Monday, July 11, 2016

What Going Cashless Could Mean

A few months ago, news broke that the Korean government plans to eliminate coins from its money supply by 2020. However, eliminating coins is not the end goal in and of itself. The ultimate goal is to eventually also phase out paper money. However, there is no set date for that yet.

At first glance, this makes sense. More and more people are using debit cards, credit cards, various smartphone apps such as Samsung Pay and Kakao Pay, as well as virtual cryptocurrencies such as Bitcoin (though Bitcoin does not seem to have become mainstream in Korea just yet) to make financial transactions. Considering the overall social trend that we are seeing in Korea unfold before our very eyes, it is understandable when the Korean government says that eliminating coins from the overall money supply would be able to help it reduce minting costs, which is about ₩60 billion (US$52.1 million) per year.

Although it is likely that the Korean government still has a positive seigniorage rate -- the profit made by a government by issuing currency, especially the difference between the face value of coins and their production costs -- in the long term, eliminating coins would be more profitable because of inflationary pressures that devalue money.

So going cashless certainly has benefits. An added bonus that comes with the elimination of cash is that it would severely inconvenience those engaged in criminal activity. As more and more people use cards, physical or virtual, to make and/or receive payments, it would become much harder for activities like tax evasion, gambling, money laundering, terrorism financing, human trafficking, and the drugs trade to go unnoticed by the government. And in Korea's case, it would help the government to better monitor the clandestine flow of money into North Korea, which is no small matter!


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However, there is another reason, a rather big reason, that the government prefers a cashless society; and it is one that is seldom talked about by those outside of groups that focus on cryptocurrencies or economics in general. The reason is that a cashless society would make it much easier for the central bank, in Korea's case that being the Bank of Korea, in tandem with the government, to potentially impose negative interest rates.


What are Negative Interest Rates?

Central banks all over the world are tasked with maintaining a certain level of stability in each country's financial system. Among the tools that central banks possess, nothing is as powerful as their ability to increase or decrease the discount rate, which is the interest rate charged to commercial banks and other depository institutions for loans received from the central bank.


So, for example, if a central bank decreases the discount rate, which is what is typically being done around the world these days, it would make it cheaper for commercial banks to borrow money from the central bank. In turn, the commercial banks would be able to pass on those savings to their customers -- you and me -- in the form of lower interest rates charged on things like auto loans or mortgage loans.

This would compel individuals to borrow and spend more money. That way, a stagnant economy would get the boost that it needs and it might be able to stave off or perhaps even recover from a recession.

Similarly, if an economy is overheating -- witnessing dangerously high inflation rates -- the central bank will increase the discount rate, which would then have a domino effect of making it more costly for people to borrow money, which would then help to cool the economy.

At least that's the theory anyway. But what happens if the theory doesn't match reality?


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What happens if an economy doesn't experience growth despite the fact that interest rates are kept close to zero? For example, interest rates in Japan have been kept at nearly zero for more than 20 years, but it has not helped Japan to escape from its deflationary trap. When we consider the fact that much of Korea's economy was modeled after Japan's economy (see here and here for more wonkish comparison) and also take into account that, like Japan, Korea has an aging population, the possibility of falling into a decades-long deflationary trap is not an unfounded fear.

As a result, more and more governments are now flirting with an idea that was once panned as being ridiculous -- negative interest rates. Basically, it's taking the idea of imposing lower interest rates to stimulate economic growth and injecting it with steroids.

The idea is that the central bank will go all in and impose a discount rate below zero percent for commercial banks. The idea is that if a central bank imposes a discount rate of, say, -0.5%, commercial banks would be less willing to park their money in the central bank where they would be charged money for doing so. So, instead, commercial banks may prefer to lend money to each other. The theory is that when more and more money circulates among commercial banks, then banks would more willingly lend money to their customers, which would in turn help to stimulate economic growth.


Does this mean that the Average Joe/Jane will have to pay to keep money in a bank?

That is a popular argument that many have made in regards to the negative interest rate. However, I think it is unlikely that commercial banks would actually do that. People who make that argument often neglect to look deeper into the very different relationship between central banks and commercial banks and the relationship between commercial banks and their customers.

Whereas the relationship between KB Kookmin Bank and me is one that can be characterized as a business/customer relationship, the same cannot be said of the relationship between Kookmin (or insert other banks here) and the the Bank of Korea. That is because central banks act much like regulators over their respective financial industries. In other words, consent is practically non-existent in the relationship between central and commercial banks. For good or for ill, central banks make the rules and regulations and in order to stay in business, commercial banks have to obey those rules.

