[HN Gopher] South Korea: the corruption that built its economy (...
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South Korea: the corruption that built its economy (2017)
Author : krn
Score : 56 points
Date : 2022-12-13 17:36 UTC (5 hours ago)
(HTM) web link (www.iias.asia)
(TXT) w3m dump (www.iias.asia)
| askiiart wrote:
| See also: Samsung's Dangerous Dominance over South Korea
|
| https://youtu.be/oL0umpPPe-8
| snapcaster wrote:
| Why did this "build" or strategy for lack of a better word work
| so well for Korea? They mention other countries that have adopted
| this model but haven't seen the phenomenal success Korea has seen
| over the past decades. What was the secret sauce?
| pydry wrote:
| The United States (and via extension, Japan) adopted a
| favorable trading relationship with Korea.
|
| Sometimes the US wants to strip-mine a country of its natural
| resources and use it as a source of cheap labor, in which case
| it will not adopt a favorable trading relationship. This makes
| export oriented industrialization an uphill battle.
|
| Sometimes it wants to build up its industry so that it is
| militarily self sufficient. Japan and Korea fall into the
| latter camp.
| nonameiguess wrote:
| It mentions Indonesia, Thailand, and Malaysia. Indonesia and
| Thailand have both had recent civil wars and failed peaceful
| transfers of power. It presumably helps South Korea quite a bit
| to have a more or less constant US military presence for 70
| years. Malaysia seems to be doing pretty well. If you eliminate
| Singapore, Hong Kong, and Macau, and only consider countries
| that aren't just a single city, it's only behind Taiwan, Japan,
| and South Korea for East Asian GDP per capita. Average 6.5%
| annual growth for 50 years.
| michael1999 wrote:
| The article lists Thailand, Indonesia, and Malaysia. Thailand
| is doing very well. Malaysia has done ok. Indonesia has ups and
| downs, but is better than you might think. And don't forget
| that China has been very successful building societal wealth
| amid corruption so deep it is almost official. The model has
| other successes.
|
| But the one thing South Korea had over all of them: the USA.
| The ROK was a US garrison state, and a military dictatorship
| well into the 80s. They were a major staging ground and
| supplier for the Vietnam war, and billions of dollars flowed
| through companies like Hyundai, growing them into industrial
| giants. The USA was even directly paying ROK soldiers who
| participated in Vietnam. The USA was eager to maintain a toe-
| hold on the Asian continent, and provided active support. When
| the "Arsenal of Democracy" needs a local supplier, you can
| create a lot of infrastructure.
|
| The support from the USA/NATO also included friendly trade
| deals despite the political cost domestically -- remember
| Toyota and Hyundai gutting the fat and lazy big-3 in the 80s?
| The cold-warriors wanted to showcase the capitalist power of
| wealth creation for the region to emulate, in contrast to the
| creeping communism of the post-war, anti-colonial era. The USA
| was much more invested in the success of ROK than the average
| independent Asian country.
|
| As for Indonesia, geography is much of it. It is the 5th most
| populous country in the world, over thousands (and thousands!)
| of islands, speaking hundreds of languages. Just transportation
| and coordination costs can explain much of their troubles
| industrializing. Also note that they were never occupied by the
| Americans during WWII. Instead, they were forced to fight a
| bloody independence fight against the Netherlands which didn't
| make any friends in NATO. They then dabbled with the Soviets
| which certainly didn't help them long term economically, and it
| meant that they were frozen out of the post-war alliances. The
| USA was happy to leave a brutal dictator in place as long as
| Suharto kept the communists out. Social and industrial
| development of the bulk of Indonesia served no cold-war aims.
|
| - The Vietnam War and the 'Miracle of East Asia' -
| https://instruct.uwo.ca/economics/317b-570/keunhoparkclayton...
| sharadov wrote:
| The economist had an article on how Indonesia is the next
| economic powerhouse
| https://www.economist.com/leaders/2022/11/17/why-
| indonesia-m...
| pezezin wrote:
| > But the one thing South Korea had over all of them: the
| USA. The ROK was a US garrison state, and a military
| dictatorship well into the 80s. They were a major staging
| ground and supplier for the Vietnam war, and billions of
| dollars flowed through companies like Hyundai, growing them
| into industrial giants. The USA was even directly paying ROK
| soldiers who participated in Vietnam. The USA was eager to
| maintain a toe-hold on the Asian continent, and provided
| active support. When the "Arsenal of Democracy" needs a local
| supplier, you can create a lot of infrastructure.
