Economic democratization

Economic democratization or democratization of the economy (경제 민주화/經濟民主化) refers to an election campaign or political slogal that the nation's economy shall be managed and operated in a democratic way.

Simply speaking, democratization of the economy shall mean the economy of the people, by the people and for the people, as U.S. President Abraham Loncoln described the democratic state at Gettysburg.

Key words
economic democratization, people, Chaebol(재벌/財閥), proper and just wage, friendly relationship

Political issue
The demand for so-called economic democratization began as a reaction to polarization of wealth in Korea. But the politicians just want to blame conglomerates for that rather than finding solutions that are real.

Take an example of Presidential Candidate Moon Jae-in of the opposition Democratic United Party, announced that he focus on conglomerate reform, which includes a ban on Chaebol’s cross-investments in subsidiaries and a reinforcement of the separation between financial and industrial capital.

Kim Chong-in, an architect of a similar platform of the ruling Saenuri Party’s presidential candidate Park Geun-hye, also vowed to pass two laws along the same lines in the National Assembly before the December election. Despite slight differences between the two, both campaigns appear to be unabashedly bashing big business under the cloak of economic democratization.

The conundrum of a wealth gap should be addressed by job creation and welfare expansion - not by banning cross holdings and separating industrial capital from financial capital. Yet the politicians are now going so far as to set deadlines for anti-Chaebol legislation.

Constitutional background
The Constitution provides for the principle of the nation's economy as follows:

Article 119 of the Constitution
 * (1)The economic order of the Republic of Korea shall be based on a respect for the freedom and creative initiative of enterprises and individuals in economic affairs.
 * (2)The State may regulate and coordinate economic affairs in order to maintain the balanced growth and stability of the national economy, to ensure proper distribution of income, to prevent the domination of the market and the abuse of economic power and to democratize the economy through harmony among the economic agents.

So to speak, those presidential candidates have focused on Paragraph 2 of Article 119 of the Constitution. At this juncture of ongoing European fiscal crisis and China’s economic slowdown, such economic democratization cannot be a proper solution because low or no economic growth is expected in the years to come.

The most important thing to remember
Surprisingly, a time honored book shows what a democratic economy will be.
 * There must be proper and just wages for men and women.
 * Everybody may go about his business safely.
 * Everyman treats well his neighbor.

In other words, economic democratization is coposed of: Apart from the above issues at hand, only Chaebol-bashing policies could exacerbate problems with our economy and have a negative impact on ordinary people’s daily lives. Presidential candidates had better reconsider such risky populist promises. They must pursue economic democratization that enhances the efficiency of the economy and social justice. Chaebol’s bad practices - enriching their affiliates at the cost of others, for instance - must be addressed before cross investments and separating industrial and financial capital. Job creation is the proper answer to the puzzle.
 * [Social justice] Proper and just wage;
 * [Legal infrastructure] Safe transactions; and
 * [Rule of game] Friendly relationship among market players.