employees than Y. The jobs created by H’s suppliers amount to over 800,000.

Leaders of the five major economic groups, including Chairman Park Yong-sung of the Korea Chamber of Commerce & Industry, gave a special lecture on economy education to 200 middle and high school teachers the day before yesterday. Chairman Park emphasized that “You must not teach that a company’s goal is to return its profits to society. Generating added value is how a company contributes to society.” He also noted that there were 64 points in elementary to high school economy textbooks that could provide faulty economic knowledge.

Y is an indispensable company. It well deserves praise. However, if the same yardstick of Y was applied to all corporations, unnecessary regulations would be set in place, hampering business. The same goes for the general tendency to think negatively of business diversification. If all companies only pursued specialization, the top semiconductor businesses or shipbuilding businesses would not have been able to take root in Korea. Even the Samsung Group may have merely been the world’s top textile company or sugar company at best.

Editorial Writer Cheon Gwang-am, iam@donga.com