It goes without saying that banks hold a lot of leverage over their customers, but no matter how powerful commercial and investment banks may be, there is one power they do not possess over their customers. They have no control over their customers' choices. For example, if Bank A charges their depositors an annual fee to keep their money in their bank, those depositors will more than likely look for other banks to save their money in where they won't have to pay such a fee. And Banks B and C and D and others will only be too happy to oblige.

That is why it is unlikely that commercial banks will somehow end up cannibalizing their customer base. Especially during periods of economic slowdown, market expansion might be a more practical strategy for long-term survival than profit maximization.

However, it does not change the fact that commercial banks would still be losing money because of the negative interest rates. So, they may partially push those costs to their customers by other means such as higher overdraft fees or eliminating free account transfers. So there is a chance that regular bank depositors might end up having to pay additional hidden fees, but being directly charged for saving money in a bank account sounds like a tinfoil hat conspiracy theory.


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What does this have to do with a cashless society?

The theory behind negative interest rates is almost sound. Incentives are important and when there is no incentive to save -- in fact, if there is every incentive to spend -- people will spend more money, which would help to stimulate economic growth. However, there is a problem with the theory. It depends entirely on the assumption that human beings think and act like Homo Economicus. The problem is that Homo Economicus does not exist.


Homo Economicus is all about maximizing one's economic utility and is aware of all publicly known information and responds accordingly. So for example, if the government taxes kale at 100% but taxes candy bars at only 10%, and assuming that they are the only two things that anyone can buy and depending on the utils that Homo Economicus derives from kale and candy bars, respectively, there is a very good chance that Homo Economicus would buy only candy bars. None of that describes a typical human being.

Human beings do not possess all publicly known information. Everyone suffers from asymmetric information from one degree to another, we are all biased, and we all tend to act emotionally. And one of the most powerful emotions that dictates how people think and act is fear.


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Theoretically, a negative interest rate will drive individuals to make the necessary cost-benefit analysis and decide that spending one's money would be more profitable than saving money at zero percent interest. However, the theory discounts humans' fear of the future. Though we do not possess all publicly known information, we are a species that is aware of our own frailty and mortality. Barring any unforeseen circumstances that could potentially snuff out our lives at any given moment, we will all some day grow old. Our bodies will become weak, our minds will become feeble, and we will all die. That is ultimately why we save our money and not spend every penny that comes our way (if you do spend your money like this, STOP IT!).

Negative interest rates could potentially wreak havoc on people's retirement plans. If the interest rate is above zero, we can save our money with the full knowledge that the balance that we end up with at the time of our retirement will be greater than the principal that we started out with (assuming that our savings are not canceled out by inflation). Unlike interest rates that can be changed at will, however, assuming there is no sudden medical breakthrough that will cure everything, the aging process does not change. So even if the interest rate is at zero percent, it will not change the fact that we still have to plan for retirement. But zero percent compounded for X years is still zero. That means that in order to reach our targeted savings goal for our retirement, we need to save more money than we would have to had the interest rate been above zero.

This is one of the possible reasons that might explain the ineffectiveness of keeping interest rates low.

So especially in aging societies like Korea and Japan, it is possible that imposing negative interest rates could lead to drastic unintended consequences (not to mention the fact that lower profit margins that negative interest rates would impose on banks in general could drive a lot of smaller banks out of business, thus inadvertently exacerbating the "too big to fail" phenomenon).

So imagine what you would do if you were planning for retirement but the bank is basically telling you that it will do nothing more than simply hold your money. What would you do? The more risk averse among us would still likely keep our money in our bank accounts despite the zero percent interest. After all, the money in the banks are insured by the government. But for those who are more prone to taking risks for whatever reason, it is likely that they will pull their money out of the bank and invest it in something that will give them a greater long-term yield. That is why so many people who can afford to do so buy property (though everyone should always keep an eye out for economic bubbles).

But if enough people pulled their money out of their banks to look for greener pastures, couldn't that lead to a bank run and wouldn't that be catastrophic? Yes, it would certainly be catastrophic. But what if there were no cash to withdraw from the banks to begin with? When there is no physical money that you can hold in your hands or literally stuff under your mattress, when the only money that you can use is all digital e-money and, unlike cryptocurrencies like Bitcoin, it can all be tracked by the central bank, then you literally cannot flee from the banks. Or at least it would be really hard to do so.


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That is because it would become much easier for the government to "direct" people from deciding against "hoarding" their money upon the imposition of a negative interest rate after cash has been eliminated. To explain, in order to have better returns, individuals may desire to take their money out of their bank accounts and invest it in private asset markets such as property or what have you. However, unlike banks, other private asset markets are not guaranteed by the state, and thus not safe for investors. At least not as safe as banks. That way, there will be incentive for people who prefer safety and risk-free investments to keep their money invested in state-guaranteed banknotes, even if all of those banknotes are purely digital.

