[Namsan Ddalggakbari] "Capitalist Market Economy Is Wrong"

Everything Changes / Written by Christian Felber / Translated by Lee Younghwan / Angle Books / 18,5000 KRW

[Asia Economy Reporter Minwoo Lee] Apple, with 137,000 employees, surpassed a corporate value of $2 trillion (approximately 2,267 trillion KRW) in August. This exceeds South Korea's GDP last year of $1.6422 trillion, as well as Italy ($2.012 trillion), Canada ($1.7364 trillion), and Australia ($1.3927 trillion). Only the United States, Japan, Germany, France, the United Kingdom, India, and China have GDPs larger than Apple's market capitalization. This is the result of the current capitalist market economy achieving the goal of extreme efficiency and profit pursuit too well.

On the other hand, the imbalance between capital income and labor income has rapidly increased. The added value created by productivity amplified by capital and technology went to those who own capital. There was no increase in the value of labor. Even Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund and known as the "godfather of hedge funds," pointed out that "capitalism has produced unequal results" and "reform is now necessary." This is why Christian Felber, an emerging Austrian economist, emphasized a new economic system in his book Everything Must Change.

Capitalist Market Economy Is 'Wrong'... Contradictions Begin with the Free Market

Felber stresses correcting the perception of "economy" itself, citing Aristotle's two economic concepts: "Oikonomia" and "Chrematistics." Oikonomia is the concept where money is a means, not a goal; cooperation, not competition, is central; and it promotes everyone's welfare and dignity. Chrematistics is an economic form where "money-making" itself is the goal.

The author argues that current economics "obsesses only over efficient use and growth of capital," and "this is no longer economics." He also denies the Nobel Prize in Economics. "Alfred Nobel established a foundation to honor achievements in natural sciences and opposed an award for social sciences like economics. The Nobel Prize in Economics, awarded by the Swedish central bank, is a usurpation and a misnomer contrary to Nobel's will and legacy."

Furthermore, the author points out that the "free market" within the capitalist market economy is contradictory. "If everyone only pursues profit, they no longer treat others equally but as means, ultimately endangering everyone's freedom. A market economy based on profit maximization and competition is an inherent contradiction that cannot be called a 'free' economy."

The author also criticizes economists. He completely denies Friedrich Hayek's statement, a Nobel laureate, that "competition is the most efficient method we know in most cases." The author states, "No Nobel laureate economist has empirically proven Hayek's claim. It is a simple belief held by most economists, and capitalism and free enterprise, the dominant economic models for the past 200 years, have been based on this 'faith.'"

From Basic Income to Inheritance Restrictions... 'Common Good Economy'

Felber focuses on Oikonomia and calls it the "Common Good Economy." He argues that the goal of economic activity is not profit increase but the promotion of common welfare. He finds legitimacy in the constitutions of various countries.

The author emphasizes, "The Bavarian Constitution of Germany states that 'all economic activity must contribute to the common welfare,' and the German Basic Law includes that 'the use of property must contribute to the general welfare.' The Italian Constitution also states that 'public and private economic activities must aim for the common good,' and the preamble of the U.S. Constitution includes the phrase 'promote the general welfare.' This shows that democratic countries' constitutions contain a consensus that promoting the common good is the goal of economic activity."

Having found legitimacy for the "Common Good Economy," the author designed a detailed system. Corporate performance is measured not by financial balance sheets but by a new "Common Good Balance Sheet." Evaluation indicators include job creation, fair profit distribution, and environmental protection.

There is also a strong obsession with income redistribution. Under democratic agreement, inheritance is limited to a maximum amount, and excess assets are allocated to a fund to be distributed as a "democratic dowry" to the next generation members.

A similar approach applies to corporate management succession. Wage ceilings are limited to about ten times the minimum wage. A public "Democratic Central Bank" is created to provide interest-free loans based on a company's "Common Good Economy" performance. All derivative products that generate profits from capital are fundamentally banned. Matters requiring multinational agreement, as well as important issues of individual countries, are decided through discussion at a "general assembly."

Lacking Practicality but... The Reflection Itself Is of Great Significance

The Common Good Economy proposed by the author sounds somewhat radical. Lee Younghwan, honorary professor of economics at Dongguk University and the translator, also pointed out, "There is no reason to fully accept institutions like the Democratic Central Bank proposed by Felber," and "Few people would willingly accept restrictions and ceilings on private property."

Its timeliness is also regrettable. This book was first published in 2010. Despite several revisions, it did not consider recent issues such as job problems caused by AI-based automation or giant tech companies controlling personal preferences.

The "Common Good Economy" advocated by the author may be an overly naive idea. The claim that it can settle if more people value cooperation and inner values relies too much on human goodwill. However, such resistance may stem from our fixation on the perception framework of the capitalist market economy. Would it not be meaningful to openly discuss the blind faith in the capitalist market economy from the perspective of harmonizing private and public interests?