(a paper to be delivered at "Korea Today: Culture, Politics, and Economy",
Paris 8 University, June 23-24, 1998)
Kim Se-kyun
Prof. of Political Science
Seoul National University
Korean society is faced with a most serious economic crisis, termed as the "greatest crisis since the Korean war". The current crisis erupted initially as a foreign currency crisis which brought Korea to the brink of a national default or moratorium. Having survived through the initial foreign currency crisis, Korea now faces a crisis of the real economy conditioned by the ultra-austerity and high interest policies dictated by the International Monetary Fund. Massive serial bankruptcies of businesses and mass unemployment are the key features of the current situation.
Korea suffered a number of crises over the last thirty years. They were, however, easily overcome in the context of powerful growth drive. Korea, today, however, is sinking deeper into negative growth with no one knowing where this will end. In this process, GNP per capita has fallen to US$ 5,000 level from pre-crisis level of 10,000. This crisis is not merely an economic crisis but developing into an 'organic crisis' impacting the total social relations.
The future development of the Korean society will undoubtedly be determined by the direction of 'restrucuturation' of the social relations unfolding in the current crisis. This paper intends to examine the changing shape of the Korean society in this process.
Some characteristics in the development of the Korean society
In order to understand the future direction of the Korean society, it is necessary to briefly examine the basic features of the past development process.
a. The Historical Framework
Korean people have a historical experience of living for a long period as one people and nation. In the late Chosun period -- the late feudal era -- there were series of efforts to break through the yoke of the feudal system. However, these efforts were repressed by 'feudal reaction' and led to colonial domination by Japan. The present day Korea, therefore, can be regarded as a newly independent nation build in the aftermath of the Japanese defeat in the second world war.
Having been liberated from the Japanese colonial domination, Korea became a battle ground for the new superpowers, the U.S. and the Soviet Union, for Korea's integration into either the capitalist world system or the socialist bloc. This was paralleled by internal struggles: the struggles amongst the various forces to build a unified nation or divided nation, to opt for a capitalist development or a non-capitalist or socialist development.
These struggles in the southern half of the partition took place with the US Military Government in Korea in power. The left forces which had their roots in the peasant and urban working class masses and intellectuals were defeated in this struggle. The victorious right wing forces supported by the US were able to set up the Republic of Korea.
The Republic of Korea -- a divided nation in the Korean peninsula -- began, with the support of the US, as the frontier anti-communist platform of the world capitalist system.
The anti-communist and anti-North Korea system that was erected in south Korea was further consolidated through the Korean war from 1950 to 1953. The war brought about a total decimation of the forces of resistance and the consolidation of state apparatus. The anti-communist and anti-North Korea ideology became the dominant all powerful ideological determinant in all aspects of the south Korean society.
The post-war system remained intact throughout the post-war period in the context of continued confrontation with north Korea. This is manifest in the continued existence of the National Security Law despite the gradual democratisation. It has been a key obstacle in the maturation of political democracy. It has been the hot-bed for the development of over-sized military and over-growth of reactionary conservative forces. This has prevented, on the other hand, the growth of working class people's movement, reflected in the absence of a socialist-oriented political party movement.
b. The Economic Framework
Korea began as one of the poorest nations in the world with GNP per capita of less than US$ 200. However, the land reform undertaken in 1950 had meant the uprooting all the landowning class, creating one of the most equal societies in the world in terms of wealth distribution.
Until the 1960s under the Rhee Syngman government, Korea saw primitive capital accumulation with the assistance of mammoth foreign aid from the US and the land reform. Industrialisation only began in earnest under the military dictatorship erected by Colonel Park Chung Hee in May 1961. The military regime became one of the most successful developmental regime in the Third World.
The early industrialisation in Korea was took the form of export-oriented development based on government's foreign borrowings and long working hours cum low wages. The government's economic development policy was able to succeed because of devoted efforts of the people to rise out of poverty. Based on the early light-industry-led growth, the government began, since mid-1970s, to promote heavy chemical industries. This created the platform for Korea's launch into the status of a leading member of the newly industrialised economies.
