South Korea: Sorrow in the Land of Chaebols

Wojciech Harpula: Koreans, striving to lift their country out of poverty, have been harnessed into an endless race for betterment. And it came at a price. The narrative dominating public discourse, media, education, and homes for decades posits that corporate growth and professional success outweigh personal life. As a result, employees often sacrifice nearly everything for their corporations – says Oskar Pietrewicz PhD, an analyst at the Polish Institute of International Affairs, specializing in issues related to the Korean Peninsula. 

Oskar Pietrewicz: We admire South Korea for its impressive economic and civilizational development. Korean industry products, popular music, cinema, cosmetics, and cuisine have conquered the world. But are there phenomena that Koreans wouldn’t necessarily want to boast about to the world?

There are quite a few, as in any society. Koreans are very concerned about their image and are sensitive about what others think of them. They enjoy being praised for their successes, but publicly pointing out their flaws is not well-received. So, when the movie Parasite achieved global success, there was joy and pride in Korea, but also voices saying some matters should not be spoken about loudly and should “stay in the country.” This refers to the highly hierarchical Korean society and stark social inequalities. I would also add the strong male dominance in almost all aspects of professional or social activity. When interacting with Koreans of both genders, I sometimes feel personal discomfort, seeing behaviors of men towards women that would be considered highly inappropriate, dismissive, even offensive in “Western” societies. There has been a trend towards women’s emancipation in Korea, with women wanting to force their partners and society to adopt a more equal coexistence model. Women are well-educated and want to pursue careers, but traditional culture pushes them to the margins of the job market, or rather – into the home. Women’s activism, in turn, meets with defensive reactions from men, especially the young, who sometimes display strongly misogynistic behaviors. In South Korea, there is clearly a problem between women and men.

Is this why South Korea maintains the world’s lowest fertility rate?

To some extent, yes, but the problem of fertility in this country has more complex causes. In the 1950s, South Korea was a devastated, backward, and depopulated country. The economy was based on subsistence agriculture, with a per capita income lower than Yemen or Ethiopia. Meanwhile, in 2023, South Korea’s GDP per capita will surpass that of the United Kingdom. It’s a remarkable leap that impresses the world. However, it came at a cost. When General Park Chung-hee took power via a coup in 1961 and began reforms that propelled Korea onto a path of extraordinary development, the fertility rate was 6. Today, it’s 0.78. Replacement-level fertility, maintaining population size, is possible when the fertility rate is 2.1.

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Koreans, pulling their country out of poverty, were harnessed into an endless race for improvement. And they paid a price for it. South Korea’s development was largely based on chaebols – large conglomerates grown from family businesses. They were – and still are – more than just companies. They have a strict hierarchy, organize employees’ lives, and introduce an atmosphere of competition and rivalry. The dominant narrative in public spaces, media, education, and homes for decades claims that corporate development and professional success are more important than personal life. Thus, employees often sacrifice almost everything to corporations. They spend time there from morning till night, and party at night with superiors. Not because they want to – but because refusing the boss would be seen as an insult. In Korea, there are voices contesting the corporate model of life and career, but for many Koreans, working in a chaebol is the pinnacle of professional ambition. And if so much is devoted to work, how to find time to start a family and raise children? If from a young age, one has to work for success and compete with others, where is the space for creating relationships and family bonds? The harnessing of society into the economic machine, emphasizing the role of work and competition, has paid off, as Koreans are immensely richer than decades ago. On the other hand, adopting such a model has disrupted society’s functioning at the most basic, familial level. Hence, among others, Korea’s significant fertility problems.

Is the hierarchy in business and the culture of work a result of the specifics of economic development in the 20th century, or do they have deeper roots?

The tendency for competition, career drive, and readiness to make sacrifices for success are partly a consequence of the Korean class system, with roots deep in the past. Traditional, feudal Korean society was divided into four classes: yangban, chungin, sangmin, and cheonmin. Movement between them was possible but very limited. Class membership had a material dimension but was primarily associated with social status. However, improving material status did not necessarily allow for a higher social position. In contemporary South Korea, it is largely determined by wealth. The greater the professional success, the more respect one enjoys. Capitalism has enabled climbing the social ladder. Koreans like to compare themselves to others, emphasizing their position. Even in North Korea, you sometimes see women in the party or government apparatus parading with expensive handbags. These handbags are not a sign of wealth. They define social status. The imperative of building one’s position in society is a subconscious reflection of the old, feudal class divisions.

