[Viewpoint] Reflecting on "Freedom" and "The Market" on New Year's Morning

Professor Kim Hong-beom, Department of Economics, Gyeongsang National University

On New Year's morning, everyone thinks of their wishes. I hope that freedom and the market will once again be respected in our society. The 'freedom' of Liberal Democracy and the 'market' of Market Capitalism. Both are core values guaranteed by the current Constitution of the Republic of Korea.

Two years ago, The Economist of the UK vividly depicted the reality of 'Illiberal' democracy. "The ruling party... has exploited its majority status in the legislature to capture regulatory agencies, dominate businesses, control the courts, buy off the media, and change election rules to its advantage. (For this, the ruler) ... does not need to break the law. They can have the legislature amend the law. ... There is no need to eliminate opponents. ... They can intimidate them through loyal media or tax authorities. (This country) ... appears to be a thriving democracy on the surface, but in reality, it is a one-party state."

'This country' is, unsurprisingly, Hungary. The 'ruling party' is Fidesz, and the 'ruler' is party leader Orb?n. After the global crisis, the world became a breeding ground for populist politics due to recession and worsening inequality. Populism outwardly champions the 'people' but inwardly sows division and stirs anger, driving out liberal democracy. In its place, illiberal democracy inevitably takes root. Hungary, Poland, and Turkey are examples. Are these countries the only ones?

In Yeouido, the ruling party, relying on its number of seats, continuously attempts populist legislation. There is even a proposed amendment to the Media Arbitration Act enforcing punitive damages to silence the press. Our people are well acquainted with the confusion and division caused by laws such as the Corruption Investigation Office for High-ranking Officials Act. When a democratic society forgets the value of freedom, laws become mere political tools for those in power, who then dominate over them. This is 'Rule by Law,' not 'Rule of Law.'

Meanwhile, in market capitalism, the 'market' organizes all economic activities based on private property rights and voluntary exchange. Policies that ignore the market and proceed unilaterally are bound to fail. The Moon administration's income-led growth and real estate measures were such cases. Their immediate goals were redistribution and speculation eradication, but the market was disregarded. Moreover, government failure resulting from these policies was exploited as an excuse for all kinds of giveaways. Society fell into the temptation of populism.

A scholar who foresaw this 80 years ago was Joseph Schumpeter, a Harvard professor. In his book "Capitalism, Socialism and Democracy," he viewed entrepreneurial innovation as the driving force of capitalism's development. Since market competition fosters innovation, Schumpeter was an ardent supporter of market capitalism. However, he worried that in the distant future, intellectuals would develop antipathy toward capitalism and prefer a big government. I now belatedly understand his concern. Look at our society today. The hypocrisy of the well-fed Gangnam leftists who constantly talk about the people has been accepted by the public, and the absurd belief that the state is responsible for individual lives has spread.

When freedom disappears from democracy, rule by law swallows the foundation of democracy. When government policies in capitalism disregard the market, not only government failure but capitalism itself is shaken from its foundation. I sincerely hope that this year will be the first year of significant progress toward the restoration of freedom and the market.

Kim Hong-beom, Professor of Economics, Gyeongsang National University

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