Korea's high growth development continued in 1980s and 1990 despite a number of crises. The government, since mid-1990s, pursue the aim of 'leap into advanced industrialised nation from middle level nation'.
The high growth development saw the concentration of wealth and economic power in the conglomerate chaebol system which became the monopolistic economic powerfhouse. On the other hand, farmers have suffered a virtual decimation while workers became the victims of excessive exploitation, which made the "success" possible.
c. The Political Framework
The state system that was created in building the Republic of Korea by the Rhee Syngman government was an authoritarian police state. The Rhee Syngman regime fell to the mass uprising of students and urban masses in April 1960. The spring of democracy, however, was short lived as military coup d'etat in May 1961 led by Colonel Park Chung Hee took control of the state power.
The passive revolution led by the military led to the further consolidation of the anti-communist anti-north Korea system. The democracy movement, led mainly by youth and students and intellectuals, and the movement of grassroots people for basic human rights were subjected to severe repression. The institution of the Third Republic based on transfer of power to civilians -- Park Chung Hee in civilian clothes without his general's uniform -- lead to a certain degree of political democracy. However, this was overturned in 1973 with the erection of the Yushin regime which aimed to reaffirm the commitment to national security and economic development.
1970s saw the early growth of struggle by women workers in the light industries -- which formed the main carrier of the early export oriented development strategy. Women workers subjected to most extreme forms of exploitation began to cry out for basic rights and labour rights. Students and dissident intellectuals began to build up anti-dictatorship struggles in direct confrontation with the state. The democracy movement and the grassroots peoples struggle came together to a certain extent to develop into a kind of people's movement.
The democracy movement with solidarity links with people's struggles reached its peack in 1979 in the context of mass grievance arising from the economic crisis.
The internal struggles over the response to the general crisis at the time led to the assassination of Park Chung Hee by his director of the secret police. The incident on December 12, 1979 saw the end of the Yushin regime. But it triggered the reaction of the military which sought to extend the military rule. This led to the bloody massacre and suppression of the Kwangju people's resistance in May 1980.
The Kwangju massacre ushered in General Chun Doo Hwan as the centre of a new military dictatorship. The re-emergence of the military rule radicalised the youth and students and the new middle strata which has grown in the process of rapid industrialisation.
1980s saw the development student-worker solidarity as the basis of a labour movement among the young workers in small to medium enterprises.
The military rule also provided the environment favourable to a loose alliance between liberal democratic opposition forces led by Kim Dae Jung and Kim Young Sam and all other forces opposed to the military regime. This culminated in the formation of a broad democratic coalition in 1987 which led the democratic struggle of June 1987.
The June Great Democratic Struggle of 1987 provided a turning point in the development of politics in Korea. All the subsequent democratisation process can be deemed as the political effect of the June Struggle.
The June Great Democratic Struggle of 1987, however, did not succeed in directly overthrowing the military dictatorship or forcing the immediate withdrawal of the military political elite. Rather, it ended with winning a constitutional amendment institutionalising direct presidential election. This result reflects the fact that the democracy movement -- despite the radicalisation of the youth and students -- was shaped by popular hegemonic influence of the liberal democratic opposition political parties.
The subsequent direction election for president in December 1987 saw Roh Tae Woo -- the hand picked successor of Chun Doo Hwan -- winning power due to the split in the opposition camp between Kim Dae Jung and Kim Young Sam. This brought about the actual continuation of the military regime.
The process, however, demonstrated that the old ruling elite, which undergirded the military regime, was no longer capable of maintaining power and obtaining a popular legitimacy by itself. In response, the Roh Tae Woo regime succeeded in drawing in the outside forces led by Kim Jong Pil and Kim Dae Jung into a formal alliance to form a stable power base.
Kim Young Sam's motivation for participation in this alliance lied in drawing the power of the ruling elite for his presidential ambition. In 1992, Kim Young Sam finally succeeded in becoming the president as the ruling party candidate.
