“Chaebol” is a Korean word for “rich clan.”[1] Probably, in the misty past, that meant families that owned a lot of farm land. One way or another, they probably had connections to the government. In the misty present, South Korea has become a major industrial and commercial society. So long as the Japanese Empire ruled Korea, the country remained a subordinate part of the rough-draft of the “Greater East Asia Co-Prosperity Sphere.” That is, it provided cheap labor and raw materials to Japanese industry.[2] Then, in 1945, came liberation and national independence, if not national unity. Then, from 1950 to 1953, came the terrible Korean War.[3]
After the war, the government of the Republic of Korea (aka ROK, aka South Korea) set out to join the modern world. Those were hard times and there wasn’t much to go around. The government channeled the scant available resources toward companies that were “bullish” on South Korea. The government also fended-off foreign competition and stepped down hard on the labor movement. The government pushed a drive for export-led growth.
Hyundai, Samsung, LG, and Hanjin are among the leading “chaebol.” Generally, these are conglomerates of related industries within sectors of the economy. Samsung makes electronics, Hyundai makes cars, and Hanjin is a (now bankrupt) shipping company. That is, they try not to compete with one another. Each one has his share of the pie.[4]
A glance at the names of the “chaebol” demonstrates just how successful this effort proved to be. A further glance north of the Demilitarized Zone (DMZ) at the Peoples’ Republic of Drudge,[5] shows an alternative strategy for development. In any event, the “chaebol” have molted into families that own a lot of companies. One way or another, they probably have connections to the government. That is, rich people finance the election or re-election of pawns.
One “tarantula on a piece of Angel food cake” in this success story is the deep resentment felt by ordinary South Koreans. In the 1950s and 1960s, the “chaebol” got scarce resources in very hard times. Ordinary people had to do without. That has become a folk memory. Today, the “chaebol” continue to pile up wealth when South Korea no longer needs to fight for survival. Ordinary people resent that selfishness. The problem for the “chaebol” is that, in the 1980s, South Korea made the shift from a military-industrial complex government to something approaching a real democracy. In these circumstances, no longer can every scandal involving the “chaebol” be swept under the rug.[6]
A second “tarantula” appears in the series of scandals and errors plaguing the “chaebol.” The Asian financial crisis of the 1990s; Samsung phones catching fire; and the sinking of the ferry boat “Sewol”[7] all have called into question the ethics and competence of the “chaebol.”
Then there’s the sinking of the F.V. “Majestic Blue.” But that’s unrelated.
[1] Carlos Tejada, “Money, Power and Family: Inside the Chaebol of South Korea,” NYT, 18 February 2017.
[2] Not that it has anything to do with economic policy, but you might want to see “The Handmaiden” (2016, dir. Park Chan-wook). It has been described as an “erotic psychological thriller.” JMO, but if this doesn’t get your motor running, then you’ve got issues.
[3] Americans commonly—and wrongly—believe that the horrors of that war are encapsulated in the Anabasis of the First Marines from “up on the reservoir” down to the sea.
[4] “Oh what a good boy am I.”
[5] I stole that from someone, perhaps from Walt Kelly.
[6] “There ain’t no clean way to make a hundred million bucks…. Somewhere along the line guys got pushed to the wall, nice little businesses got the ground cut out from under them… Decent people lost their jobs…. Big money is big power and big power gets used wrong. It’s the system.”–Raymond Chandler, The Long Goodbye (1953).
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