'Progressive Theorist' Choi Byung-chun: "Progressive Economic Logic Has Been Wrong So Far"

"Progressive Economic Logic is Resistance Theory... Need to Shift to Progressive Economy 2.0 for Competent Governance"
"Must Collaborate with the US in Advanced Technology... Era of Self-Reliance and Strategic Alliances"

[Interview with Jeong Jae-hyung, Economic and Financial Editor; Summary by Reporter Heo Mi-dam] The book titled Good Inequality is gaining attention. Published on September 1, it has gone into its third printing within just over a month, selling about 5,000 copies. Choi Byung-chun, head of the New Growth Economy Research Institute and a theorist in the democratic progressive camp, is drawing attention for his sharp criticism of the economic policies of the Democratic Party and the progressive camp.

He pointed out the flaws in the Moon Jae-in administration’s economic policies such as income-led growth and rapid achievement of a 10,000 won minimum wage, and argued through 110 graphs and tables that economic inequality in Korean society was driven by inequality originating from China. This book helps readers understand 30 years of Korea’s economic inequality history, the relationship between inequality and economic growth, the impact of changes in the global and Chinese economies on Korean inequality, as well as Korea’s labor issues, social welfare, and super-aging problems.

Choi categorizes the economic logic of Korea’s democratic progressive camp into three stages: ▲the Hakhyun School of the 1960s and 1970s led by Park Hyun-chae and Professor Byun Hyung-yoon ▲the socialist ideology of the 1980s activist groups ▲and anti-neoliberalism after the 1997 financial crisis, asserting that “the economic logic of these progressive camps is wrong.”

He argues that the policy experiments carried out in reality by the Moon Jae-in government, based on the progressive camp’s problematic awareness, failed, which inevitably led to a regime change despite a solid fixed support base.

Choi’s profile is rising as he recently appeared on the economic YouTube channel ‘Sampro TV’ to introduce the contents of his book.

Author of 'Good Inequality,' Choi Byungcheon, Director of the New Growth Economy Research Institute. / Photo by Kim Hyunmin kimhyun81@

- Do you feel the popularity?

▲Not much different from usual yet.

- What motivated you to write the book?

▲When the Moon Jae-in government took office, it implemented flawed economic policies such as income-led growth and rapid achievement of a 10,000 won minimum wage, which caused many side effects. For the progressive camp to be recognized as a competent governing force, it must implement proper economic policies. The economic logic of the Democratic Party and the progressive side is the economics of resistance forces. If we call that Progressive Economics 1.0, then the economics of a competent governing force must be upgraded to Progressive Economics 2.0.

- You say the progressive camp’s economic logic is the economics of resistance forces?

▲In the Park Chung-hee era’s economic logic and economics, there are both light and shadow sides, roughly a 6:4 ratio. Currently, Korean progressives, including the Democratic Party, focus on the shadow side?the 40%?and keep looking only for problems. To govern competently, one must also properly acknowledge the light side and add positive elements based on a full understanding of it, but that did not happen.

- Don’t progressives, including the Democratic Party, acknowledge the achievements of Park Chung-hee era’s economic growth?

▲The basic economic logic of Park Chung-hee’s economy emphasizes the trickle-down effect of export companies and large corporations. Wage suppression and labor rights oppression are the shadow side. Progressives oppose export-oriented large corporations and emphasize a domestic demand-centered economy and small and medium-sized enterprises (SMEs). I categorize company sizes into six groups: ①self-employed ②small enterprises ③medium enterprises ④mid-sized enterprises ⑤large enterprises ⑥global large enterprises.

Then I want to ask progressives, “Is an economy with many in categories 1, 2, and 3 and few in 4, 5, and 6 better?” In other words, is a large corporation-centered economy better, or is an economy centered on self-employed and small enterprises better? When asked, Democratic Party politicians or lawmakers say, “We will build an economy centered on SMEs.” This is related to protecting neighborhood businesses. Economically, this is a policy encouraging diseconomies of scale.

- The idea is to support SMEs and self-employed as the weaker parties, but don’t they also think that large corporations provide better jobs and thus there should be more large corporations than SMEs?

▲No. The theory is all mixed up and unorganized. The old activist sentiment remains, thinking companies are bad guys exploiting labor, especially chaebol large corporations are really bad guys, but at the same time, they think large corporation jobs are good jobs. The perception is confused. Large corporations and chaebols must be distinguished.

- What do you mean by distinguishing large corporations and chaebols?

▲The U.S. economy is centered on large corporations. The self-employed share is only about 5%. There are no chaebols abroad, but there are large corporations. The chaebol problem in Korea is that owners with minority shares control corporate management and make decisions benefiting themselves rather than the entire company. Chaebols, like the Park Chung-hee era economy, have pros and cons and should be reformed gradually, but large corporations should be encouraged. However, the Democratic Party and progressives have no discourse fundamentally encouraging large corporations.