Kim Young Sam government represents the first civilian government since the military coup d'etat in 1961. However, it remained a coalition with the forces of the ancient regime which gave support to the military dictatorship. In constrast, the victory of Kim Dae Jung in 1998 presidential election represents the first ever victory by an opposition candidate, realising the first ever transfer of power. However, the current regime is also based on an alliance with Kim Jong Pil who had a fall out with the previous Kim Young Sam regime.
The ascendancy of Kim Dae Jung -- despite the continued existence of the National Security Law and the ideological paraphernalia anchored in this law which have distorted and obstructed the democratisation process -- brought about the withering away of the traditional 'democracy versus anti-democracy' conflict structure of the society and politics. This has produced a situation where the progress in procedural and formal democracy is not accompanied by a real political growth of the people.
d. The People's Movement
The student and youth movements which led the democracy movement had been engaged in a direct struggle against the state. This movement developed into a force for a fundamental systemic transformation following its radicalisation through the experience of the Kwangju People's Uprising and the subsequent bloody massacre. This movement, which had aspired for a fundamental transformation over and beyond a bourgeois democracy, suffered a drastic weakening due to the establishment of the 'civilian government' in 1992 and the implosion of the existing socialist states in early 1990s.
The opening of legal political space as the result of the June Democratic Struggle in 1987 gave rise to a new kind of movement. This movement, known as civli society movement centred on intellectuals and new middle strata, renounced a direct struggle with the state, but concentrated on social reform and in the efforts to solve the various problems that have risen as the by-product of rapid industrialisation.
On the other hand, the 1987 democratic aperture saw the mushrooming of workers struggles. June Democratic Struggle was followed by months of spontaneous workers struggles. The new workers struggle developed into a movement which, on the one hand, sought to defend and advance workers welfare, and on the other hand, aimed at building democratic trade unions independent of the state and capital. The democratic trade union movement was carried forward by blue collar workers from large factories and urban white collar workers who had not until that time experienced any previous mobilisation.
The Roh Tae Woo regime developed an accomodationist approach to the new civil society movement, but persevered with repressive policies towards the grassroots people's movement, including the democratic trade union movement.
The labour policy of the Kim Young Sam regime did not differ greatly from the previous government, despite the relaxing of the degree of repression.
In November 1995, the democratic trade unions which have developed since 1987 succeeded in the establishment of the Korean Confederation of Trade Unions as its national centre with a total membership of around 500,000. Despite its size, the KCTU encompasses the most of the strategic conglomerate workplace, making it an organisation capable of exercising significant social and political influence.
The creation of the KCTU has meant that the democratic trade union movement has a potential to develop into an alternative social and political force unlike the radicalised students and youth who have been absorbed into the institutionalised politics in 1990s.
e. The Dilution and Distortion of the Reform Process
The Kim Young Sam government proceeded energetically with reform efforts to clean up the legacies of the military rule. However, this reform was never one based on the power of people and workers aimed at winning concessions from the capital -- which would have made it a integrative progressive reform consolidating the people's power. Rather it remained a exclusive conservative reform aimed at rationalising domination and producing a more effective system of domination.
On the other hand, the Kim Young Sam government failed to carry out or even start a reform of the chaebol centred economic system due to its consideration for the impact on economy. His reform rhetoric became nothing more than an instrument of his power politics.
The conclusion of the Uruguay Round in December 1993 saw the emergence of 'national competitiveness' as the paramount state agenda. Kim Young Sam government also adopted a strategy of 'segyehwa' (globalisation/internationalisation) to support and promote the overseas advances of Korean capital. Korea's membership in the Organisation for Economic Cooperation and Development (OECD) in November 1996, while presented as a historic achievement of the Kim Young Sam government in elevating Korea into the status of advanced nations, was aimed at providing support to the outward (internationally) oriented Korean firms. This shift -- or clarification of policy agenda -- saw the disappearance of all semblance of reform politics. Rather, the government policies became entirely pro-chaebol.