|
| Funny how I have read the same argument regarding Japan and
| the Korean War... (I'm not saying it is wrong, just that I
| find the similitudes interesting)
| michael1999 wrote:
| The USA spent $168 billion dollars (roughly a trillion 2020
| dollars) on the Vietnam war. There was enough money for
| both Korea and Japan (and the Philippines, and Thailand,
| and ...)
|
| https://www.ide.go.jp/library/English/Publish/Periodicals/D
| e...
| underbrush wrote:
| South Korea have a fairly direct threat of invasion that at
| least somewhat limits how dysfunctional the elites can be
| without the risk of facing consequences themselves. Taiwan,
| Finland, Israel and so on.
| vkou wrote:
| 1. American presence in the DMZ is an immediate no-go when it
| comes to a plausible 'threat of invasion'.
|
| 2. Even if the US were not involved - If you think Russia
| invading Ukraine is a debacle, don't think too much about
| what North Korea trying to invade South Korea would look
| like.
| underbrush wrote:
| Because South Korea is successful at what it does. If South
| Korea looked like Thailand it would be a different story.
| And that is part of why it doesn't.
|
| The Russian invasion of Ukraine is actually a good example.
| Just the other way around. What is happening to Russia is
| exactly what happens when you neglect your industry and
| population to the point that you no longer have enough of
| an advantage in equipment or people willing to fight.
| Something South Korea can't afford.
| Symmetry wrote:
| Well, land reform helped create a broad consumer class but at
| the same time subsidized industries were required to compete in
| international markets early to keep their privileges so they
| didn't get complacent. In places like Indonesia industrial
| policy was more a matter of sending money to the allies of
| those in power. Industrial policy can work to encourage growth
| but only if the government really wants it to and is competent
| in how it carries it out.
|
| I think the book on development I'd most recommend on
| development in general is _Gambling on Development_ but for
| what exactly South Korea did _How Asia Works_ has the details.
| snapcaster wrote:
| Thanks for the reading material recommendation! Very
| interesting topic
| boringg wrote:
| Are both the books approachable and enjoyable to read? I find
| that sometimes this stuff can be factual and content rich but
| not very digestible.
|
| Thanks for reccos
| arthurjj wrote:
| How Asia works is very approachable. The author was a
| business reporter so he tells an interesting story with the
| countries covered
| anigbrowl wrote:
| North Korea
| pcurve wrote:
| There are probably several factors at play:
|
| 1. Countries in colder climate are generally more economically
| prosperous. South Korea is colder (though hot in summer) than
| S/E Asian countries.
|
| 2. South Koreans have always been overzealous about education.
|
| 3. South Korea is ethnically more homogenous than S/E Asian
| countries. People have been comfortable with idea of putting
| interests of the large group (i.e. nation) before that of the
| individuals.
| odysseus wrote:
| I'd be interested in any research that backs up your point 1.
| Russia is not all that economically prosperous. Neither is
| Mongolia.
|
| Singapore and Taiwan are very much so. And Singapore is right
| on the equator.
| pcurve wrote:
| I thought it was a fairly well established link, but sure.
|
| https://web.stanford.edu/~mburke/climate/BurkeHsiangMiguel_
| F...
|
| https://www.dailymail.co.uk/news/article-8477297/Why-
| colder-...
| finikytou wrote:
| russia is one of the wealthiest nation on earth and their
| economy is one of the strongest in the world because not
| related to inflated bubbles like tech or healthcare but to
| raw materials, natural resources, engineering, steel and
| other hard materials production.
|
| the war was supposed to sink them according to european
| leaders and yet they are stronger than ever.
| cycrutchfield wrote:
| Grade A copium here
| Bayart wrote:
| Environmental determinism hardly stood the test of time, as
| far as theories go.
| prottog wrote:
| I'm curious to know more. Sure, they're not well-tested
| theories and never will be, given their nature, but broadly
| it seems to track. The powerful forces of climate and
| geography on a people's culture and the effect of that
| culture compounded over generations seem at least an
| adequate explanation between the wealth gap of equatorial
| countries and those in colder climes.
| zyang wrote:
| There are different types of corruption. Access and speed money
| actually boosts development like a steroid. Just like a steroid
| you reap the benefit early but eventually it becomes corrosive.
| You can hide a lot of problem as long as the growth rate is
| high.
| PaulHoule wrote:
| That article makes me think that corruption is (at best) a zero
| sum game, but maybe in an export oriented economy the losers
| could be outside the country.
