[KS] How unequal is South Korea, really?

[Ruediger Frank]

Dear Frank,

well said, and inspiring. I agree, there is no need for mianhae.

But I think I have to defend my other field a bit. As you said correctly,
economics nowadays is much more than just supply, demand and markets. The discipline has
incorporated a wide range of approaches and even transformed culture from a black-box
variable into something that is accepted as determining human actions just as all the
other forces we know of (see institutional economics; I find this quite exciting).
Actually, given the openness of that discipline, I can't see how anything has a chance to
"get far beyond economics". In my humble opinion, economics is one way to interpret human
behavior, and that's all encompassing.  I know there are some folks who give the
profession a bad name, but that's no reason to blame the whole field.

It is absolutely correct to emphasize that numbers are only as good as their
interpretation. The Gini coefficient or the Lorentz-curve do not tell the whole truth, so
they should be applied critically. The point is that they should nevertheless be applied;
there is no reason to discard them altogether. These indicators, like GNP, GDP per capita,
literacy rate, population density, Dax, Nikkei etc. etc. provide not more and not less
than an important part of the picture. I can't see why they should be less objective than
arbitrarily selected numbers or, even worse, personal statements which are biased by
definition.

I think what you said about perceptions is the most important point to make on the
inequality issue. Poverty is an absolute term if you starve or your life is otherwise
threatened by a lack of resources, but beyond that, poverty becomes relative. It's our
neighbors' wealth, not our own, that determines whether we feel rich or poor. It is the
value system that surrounds us what determines whether we feel treated well or badly by
life. This value system is what most Koreanists do their research about - so here's our
contribution (and from my limited understanding, downscaling one's expectations as a road
to happiness is the essence of a good deal of ancient learning in East Asia, isn't it?).
It is not my area of specialization, but I think the question of who belongs to the middle
class, and how this membership is defined, has long been a subject of heated debate in
South Korea, at least since the 1997/98 financial crisis. So this is actually an old hat.

The media and public opinion in general seem to have a huge influence on the "wind-chill"
inequality, in particular since bad news sell much better than good news. That can well
develop into mass hysteria. Economists in Germany have argued that the negative public
sentiment regarding the economic situation under Schroeder has worked as a self-fulfilling
prophecy that resulted in a real reduction of consumption and hence less growth.

This is not to say that there are no abnormally rich people in Korea (like anywhere
else). So what? Now it is my part to say sorry: If I feel bad because my neighbor is
better off, then most likely I am the problem, and nobody else. And let's not forget that
real estate prices in Seoul are high not because a few people own the property, but
because so many want it. This is their good right - but, let's face it, skyrocketing
prices are simply part of that deal.

I have often heard the argument that the inequality
in the United States is a major engine of growth and innovation in that country. A rich
guy is not only a reason to go green with envy; he (or she) also shows you what can be
achieved with hard work or pure luck or both. Economists call that an incentive. Having
experienced the sedative effects of an (allegedly) egalitarian society, I suggest to be
careful with normative demands for more equality.

Perfect equality is a myth, given the naturally different resource endowment of
individuals. What I consider to be crucial for the question whether a society is just or
unfair are the CHANCES for social mobility. In other words: is it possible to live the
American Dream in Korea?

By the way, there will be a panel or some other form of discussion on the future of Korean
Studies at the next AKSE in April 2007, including some provocative thoughts on the
cohabitation of Korean Studies and social sciences. We had a meeting on this topic in
Oxford in June, the resulting papers are posted on our shiny new AKSE website at
http://www.akse.uni-kiel.de . Feedback is highly welcome, as is broad participation in the
related discussion at the next AKSE.

All the best,

Ruediger

Frank Hoffmann schrieb:
> Dear All:
> 
> Dr. Bertrand Renaud's rejoinder to Paul Shepherd (thanks for posting 
> this, Young-Key) raises also some questions about Korean Studies.
> 
> I think this is a highly interesting discussion because it touches on 
> just so many important issues that go far beyond economics. Dr. Renaud, 
> of course, has already expressed that in various ways in his posting.
> 
> Inequality, economic, social, sexual inequality, *if* perceived as such, 
> has always been the motor for political movements. When Dr. Renaud 
> states that "[t]he land distribution issue in Korea is a major social 
> issue by Korean choice" he basically seems to say that it is mostly the/ 
> perception/ of inequality that drives people into the streets, whatever 
> the Gini, Pini, or Winimini. In a country like Korea such perception 
> then legitimizes certain kinds of political actions. Violent protest 
> such as street fights or squatting, for example, are widely accepted as 
> legitimate tools of political protest in Korean culture. Not so in the 
> U.S., but again quite so in most of Europe! Conflict solving strategies 
> and cultures in general, both in private and public, are quite different 
> in Korea and the U.S. What I wonder about, though, is how exactly people 
> come to their perceptions of inequality -- no doubt this seems to be 
> culture-specific, to a large degree at least. How otherwise can we 
> explain that hardly anyone in the U.S. really cares about such amazing 
> facts: "the top one-tenth of one percent [that's 1”, not 1% !] of the 
> income distribution earned as much of the real increase in 
> wage-and-salary income from 1997-2001 as the bottom 50 percent of the 
> country" (NBER newsletter, as quoted by Dr. Renaud). Tell that some 
> first graders and show them some photos and they will be shocked. But 
> something is happening between first and 10th grade. Something very 
> different seems to happen in Korea between 1st and 10th grade.
> 
> In the late 60s and the 70s "interdisciplinary approaches" were very 
> popular in the humanities. Personally, most such "interdisciplinary" 
> works I had to read came across like cut & paste wisdom collections for 
> Catholic youth groups. What really happened, however, is that Economics, 
> Art History (not East Asian Art History), and many other fields -- not 
> as much History, unfortunately -- incorporated methods from psychology 
> and sociology into their disciplines. Economics or Art History, for 
> example, does not need to be "interdisciplinary" therefore.
> 
> Now ... what about Korean Studies, I mean Western Korean Studies as we 
> all know it? What is that? And who needs it? What for? (Same question 
> for Sinology/Chinese Studies and Japanology/Japanese Studies.) Is Korean 
> Studies just a collective term to name studies related to Korea/n from 
> the "real" disciplines, both the humanities and the hard sciences? Or is 
> it Samsung's and the Korean Overseas Information Service's international 
> arm to propagate things Korean? Mianhamnida ...mianhae, mianhae, I will 
> never ever o it again, but this one time. Can Korean Studies, if it 
> exists (it sure does in Europe) offer any answer to the 
> inequality/culture complex that e.g. Economics as it exists as a 
> discipline today cannot answer? If I am asking the wrong question, 
> please let me know why.
> 
> Frank
>