10 ms·

South Korea: the corruption that built its economy (2017)

76 points by krn 4y ago

PaulHoule 4y ago
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 4y ago
  > 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?
  - PaulHoule 4y ago
    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.
    - GekkePrutser 4y ago
      The strange thing with Sony is that they don't even seem to try in the mobile market. For years they're putting out phones that are overpriced, have very poor software support duration and focus on gimmicky features like 4K screens that are almost never actually used as such. As a result they occupy only a tiny niche of the market but they keep going on as they are. Like they don't even care. It's a shame because they made great stuff. My Z4 Tablet with its Bluetooth laptop dock is the most useful mini laptop I've ever had. Never saw a successor though :'(
  - mc32 4y ago
    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?
  - lmm 4y ago
    > 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 4y ago
  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.
damnthisis 4y ago
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
- snapcaster 4y ago
  Can you expand on this or share some links/reading materials?
- mach5 4y ago
  that's a good thing
- josephh 4y ago
  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 4y ago
  [deleted]
snapcaster 4y ago
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?
- zyang 4y ago
  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.
- nonameiguess 4y ago
  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.
- Symmetry 4y ago
  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 4y ago
    Thanks for the reading material recommendation! Very interesting topic
askiiart 4y ago
See also: Samsung's Dangerous Dominance over South Korea https://youtu.be/oL0umpPPe-8 https://youtu.be/oL0umpPPe-8
- benatkin 4y ago
  That channel seems to specialize in clickbait. Are they merely stating the obvious, that Samsung makes up a huge % of their GDP? It starts with a comparison in land area to a US state.
  - ubercow13 4y ago
    How exactly is it clickbait? The channel has generally quite well researched essays and the titles usually literally describe what's in the video, for example "The Incredible Logistics Behind Corn Farming" is about the logistics of corn farming. This video is absolutely not just stating the obvious size of Samsung in the way you suggest.
    - deleted 4y ago
      [deleted]
    - benatkin 4y ago
      One of the comments: > Real Life Lore, Polymatter and Wendover Productions have a >20% influence on the gross domestic production of YouTube's world politics explanation videos, and their coalition should really be kept in check to prevent excessive dependence /s I think I've watched enough of these for the year. I was just hoping to get some insight without watching the video. Ah well.
skrtskrt 4y ago
there's a reason that almost every Korean movie or TV show has an underlying theme of extreme economic inequality
- lcnPylGDnU4H9OF 4y ago
  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.)
  - m0llusk 4y ago
    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.
  - tekla 4y ago
    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.
- legitster 4y ago
  Not necessarily. I have been told that the stuff that gets play over in the US is a pretty niche category in Korea. The TV most people watch is highly commercialized.
  - lostlogin 4y ago
    What ever it is, Squid Games was much appreciated.
  - skrtskrt 4y ago
    there is an enormous amount of korean stuff to stream on US services, most of which originally aired on Korean TV and are widely regarded as the most popular korean shows of all time They'd have to have a second, huge, secret TV industry for the stuff we have available here to not be representative.
rippercushions 4y ago
> In most places in the world, corruption tends to be growth-reducing, but this is much less true in East and Southeast Asia, where it tends to be growth-enhancing. This is a pretty astonishing claim. The richest place in Asia is famously corruption-free Singapore, and it's blatantly obvious that corruption has held back neighboring countries like Malaysia (billions embezzled from 1MDB), Philippines, Indonesia, Thailand etc.
- readthenotes1 4y ago
  the claim is also ridiculous. the special benefits given to a few "capitalist" firms could have been done without kickbacks to politicians...
  - seunosewa 4y ago
    The competition to export more in order win more govt support seems to have been the key. It doesn't require kickbacks to politicians, either.
cardosof 4y ago
Having lived most of my life in a very corrupt country, my view is that corruption is to society what cancer is to the body.
sumo86 4y ago
They also steal/stealing black hiphop and other music from around the world specially black.
hoseja 4y ago
If this was an unfriendly regime, this would be rightly described as fascism. This is basically a textbook example.