In other words, a cashless society transfers absolute control of the money supply to the central bank. Combine that with negative interest rates and the central banks have the perfect mix of ingredients necessary to incentivize spending, disincentivize savings, AND prevent bank runs that could offset the stimulative goals of the negative interest rate. Theoretically, assuming everything goes according to plan, the macroeconomic outlook will become less dire and might be a winning strategy to overcome negative economic growth. But what will that do to individuals' savings? How will this effect retirement plans?



So why not go cashless from the get go?

Like the case in Germany, though many people prefer to use other methods of payment, cash still has a special place in everyone's hearts for various reasons (see here, here, here, here, and here).


So, a sudden abandonment of cash would be met with great resistance. It would make a lot more sense to gradually acclimate the public to going cashless.

The government has stated that people will be issued special cards for them to store their e-change. For example, if someone buys ₩9,500 worth of goods and handed over a ₩10,000 note to the cashier, instead of receiving a ₩500 coin as is done right now, the cashier would digitally wire that ₩500 worth of change to the card that the customer carries. This is perfect in many ways. That is because eventually, all the change that gets digitally wired to individuals' cards will begin to accumulate over time and once that happens, that accumulated money in people's cards will be used for transactions side by side with paper money (for as long as paper money is still circulated).

This means that the continued use of e-money could be further incentivized. Doing so would just be a matter of imagination. For example, the government could provide a favorable rate environment for e-money, or by an enticing exchange rate for swapping out of paper money for e-money via credit or point systems or special offers in partnership with Korean conglomerates.

Combine that with a a steady campaign to stigmatize the use of paper money -- as has already been done throughout Europe -- and the Korean government would be able to gradually shift toward a cashless society while facing minimal resistance. It's actually quite brilliant.


What it would mean to live in a cashless society

As I mentioned earlier, a cashless society could wreak havoc on people's retirement plans. And this is no small matter especially when we take into account how much debt the average Korean household has


There are other possible outcomes that could arise from going cashless. For one thing, a cashless society would certainly reduce privacy for the average person as our money could easily be tracked, thus making it incredibly difficult to hide our money from the Tax Man. However, it is not just the government that people will have to worry about. Once e-money is "printed" by the government and administered to the general public by private financial institutes, it could become much easier for our spending habits and history to be tracked by others such as insurance companies and marketers.

As usual, the rich will still be able to benefit. They can buy anonymity via shell companies or charities. However, for average people, anonymity would be a thing of the past. However, those who would be hit most are those who currently do not have bank accounts because of poor credit scores. Once cash becomes a thing of the past and they are still barred from banks because of their poor credit scores, their lives could become much more difficult. It would not be a stretch to conclude that this could potentially exacerbate the wealth gap.


If you're rich
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Further, it could also make life miserable for those who are deemed immoral by societal standards. Take the porn industry for example. In 2014, it was reported that Chase Bank had shut down a number of bank accounts that were discovered to have been used by porn actors. Porn is already illegal in Korea and those who are apprehended are usually prosecuted to the fullest extent of the law. Pornographers may be difficult to defend, particularly if they might also peddle revenge porn. However, other possible victims of the morality police are sex workers who already face a lot of discrimination in their lives as they might get locked out of banks, too.

Also depending on how well the relevant laws are enforced, it could also make it impossible for businesses to pay people anything lower than the minimum wage. Many people might think that this is a good thing. However, it could potentially make life much harder for marginal workers as it is possible that people might not even bother to hire them at all.

However, all of those problems pale in comparison to the much bigger issue -- what if going cashless and imposing negative interest rates on top of that still do not help to spur economic growth? What happens then? That is what people should be pondering.

Tuesday, June 14, 2016

My Response to Se-Woong Koo's "South Korea's Misogyny"

Late last month, I wrote a post called "I am part of the problem and I want to talk about it," where I talked about the Gangnam murder case and the level of misogyny that exists in Korea.

It was the most personal thing that I had ever written on this blog. I don't usually write my personal feelings, but the reason I wrote that was because I felt angry, but more importantly, I felt helpless. The amount of hate, ridicule, and marginalization (and sometimes straight up violence) that women face in their lives is not something that I am entirely familiar with, but something that I want to get to know better so that I will no longer be part of the problem that women face; and hopefully, become a part of the solution. I said that I wanted to be a part of the conversation, and this is my way of continuing it.

But we have to identify what the problem is, and also what it isn't. And no matter how I look at it, misogyny seems like the product of a social problem. And I use the word "social" to encompass culture, religion, and tradition. You'll notice that there is one category that is missing in my definition of "social problem" -- legal.

