[The Editors' Verdict] The True "Market Disruptor" Is the Government Itself

"The reason we can have dinner is not because of the kindness of the butcher, the brewery owner, or the bakery owner, but because they are interested in their own benefit, that is, making money." Adam Smith, the founder of economics, viewed the fundamental mechanism that allows the market to operate efficiently as the natural human impulse of 'self-interest' in his book The Wealth of Nations. He argued that to increase the wealth of a nation, it is necessary to actively develop and utilize the basic human tendency to 'want to live better than now' rather than suppress it.

Of course, there are cases where government intervention is necessary due to market failures, but the proposition that human self-interest is the most powerful force driving the market to operate efficiently has remained unshaken for over 200 years. Under market economy principles, government economic policies should also begin with the consideration of how to guide human natural impulses toward the benefit of the entire nation.

However, watching the government's recent real estate policies, one cannot help but doubt whether the government truly understands the operating principles of the market economy. Looking at the government's real estate policies released once a month recently, they demonize the natural human desire to own a home and label homeowners as potential speculators. As a result, every time a measure is introduced, side effects occur, followed by patchwork remedies to compensate for them.

What does a 'house' mean to our people? Parents in Korea, which boasts the highest educational enthusiasm in the world, look for good school districts as soon as they have children. When their children marry, parents feel they have fulfilled their last role if they can at least help with the jeonse (long-term deposit lease) funds. Children who have lived through multiple jeonse leases feel truly independent only when they own a house in their own name. The baby boomer generation, worried about their old age, tries to become multi-homeowners with the idea of earning monthly rent so as not to rely on their children. The young generation, just stepping into society, wants nothing else but to live close to their workplace. Real estate policy must start with understanding these basic desires.

Every weekend, protests against the government's real estate policies are held in the heart of Seoul. Listening to the participants, they all complain, "Why am I treated like a speculator?" They say they saved every penny to buy a house and started rental businesses to prepare for old age, only to suddenly face a tax bomb. These are the people the current government labels as 'forces disrupting the market.'

Government officials are not much different. The Blue House and the government recently pressured, saying, "High-ranking public officials with multiple homes should sell their houses." If public officials in charge of real estate policies own several houses in key areas, there is a possibility of conflict of interest. However, pressuring all public officials, regardless of their duties, to uniformly sell their houses is unimaginable in a free-market country.

The more regulations people face, the more they find ways to evade them. Therefore, no matter how well-intentioned a regulation is, it often fails to work properly. This is the paradox of regulation. Taxes imposed on landlords are ultimately passed on to tenants. As soon as the three lease laws were passed, jeonse prices surged, and jeonse listings disappeared. At this point, it is hard not to be confused about who the real forces disrupting the market are.

When house prices did not come down despite all the government's threats, President Moon Jae-in even proposed creating a permanent real estate market monitoring organization, something not found in any other country in the world. This is something that could only happen in an authoritarian or totalitarian state.

This content was produced with the assistance of AI translation services.