The Korean work ethic, often spoken of as almost mythical, has purely contemporary sources. In my opinion, people can work very hard in any country. It all depends on the social framework and the economic system in which they operate. Koreans were not always work titans. Polish traveler and researcher Wacław Sieroszewski visited developing Japan in the early 20th century and also spent time in Korea. In his accounts, Koreans are portrayed as lazy, demoralized people, spending their days aimlessly. Compared to the society of Japan, harnessed into modernization, Korea – in Sieroszewski’s accounts – was a land of poverty and backwardness. Today’s Korean work ethic results from the specific socio-economic system implemented in the 1960s. Importantly, it was introduced under an authoritarian political system.

Discussions about South Korea often mention the “Miracle on the Han River” to describe the country’s rapid economic development. What did it entail?

I dislike the term “Miracle on the Han River,” as it suggests Korea’s development was spontaneous, sudden, and unexpected. In reality, it was the result of a precise plan and enormous effort by Koreans. The society constantly heard from authorities: listen to your bosses, work hard, and sacrifice for the country’s development. But those who worked for Korea’s success in the 1960s and 1970s didn’t benefit from it. Initially, development was based on cheap labor.

We’ve already said that South Korea was a very poor country. The Japanese ruthlessly exploited it during their occupation, and the Korean War devastated it completely. Additionally, South Korea’s first president, Rhee Syng-man, who ruled from 1948 to 1960, was not only authoritarian but also incompetent. His rule was associated with pervasive corruption and ties with family businesses, today known as chaebols. The history of the largest chaebols dates back to the Japanese occupation, and in South Korea, they were given a “green light” by politicians. In exchange for bribes, they received preferential loans or access to foreign currency. These businesses were unprofitable, serving essentially to extract wealth for a few, without positively impacting the country’s development. They just “ate up” American financial aid.

South Korea’s economic successes are attributed to reforms initiated by General Park Chung-hee. A former officer in the Japanese army, he admitted to being inspired by Japanese solutions while implementing changes in South Korea. In 1961, he took power, surrounded himself with military personnel, and started ruling with an iron fist. One of his first decisions was to arrest the country’s most important businessmen. He gave them a choice: join me, or it’s the end for you. Colloquially speaking, he took the South Korean business “by the balls” and introduced a centrally managed economy based on five-year plans. It was decided that the entire economy could not be developed at once, and that the focus should be on the most promising sectors. Facing a lack of capital, the focus was on its accumulation. All saved money was invested in industrial development and production for export. It started with the simplest things, like textiles, then moved to shipbuilding, machinery, electromechanical, electronics, metallurgy, and chemicals. Economic planning decisions were made within the Economic Planning Board. Companies that met its goals could expect subsidies, loans, and tax breaks. This way, the biggest players, the chaebols, were supported. Opening the American market to goods from South Korea for political reasons also helped. However, until the 1980s, the South Korean market was largely closed to imports.

It was “textbook” trade protectionism: focusing on the development of selected industries, a pro-export strategy, and protecting the domestic market from imports. When the first successes and capital appeared, investment was made in the research and development sector, enabling the production and export of increasingly advanced products. The effects became visible at the turn of the 1980s and 1990s. Today, the whole world knows products from Samsung, LG, and Hyundai. General Park Chung-hee’s plan succeeded, but it wouldn’t have been possible without very specific internal and international circumstances.

Meaning?

South Korea could focus on economic development because the United States provided a security umbrella and funded reforms. At one point, money also started flowing from Japan. In 1965, South Korea and Japan normalized diplomatic relations. Part of this process involved Tokyo paying reparations for the 1910-1945 occupation period. Japanese capital in the form of grants, loans, and investments was a significant financial boost for Seoul. Interestingly, this money was officially meant to compensate South Korean citizens for the colonial period. However, people didn’t receive it. It was taken by the authorities. Koreans only learned about this in the 21st century when archives were declassified.

The reforms in South Korea also succeeded because of specific internal circumstances. To put it bluntly: the state was ruled autocratically, and the authorities didn’t have to consider the voice of citizens. The oppressiveness of the South Korean system was much greater than what we experienced during the PRL [communist Poland – ed.] era. It was a military dictatorship, suppressing civil rights and freedoms and stifling all opposition movements. In 1972, the Yushin Constitution was adopted, introducing almost sole rule for General Park Chung-hee. The subsequent riots were brutally suppressed by the authorities. When General Park was killed in 1979 by the head of South Korean intelligence, there was hope for democratization, but military officials took power again. In 1980, an anti-government uprising erupted in Gwangju, and soldiers opened fire on citizens. Officially, 160 people were killed during the several-day conflict, though some sources mention over 1,000 victims. President Chun Doo-hwan, head of military intelligence, then ruled dictatorially for another seven years. During his reign, the positive effects of the reforms became largely visible, and Koreans’ lives markedly improved. In the context of changing socio-economic conditions, political threads proved significant. People no longer wanted to live under the boot of the military junta. When Chun Doo-hwan announced in June 1987 that he would appoint the next president, protests swept across the country. In Seoul, students regularly battled the police. Faced with mass social demonstrations, the authorities relented. They agreed to hold presidential elections, allowed opposition political parties to function, and lifted censorship. A new constitution was adopted. Significantly, the first free presidential elections were won by regime representative General Roh Tae-woo with 37% of the vote. If the opposition had nominated a single candidate instead of two, it would have won, but support for the old system in Korean society turned out to be surprisingly high. Roh Tae-woo, co-responsible for the Gwangju massacre, continued the country’s democratization. His successor, Kim Young-sam, became the first civilian president of South Korea in 30 years. Koreans changed their country. They didn’t overthrow the government but forced a compromise between the regime and opposition forces, resulting in a democratic transformation. Poles underwent a very similar path at the end of the 1980s.

