[Inside Chodong] How to Survive in the Baroque Era

A Mercantilist Era Returns with Trump,
Signaling Extreme Inequality
If the Old Order Remains, Survival Itself Is at Stake
Major Shareholders over Building Owners,
Engineering over Medicine
Radical Transformation Must Happen Within Years

Bach, Handel, Vivaldi... Even those who are not classical music enthusiasts have likely heard these names at least once. All of them were icons of the Baroque era. This was the music enjoyed by kings and nobles in courts adorned with rare jewels and lavish paintings, feasting on delicacies flavored with spices from Asia and Africa. Yet, outside the high palace walls where these noble melodies did not reach, the common people endured lives of misery that are almost unimaginable today.

With a heatwave sweeping across the globe, a major turning point in world history has arrived. President Donald Trump unilaterally ended the tariff negotiations, bringing an end to the era of free trade that had matured over three centuries. Like Hegel's dialectic, humanity is now returning to the earlier age of mercantilism?an era marked by extreme inequality, the very period when Baroque music flourished.

It is striking to recall the warning given by Thomas Piketty when I met him in Seoul just after he published "Capital in the Twenty-First Century" over a decade ago. He analyzed that when the rate of return on capital (r) consistently exceeds the economic growth rate (g)?that is, when r>g?capital becomes increasingly concentrated in the hands of a tiny minority. As a result, he warned, humanity would inevitably face great dangers, such as war, in order to resolve the resulting extreme inequality. His proposed solution was a 'global capital tax.'

However, international legal mechanisms like a global capital tax, which rely on the idealism of 'international cooperation,' no longer function. The United Nations (UN) barely appears in the news, and the World Trade Organization (WTO) has been rendered powerless by the United States. We are witnessing a return to an era where weaker nations pay tribute to stronger ones and soldiers arriving by sailing ships turn lands into colonies. Mercantilism has returned.

This was a time when the king was the law. Mercantilism spared no means or methods. Today’s United States is no different. It unilaterally imposes multi-hundred-billion-dollar investment packages on the European Union, Japan, and South Korea?deals so complex their meaning is unclear. It stokes inflation through tariffs while simultaneously pressuring central banks to lower interest rates, and, in response to waning hegemony and a lack of demand for unpopular U.S. Treasuries, it freely allows stablecoins.

The Baroque era was a time when only the great powers and the top 1% could enjoy happiness. The extreme inequality that Piketty warned about was the norm. History is repeating itself. As seen in the Alaska U.S.-Russia summit, where the interests of Ukrainians were ignored, those who are not part of 'their league' may find their very survival at risk. To survive, a nation must possess capabilities strong enough not to be ignored by the great powers.

Change must come quickly. Major shareholders should be more admired than building owners, and engineering graduates should earn more than those from medical schools. There must be far more new industries and startups?such as artificial intelligence (AI) and content creation?to replace the manufacturing jobs that have moved to the United States. And all these transformations must happen at a breathtaking pace within just a few years.

The dawn of a new era is always accompanied by fear. But human history has always been a series of challenges and responses. It is not the strongest who survive, but those whose DNA adapts most rapidly to change. Even in the mercantilist era, only those who ventured out on sailing ships into the Pacific?with just a 1% survival rate?became great powers. This was made possible by the revolutionary institution of the 'corporation,' which allowed adventurous investors to fund such voyages.

There is no time to get bogged down in trivial matters. We must usher in an era of major reform.

Jo Siyoung, Head of the IB Team, Securities and Capital Markets Department

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