[The Editors' Verdict] To End Populism Exploiting the Common People

"Those who ignore the tears of the common people have no right to be the stewards of the treasury," is the criticism being directed at the Ministry of Economy and Finance. The Bank of Korea is also being pressured to "print money and purchase government-issued bonds." The ruling party, which has complete control over the National Assembly, is the main actor behind this.

Gyeonggi Province Governor Lee Jae-myung, who ignited the populism competition, incited by saying, "Is this country the Ministry of Economy and Finance's country?" Apparently disliking the term populism, he even attacked scholars by saying, "If you criticize disaster basic income as populism, you are treating the people not as sovereigns but as subjects to be ruled." It seems he does not realize that terms like sovereign or subjects are favored by populists. Fiscal and financial populism, which promotes that pumping money into the economy will revive it, creates polarization and actually causes the common people to shed tears of blood. The treasury is emptied and refilled with taxes, and if that fails, money is printed. However, prices soar accordingly, causing the common people's already meager income to plummet and their savings to become worthless. History, both in Korea and worldwide, shows that populism destroys not only politics and the economy but also society.

At the end of the 19th century, Heungseon Daewongun printed a currency called Dangbaekjeon when the national treasury was empty. This caused prices to skyrocket, and the common people suffered from hunger, eventually turning a blind eye when Japan annexed Joseon. In the early 20th century, Germany's Weimar Republic, in an attempt to revive the economy, had the central bank and the Ministry of Finance jointly print money and issue government bonds. Real wages plummeted, unemployment and strikes surged, and retirees' pensions disappeared. Distrust in the state and middle-class anxiety paved the way for Hitler's dictatorship, and eventually, the German people were mobilized for war. In 2009, when North Korea faced fiscal collapse, it attempted a currency reform to reclaim money saved by residents. The economy's foundation itself collapsed as the yuan and dollar circulated instead of North Korean won. Venezuela, once the richest country in South America due to oil, fell into extreme poverty in the 2010s. Reckless spending led to fiscal collapse, which was patched up by printing money. Coupled with international financial sanctions against the dictatorship, the common people, unable to obtain daily necessities, were forced to flee.

Populism begins with politicians exploiting the common people through hypocrisy and propaganda. The result is making the common people poorer. To put a brake on populism, responsible elites in positions of authority who understand these facts must uphold principles. Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki has bravely stood up against the ruling party's tyranny. He quoted the Dao De Jing's 知止止止 (Zhizhizhi), meaning "knowing when to stop and stopping at the right place," showing his determination to resist fiscal and financial populism. The Governor of the Bank of Korea also stated that the bank cannot take on government debt through money printing. These individuals must act against populism not just in words but with a sense of mission and pride. International economic organizations point to effective economic policies and the excellence of economic bureaucrats as one of the reasons Korea has grown from one of the poorest countries to its current state. Consequently, past presidents, including those from authoritarian regimes, respected bureaucrats' opinions on economic policy and resisted politicians' interference. The late President Roh Moo-hyun, whom the current administration reveres, was no exception.

Currently, populism is rampant in all directions in Korea. Accordingly, the voices of citizens opposed to populism are also growing louder. This is why the efforts to uphold the rule of law by Board of Audit and Inspection Chairman Choi Jae-hyung and Prosecutor General Yoon Seok-youl have been applauded. To stop populism that exploits the common people, elites must demonstrate self-sacrificing patriotism. It is the duty of elites in this era to present genuine policies for the common people that break populism exploiting them.

Kim Tae-gi, Professor of Economics, Dankook University