In South Korea, there was a political transformation, but the foundations of the economy remained unchanged. The role of chaebols was not shaken. To what extent are the voices of Korean publicists justified in comparing these conglomerates to mafia organizations and calling the South Korean political system an oligarchy?

Chaebols have adapted well to the liberalization of the political system. Every South Korean president, regardless of political affiliation, negotiates with the largest companies. There is no anti-system politician who says, “Down with chaebols,” because that would mean questioning the economic development model that the nation is proud of and has brought success. Conglomerates have a huge impact on the South Korean economy, so politicians must consider the biggest domestic companies. They are treated almost like national assets. Thanks to their prosperity, South Korea has developed. Chaebols use this situation, exerting influence on authorities, both through legal lobbying and corruption. They deter politicians from imposing higher taxes on corporations, ensure labor laws are favorable to them, and press legislators or officials for specific legislative solutions or administrative decisions. Essentially, they decide the entire course of the country’s economic life.

South Korean governments and chaebols have long lived in symbiosis. In the 1950s, corrupt ties between family businesses and authorities were commonplace. The military changed the situation so that they subordinated business to themselves, but that doesn’t mean they didn’t take money from chaebols. Generals who ruled in the 1980s were later tried first for corruption and then for the coup d’état and the Gwangju massacre. Reforms in the early 1990s introduced many improvements in economic management and allowed South Korea to join the WTO and OECD, but strong ties between the government and large conglomerates remained unchanged. Conglomerates often buy politicians’ favor, willingly giving them expensive gifts or funding related foundations. This was evident in the scandal around President Park Geun-hye. Samsung gave the friend of the former head of state (or rather her daughter) a horse worth about US$850,000. In 2016, parliament initiated impeachment proceedings against the president, and in March 2017, she was removed from office. Later, she was sentenced to 22 years in prison. Notably, in 2021, she was pardoned.

Lee Jae-yong, the “prince” of Samsung, heir to the electronics conglomerate’s fortune, who played a major role in bribing President Park Geun-hye, also did not face severe consequences. During the trial, it was revealed that Samsung was to have paid the head of state and her associates US$52.8 million in bribes. The “prince” went to prison, but not for long. First, his sentence was reduced, then suspended, and by 2021, he could calmly return to running the business.

The current president of South Korea, Yoon Suk-yeol, has no problem forgiving past sins. He applied clemency to many former politicians and officials convicted of corruption and other abuses. Thanks to him, Lee Myung-bak, who served as president from 2008 to 2013, was released. He was serving a 17-year sentence for taking bribes and embezzlement. The public reaction to the lenient treatment of those involved in corruption is also interesting. A public opinion poll about the pardon of the “prince” of Samsung left no doubt: the majority believed President Yoon Suk-yeol’s decision was correct. According to Koreans, the situation in Samsung should be stable because if the giant falters, subcontractors and the entire community suffer. On one hand, Koreans recognize the problems generated by chaebols, but on the other, there is no public support for fundamentally changing their functioning. Accompanying this is the baseless belief that chaebols will heal themselves. Indeed, after the Asian crisis in 1997, Korean conglomerates underwent many changes, significantly improving efficiency, but the corrupt nature of their relations with authorities remained unchanged. Therefore, it is difficult to expect that suddenly chaebols will see their mistakes and start functioning differently.

Discussing South Korea, it’s impossible to avoid the topic of North Korea and the peninsula being divided since the end of World War II. After experiencing a fratricidal war and over 70 years of life in radically different states, do the societies of both Koreas still share anything?