The policy shift signified a wholesale promotion of neo-liberal economic reform accompanied by market opening. Liberalisation, deregulation, privatisation, and flexibilisation.
The substantial liberalisation of agricultural market timed with the conclusion of the Uruguay Round negotiations was the first step in this direction. The railroading of labour law amendment in December 1997 could be seen as the climax of the neo-liberal attack on the labour.
The commando operation like passage of the labour laws triggered the largest general strike of Korean workers since the 1948 general strike in opposition to the unilateral creation of a separate government in south Korea. The month-long general strike aroused the anger of ordinary people towards the government failures and retreats in reform and procedural democracy. It, thus, developed into a broad solidarity linking the various sectors in the society. Furthermore, it succeeded in winning the support of workers and trade unions in other countries which have suffered continued neo-liberal attacks since 1980s.
Despite these successes, the general strike, due to the compromising attitude of the leaders, failed achieve any real results or make progress towards halting the neo-liberal offensive of the capital to flexibilise the labour, accept for the legalisation of the KCTU.
Nevertheless, the general strike inflicted a critical blow to the Kim Young Sam regime which had been engaged in an effort to reconsolidate its power base through renewal of the loyalty of the reactionary conservative forces. The conservative forces were compelled to withdraw its support.
The series of exposure of power abuse by Kim Hyun Chul, the son of president Kim Young Sam -- regarded as the crown prince of his government -- damaged the government's legitimacy beyond repair. The government handling of the collapse of the 8th largest chaebol group Kia exposed the very incompetence of the government. The series of events spiraled into the catastrophic crisis.
The Korean Economic Crisis and the Process of Restructuration
The most important influencing factors in determining the development direction of the Korean society are the crisis management prescriptions dictated by the International Monetary Fund and the policies undertaken by the Kim Dae Jung government which came into power in the midst of the crisis.
The principal element of the IMF prescription is that the cost of restructuration required to overcome the crisis must be borne totally by the recipient of the bailout fund. This lies beneath the adherence to the short-term prescription centred around ultra-austerity policies and high interest policy and the medium-to-long term prescription for structural adjustment for the establishment of a free market economy.
The International Monetary Fund perceives the fundamental weaknesses and problems in the financial sector and corporate sector" as the key cause of the current crisis. In answer, the IMF calls for exits and liquidation of non-viable financial institutions, the reform of the corporate governance structure, liberalisation, and labour market flexibility. These are the main elements of its medium-to-long term structural adjustment programme.
These measures are firmly rooted in market oriented neo-liberalism. It aims to remove all obstacles to the entry and operations of transnational corporations in Korea. It envisions the influx of foreign capital, increased exports, and enhancement of international competitiveness of Korean firms as the only means and option available for Korea in its escape from the crisis.
The Kim Dae Jung government shows no hesitation in embracing the beckoning of the International Monetary Fund. President Kim Dae Jung presents himself as a "champion of free market economy". He holds firmly to the belief that the medium-to-long term structural adjustment programmes advised by the IMF should be taken as THE programme of the Korean people for the renewal of the Korean economy. President Kim Dae Jung has remained consistent in his adherence to a neo-liberal approach to structural adjustment.
President Kim Dae Jung has masterminded and steered introduction of the legal provisions for mass layoff -- which had been postponed due to the historic 1996-97 general strike -- and has devoted himself to attract foreign capital and open up the Korean economy. It is expected that his government will begin an all-out campaign, upon the conclusion of the local government elections, to wind up non-viable firms and financial institutions and privatisation of government corporations.
The neo-liberal structural adjustment programme, however, differs from the previous initiatives in that it calls for a reform of the chaebol system through the introduction of a ban on cross loan guarantees between sister companies of a chaebol group, compulsory consolidate accounting system (kyulhap jaemu jaepyo), measures for corporate transparency, and reforms in corporate finance situation. Some of these programmes had also been mentioned by the previous Kim Young Sam government only to be scrapped due to the resistance from the chaebols. The Kim Dae Jung government is able to pursue these reform agenda with a greater vigour because it would be difficult for the Korean economy to come out of the crisis without these needed changes. Another reason lies in the strong demand by the International Monetary Fund.