- So the problem is equating large corporations with chaebols?

▲Exactly. The chaebol concept is linked to governance structure and the institutional and cultural systems supporting it, which is the chaebol system. Large corporations are different; it’s about scale.

- You think the origin of progressive economic logic is Park Hyun-chae in the 1960s?

▲Yes. It influenced the 1960s, 1970s, and even the 1980s.

- During the Park Chung-hee era, there were the Seogang School that participated in the regime and the critical Hakhyun School.

▲They are the same. The Hakhyun School, centered on Seoul National University Professor Byun Hyung-yoon, consisted of progressive scholars who advocated a domestic demand-centered economy and SME-centered economy. Taiwan was considered a desirable alternative model. You might recall that until the mid-1990s, progressives believed Korea’s economy should become like Taiwan’s. Taiwan, with strong SMEs, was prosperous, so why support large corporations? Those who spent their 20s in the 1970s and 1980s created income-led growth.

- So can it be said that the economic issues raised by the democratic camp were all proven wrong through Korea’s economic development and growth?

▲I broadly call it the economics of resistance forces, but I think there were three versions. The mainstream theory of Korean progressives in the 1960s and 1970s was Park Hyun-chae’s national economy theory. Kim Dae-jung’s 1971 presidential election candidate’s mass economy theory was similar. This was mainstream economic theory in the Third World, called import substitution industrialization or inward-looking industrialization. Park Chung-hee’s export-led growth was a heretical theory in the Third World. Korea, Taiwan, Hong Kong, and Singapore?the four Asian dragons?succeeded spectacularly.

The first version was the national economy theory. After the 1980 Gwangju democratization movement, student activism radicalized, bringing in anti-imperialist and anti-capitalist theories. The economic theories of the National Liberation (NL) and People’s Democracy (PD) camps were simply nationalization and planned economy. After the Soviet collapse in 1991, socialism collapsed, and anti-neoliberalism emerged. The 1997 Asian financial crisis was a turning point when globalization accelerated and neoliberalism was introduced, which they opposed.

- So anti-neoliberalism became dominant after the financial crisis?

▲Yes. Anti-neoliberal books sold well, and the Democratic Labor Party embraced it as policy. Korean progressive theory is strictly resistance theory, and anti-neoliberalism is similar: opposing layoffs, restructuring, and privatization. Income-led growth theory is a somewhat positive version of this. It incorporates the previous three: national economy theory, NL-PD economics, anti-neoliberalism, plus Keynesianism, social democracy, and welfare state as seasoning.

- Did the entire progressive camp agree on income-led growth theory?

▲Income-led growth theory contains the history of Korean progressive economics. Narrowly, it is a 25-year policy experiment of anti-neoliberalism after the financial crisis, and broadly, it contains the history of heterodox economics.

This is fine as resistance theory. It is just opposition economics like an opposition party. You can keep criticizing. But it is not a theoretical system that gives confidence to economic stakeholders that “the Democratic Party can manage the economy better than the People Power Party” or “the Democratic Party is much better.”

- There were Democratic governments of Kim Dae-jung, Roh Moo-hyun, and Moon Jae-in, but Kim and Roh’s governments entrusted much of the economy to bureaucrats.

▲Good point. The economic policies of Kim Dae-jung and Roh Moo-hyun governments differ from Moon Jae-in’s. The former delegated quite a bit to economic bureaucrats. The Moon Jae-in government tried out progressive economic policies to the fullest. This is symbolized by the Blue House policy chiefs. Among the four policy chiefs during Moon’s government?Jang Ha-sung, Kim Soo-hyun, Kim Sang-jo, and Lee Ho-seung?only Lee Ho-seung was a bureaucrat from the Ministry of Strategy and Finance.

- Was appointing a bureaucrat as the last policy chief an admission of failure?

▲It could be overinterpretation; we don’t know what they thought internally. More importantly, for four years out of five, progressive professors served. Jang Ha-sung, Kim Soo-hyun, and Kim Sang-jo were considered the better progressive economists, relatively balanced and realistic. Conservatives might see them as pathetic, but about half of progressive scholars say “the Moon Jae-in government failed to implement progressive economic policies properly.”

Author of 'Good Inequality,' Choi Byungcheon, Director of the New Growth Economy Research Institute. / Photo by Hyunmin Kim kimhyun81@

- Recently, economic issues are directly linked to security issues, so economic reporters must study international political order. It is called the new U.S.-China cold war, blocized re-globalization, the era of multi-empires, and survival of the fittest.

▲There is a view that it is difficult to see the current situation as a ‘U.S.-China new cold war’ like the U.S.-Soviet Cold War. The Cold War system was linked to class fronts. The Soviet Union created a workers’ state, so the discourse was about whether the working class or capitalist class was more important. The working class existed in all advanced countries, so it was a confrontation based on universalist discourse.