Koreans in both states learn from school textbooks that they are one nation, and these are not just empty words. Many elements bring both societies closer. They speak the same language and share a cultural code based on national mythology. Both South and North Koreans claim descent from the legendary leader Tangun, who was born in 2333 BCE and founded the first Korean kingdom of Choson. In the culture of the peninsula, he is recognized as the ancestor of all Koreans. This is not just a story like our legend of Lech, Czech, and Rus. The belief in descent from Tangun gives Koreans a sense of their uniqueness and distinctiveness from the rest of the world. This uniqueness has ethnic-cultural components, but also racial.

Racial?

It might be surprising, but Koreans consider themselves racially distinct, especially from the Japanese and Chinese. In North Korean propaganda, the concept of the “most perfect race in the world” appears quite often, while in South Korea, various ideas emphasize the uniqueness of the “Korean race.” The shared feeling of han, difficult to translate directly, is also thought to be unique to Koreans. Han can be described as a sense of all-encompassing sadness, suffering, unfulfillment, but also anger. In both states, Koreans, due to history, have a sense of being besieged, playing the role of a victim. First, they were threatened by the Chinese, then the Japanese, and currently, the peninsula is divided into spheres of influence by superpowers. National martyrdom builds a sense of uniqueness. In North Korea, this element sometimes takes on a grotesque dimension, but South Koreans are also not free from emphasizing the tragic path their nation has had to take.

Do South Koreans see themselves as forming a national community with residents of North Korea?

Generally, they believe Koreans live in both states, which is undeniable. However, looking more closely at public opinion surveys conducted in South Korea, we can notice a differentiation in attitudes towards North Koreans. South Korea’s youngest generation (up to about 40 years old) considers people north of the 38th parallel as strangers. They are not brothers and sisters, but not necessarily enemies either. The oldest generation, affected by the nightmare of war, sees North Koreans as barbaric aggressors and a hostile force constantly threatening South Korea’s security. There’s also a middle group – people aged 50-60. They are most open to dialogue with Pyongyang. Many from this generation were involved in the protests of the 80s, which led to the democratization of the country. They are the liberal-left electorate. Cooperation with North Korea has always been important for representatives of this camp. Conservatives approach contacts with the Kim regime with much more reserve.

Does South Korean society want the unification of both states?

Article 3 of the constitution states that the Republic of Korea is a state encompassing the entire territory of the Korean Peninsula. And Article 4 directly states that the Republic of Korea strives for unification. So every subsequent president of South Korea is obliged to work towards reunification. Hence, the official message is clear: someday there should be one, united Korean state. The Ministry of Unification of Korea and numerous state agencies and social organizations working towards this end are still active. However, an increasing part of society believes that unification is unnecessary. In one of the latest surveys, a record 32% of respondents expressed this opinion. Dialogue with North Korea is enjoying less and less social support. However, this is largely a derivative of the political relations between the two states. When the Korean summit occurred in 2018 and the joint declaration was signed by Kim Jong Un and President Moon Jae-in, even over 60% of South Korean society supported dialogue. But two years later, North Korea blew up the liaison office in the border town of Kaesong, which was the most concrete achievement of cooperation between the two Koreas in 2018. Thus, enthusiasm for further talks with the North is hard to maintain. Society sees that since the 1990s, Seoul has been extending a hand to Pyongyang, and the regime does whatever it deems appropriate at any given moment. Conservative President Yoon Suk-yeol, who won last year’s elections, has opted for confrontation with North Korea. He rejected dialogue and wants to strengthen the army. This approach raises no objections, not only among his supporters but also among the vast majority of South Koreans. This reluctance to cooperate with the North is further reinforced by questions about the costs of potential unification.

Has anyone attempted to estimate them?

Very broadly. Every time, estimates spoke of trillions of dollars. Certainly, huge sums are involved. President Lee Myung-bak (the same one convicted of corruption) was critical of dialogue with the North but proposed a unification tax. He argued that South Korea should be financially prepared if the opportunity for a united state arises. The idea quickly fell through, especially as young citizens didn’t want to spend their money on a pipe dream that, in their opinion, would probably never materialize.

The situation is as follows: officially, there’s talk of one nation on both sides of the 38th parallel, South Korean society is increasingly cold towards the prospect of unification, and on the other side of the demarcation line, there’s hardly anyone to talk to. Personally, I’m closer to the view that the authorities in South Korea should aim to work out peaceful coexistence with Pyongyang. North Korea isn’t going anywhere, and pursuing a policy of confrontation could lead to unpredictable consequences. Accepting this state of affairs is also a manifestation of Korean han.

Meaning?

We’ve made a great leap in development. Our brands, songs, and films are known all over the world. But we can’t overcome the division of the nation and are increasingly becoming two separate nations. What remains? Sadness.

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Translation: Klaudia Tarasiewicz