Innovations in information technology and the greater availability of social media and applications such as Kakaotalk (the Korean instant-messaging application used by tens of millions in the country and globally), Twitter, Snapchat and Line have transformed not only how Koreans communicate, but also the way in which grievances are aired and discontent is channelled from virtual discussions to demonstrations in public spaces, ultimately blurring the divide between online and offline politics (Kim 2009). Metaphors have been drawn between the contemporary ailing and the conditions of many Koreans under the late Joseon dynasty, which ruled the Korean peninsula from 1392 to 1910. Hell Joseon is the widely-used pejorative term used to compare current societal structure to class-based Joseon (also spelled as Chosun) Korea in the 19th and early 20th centuries. The gap between haves (kap, indicating those with power in society) and have-nots (eul), or those ‘born’ into eating with golden or silver spoons and the increasingly larger segment of society eating with ‘clay spoons’ (heuksujeo), is becoming wider. These terms are used to express the popular anger at the divisions within, the polarization of and the deepening inequality in society. The scandal of the ‘nuts rage’ 1 and the ‘ramen incident’ 2 well illustrate both the sense of entitlement and privilege of the ‘very few at the top of society’ and the widespread outrage such conduct sparks among ordinary citizens. Though much larger in magnitude and in its political significance and implications, the ‘Choi Soon-sil gate ’ of 2016–2017, where the embezzlement of former Park Geun-hye ’s confidant of several decades and the briberies companies had to pay for access and favour, is ‘merely’ the latest episode in a series. The impeachment of the former president, which was prompted by the scandal and demanded by millions of citizens that took the streets of Seoul every Saturday over several cold weeks in the fall and winter of 2016, is of high symbolic significance. Privilege, entitlement and abuse are widespread and lie at the very top of the Korean political and economic system; however, justice and change can be brought about from below.
Korean society is changing rapidly. It is also becoming more unequal and polarized. Debates over democratization and democratic consolidation have given way to others questioning the quality of democracy in the country. Starting from 2012 the term economic democratization , Gyeongje Minjuhwa (to complement the political transition which took place in 1987) has become a common expression in Korean politics and society. Former President Park Geun-hye made achieving economic democracy a central feature of her electoral manifesto back in 2012 (Kim 2014).
The demand for economic democracy and more shared welfare is now the Zeitgeist in Korea (Yu 2013: 83). And yet, questions remain about how much Korea’s governments are actively engaged in addressing this issue and what the implications of growing societal divisions are for the social fabric. Can Korean society stick together or is it already made up of different segments that are increasingly disconnected from each other?
This book is concerned with understanding the sources of polarization in Korean society and the broader political and social dynamics this engenders in order to interrogate the state of Korea’s transition to democracy. This is especially timely in light of the scandals that engulfed the higher echelon of Korea’s political establishment and the large industrial conglomerates between late 2016 and early 2017. The connivance of politics and business, shady interference from non-elected and non-accountable individuals in policy decisions by the head of the country’s executive and the evolution of ties between politics, business and the media have all been exposed. Through vast demonstrations in Gwanghwamun square, not far from the Blue House (the president’s official home), sustained over several weeks and growing in numbers each time, the public, in turn, reminded outside observers of the contentious nature of Korean society and the potential for change that mass popular protests can generate. Eventually Korea’s political system was plunged into a deep crisis. South Korea experienced the first removal of a sitting president through an impeachment, and the country went through a void of political leadership at a time of growing tensions with the North and uncertain relations under the new Trump administration. The individual contributions reflect how it has changed especially since political democratization and how the deepening inequality is affecting Korean democracy in such crucial times.
Wealth Concentration, Polarization and Contention
In South Korea the largest 10 corporations contribute more than 76% of the country’s total GDP while more than 80% of the country’s GDP is contributed by small- and medium-sized businesses in Japan. Again, in Japan, conglomerates like Sony, Toyota and Panasonic contribute less than 20% of the total GDP (Kwon 2013: 19). On the surface level, the GDP seems to closely follow the trajectory of the Chaebol s ’ performance, which may give the impression that all is well in the Korean economy. Below the surface, however, a growing number of citizens seem to be struggling to cope with serious economic hardship, as wealth is concentrated in very few hands. According to Nam, 68.5% of the population belonged to the middle class in 1996; figures dropped to 58.5% in 2006 (Nam 2009: 6). Before the financial crisis, 70–80% of Koreans believed they belonged to the middle class; after the financial crisis this dropped to 28% (Nam 2009: 9).