76 points by krn 4y ago

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 4y ago
> 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?
- PaulHoule 4y ago
  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.
  - GekkePrutser 4y ago
    The strange thing with Sony is that they don't even seem to try in the mobile market. For years they're putting out phones that are overpriced, have very poor software support duration and focus on gimmicky features like 4K screens that are almost never actually used as such. As a result they occupy only a tiny niche of the market but they keep going on as they are. Like they don't even care. It's a shame because they made great stuff. My Z4 Tablet with its Bluetooth laptop dock is the most useful mini laptop I've ever had. Never saw a successor though :'(
- mc32 4y ago
  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?
- lmm 4y ago
  > 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 4y ago
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.

damnthisis 4y ago

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

snapcaster 4y ago
Can you expand on this or share some links/reading materials?
mach5 4y ago
that's a good thing
josephh 4y ago
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 4y ago
[deleted]

snapcaster 4y ago

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?

zyang 4y ago
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.
nonameiguess 4y ago
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.
Symmetry 4y ago
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 4y ago
  Thanks for the reading material recommendation! Very interesting topic

askiiart 4y ago

See also: Samsung's Dangerous Dominance over South Korea https://youtu.be/oL0umpPPe-8 https://youtu.be/oL0umpPPe-8

benatkin 4y ago
That channel seems to specialize in clickbait. Are they merely stating the obvious, that Samsung makes up a huge % of their GDP? It starts with a comparison in land area to a US state.
- ubercow13 4y ago
  How exactly is it clickbait? The channel has generally quite well researched essays and the titles usually literally describe what's in the video, for example "The Incredible Logistics Behind Corn Farming" is about the logistics of corn farming. This video is absolutely not just stating the obvious size of Samsung in the way you suggest.
  - deleted 4y ago
    [deleted]
  - benatkin 4y ago
    One of the comments: > Real Life Lore, Polymatter and Wendover Productions have a >20% influence on the gross domestic production of YouTube's world politics explanation videos, and their coalition should really be kept in check to prevent excessive dependence /s I think I've watched enough of these for the year. I was just hoping to get some insight without watching the video. Ah well.

skrtskrt 4y ago

there's a reason that almost every Korean movie or TV show has an underlying theme of extreme economic inequality

lcnPylGDnU4H9OF 4y ago
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.)
- m0llusk 4y ago
  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.
- tekla 4y ago
  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.
legitster 4y ago
Not necessarily. I have been told that the stuff that gets play over in the US is a pretty niche category in Korea. The TV most people watch is highly commercialized.
- lostlogin 4y ago
  What ever it is, Squid Games was much appreciated.
- skrtskrt 4y ago
  there is an enormous amount of korean stuff to stream on US services, most of which originally aired on Korean TV and are widely regarded as the most popular korean shows of all time They'd have to have a second, huge, secret TV industry for the stuff we have available here to not be representative.

rippercushions 4y ago

> In most places in the world, corruption tends to be growth-reducing, but this is much less true in East and Southeast Asia, where it tends to be growth-enhancing. This is a pretty astonishing claim. The richest place in Asia is famously corruption-free Singapore, and it's blatantly obvious that corruption has held back neighboring countries like Malaysia (billions embezzled from 1MDB), Philippines, Indonesia, Thailand etc.

readthenotes1 4y ago
the claim is also ridiculous. the special benefits given to a few "capitalist" firms could have been done without kickbacks to politicians...
- seunosewa 4y ago
  The competition to export more in order win more govt support seems to have been the key. It doesn't require kickbacks to politicians, either.

cardosof 4y ago

Having lived most of my life in a very corrupt country, my view is that corruption is to society what cancer is to the body.

sumo86 4y ago

They also steal/stealing black hiphop and other music from around the world specially black.

hoseja 4y ago

If this was an unfriendly regime, this would be rightly described as fascism. This is basically a textbook example.