Government’s Four Major Reformative Laws Dampen Enterprises’ Spirits

Experts have concluded that the so-called “four major reformative laws” and the revision of the Fair Trade Law that have been precipitated by the government are dampening enterprises’ spirits and causing the violation of property rights.

They also argue that excessive protection of regular workers will make it difficult to settle non-regular worker problems, and management mechanisms based on employee participation, such as employee stock ownership plans (ESOP), will reduce corporate efficiency.

These issues were discussed at “The Fourth Symposium on Liberal Policies” organized by the Korean Hayeki Society and chaired by Kim Yeong-yong, professor of Chonnam University, at Kyunghee University. This organization, consisting of 50 members, mostly professors, has devoted itself primarily to market economy study.

During the keynote address, Professor Kim criticized, saying, “Under the name of reforms, the government is supporting the abolition of the National Security Law, the revision of the private school law, the revision of a press-related law, and the enactment of a law penalizing past wrongdoing. These initiatives are not only dampening enterprises’ spirit, but also are contradictory to market-oriented policies.”

Nam Seong-il, professor of economics at Sogang University, stressed that in order to tackle non-regular worker problems, we have to reduce the level of protection currently enjoyed by regular workers.

Jang Dae-hong, professor of business administration at Hallym University, said, “The case of United Airlines in the U.S. shows us that sharing ownership among employees just results in the complication of the production process and corporate inefficiency because the firm’s decision-making costs increase,” adding, “Such types of operations, therefore, must be restricted to small-scale professional enterprises or the service industry.”

Ahn Jae-ook, professor of economics at Kyunghee University, contended, “To preempt government-run finance of financial institutions, it is important to establish strong singular ownership in banks Therefore, we should remove regulations that limit stock owned by individuals to 10 percent and increase accessibility to financial sectors.”

Ki-Jeong Ko koh@donga.com