[A Sip of Books] Time to Move Beyond "Winner-Takes-All Compressed Growth"... Toward an "Innovative and Dignified Society"

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This book, planned to commemorate the 50th anniversary of the Korea Foundation for Advanced Studies, asks where Korean society should head now that it has entered the "post-success era." Based on the academic achievements accumulated over half a century, the foundation attempts a comprehensive diagnosis encompassing politics, economy, and society, defining the current crisis as a "winner-takes-all fractured society." Issues such as low growth, low birthrate and aging population, widening disparities, and political confrontation are not isolated problems, but rather structural outcomes accumulated after the success of compressed growth. The book points out that the existing growth-oriented mindset can no longer provide solutions, and presents an "innovative and dignified society" that considers innovation, social trust, and institutional balance together as an alternative vision. It also proposes a practical roadmap, suggesting that we must transform the predetermined future into a desirable one through a shift in mental models, simultaneous reforms in politics, economy, and society, and decisive action without delay.

Today, Korea has escaped the middle-income trap and achieved an advanced economy and mature democracy. However, this only marks the starting point of becoming an advanced nation; it does not mean Korea has successfully settled or acquired the ability to sustain this status. In fact, Korea now faces enormous challenges such as the climate crisis, population decline, geopolitical instability, and social polarization. To navigate these turbulent times, a systematic diagnosis across all areas-politics, economy, and society-and a comprehensive strategy based on such diagnosis are urgently needed. Korea must now prepare for a second wave of creative destruction toward a greater future. Therefore, Chapter 1 of this book raises the following four fundamental questions to confront the realities facing Korean society today and seek future directions, and seeks insightful answers to them. First, what are the specific symptoms of the "winner-takes-all fractured society" that Korea is currently experiencing? Despite achieving globally recognized economic success, Korea is suffering from severe social inequality and unequal opportunities. The book examines how these contradictions manifest and what kinds of fractures and anxieties they cause throughout Korean society. -p. 38

As key concepts illustrating the structural characteristics of the winner-takes-all fractured society, the book introduces the "paradox of affluence" and the "paradox of democratization." Let us first look at the paradox of affluence. Today, Korea's per capita national income has surpassed 30,000 dollars and is approaching 40,000 dollars, yet people's lives have become more unhappy. According to the Organization for Economic Cooperation and Development (OECD) report "Society at a Glance," which is based on social indicators, Korea ranks at the bottom in most social indicators despite its high economic indicators. In particular, Korea shows serious problems in areas such as the speed of aging, unemployment levels, social safety nets, elderly poverty rate, welfare spending, health concerns, suicide rate, social trust, anxiety, social isolation, and loneliness among the middle-aged and elderly. In the World Happiness Index, Korea ranked 41st in 2013, 62nd in 2021, and 57th in 2023, placing it at the bottom among OECD countries. -p. 52

To overcome the multi-layered dilemmas of the winner-takes-all fractured society and move toward an innovative and dignified society, long-term and systematic policy design spanning decades is essential. In order to solve Korea's complex problems, it is crucial not to repeat the failures of previous administrations. What is the most important principle for this? It is the dynamic balancing strategy that transforms short-term dilemmas into long-term virtuous cycles. Most of the core values pursued by the economy, society, and environment conflict with each other in the short term. For example, the most urgent task in Korea today is to protect those at risk in society. However, expanding social welfare creates a dilemma of rising inflation and increasing national debt due to expansionary fiscal policy. The government must resolve such short-term dilemmas through a dynamic balancing strategy to achieve long-term virtuous cycles. For Korea to be sustainable economically, socially, and environmentally, it must enhance economic efficiency, social integration, and environmental responsibility. In other words, increasing economic efficiency enables stable and sustainable economic growth, while enhancing social integration allows for the maximization of individual autonomy and creativity, as well as the creation of a harmonious and orderly society. -p. 90

The transition to an innovative and dignified society is not a task that can be completed by a single government or administration within its term. It is a long-term "generational project" that our generation must begin and complete together with the next generation over several decades. For such a long-term project to succeed, courageous decisions and patience for the future of the nation are needed, beyond short-term political interests and gains. Broad social consensus on new national goals is also urgently required. If the Miracle on the Han River represented economic values and the June Democratic Uprising embodied political values as the spirit of the times, then now Korea must establish social values as the new zeitgeist. In other words, Korea should aim for a society where the dignity and potential of all members are respected, overcoming anxiety, distrust, discrimination, and helplessness. Though the journey will be rough and challenging, there is no more hesitation, as this is the only path to move beyond the trajectory of a winner-takes-all fractured society toward a sustainable and dignified future. Now is the time to take action. -p. 103

In a low-growth economy, economic surplus is scarce, leading to fierce competition for available resources. Rather than pursuing new investments or innovations to achieve growth, there is a strong tendency toward rent seeking-protecting one's vested interests or taking over others' privileges. This intensification of rent-seeking behavior creates a structure of confrontation rather than compromise. Therefore, in a situation where income distribution worsens due to economic polarization, social conflict can spread in all directions. The polarization of political forces into progressive and conservative camps and the increasing tendency to divide along gender lines are examples of this widespread social conflict. Furthermore, when a low-growth, disparity-driven economy combines with a shrinking economy caused by a continuously and asymmetrically declining population, generational and regional conflicts become even more severe. Thus, Korea is currently facing a complex crisis where not only an economic crisis but also the social integration that forms the foundation of the economic order could fundamentally collapse. -p. 128

In fact, many policy responses to the issue of demographic transition are based on this possibility. However, such policy responses are premised on the implicit assumption that "even if the population steadily declines and approaches zero, it is sufficient as long as the per capita income of the survivors grows." In other words, if it is impossible to avoid the continued low birthrate below the replacement rate and the resulting "collective suicide," the focus should be on improving the welfare of the survivors during the transition rather than reversing the trend. But is it really right to head toward a future where the lives of the survivors are affluent and prosperous, but the majority of the population disappears? This value judgment is an important issue. It is a question of what value to assign to the lives of the current generation and those of future generations-an issue concerning the very value of human survival. Even setting aside this question of value judgment, is such a scenario even possible? To answer this, we must examine the implications of demographic transition for economic growth and the socioeconomic structure. -p. 155

The greatest achievement of Korean politics over the past 50 years is that it accomplished both democratization and industrialization simultaneously. Among the many newly democratized countries that joined the wave of democratization in the mid-1970s, most experienced democratic regression or a return to authoritarianism. In this challenging reality, Korea was recognized as a model case for sustaining a stable democratic system. Moreover, Korea achieved economic growth through industrialization, drawing global attention. On December 3, 2024, with President Yoon Suk-yeol's declaration of martial law, Korean democracy faced a major crisis. Surprisingly, it was none other than the people who corrected this national crisis and further strengthened the roots of democracy. Through voluntary and peaceful gatherings, the people demonstrated firm conviction and support for democracy. This clearly showed the strong resilience of Korean democracy. -p. 221

Innovative and Dignified Society | Choi Byungil et al. | 324 pages | 23,000 won