Much of the scholarly and policy discussion about the decline of the middle class (and the related aspect of the rise of new classes) revolves around the role and impact of the large industrial conglomerates, the Chaebol s . The origins of the ‘Chaebol economy’ go back to the policies of the Park Chung-hee administration in the 1960s. During this time Chaebols collaborated with the state and the Chaebols could lead the way in the making of Korea’s ‘economic miracle’ thanks to state aid and special benefits and loans allowed by the state, as well as to the sacrifice of labour in 1970s and 1980s. Chaebol business moved from heavy chemical industry to services and IT industries. As the Chaebols’ grip on the market becomes pervasive and manifests itself in every area of daily life from cars and electronics to coffee and bakeries, many now hold the belief that the power of the Chaebols is beyond the state’s control. As former president Roh Moo-hyun mentioned at his annual speech in 2005, ‘power is handed over to market […] and the Chaebols hold a monopolistic position in the market’ (Yu 2013: 79).
This is not to say that wealth is not generated outside of the Chaebol economy, but those who do accumulate wealth tend to do so riding the property market boom. Research on income polarization confirms that the polarization is led by non-labour income (Shin and Shin 2007 cited in Nam 2009). According to the 2007 income inequality index, non-labour income inequality was 0.7069, twice higher than that of income inequality (Kang 2012: 156). Those who belong to the top 20% of asset owners have a staggering 474 times more assets than those who belong to the lowest 20% (Ibid, 156). In his research Nak-Nyeon Kim measured wealth by the inheritance tax and estate multiplier method, which also shows the top 10% Koreans owning 66.4% of the wealth, while those below 50% owning only 2% of the total (Business Post October 29, 2015; Kim 2015: 1).
To be clear, the current predicament has not emerged overnight. Polarization in Korean society dates back at least as far as the restructuring project adopted under the guidance of the IMF following the Asian financial crisis that engulfed the Korean economy in 1997. Neither are inequalities and segmentation unique to Korean society. That said, the gap between the poor and the rich has widened considerably as a result of specific government policies.
During the Asian financial crisis the bankruptcies of many large industrial conglomerates such as Daewoo, Kia and Hanbo led not only to layoffs and vast unemployment at the time, but also to the shrinking of a middle class where those who lost jobs, security and their position in society could not ‘bounce back’ and lay in a socio-economic limbo in the following decades. Some sought to cope by opening small businesses, which engendered a race to the bottom on profit margins and fierce competition in the small business sector, which led to additional losses. Lack of start-up capital meant many borrowed large sums of money, incurring significant debt. Subsequent business failure translated into even bigger losses and pain. This was a predicament that each administration inherited from its predecessor and one which all failed to tackle.
From rags to riches: Government-labour relations in Korean post-war history and the advent of neo-liberal policies
Some context as to why and how the Korean government and society has come to this point is needed to understand the discussion that follows. Under authoritarian rule workers are not allowed to form organized unions. The Chun Doo-hwan government (1980–1988) was determined to deter unions from political participation, cracking down on their collaboration with political actors such as student activists, opposition intellectuals or political parties. However, this did not prevent unions from resorting to strikes, demonstrations and a whole variety of repertoires of contention to voice its demands (Im, this volume, Chap. 2). In fact, the contentiousness of Korea’s labour and its contribution to the country’s democratization is well noted in the literature (Lee 2011). The civilian (but former military) government of Roh Tae-woo (1988–1993) made some concessions to the workers, while maintaining the pluralist company unionism introduced by Chun Doo-hwan. Because of the internal fragmentation of the unions each of them had to negotiate with its own firm to improve the workers’ conditions and work environment. Under the highly pluralized unions the Chaebol s become responsive to the militant unions within their own companies and provided an occupational welfare system in the form of housing or subsidizing children’s education or offering extra trainin...