The reform of the chaebol system promoted by the Kim Dae Jung government, however, does not extend any more than the demands presented by the IMF. While they may stand in conflict with the immediate interest of the owners of the chaebol conglomerates, they contribute to the long term interest of the total capital by contributing to the enhancement and efficiency of the Korean corporate structure and practice. Therefore, it is far removed from the labour demands for the democratisation of ownership and management. At the same time, it does not enforce a net concession of the capital to labour. This is clearly reflected in a recent statement by president Kim Dae Jung that "workers should not intervene in the affairs of the management".
The only thing which president Kim Dae Jung goe beyond the IMF's demands is the call on the owners of the chaebol groups to channel their private wealth into the company. The channeling of fund, however, is merely investment by a person in the business. And it can always re-transferred to private bourse. It does not contribute to the compensation of wage losses suffered by workers or to the democratisation of corporate ownership structure.
The Kim Dae Jung government, therefore, can be regarded as a 'dependent neo-liberal regime' responding loyally to the demands of transnational capital to implement market-oriented neo-liberal solutions to the crisis. Its rhetoric of a government of people or democratic government pales before this reality.
It could be said that the Korea will come under the domination of transnational capital and a handful of giant monopoly conglomerate companies (a chaebol company in different shape) if Korean economy is re-organised in accordance with the prescriptions of the International Monetary Fund and the reform policy of the Kim Dae Jung government which embraces the IMF demands.
Along with the deepening of the economic crisis, and the continued increases in inflation due to currency devaluation, workers suffer from wage freeze and cuts, reducing the living standard of working families to one third of the pre-crisis level. This has brought about the implosion of the middle classes which are regarded as the foundation of social stability. The Korean society is, as in the words of Hans-Peter Martin and Harald Schumann in their Die Globalisierungsfalle, fast become a society of 20 versus 80.
The company closures due to bankruptcies and mass dismissals as a part of downsising restructuration are giving rise to a rapid and massive increase in unemployment. Even according to the official government figures which count only those who work less than one hour a week as unemployed, the unemployment has risen to above 1.4 million. The real unemployment figures, if the people who work less than 14 hours a week and those who have given up job search or those who work without pay in return for food and boarding as unemployed, could already be higher than 4 million.
The conclusion of the local government elections heralds the beginning of massive layoffs among the workers in government owned or invested corporations and financial institutions and blue collar workers in the large manufacturing firms. Massive layoff is expected in the process of prospected corporate mergers, acquisitions, and transfers. Insecurity is bound to worsen among all workers.
These drastic changes are giving rise to unimaginable social ills. Rate of suicide has doubled since the break out of the crisis, homeless people are hovering in downtown streets and subway stations, and other stresses are causing the break up of already strained families. All these are serious signs of social distress and crisis.
Despite the general implosion of the society, the Kim Dae Jung government is shouting that wage freeze, cuts, and mass layoff is inevitable in order to enhance competitiveness and attract foreign investment. The crisis management policies of the government is, in fact, holding the livelihood of the people as a collateral.
The Kim Dae Jung government seems to be concerned that the mass unemployment may lead to serious problem, in the context of the conspicuous absence of a meaningful social safety net for the unemployed people. The unemployment relief programme of the government, however, is rooted in the neo-liberal crisis management solutions. Therefore, it regards ('temporary' in government's words) massive explosion in unemployment as inevitable. It hopes that the attraction of massive foreign investment will lead to strengthening of corporate competitiveness, and this will, in turn, lead to job creation which will reduce the level of unemployment.
Various unemployment relief programmes adopted by the government are ad hoc response. There is no thought given to the possibility of cutting back on the huge military spending or the possibility of levying tax on the huge interest profit generated by the current high interest rates. Rather, it is oriented to increasing indirect tax which impact the wage earners unfairly or levying special tax on salaried people.
