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The labor struggle has been part of a democratic movement in support of workers' rights against companies' suppressive exercise of authority. This movement has played a key role in maintaining laborers' negotiating power with companies and to some degree has helped improve labor conditions. However, in response to economic initiatives by the Kim Dae Jung government during the 1997 financial crisis, the movement has extended its influence beyond the enterprise-labor relationship.
The Kim government, in order to induce foreign investment, radically liberalized the domestic regulation of foreign capital through such moves as lowering the upper limit on the foreign ownership of stock. The government's "neoliberal" approach increased economic inequality, dividing society into two extremes, accompanied by increasing unemployment.
Critics of this approach, whether labor activists or so-called progressive leftwing economists, asserted that these were the side effects of the government's pro-private business policies and a threat to social stability.
In theory, neoliberalism extends the principle of an individual's fundamental freedoms to corporations and banks. It upholds that there should be no governmental restrictions on property rights or business activities; in other words, it advocates the liberalization of global trade, investment and all related business activities.
There seems to be a general consensus that neoliberalism has had serious negative effects on Korean society, but opinions diverge as to what should be done. Some question the acceptability of capitalism as the country's underpinning economic principle and the viability of the economic growth policy in ensuring laborers' wellbeing.
Firstly, new leftwing economic theorists have opposed capitalism, maintaining that it tends to turn people into stereotyped consumers in the mass production era, leaving the public dehumanized. These theorists do not propose any valid solutions to the problem, however, or any viable alternative to capitalism.
Secondly, the progressive democratic movement in Korea contends that the focus should be on the national economy and rejects global capitalism on the grounds that an interdependent global economy cannot provide for the wellbeing of laborers. These groups contend that an integrated global economy is imperialistic, allowing strong economies to bring developing ones under their rule. Furthermore, they say the global system imposes barriers to national economic growth, which is better served by remaining independent and autonomous.
Thirdly, critics of neoliberalism point out that the economic competition it engenders tends to unsettle society by sending people across borders in pursuit of better wages. These critics reject the idea of a globalized economy and ignore its achievements, such as greater prosperity across the world.
The question arises whether appropriate adjustments can be made to minimize the negative outcomes brought about by excessive liberalization while keeping the fruits of globalization.
A new policy model has been grabbing attention in Korea. The "grand compromise" theory calls for a compromise among market participants and regulators based on the principle of shared social responsibility. Cambridge University economics professor Ha Zoon Chang and Kookmin University economics professor Jung Seung-Il suggest a new model in which they acknowledge the positive aspects of growth-oriented economic policy as necessary and even inevitable for a society's prosperity.
The "grand compromise" theory advocates Sweden's successful social democratic policies, which positively accept economic growth and interdependence between the domestic and global economies. This approach usually tends to favor global competitiveness at the cost of employment stability. However, Sweden successfully achieved both goals by pursuing new insurance programs and wage policies.
This theory suggests that Korean laborers, the current government and companies should each bear their respective share of social responsibility. At present, laborers can be blamed for neglecting their social responsibility in that they are extremely sensitive to their own interests in the companies they work for. This is another kind of egoism in the arena of market competition; thus they are not so qualified to criticize the lack of social responsibility of the companies.
The governments of Kim Dae Jung and Roh Moo Hyun are also to blame for placing inordinate priority on the country's financial credit over their responsibility to the interests of the Korean people. They need to restore public confidence in their commitment to public welfare.
Korean companies are also too engrossed in their shareholders' interests, failing to consider their social responsibility. The theory basically contends that all these main social players should cooperate to address the challenge of globalization.
In addition, as a supplement to the Korean welfare system, a social investment strategy has been proposed by some progressive leftwing groups. It seems a little surprising because this proposal, in contrast to the leftwing's traditional stance, does not deny the government's function as a guardian of social welfare. These groups maintain that the traditional role of government should be extended to address labor issues.
Korean laborers and companies are struggling to reach agreement on temporary worker issues these days. The issues particularly involve the protection of temporary workers' employment and companies' growing reliance on outsourcing strategies. Companies have become the target of public criticism for failing to protect workers' rights. The legislature also faced criticism for failing to deal with the outsourcing issue in a new law designed to protect workers, which came into force on July 1.
The struggle is still going on. Congress seems unwilling to take radical measures, claiming it is practically impossible to revise the law within this year. This temporary worker issue will probably remain unresolved for a while, at least until the Congress can devise a breakthrough next year.
As long as countries hope to keep benefiting from an increasingly globalized economy, there is no sense in avoiding or abandoning the neoliberal economic approach. As a democratic market economy, Korea must find its place in the global economy. On the other hand, it needs to find remedies to the social problems this engenders as quickly as possible. It must not become captivated by excessive, chaotic liberalization, which could go beyond the control of stakeholders.
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(Lee Jae Young is a freelance writer and citizen reporter for Ohmynews International. He is currently also studying for a master's degree in Seoul, South Korea. ©Copyright Lee Jae Young.)
