Triumphs and Their Discontents: Growth and Inequality in the South Korean Developmental State (original) (raw)

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Abstract

South Korea has long been looked to as an exemplary case of rapid economic expansion. Further, proponents of the South Korean development model have tended to not only extoll its industrial ascent during the 1960s and 1970s but also herald the fact that its breakneck developmental pace was attained in conjunction with a relatively low degree of inequality. This paper challenges this framing on two fronts. First, it delves into the specific historical sequencing of South Korea’s developmental epoch to point to theoretical and empirical problems with the causal association drawn between its state-led development model and the low levels of inequality. Second, the paper draws upon an array of contemporaneous research from the era of rapid growth to reassess the extent to which South Korean society did, in fact, feature a distributional regime that merits the praise found in retrospective accounts. In making both of these arguments, the analysis draws upon Thomas Piketty’s groundbreaking work on inequality. The paper demonstrates that the social processes and institutions catalyzing distributional divergence in South Korea were established long before the neo- liberal-inspired reforms in the 1990s. These conclusions bear significantly upon both our understanding of the South Korean case and its implications for development theory more broadly.

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What explains the continuity of inequality from Korea's developmental state era to now?add

The study reveals that inequality in Korea has deep roots tracing back to the 1940s, with political and ideological constructs shaping distributional politics and welfare policies. Evidence from scholars like K.-D. Kim and Choo in the 1970s indicates that inequality was already a concern during the growth with equity narrative.

How did the 1997 financial crisis influence Korea's inequality dynamics?add

The paper argues that the financial crisis of 1997 exacerbated pre-existing inequalities rather than creating them, shifting policy towards neo-liberal reforms that intensified social stratification. This transformation was entrenched by existing political structures and ideologies rather than a complete policy overhaul.

What role did education play in sustaining inequality during the Park regime?add

The study indicates that education under the Park regime was designed to foster loyalty to the state, reinforcing socio-economic hierarchies rather than alleviating inequality. Costs placed on families hindered lower-income households from accessing quality education, perpetuating the cycle of poverty.

Why is the notion of 'growth with equity' in Korea considered misleading?add

The analysis shows that while some economic growth occurred, it did not equate to equitable wealth distribution, as the richest quintile's income share grew significantly during this period. Reports from Suh and Lee highlight that poverty and malnutrition increased despite GDP growth.

How did state policies affect labor conditions during the Park era?add

The paper illustrates that the Park regime's policies targeted labor repression, facilitating exploitation and maintaining low wages under harsh working conditions. Legislative measures were enacted to suppress labor movements, ensuring the state's control over labor dynamics.

Figures (1)

[Figure 1 Growth, capital, and inequality in Pikett's model Alas, for Piketty these fundamental tendencies are by no means deterministic, nor do they predict that all capitalist systems are destined to produce deeply inegal- itarian societies. Instead, the decisive variables for combatting the inegalitarian tendencies of anr > g environment are of a political and ideological nature. In this way, “economic and technological rationality” is quite distinct from “democratic rationality” such that “real democracy and social justice require specific insti- tutions of their own” that go beyond market mechanisms or even “parliaments and other formal democratic institutions.” Further, this assertion corresponds to the conclusion that ultimately “growth is quite simply incapable of satisfying” aspirations for equality rooted in democracy or the meritocratic ethos.?? Thus, from this perspective, “[iJnequality is neither economic nor technological; it is ideological and political.”°° In sum, Piketty’s analysis etches out a sequence that commences with a steep decline in inequality resulting from exogenous shocks, which after a transitory moment of relative equity, gives way to rising tension between the dominant tendency toward distributional divergence and the political and ideological forces either fortifying or countermanding this state of affairs. Figure 1 presents a stylized representation of Piketty’s depiction of inequality’s fluctuation over time, along with the role of politics and ideology in facilitating ](https://figures.academia-assets.com/119421526/figure_001.jpg)

Figure 1 Growth, capital, and inequality in Pikett's model Alas, for Piketty these fundamental tendencies are by no means deterministic, nor do they predict that all capitalist systems are destined to produce deeply inegal- itarian societies. Instead, the decisive variables for combatting the inegalitarian tendencies of anr > g environment are of a political and ideological nature. In this way, “economic and technological rationality” is quite distinct from “democratic rationality” such that “real democracy and social justice require specific insti- tutions of their own” that go beyond market mechanisms or even “parliaments and other formal democratic institutions.” Further, this assertion corresponds to the conclusion that ultimately “growth is quite simply incapable of satisfying” aspirations for equality rooted in democracy or the meritocratic ethos.?? Thus, from this perspective, “[iJnequality is neither economic nor technological; it is ideological and political.”°° In sum, Piketty’s analysis etches out a sequence that commences with a steep decline in inequality resulting from exogenous shocks, which after a transitory moment of relative equity, gives way to rising tension between the dominant tendency toward distributional divergence and the political and ideological forces either fortifying or countermanding this state of affairs. Figure 1 presents a stylized representation of Piketty’s depiction of inequality’s fluctuation over time, along with the role of politics and ideology in facilitating