The Kim Dae Jung government is intent on representing the interests and demands of transnational capital and domestic monopoly capital. It insists on implementing its policies through 'social agreement' to be thrashed out a tripartite (labour-employer-government) body. On the other hand, it portrays the lifting of a ban on political activities by trade unions, the reforms for freedom of association for teachers and government employees, and other general democratic reform agenda as a concession in return for workers' self-mutation.
His tripartite method is rooted in the awareness that he is regarded as the most progressive of the existing politician with the greatest support from the ordinary people. Furthermore, the tripartite process is necessitated by the need to prevent labour unrest in search of improving international confidence and foreign capital investment.
Following the electoral success in December 1997, Kim Dae Jung established a tripartite council and succeeded in extracting from the labour an agreement to the introduction of mass layoff legislation in return for the chaebol reform. (The national congress of the Korean Confederation of Trade Union rejected the tripartite agreement tabled by the leadership. As such, it is not true to say that the KCTU has agreed to the layoff law.)
Tripartite process is a central element of European social democracy based on class collaboration. The Kim Dae Jung government, however, is not in any shape pursuing a social democratic reform. Rather the social agreement is sought to defuse the labour resistance that may arise from the neo-liberal re-organisation which fundamentally threatens the livelihood of the people.
The tripartite regime pursued by the Kim Dae Jung government can be regarded as a 'neo-liberal corporatism'. The problem with such a system is that it cannot really win the acceptance of the rank and file constituency even if the leadership of the trade union movement assent to its establishment.
A democratic reform undertaken to support neo-liberal agenda which drives the working people into depth of suffering with its wage cuts and unemployment can only be regarded as a 'superficial progress in democracy combined with actual retreat in democracy or reactionary regress' or 'falsification of democratic reform through actual regress in democracy'.
One has just to remember that the Kim Dae Jung government is a coalition with the most reactionary force in the Korean politics led by Kim Jong Pil. Furthermore, it is intent on recruiting even more members of the ancient regime to bolster its power base. As a result, the politics in Korea is said to be constituted by new ruling elite (led by Kim Dae Jung and Kim Jong Pil) and the old ruling elite (represented by the Grand National Party). It bespeaks of the general conservative tone of the establishment politics.
In such a situation, the democratic reform which can be undertaken by the Kim Dae Jung government could only be severely limited.
The attempt of the Kim Dae Jung regime to build a tripartite system is under threat due to the changes in the major labour representative, the Korean Confederation of Trade Unions. The leadership of KCTU who reached a provisional agreement at the tripartite council and tabled the agreement for the approval of the congress was rejected and forced to resign by the congress. Furthermore Lee Kap Yong, a candidate in the leadership election in the KCTU, was voted into presidency on the basis of his critique of the compromising stance of the previous leadership.
The new leadership of the KCTU has identified the defense of the livelihood of workers faced with the neo-liberal offensive of the domestic and international capital and the state as the most paramount goal of workers struggle. It proposes to realise its demands through struggle and direct negotiation with the government rather than participation in the tripartite body. Furthermore, it is committed to a tactic of participation in the tripartite body -- if it agrees to participate in it -- as a means to publicise the legitimacy of its demands for a greater activation of mass struggle, rather than to work towards an agreement.
The new leadership of the KCTU, therefore, can be regarded as presenting an alternative sets of solution for the current crisis. Unlike the neo-liberal approach, it seeks to overcome the current crisis on the basis of a consolidated guarantee of the livelihood of the people and a thorough democratic reform.
The changed orientation of the KCTU has manifest in the May Day rally. The rally developed into a worker-student solidarity demonstration which saw fierce confrontation with the police in the streets of Seoul into the late hours of the night.