| swagasaurus-rex wrote:
| > The Park government provided these capitalists promotional
| privileges--particularly cheap credit from state-owned banks
| and monopoly privileges in local markets--to grow their firms
|
| Sounds to me like the losers were Koreans whose businesses were
| crushed by an unequal playing field.
|
| Had there been true competition, who is to say there wouldn't
| be more thriving and innovative businesses in Korea?
| mc32 wrote:
| That seems likely, on the other hand, without putting their
| thumbs on the scales, it's possible that no company would
| have been a break-out like many of the Chaebols.
|
| So maybe the question is: level playing filed where everyone
| has equal access to capital and labor but achievement is
| limited, or do you want an uneven playing field but which
| results in economic juggernauts which leave small businesses
| behind?
| PaulHoule wrote:
| Certainly smaller businesses in Korea do poorly. Maybe there
| is a generation of startups we are missing.
|
| Samsung though, is leading the world in a number of areas. It
| makes processor chips, it makes flash memory. I think it's
| the only important cell phone brand other than Apple that
| isn't based in China. It wins in areas where (say) Sony
| fails.
|
| People in the US might ask why there are no heavy forges in
| the US but there are heavy forges in Korea? ASML not
| withstanding, Europeans would like to have an electronics
| industry. Anybody who thinks they'd like to subsidize some
| business and turn it into a world beater would probably be
| envious of Korea.
|
| That said, I understand that many young Koreans perceive the
| country to be "Hell Joseon" and immigrate to places like the
| US where they perceive you can get ahead if you don't get
| hired by Samsung. Contrast that to Japan which is said by
| some to be economically and culturally stagnant but doesn't
| have a mass exodus.
| lmm wrote:
| > Had there been true competition, who is to say there
| wouldn't be more thriving and innovative businesses in Korea?
|
| Given that Korea has outperformed most or all comparable
| nations, that seems implausible.
| vkou wrote:
| The losers are inside the country, but a rising tide allegedly
| lifts all boats, and the drag of corruption on a quickly-
| growing economy still results in net growth. And when there's
| net growth, and a lot of it, the sore losers can be brushed
| aside.
|
| The secret to a quickly-growing economy is government
| investment in infrastructure, grueling work hours in high-
| margin industries[1], and an export focus. And, if Korea[2],
| China, and Vietnam are any indicators, a brutal and repressive
| dictatorship can't hurt.
|
| [1] Your country won't get rich growing peas.
|
| [2] Pre-1987.
| skrtskrt wrote:
| there's a reason that almost every Korean movie or TV show has an
| underlying theme of extreme economic inequality
| lcnPylGDnU4H9OF wrote:
| Ah, it similarly explains why Gangnam Style was such a big hit
| compared to that artist's other works. My understanding is that
| Gangnam is a very affluent area (neighborhood?), especially as
| compared to some others, and the song was intending to speak
| out in some way against this inequality.
|
| (I don't remember where I heard this, so take it with a grain
| of salt; I'm not sure how accurate it is.)
| tekla wrote:
| Sort of?
|
| It mostly refers to people who act/look rich but aren't.
| Which is why its called "Gangnam Style", buying/doing shit to
| look affluent like people in Gangnam.
|
| Korea has so much that BS, its extremely obnoxious.
| m0llusk wrote:
| Most don't recognize the visual references but every scene in
| that video is from a famous movie, show, or popular music
| video but remade with garbage blowing instead of snow or
| whatever. So it ends up being sharp criticism of society as a
| whole.
| damnthisis wrote:
| the park's regimes(both father and daughter) are overthrown by
| chinese influence. The socalled leftist governments are consists
| mostly a mix of north korean spies and ccp agents. If you look
| closely at what happen after Park's depature, the country is in
| shambles
| mach5 wrote:
| that's a good thing
| snapcaster wrote:
| Can you expand on this or share some links/reading materials?
| josephh wrote:
| South Koreans have realized that their alternative choice is
| just as corrupt, if not more.
|
| Some of the things that have happened since:
|
| - President Moon's right hand was convicted for opinion rigging
| leading up to the election by overseeing a bot farm.
|
| - The country's chief prosecutor resigned after the
| administration's desperate attempt to cover up their own
| corruption, joined the opposition party, won the primary to
| become their presidential candidate, then actually winning (!)
| the election (as absurd as it sounds, this is roughly
| equivalent to Merrick Garland joining the GOP, getting
| nominated as their candidate, and winning the election).
| [deleted]
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