Thinking About Some Paid Lovin’?

Korea has one way to generate wealth: sell cars, ships, steel and electronics to the rest of the world (with honorable mention to heavy engineering projects in the Middle East). Every won in everyone’s pocket can be traced back to those industries.

Taxes from those industries fund the government’s budget. Trickle-down from those export earnings provides the cash flows for the entire domestic economy. There is no value added in the service industry, finance, tourism, small industry, high tech, venture capital, professional services or arts & culture.

For Koreans overall to enjoy their standard of life, therefore, it is essential that systems be in place to distribute wealth away from the big exporters. This Korea has done pretty well. And I will note, it didn’t happen by imposing high taxes on the exporters and then spreading it around.

Koreans have a culture that supports redistribution. They do a lot of their consumer spending at neighborhood shops within walking distance from their homes, rather than always driving to the Big Box stores. They eat out a lot. They throw expensive parties. They buy a lot of gifts for each other. They love new clothes. They don’t get much in the way of making a living as a street merchant. They throw away anything more than three years old. They go drinking a lot. They overspend on holidays. They blow a ton of money on education for their kids right from age 3. They are always ready to jump on the latest fad.

They also have a lot of ways to pay for sex. It may be unsavory to the sensibilities of people who get up early on Sunday mornings, but as a culture, I believe Koreans understand that their room salons, an-ma, sports massages and barber shops are an effective way of re-distributing salaryman paychecks and the marketing budgets of large corporations to the benefit of parts of society that otherwise would have no way of obtaining a remotely similar level of income.

I do hate to derail a perfectly good prostitution thread, so I’ll be brief: I believe you are entirely correct about breaking up the chaebol and how it would help diversify the economy. But remember, in Korea it’s not about earnings, it’s about assets (it’s not how much you make, it’s how big you are).

If you took a chaebol that now has a market value of $30 billion and split it up, you wouldn’t have a bunch of companies collectively worth $30 billion. The process of splitting them up and giving each their own books would reveal that the $30 billion is an inflated value based on cross-ownership, and in fact, the whole thing was only really worth, say, $5 to 10 billion. I think it’s a hit worth taking, cuz you only need to take it once. But that’s not the point of view of the relatively small number of people who would be taking that hit.

But now you’re not being Korean. Confucian culture isn’t just a one-way street of showing deference to your superiors. Superiors also have responsibilities to their direct underlings, as well as to the whole society. I’m also a strong believer in ‘the discipline of debt’, but your suggestions usurps what is seen here as the rightful role of the elite class to manage things on behalf of society (speaking here specifically about the Korean government’s role in providing unsupervised financing to the chaebol).

I might add that the meltdown in the Anglo-American financial system in the past year hasn’t done a whole lot to discredit the NE Asian way of organizing an economy.

(Whore thread officially hopelessly derailed)