Following a number of mass rallies, the KCTU waged a general strike on May 27 and 28, with the unions of the Korean Metal Workers Federation and the Korean Federation of Public and Social Services Unions as the main participants. KCTU leadership has declared its willingness to lauch an indefinite general strike on June 10, if the government fails to produce satisfactory response to its five demands. KCTU's five demands are: the repeal of the mass layoff law and the law allowing temporary manpower business; employment security and creation through reduction in working week; disbandment of the chaebol system through punishment of chaebol owners responsible for malpractice and appropriation of their private wealth for re-capitalisation of their companies; reduction in military spending and new capital gains tax to be used to general a revenue of 20 trillion won for unemployment relief, and the right of unemployed people to maintain union membership; renegotiation with the International Monetary Fund for the repeal of the ultra-austerity fiscal policy and high interest policy, and labour market flexibility.
The Kim Dae Jung government is developing a two-faceted approach to the KCTU. On the one hand, it is applying pressure on the KCTU unions, its leader and members by threatening harsh legal action and damage suits. On the other hand, it proclaims its commitment to continute to dialogue with the KCTU.
The two-pronged approach reflects its precarious position. The Kim Dae Jung government is not in a position to retract from its agreement with the domestic and international capital and the IMF, especially in terms of the mass layoff law. But, on the other hand, it cannot rush headlong into hardlined repression which may provoke uncontrollable resistance from the labour.
The KCTU, in having succeeded in organising and waging a general strike against all expectations, seems to have gained in confidence to build up an even greater action. On the other hand, however, the KCTU is faced with conservative media and anxious citizenry who denounce that the workers strike action may worsen the economic crisis and drive the Korean economy into an irreparable depth.
The forces in the civil society movement, on the other hand, seem to regard the neo-liberal structural re-organisation as an opportunity and means to overcome the crisis and to improve the structural health of the Korean economy. They insist at the same time, however, that the government must undertake more energetic pro-active efforts to minimise or eradicate the negative impact of such a restructuration.
The Prospects for the Development of the Korean Society
The impact of the IMF policy regime and the assumption of power by the Kim Dae Jung government which is intent on creating a free market economy will accelerate the market oriented and neo-liberal reorganisation of the Korean society. The process under way in Korea is part of the global neo-liberal re-organisation undertaken by the advanced capitalist countries since the 1980s following the structural recession that has plagued the world capitalist system since the mid-1970s.
The world-wide structural re-organisation is made possible by two important trends. One is the establishment of 'flexible production system' stimulated by the scientific-technological revolution led by the micro-electronic technology. The other is the globalisation of capital movement made possible by the easy transfer of productive facilities around the world. As a result, the world capitalist system is fast becoming a genuine global capitalism. The market economic mechanism and competition between capital operating in the world market have become the dominant force over and above the various national economies in the world.
The 'sekyehwa' strategy proclaimed by the Kim Young Sam government was an attempt to respond actively to the changes in the world economic order to elevate the status and position of Korean capitalism within the world capitalist system. This attempt, however, fell apart without much success due to the hasty liberalisation of the capital and financial market. Despite the failure, there is wide spread belief that greater liberalisation and greater market oriented reform aimed at attracting more foreign capital investment and enhancing the corporate competitiveness are the only 'bourgeois' solution in the context of a global capitalist system.
Such a reform, however, requires a greater flexibilisation of labour utilisation and eradication of the collusion between political powers and corporate activities and the state-direct banking system. It also calls for a greater corporate and financial sector structural adjustment.
The impetus for such a reform may still be undermined by the resistance of the established elite who have vested interest in the chaebol system and the bureaucratic power fostered by the developmental regime. Even if such a reform project succeeds, it will contribute to a greater individualisation and atomisation of the social constituents leading to a deeper integration into and subjugation to competition and capitalist accumulation. This will, for most of the emergign and Third World countries, mean a heightening of foreign dependence.
On the other hand, such a reform will transfer the cost of the crisis and adjustment to workers and ordinary people, leading to a greater polarisation between the rich and the poor. It will accelerate the impoverishment of the greater part of the population.
