[Insight & Opinion] The Importance of What Should Not Be Done

[Asia Economy] I like jazz pianist Bill Evans. Listening to pieces like "Peace Piece," which he played imagining walking alone on the streets of New York, or "My Foolish Heart," released after forming his own trio, the serene melancholy feels so comforting. This comfort, like an early autumn evening still touched by sunlight, felt while listening to his gentle piano playing, where does it come from?

Playing the piano means accurately pressing the keys corresponding to the notes written on the sheet music. However, there are very brief but subtle breaks between sounds. Sometimes these breaks are felt, sometimes not. The emotion conveyed by music may not only come from playing the notes exactly as written but also from the harmony created by the sometimes empty, sometimes not empty time between one note and the next. So perhaps both are important: accurately producing the notes on the keys as written and also the act of not producing sound at all.

The same might apply to other matters. In the world, there are things to do and things not to do. Doing what must be done well is obviously important. But equally important might be refraining from doing what should not be done. Government policies are no different. The government must properly and surely carry out what it must do. However, if it mistakenly does what it should not, the merit and results of what it should do disappear, and distrust in the government grows, producing worse outcomes than doing nothing at all. Things the government should not do include things it cannot do. While raising the minimum wage and eliminating irregular jobs, it is impossible to increase jobs. Targeting only specific regions to control housing prices was something that could not be done, and sharply raising taxes in a short period to curb speculation was a short-term effect policy that should not have been done. Encouraging gap investments by multi-homeowners through the private rental registration system while trying to control housing prices was like pressing the accelerator and brake simultaneously.

Such policy implementations still continue today. While carbon neutrality and energy transition are national goals, the realization of energy prices, including electricity, is still being postponed. While claiming to nurture the startup ecosystem, various regulations behind the scenes hinder new technology development and commercialization. To curb inflation by reducing demand, the base interest rate is raised, but financial authorities request commercial banks to restrain from raising rates.

Policies that ignore the market may have temporary effects but are unsustainable and ultimately fail to achieve their goals. Of course, the market is an institution that must operate according to rules set by the state. Therefore, the government must set the scope of property rights protection and regulate monopolies to limit market dominance. However, once the market operates, the government's role should be limited to monitoring and disciplining the market to function properly. Good intentions do not guarantee good results. The legally mandated maximum interest rate policy, started with good intentions, has driven low-credit citizens into illegal private loan markets contrary to its purpose.

Kim Sang-cheol, Economic Commentator

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