[Editorial] Time for Bureaucrats, Entrepreneurs, Scholars and the Public to Defend Free Market

The economy is in a crisis. The depth of the crisis is beyond the point where we may sit by and worry about an imminent collapse. Cynicism that when it goes down, the economy should go down thoroughly to teach us a lesson won’t help. How can we let it ruin after all the years and effort to build this country and this economy?

It is not time to worry or get cynical. It is time to act. If there is a force who opposes liberal democracy and the free-market economy and which attempts to change the political and economic system of the country, any advice will drop on its deaf ears. If there isn’t any force like that, the president, politicians, economic policymakers, bureaucrats, entrepreneurs, workers, scholars, researchers and the press should play their own role in turning around the economy and public livelihood.

Regarding this, Deputy Prime Minister and Minister of Finance and Economy Lee Hun-jai gives some framework when he said, “Although the state of affairs is difficult, the market economy must be well established to enliven the country. These days, I sometime doubt whether a free market economy is possible in Korea.” While he should be criticized for taking consultation fees from a bank, the problem at the core is the crisis of the free-market economy.

Why the free-market economy? This is because once it collapses, we will hardly survive in the global competition. The economy and public livelihood will also wither away. The free-market economy is the system designed to respect the autonomy and creativity of economic players, and to maximize efficiency and impartiality through competition mechanisms. Its basic tenets are that it is a valid idea to turn self interest into motivations for economic activity. While the state should correct any side effects, it claims that the pursuit of self interest should not be interrupted by social or political pressure in order to grow the economic pie larger for the majority of society.

We are witnessing the fact that capital, high-skilled labor, and state-of-the-art technology are looking for a way out of the country where confidence in the market economy are shaking. Korea moves away from the free market. China becomes more capitalistic. This is the reality. If China sniffed at the market economy, could it have surpassed Japan and Germany and trailed the U.S in purchasing power? What are they telling us when European socialist countries collapsed or stagnated after their policies emphasized distribution and public welfare, and then stuck to the realization of free market?

The business-friendly country, the investor-friendly country, about which the president often wants to talk, is the country where the principle of the free market economy is fully operational. Nevertheless, if national leaders incite anti-business anti-rich sentiment, if they insist private properties like houses are public goods, if they divide the country into those with vested interest and those without it, if they incite the hype to commandeering others’ for all as a good deed, the results will be self-evident. If tendencies to flout laws at will and to trample the free market tenets for popularity are dominating the politicians, the labor movement, and the legislature, the damage they can cause is also clear.

Is a run of anti-free market policies -- regulatory chains binding free competition, restrictions on entrepreneurial activities in the name of reform, demand for the public disclosure of the construction cost of apartments, and demand for the introduction of a wealth tax—bound to raise doubts and suspicions that Korea is veering away from the free-market economy? The economy is in a structural crisis, a stage in which topsy turvy fiscal measures or tax incentives can address the problems. When the market economy itself is shaking, any policymaker will be helplessly incompetent.

Then, the president should make clear about his posturing, and politicians should reveal their true [ideological] colors. Bureaucrats must not sit by and see how the wind blows. Industrialists must not just avoid the issue. Intellectuals must not remain silent. Everybody should stop being a wandering minstrel who talks superficially. We’d like to appeal to labor leaders to help enliven the economy for the lives of all workers. However, if they turn a deaf ear to us, the majority of workers who fall victim to their hard-line struggles and the unemployed who are deprived of their right to a job should oppose the incumbent labor movement. If we are haunted by a specter of ideology and shake and twist the state and economic system while the rest of the world rushes on, what will await us is a freefall.

Reporter Bae In-joon, injoon@donga.com