This is clearly seen in the experience of the US which has undertaken a deep-going neo-liberal reform since the 1980s. The benefits of the long period of remarkable economic performance since 1990 is monopolised by a small minority.
The neo-liberal approach, based on a faith in self-regulating market economy, escalates the 'structural instability' of the capitalist system, exposing the system to an ever present and threatening crisis. The crisis, once it erupts, has a tendency to develop uncontrollably into a catastrophic disaster. This propelled by the empowerment of a 'casino capitalism' in the process of deregulation and liberalisation of capital movement and globalisation, which has led to the deepening of the instability in the international financial system.
The Asian crisis is a clear demonstration and manifestation of such explosive instability inherent in the casino capitalism. The laisez faire capitalism in an earlier period led to the unprecedented depression in 1930s is also a good example.
The seriousness of the situation lies in that the crisis of the Korean economy is not just a crisis contained in Korea, but a part of a widespread crisis that is sweeping through the whole of eas and southeast Asia. The cirisis -- triggered by overaccumulation in the world capitalist system -- may -- this is the cause for concern -- precipitate -- without anyone capable of controlling the process -- into a world-wide depression.
The Europe today continues to suffer from a recession. And even the US is experiencing a very unstable bullish economy with a real prospect of a sudden implosion.
Given this, the worsening of the cirisis of the Japanese economy or an outbreak of a crisis in the US, may nullify all the Korean efforts to overcome the crisis through a greater liberalisation and market-oriented reform.
The capitalist crisis of over accumulation is described as the root cause of the Asian crisis stemming from the backward capitalism built on chaebol system or the state-led capitalist system. The crisis of over-accumulation, however, is not peculiar phenomenon of 'unique' Asian capitalist system(s), but the inherent problem of the capitalist market economy.
Today, the world is already faced with an imminent threat of a world-wide depression. Such an eventuality will usher in unprecedented suffering to all world peoples. Given this, the search for an alternative approach other than the neo-liberal strategy for the solution of the pending crisis is a paramount task.
In Korea, the democratic trade union movement and the various other forces which work in solidarity with workers are emerging as a real force for the alternative approach to the crisis. The democratic trade union movement, unlike the mass trade unions in Europe, is refusing to become a junior partner to the neo-liberal project pursued by the IMF and the Kim Dae Jung government.
The democratic trade union movement, organised in the form of the Korean Confederation of Trade Unions, can be said to be undertaking most militant struggle in resisting the neo-liberal offensive. The objective condition of its struggle is not at all favourable. But, its struggle is serves the role of wind-breaker to the thrusts of neo-liberal drive in defense of the rights and welfare of people. It also acts as an educating force for the greater ordinary people to create a better understanding of the need for greater social and democratic control of the capitalist movement.
The Korean workers movement is likely to be come a powerful force of mobilisation, as the neo-liberal drive creates more devastation. The democratic trade union movement is also prepared to take up a greater activist role to organise and promote a greater solidarity and joint struggles in the world against the common world-wide neo-liberal offensive.
The fate of the Kim Dae Jung government, which is attempting to combine the neo-liberal re-rganisation and a democratic reform, will depend, on the one hand, on the speed of the economic recovery, and on the other hand, how effectively it can control the resistance of the people. But it is difficult to expect the Kim Dae Jung governing making much success in both areas.
Korean economy is deeply integrated into the world capitalist system which is plagued by the crisis of over-accumulation. At the same time, the Kim Dae Jung government is faced with a wide spread resistance of workers. A failure to control the resistance will lead to a parting of ways between the Kim Dae Jung government and the ruling elite. In such a case, it is likely that the forces which call for a fascist solution of the crisis may surface with great influence. Social tension will also intensify. The future of the Korean society will be, then, determined by the play of the intensified social tension.
The problems and prospects facing the Korean society is not unique to Korea. It is a general situation of all nations in the world. We live in an era when the common effort to build a "world of freedom and happiness of the people" against the prospect of "paradise for capital movement" is ever more important. (May 29, 1998)