Now it is a confrontation invoking very old empires, i.e., nationalist empires: the Turkish Empire, Russian Empire, and Chinese nation. There is no global universality. The U.S.-Soviet Cold War was based on ideological and class universality, but now major player countries try to exert power individually: the U.S., China, Russia, and then India.

India is currently Hindu nationalist. It severely suppresses Islam, which accounts for about 200 million people, roughly 18% of India’s 1.4 billion population.

- Then what should Korea do?

▲In the era of globalization, it was enough to focus on the economy without worrying about security. But now traditional security has become important. After the U.S. defeat in the Vietnam War, President Nixon announced the Nixon Doctrine in 1969 as a new Asia policy and visited China in 1972. Because of this, President Park Chung-hee promoted self-reliant defense and began fostering defense industry and heavy chemical industry. The Korea-U.S. alliance will continue, but the U.S. may act passively on the Korean Peninsula depending on its interests. Korea cannot rely solely on the U.S. and must build a multilayered security cooperation system.

- What do you mean by multilayered security cooperation?

▲The U.S. remains most important, but security cooperation should also be with Quad countries like Japan, Australia, and New Zealand, as well as NATO in Europe and India.

- Economically?

▲Economic decoupling between the U.S. and China will proceed, but the U.S. will not completely block all technology and economy from China. If technology is divided into low, medium, high, and advanced technology, advanced technology is important. It is used simultaneously in military and civilian sectors: semiconductors, artificial intelligence (AI), quantum computers, etc.

In advanced technology, Korea must go with the U.S. Considering market and technology, technology is more important. Also, the Chinese market is shrinking. China is pursuing Made in China 2025 and achieving localization in many fields. It is important to go with the U.S.

Korea, as a manufacturing powerhouse and export-oriented country, needs to make its voice heard internationally. The U.S. is not an export-driven country, and countries worldwide maximize national interests in various ways. Now is an era where diplomacy and security are important. Various forms of survival of the fittest and alliances are happening. Korea must pay more attention to diplomacy and security to maximize national interests.

Author of 'Good Inequality,' Choi Byungcheon, Director of the New Growth Economy Research Institute. / Photo by Hyunmin Kim kimhyun81@

- Why did you participate in student activism from high school?

▲I was involved in high school activism. I had an experience of poverty in childhood, and secondly, it was just after 1987. I attended Dongseong High School in Daehangno, a place with many demonstrations, and was influenced by extracurricular circles. I was active in Heungsadan outside school, and the high school was affiliated with Myeongdong Cathedral. After 1987, there was some kind of energy.

- Heungsadan was founded by Dosan Ahn Chang-ho?

▲Heungsadan still exists. At that time, Heungsadan had many people with activist awareness. Kim Young-sam was elected president in December 1992, but from 1987 to 1992, there was a revolutionary spirit in society. There were many strikes; more than half of all strikes in Korea since liberation occurred between 1987 and 1992. Many around me, including myself, went to factories after graduation. It is called ‘high school activism.’ I worked in factories in Guro Industrial Complex, Doksan-dong, and Cheonan for about six years. I have an electric welding certificate.

- Did you leave the factory after socialism collapsed?

▲No, much later. I entered the factory around the time socialism collapsed. I didn’t study, so I didn’t understand what socialism’s collapse meant. I heard socialism was good but didn’t know the theory. The theory was vast, and the financial crisis was a more important experience for me. I was working in a factory in Cheonan when the financial crisis happened.

I always read the Hankyoreh newspaper then, and the whole paper was about the economy: bailout, IMF, default, moratorium, floating exchange rate system. You might recall the term ‘trusteeship.’ People said Korea entered IMF trusteeship, which felt like the Eulsa Treaty. What did that mean? Living as an activist, I was somewhat illiterate and didn’t understand anything. I thought if you don’t understand the economy, you can’t protest well. To be a good protester and excellent activist, I thought I had to study economics, so I went to an economics department.

- You went to university in the late 1990s?

▲Later. I learned the economics curriculum and then tackled overdue homework: to understand why socialism collapsed, I had to know what socialism was. It’s not a simple answer; you have to know a lot. Also, seniors said welfare states were bad. The old activist view was that imperialism exploited the Third World and that welfare states were bad. Books like Hong Se-hwa’s I am a Taxi Driver in Paris came out, which seemed good but were said to be bad. So why did socialism collapse? Are welfare states good or bad? How can they be built? What is liberalism? What is neoliberalism? Why did the financial crisis happen? I studied these overdue questions diligently.

- Please briefly introduce your book and its goal.

▲I wrote the book with the mindset of entering a factory for labor activism. The ultimate goal is for Democratic Party politicians to read it. I hope current Democratic Party lawmakers, aides, and next presidential candidates read it. The Democratic Party is not a group that leads change but is interested in change to get elected. Once it influences the general public, it can be conveyed to the Democratic Party through various channels.

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