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  108. See Hae-Yung Song, The State, Class and Developmentalism in South Korea: Development as Fetish (London: Routledge), 2020; Hockmuth, "Developmental Sources," 2022. For a discussion of how the "self-help" ethos persists in contemporary discussions of social welfare and inequality in Korea, see Jungho Roh, "Concern about the Rise of Lazy Welfare Queens? An Empirical Explanation of the Underdevelopment of the Redistributive Welfare System in South Korea," The Social Science Journal 50.3 (2013): 289-298.
  109. Kristen Looney, Mobilizing for Development: The Modernization of Rural East Asia (Ithaca, NY: Cornell University Press, 2020), p. 9.
  110. Mick Moore, "Mobilization and Disillusion in Rural Korea: The Saemaul Movement in Retrospect," Pacific Affairs 57.4 (1984): 583.
  111. Samuel Ho, "Rural-Urban Imbalance in South Korea in the 1970s," Asian Survey 19.7 (1979): 647.
  112. Moore, "Mobilization and Disillusion in Rural Korea," 1984, p. 583.
  113. For references to the "trickle-down" model within the context of Korea's developmental system see, Kim et al. (2011); Park (2011); Yang (2018).
  114. Mobrand, Top-down Democracy, 2019, p. 33.
  115. Oddly, the deep skepticism the student of politics would tend to cast upon claims of "popular support" in a system with severe restrictions on freedom, widespread state control/ influence over the media and education, along with a massive system of surveillance is often suspended when discussing public attitudes toward the Park regime.
  116. Paul Chang, Protest Dialectics: State Repression and South Korea's Democracy Movement, 1970-1979 (Stanford, CA: California: Stanford University Press, 2015), pp. 55-56.
  117. Rhee, "South Korea's Economic Development," 1973, p. 684.
  118. Lee, "Developmental Dictatorship," 2006, p. 204.
  119. Yang, Small Welfare State in South Korea, 2017, pp. 70-71, emphasis added.
  120. On the military emphasis of HCI see Peter Banseok Kwon, "Building Bombs, Building a Nation: The State, Chaebŏl, and the Militarized Industrialization of South Korea, 1973-1979," The Journal of Asian Studies 79.1 (2020): 51-75.
  121. Eun Mee Kim, Big Business Strong State: Collusion and Conflict in South Korean Development, 1960-1990 (Albany, NY: State University of New York Press, 1997), p. 170.
  122. See Alice Amsden, Asia's Next Giant: South Korea and Late Industrialization (New York, NY: Oxford University Press), 1989; Evans, Embedded Autonomy, 1995.
  123. Indeed, one of the paper's epigraphs is drawn from Cho Se-hǔi's riveting and forlorn novel anchored in the real experiences of urban "renewal" in 1970s Seoul. The book was widely read in Korea and, though fictional, stands as one of the more substantive accounts of how "development" was experienced everyday citizens.
  124. Yushin can be translated as rejuvenation or renewal.
  125. Hyug Baeg Im, "The Origins of the Yushin Regime: Machiavelli Unveiled," in The Park Chung Hee Era: The Transformation of South Korea, eds. Byung-Kook Kim and Ezra Vogel (Cambridge, MA: Harvard University Press, 2011), p. 237.
  126. Youngju Ryu, "Introduction," in Cultures of Yushin, ed. Youngju Ryu (Ann Arbor, MI: University of Michigan Press, 2018), p. 8.
  127. Yang, From Miracle to Mirage, 2018.
  128. Kim and Park, "A Critical Reappraisal of the Park Chung Hee System," 2007, p. 196.
  129. Hagen Koo, Korean Workers: The Culture and Politics of Class Formation (Ithaca, NY: Cornell University Press, 2001), p. 16; see also, George Ogle, South Korea: Dissent within the Economic Miracle (Atlantic Highlands, NJ and Washington, DC: Zed Books and International Labor Rights Education and Research Fund), 1990.
  130. Jin Woong Kang, "The Disciplinary Politics of Antagonistic Nationalism in Militarized South and North Korea," Nations and Nationalism 18.4 (2012): 237.
  131. Youngju Ryu, Writers of the Winter Republic: Literature and Resistance in Park Chung Hee's Korea (Honolulu, HI: University of Hawai'i Press, 2016), p. 3.
  132. Suh, Economic Growth and Change, 1985, p. 8.
  133. Suh, Patterns of Poverty, 1979, p. 41.
  134. Choo, Review of Income Distribution Studies, 1974, p. 41. For more detailed discussions of the problems with statistics from the Park era see Chun, They Are Not Machines, 2017, especially pp. 6-9; Danny Leipziger, The Distribution of Income and Wealth in Korea (Washington, DC: World Bank), 1992; Kuznets, Economic Growth and Structure in the Republic of Korea, especially pp. 92-99.
  135. Lee, "Developmental Dictatorship," 2006, p. 205.
  136. Suh, Patterns of Poverty, 1979, p. 48.
  137. Choo, Estimation of Size Distribution of Income, 1985.
  138. Choo, Estimation of Size Distribution of Income, 1985, pp. 9-10.
  139. Leipziger, Income and Wealth in Korea, 1992; Yang, From Miracle to Mirage, 2018. Leipziger (p. xv) notes that between 1974 and 1989, "land prices rose by a factor of 14, more than three times as fast as real GNP. As a result, huge capital gains (unrealized as well as actual) have accrued to those owning these assets, a group that is a small fraction of the population."
  140. Suh, Patterns of Poverty, 1979, p. 43.
  141. Choi, "Political Cleavages," 1993, p. 30.
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