As you may all know, Lee Kun-hee has publicly resigned as Samsung Group’s Chairman. Or has he? According to today’s Washington Post, Lee’s power and influence may stay long after his announced resignation. The tentacle-like arms of the Lee family are long and far reaching and the press conference yesterday may merely be a rehearsal to a puppet master pulling the strings from above.
However, others take a more positive view and see it as the begining of the end for Korea’s plutocratic chaebols and its kleptocratic and “chummy” relationship with the government. Yeah, right indeed.
In anycase, looks like Lee Kun-hee’s ajoshi drinking and golf buddies are up in arms, protesting the charges and burning pictures of Kim Yong-Chul.
At the end of the day, Korea may be at a cross roads of sorts, with a choice to reduce graft and corruption or just go with the program as usual. An article from Bloomberg quotes our very own Brendon Carr who says dryly:
“Korea is corrupt fundamentally…. Corruption is illegal on the books, but it’s socially mandatory.”
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“According to today’s Washington Post, Lee’s power and influence may stay long after his announced resignation.”
And in other news, water is wet.
Welcome, WangKon.
Change is stressful. There’s a social contract here that everyone understands: the gov’t controls the nation’s finances and ensures their chosen exporters get capital. Korea’s wealth increases in line with exports, and that wealth is primarily reserved for use by the exporters. The exporters (plus infrastructure chaebol, and the gov’t itself) fulfil their end of the deal by providing employment in excess of their actual manpower needs.
It works fine for a certain stage of development - that stage being the rapid growth phase, the one China is going through now. The stressful change comes when the exporters reach their efficiency frontier, and can no longer provide the rapidly rising standards of living that are required under the social contract. That’s when people lose patience with the corruption that always accompanies cronyism.
If Samsung and the others really were to become transparent, their books would confirm Korea’s poor labor productivity and misallocation of capital. Overall, it would show that the government and corporate elite are no longer are able to provide Koreans with enough income growth to make them ignore the cronyism; that the model has expired; that people in a developed nation have to fend for themselves.
Bringing down the chaebol will necessarily mean liberalizing the labor market. Stressful. A lot of underproductive Korean workers would have good reason to fear this. Burn, whistleblower, burn.
As always when one talks to a reporter there is a risk that some nuance will get thrown overboard while the story is being made.
Korea’s corruption subsists at a very fundamental level, as it is socially mandatory. What any observer over time could note, however, is the steady erosion of tolerance for corruption and the consequent reduction of the overall level of graft.
Petty corruption of public officials — the small bribes they used to expect for simply doing their routine jobs — has evaporated. It’s very hard to find public officials sticking their hands out for fifty bucks like they used to.
Grand corruption — big-time fraud, bribery, and embezzlement — still hangs around, but in my observation has also been on the decline.
I think in 100 years we may see a “clean Korea”.
It’s still the national sport for now, though.
At least they gave you higher billing than Tami Overby.
As we know, Korean society largely operates on the premise that the whole country is illegal. And while Brendon is correct in saying the society is fundamentally corrupt, it is much less corrupt than what it was 30 years ago when 10% bribes were considered almost like a surtax whenever dealing with government officials (as Brendon suggested in the above comment).
And, contrary to seeing chaebol tops face public humiliation, 30 years ago exposed “corrupt officials” in both the public and private sector were rarely larger than small fish.
Bottom line: Korea has a long way to go, but we should not forget how far it has come.
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[...] RJ Koehler [...]
[...] Per a company spokesman, he will only remain as a shareholder of Samsung companies. Lee Kun-hee resigned as Chairman of Samsung Group back in April over allegations that he illegally manipulated the stocks of the company so his [...]
[...] Per a company spokesman, he will only remain as a shareholder of Samsung companies. Lee Kun-hee resigned as Chairman of Samsung Group back in April over allegations that he illegally manipulated the stocks of the company so his [...]