MyongSool Chang
Translated by SoYeon Lee


One of the most world renowned and a Korean born economist, Cambridge University professor, Ha-Jun Jang said “Korea for initiating the welfare system needs the reach a collective bargain and great agreement.” Professor Jang is the author of the bestselling book “23 things they don’t tell you about capitalism” in Korea and UK.

On 11th, Professor had a question and responses after his lecture at the Harvard Kennedy School said although Korea is the best for the social equality before taxes, through the income redistribution after taxation, Korea still falls behind other welfare countries.

He has an example to the protection of the Chicken cuisine restaurant that was founded by retirees after the 1997 financial crisis, which put the regulation on entry of Tongkeun hicken run by Lotte, one of the largest conglomerate in Korea. According to him, lifting the market limits before the welfare system was established to allow the entry of Tongkeun Chicken and Walmart would cause a huge unemployment with social conflicts.

Now, they are regulating the entry of big companies but it is merely a temporary measure. Today, it’s a chicken but more problems from computer, rice , beef and society. Instead of facing every single problem , collective bargain should create social welfare system first, then let the small companies that fall behind the market competition go out of businesses.

A question of how differences in philosophical views that exist in Korea would ever create a social agreement, professor Chang commented that “we should compromise in spite of philosophical differences. Compromise is possible because differences do exist. Why would we need to compromise if we all think alike? If we change our views, there is a middle way.”

“People who are against to social welfare but agree to free elementary, middle school education and people who favor welfare system do not ask the country to take all the responsibilities. Sweden was one of the countries with the most strikes before its great compromise. In 2004 when I mentioned Sweden’s great compromise people called me crazy but not they bring up the topic.”

Korea-US FTA
About the Korea-US FTA, professor Chang said, “basically, it is best to free trade between the countries in same situation but when there is a gap between the countries, it seems beneficial to the poor country in the short-term but since poor country cannot develop high-tech industry, in the long-term, it is not” reaffirming the opinion written in his book.

Professor Chang also said “bilateral free trade agreement is not the actual free trade agreement. If we buy U.S. beef less expensively then that is a discrimination against Austrian beef and if we buy cheap cars then it is a discrimination against Japanese cars. There is no actual free trade.”

“(in Korea), people do not want to debate properly. When you are against FTA, people criticize you for supporting the isolationism. Through FTA, regardless of which policy works or not, it showed how our country can be immature when it comes to policy debates.

About Kun-Hee Lee Sandwich theory
When professor Chang asked about the future of Korea’s manufacturing, he replied that he doesn’t understand why “a country that pushed for impossible in the past is now telling us we can’t do what is possible.” He emphasized that we can’t give up on manufacturing.

Professor Chang, about Kun-Hee Lee’s sandwich theory, “except for the best and the worst, everyone is a sandwich. Should the one chasing only be scared, one fleeing should be scared too. Because China’s manufacturing industry was chasing Korea, we said we should enter the financial and service industry but do you think America and UK would let us do as wish?” he criticized.

Chairman Kun-Hee Lee at his 20th inauguration ceremony talked about the sandwich as he said he is “worried about next 20 years. While China is chasing and Japan is already in front, Korea is playing the role of a sandwich. If we do not overcome the obstacles, we will experience many hardships.” He said we need the creative management.

About the gas price on the rise
Professor Jang about the Libyan crisis and soaring gas prices that are adversely affecting the economy recovery and how the issue is neglected due to the market principles gave a basic comment, “To determine a policy, the various aspects should be considered.”

He said like the exchange rate issue, “ from the environmentalists’ point of view, the United States should raise its gas price while for the short-term economic recovery and the unemployment problem , the gas price should be lower. In this regard, the balance of policy should be considered.” Also he added that “due to the futures market, forcing the government regulation has been difficult.”

Professor Ha-Jun Jang who majored in economics was attracted by David Ricardo’s comparison advantage theory. Now he refutes Ricardo’s theory. He also received Leontief awards that was given to a scholar who provided a new insight into economics.

ⓒ 보스톤코리아(http://www.bostonkorea.com), 무단전재 및 재배포 금지