[Insight & Opinion] Classism Undermining the Foundations of Capitalism

[Asia Economy] To many, the question "What is the opposite of capitalism?" is posed. Most people find the question puzzling and respond by asking if it is communism. Although various dictionaries state this as well, the question is asked again: "Then, was the Joseon Dynasty or the medieval feudal era a capitalist society or a communist society?"

The idea that the opposite of capitalism is communism feels insufficient to the author, much like answering that the opposite of happiness is hunger. While it is certain that communism is not capitalism, communism is by no means a term that can represent the various economic systems that have actually existed and are not capitalism.

From ancient Rome through medieval Europe, the Ming Dynasty, Goryeo, Joseon, to the modern former Soviet Union, Mao Zedong's China, and present-day North Korea, what do these non-capitalist countries have in common? They all have ‘classes’ such as kings, nobles, yangban, the Communist Party, or the Baekdu bloodline.

There has never been a capitalist society where classes existed. Depending on the argument, the earliest capitalist states mentioned?the 7th-century Venetian Republic, the 17th-century Dutch Republic, or the British constitutional monarchy?share the commonality that leaders were elected by parliament, classism disappeared, and citizens became the main drivers of the economy. Based on these facts, the author argues that the opposite of capitalism is a class-based economic system.

A class system is a social structure where groups formed by people with similar property or occupations maintain their social status unchanged across generations. Capitalism was born by overthrowing the class-based economic system centered on kings and nobles. However, even in capitalist societies, class-like characteristics such as vested interests can exist. And if these class characteristics become increasingly entrenched, that society should be seen as moving further away from true capitalism.

For example, if in a capitalist society the wealth level of a specific region rises significantly, and the residents of that region can continue to inherit wealth without taxes, monopolize much information using that wealth, strengthen their relationships through exchanges and marriages, and as a result monopolize key positions in national administration, judiciary, media, or corporations to make decisions favorable only to their group, the future of that society would be very bleak.

However, capitalism has developed various safeguards over its long history to guard against classism. For instance, the systems in major advanced countries that forcibly allocate many opportunities for high-level education and high-level jobs to socially disadvantaged groups greatly help prevent the monopolization of key occupations by certain classes. Inheritance tax and property tax also play a role in preventing some classes owning expensive land from inheriting wealth without any cost, like the nobles and yangban of the past.

Voices arguing against the unfairness of inheritance tax and property tax can be heard here and there. In reality, these are systems to protect capitalism, yet they seem to be unfairly labeled as anti-capitalist. The desire to easily inherit and maintain wealth status without taxes for generations may be a natural human feeling shared by many, including the author. However, such desires must not cause our capitalist system to regress into classism. The true enemy capitalism must guard against is classism.

Seo Junsik, Professor of Economics, Soongsil University