The Miracle on the Han river; South Korea
From the 16th century to 1953 the Korean peninsula was attacked and occupied to some extent in some form or another by foreign nations. Most notably the Japanese before World War II and then the soviet and Chinese influenced communists before finally achieving its independence through a brutal war that technically is still taking place. The miracle on the Han river can only be used in the context of South Korea because the northern part is still isolated and sometimes can be regarded as stuck in the 20th century. The war torn country of south Korea didn’t accept democracy right away, it was still under military rule but in 1987 through The June Democratic Uprising the country liberalized and political reforms were made. The Korean economy got stronger and stronger each year after the war, it is astonishing how the people of Korea persevered through those hard times and correct decisions were made at the right moments to ensure that the economy experiences a healthy growth.
Companies such as Samsung, KIA, Hyundai, LG, are juggernauts in the world market today and while most developed countries have a historical trend of following a specific industry to achieve growth such as oil or natural gas, Korea is an example of utilizing capitalism to its fullest as it diversified in all markets in different industries. Policies were made early to cater to the business communities and entrepreneurs to make sure that companies could sustain the early stages of growth. Companies such as Samsung is not only a private organization but also a cultural landmark for the people of Korea, it is seen as an institution of national pride and students from all over Korea feel pride in achieving a position in the company, and Samsung even has their own entrance exams for Korean students. Samsung entered the electronics industry in the 1960s right when the Korean economy was suffering the most, it constituted in diversifying its market by investing heavily in R&D and focusing on fulfilling local demand, the government of Korea fully backed Samsung in its endeavors and this partnership between the private corporation proved very fruitful as Samsung in those primitive years quickly developed into the a multinational corporation with immense influence and technological advantage, which made the Korean economy prosper as Samsung was still reinvesting its earnings back to the Korean economy, this model of private companies and the state working hand in hand proved useful as more and more companies got to benefit from lower taxes, cheap labor and most importantly in some case investment from the Korean government.
The upside of all this is the rapid development of one of the poorest countries in the mid 20th century accumulating wealth and then becoming one of the leading economies in all of Asia by the end of the century. But there are significant downsides. As the difference between the private corporations and the government got murky, the power and wealth seemed to get concentrated more and more to a handful of families, which meant they could influence government policies and sometimes become more influential than the lawmakers and legislators. This led to one of the biggest financial scandals of the decade when Samsung heir Lee Jae-Yong was imprisoned twice for bribing the Korean President but his conviction was dropped by a special presidential pardon. This led to wide protests in the streets and the president was forced to step down from her role meanwhile Lee was still in his position as an executive board member of the Samsung group. These businesses are run as empires as the top corporations such as Samsung, LG, and Hyundai account for 80% GDP of South Korea. Which means any action that goes against the families who control these corporations are essentially risking the economies of the whole country. The elite have taken over the power structure of Korea.
As it seems time and time again that the wonders of capitalism always come at a cost, the cost of inequality. This trade off seems justified in the face of hunger and famine. For the war torn country of Korea it was necessary to empower businesses to make a rapid turn around and that decision has proved fruitful, Korea now has higher per capita income than most European nations. As Europe and the west made their wealth through colonialism and war, Korea is an alternate example of prosperity and hope for the emerging economies all over the third world countries, but Korea is also a warning sign, a reminder of the trade off that can lead to mass inequality which ultimately defects the purpose of a functioning democracy, an unregulated capital market is bound to prosper but at the cost of political power of the people, a regulated market on the other hand may not achieve that level of speed and sometimes prove to be obsolete. So the dilemma is yet to be resolved, as the question is a heavy handed one.
