"Allow Freedom and Aspiration in the Market"
The 20th presidential election was centered around regime change. Despite numerous negative campaigns, the narrow victory of candidate Yoon Seok-yeol was likely due to the public's expectation for a change in government. From the perspective of the author, an economist, regime change signifies market recovery.
The Moon Jae-in administration's most representative economic policy goals were likely ‘income-led growth’ and ‘housing price stabilization.’ To achieve these goals, a multitude of policies were implemented in a flood-like manner, including minimum wage increases, the 52-hour workweek system, increased taxes related to real estate, and the three lease laws. The common characteristic of these policies was the government's attempt to drastically alter market mechanisms in the desired direction. As everyone experienced, the result of changing market mechanisms was disastrous. Quality jobs steadily decreased, and housing prices skyrocketed.
The market is a place where transactions occur. Transactions happen when sellers, who want to earn even a single penny more, and buyers, who want to save even a single penny more, agree. In other words, the market is a place where the fundamental human desire for material abundance fiercely clashes. The important point is that these clashing desires do not come from just one or two people but from every citizen and every person worldwide without exception.
Over the past five years, many market sectors have become tattered. For example, the labor market has become comfortable for those who secured stable jobs, but the threshold has become like a wall for those without jobs. Even if housing regulations are reset to their original state, housing prices will not return to what they were five years ago.
The English word for economy, 'economy,' comes from the ancient Greek word ‘oikonomia.’ It is said to be a combination of ‘oikos,’ meaning ‘house,’ and ‘nomia,’ meaning ‘management.’ The etymology reveals that the fundamental issue of the economy is the livelihood of the people who make up a household. However, this English term was translated into ‘경제’ (gyeongje) in Japanese and established itself not only in Korea but also across East Asia. ‘경제’ is an abbreviation of ‘경세제민’ (gyeongsejemin), meaning ‘to govern the world well and save the people.’ It was interpreted that saving the people ultimately means enabling them to live well.
What is noteworthy is that the subjects of ‘household management’ and ‘saving the people’ are completely different. The subject managing the household is the individual, but the subject governing the world and saving the people is the ruler. To put ‘경세제민’ in modern terms means to run the state well so that the citizens can live well. Although it sounds reasonable at first glance, an implication not originally present in ‘oikonomia’ was added to ‘경세제민’?that the ruler should bear a strong responsibility for the livelihood of individuals or households.
Was the Moon Jae-in administration in a state of excessive government? The fundamental reason its course was precarious was that the government increasingly narrowed the position of individuals, who are healthy cells of society as an organism. The government grew continuously like cancer cells that do not die but only proliferate, even intercepting nutrients meant for normal cells. I hope for the president-elect to allow freedom and aspiration in today’s ‘경세제민,’ respecting the market as in ‘oikonomia.’
Min Se-jin, Professor of Economics, Dongguk University
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