[Im Cheol-yeong's Cheonggyeongudok] Inequality, ESG, Climate Change, Low Birthrate... "Step Forward with 'Fairness and Innovation'"

Member of the National Assembly Lee Yong-woo's 'Economy on Two Feet'
Dissecting Structural Issues of Inequality, Diagnosed from the Perspective of a Field Economist

[Asia Economy Reporter Lim Cheol-young] "Occupy Wall Street."

In September 2011, New York was filled with the voices of the bottom 99% in terms of income. Citizens, angry about job insecurity and income inequality, poured into the streets one after another, and the voices resisting severe inequality continued for 73 days. The rally, broadcast worldwide in real time via the internet, was an expression of anger against neoliberalism that dominated the Anglo-American world around 1980, and furthermore against predatory financial capitalism.

What was the situation in Korea at the same time? The global financial crisis of 2008 caused considerable repercussions reminiscent of the 1997 International Monetary Fund (IMF) crisis, but the direction was completely opposite. After the IMF crisis, the hegemony of the global financial market began to take deep root, whereas after the 2008 global financial crisis, it became an opportunity to reconsider the mainstream paradigm that market fundamentalism through price mechanisms and growth determine distribution. It was also at this time that discourses on strengthening welfare and reducing income inequality began to pour out in earnest across both conservative and progressive political circles.

In this process, the world economic order shifted to a ‘G2’ centered on the United States and China, and China's rise positively influenced Korea's economic growth. Now, more than 13 years after the global financial crisis, Korea has advanced from benchmarking developed countries to becoming a leading economy competing with them. Experts diagnose that as competitors disappear, the risks of competition have increased. Just as Apple's smartphone propelled the digital economy, Korea is at a stage where it must secure global competitive advantage through new challenges.

There are many challenges Korea must solve as a leading economy. It must accept the inertia of policies focused on growth and resource distribution through government support or the limits of regulation and shift the direction of industrial and financial policies. Korea must respond to the ongoing calls for ‘extreme inequality reduction’ from the 99%, which once occupied Wall Street, elevated the debate with Thomas Piketty’s "Capital in the Twenty-First Century," and continues today. Additionally, Korea must actively address increasingly important issues such as ESG management, climate change, low birth rates, and youth problems.

The book "An Economy Standing on Two Feet" contains the situation Korea faced in 2021 and a wide range of topics to be solved. It was written by Lee Yong-woo, a former co-CEO of Kakao Bank, one of the most notable companies in the capital market, and currently a member of the National Assembly from the Democratic Party of Korea. Starting his career at an economic research institute and moving through financial holding companies, securities firms, and asset management companies, he focused on seeking alternatives based on accumulated field experience, culminating in his role as co-CEO of Kakao Bank, a pioneer in fintech.

The author presents ‘fairness and innovation’ as keywords for Korea’s transition to a new system as a leading economy. Part 1 deals with ‘platforms,’ icons of market innovation. It sheds light on how the platform economy, from Amazon to Korea’s Coupang, has changed the existing order. In particular, it points out the status of ‘platform workers,’ which has emerged as a global issue, as a challenge to be resolved in the future.

Part 2 contains long-standing thoughts on capital market systems such as initial public offerings (IPO), shareholder capitalism, and various regulations by supervisory authorities. The author argues that the market’s functions should be maximally guaranteed while shifting to negative regulation. However, he emphasizes that negative regulation should not be mere deregulation but must hold market participants strongly accountable.

The section emphasizing the proper establishment of shareholder capitalism is especially notable. The author states, “The owners of a company are the shareholders, and the board of directors, representing all shareholders, should appoint and supervise executives who are delegated management rights as a principle.” He points out, “The fact that chaebol heads cannot distinguish between their own interests and the company’s interests is clear evidence that the principles of capitalist society have not yet been realized.”

Part 3 expands the discussion to social issues. The author begins with the 2008 global financial crisis that revealed the limits of neoliberalism and predatory financial capitalism, the 2011 "Occupy Wall Street" protests in the U.S., the inequality research by Thomas Piketty, professor at Paris School of Economics, and Emmanuel Saez, professor at UC Berkeley, and the Moon Jae-in administration’s ‘income-led growth’ policy.

Above all, he coolly diagnoses from an economist’s perspective how to structurally view inequality issues that became prominent with COVID-19. While outlining the tasks of a Korean-style New Deal to complement this, he also analyzes the low birth rate problem with a total fertility rate of 0.84 and the upcoming basic income debate.

While addressing economic and social issues for the book, the core value not missed is ‘fairness and innovation.’ The author Lee Yong-woo believes innovation without fairness is impossible. This is also why he takes a stance against issues such as Samsung’s shadow, chaebol governance, and dual-class voting rights throughout the book.

The economic politician says, “The neoliberal economic order no longer works, and solving inequality has emerged as a task of the era. Fairness and innovation are not contradictory. Innovation occurs on the foundation of a fair economic order, and we must review how we handle that competition.”

(Two-Footed Economy / Written by Lee Yong-woo / Hanbit Biz / 23,000 KRW)

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