It goes without saying that there are certainly laws that are unfair to women. I think one of the best examples of laws being unfair to women are child support laws. In many instances after a divorce, the woman almost always takes custody of the child(ren), but most women are awarded an inadequate amount of child support, if they are awarded any child support at all.

So there are certainly laws that put women at a disadvantage. But the reason why I did not add legal in my definition of "social problems" is because it is my opinion that the law itself is not the source of misogyny. That is because laws are but a reflection of a society's shared morals. In other words, what I am saying is that in my opinion, misogyny is a social problem, which at times is reflected in a country's laws, but is not necessarily a problem caused by the law.

This is why misogyny is so incredibly pervasive and just as hard to combat. During that time when so many Korean women were sharing their thoughts and feelings about the Gangnam murder case and sharing their stories about being objectified and victimized in various Naver blogs and Facebook posts, I found far too many men leaving behind distasteful comments. One commenter said that women couldn't complain about sexism because Korean women are not forced to serve in the military. I know that I'm no Mr. Perfect either, but I can't imagine how self-absorbed someone has to be to be unable to fathom that someone else could actually be a victim.

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Whenever I read any of those comments, I just wanted to grab them all by their collars and slap some sense into their thick skulls. (Aren't we all a bunch of keyboard warriors when we are behind our computer screens?) But even if I could, that wouldn't solve the problem.

Perhaps I am wrong, and if I am, I'd be only too happy to be corrected, but as I said, I see misogyny as a social problem, which is a culmination of culture, tradition, and religion. These elements are the very fabric of society and a society's fundamental building blocks cannot and do not change overnight, at least not if it is done in the least bloody manner possible (the alternative that I am referring to is, of course, violent revolutions). Getting a society to change is tiring, tedious, frustrating, and painful work; but I think it is uncontroversial to say that it is less tiring, tedious, frustrating, and painful than violent social upheavals.

So although I recognize that this will be a long and thankless journey, and even though I will most likely be little more than just another tiny voice in a sea of people who wish to strive for social improvements, I still wish to be part of the conversation if for no other reason than the fact that I don't wish to feel ashamed every time I look into the mirror wondering why I didn't do more to help.

It was at this point that I read Se-Woong Koo's column in The New York Times - South Korea's Misogyny. I am not unfamiliar with Mr. Koo's work. I have read a few of them and more often than not, I have strongly disagreed with some of the things that he has said (see here and here). And I found myself once again disagreeing with Mr. Koo's proposed solution -- passing Korea's stalled anti-discrimination laws.

I started my blog back in 2013 and the stalled anti-discrimination bill was the second thing that I had ever written about. For those who are more familiar with my economic and political views, I am sure that it will come as no surprise to you that I was (regretfully) happy that the bill did not pass. If you would like to read what I had written about it then and understand why I added "regretfully" in parenthesis, you can read it here.

Another thing that I found lacking in Mr. Koo's column was his lack of explanation of some his points. In all fairness, he was writing an op-ed for The New York Times, which, unlike his blog, has a word limit. So I don't hold that against him too much. However, I would be remiss if I did not take a swipe at his throwaway comment about Korean women getting paid only two-thirds of how much men get paid considering the fact that he seems to completely neglect the fact that that is actually a median wage gap. You can read more about what I had to say on the subject of the gender wage gap here.

Also his statement about how "an anti-discrimination bill would help reduce discrimination, create legal protections and compensation, and, hopefully, reduce misogyny" is rather unconvincing.

I recognize that neither of my positions regarding the anti-discrimination bill and the gender wage gap is particularly popular, but I stand by every word that I said in those blog posts.

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Now of course, I agree with Mr. Koo about everything else, particularly his diagnosis of Korean society. I remember when I was a child, I was shocked when my grandmother told me that she didn't know how to read. She was part of that generation when people thought that girls didn't need any kind of education whatsoever. I also learned later on that my grandmother had put on makeup only once in her life, which she washed off promptly, because my grandfather barked at her for doing so because "it made her look like a whore."

I say this without any exaggeration that when my grandmother was younger, the only two places that she "belonged" were in the kitchen and the bedroom. Obviously Korean society has progressed since my grandmother's day but, as Mr. Koo said, those changes have "come too late for her, but it’s not too late to give respect to South Korean women of new generations."

So, to repeat, although I agree with Mr. Koo's diagnosis, it is my opinion that Mr. Koo's proposed solutions leave much to be desired.

As I said before, I want to be part of the conversation and I want to be part of the solution. Misogyny is real and there have been far too many victims. As Mr. Koo himself also said, there is no easy solution. What's unfortunate is that as soon as he said that, he offered an easy solution, which is no solution at all. In fact, it could be downright counterproductive.

I think the way forward is going to be long, exhausting, and just completely unpleasant. But I think that is the only way forward that will bring about real lasting change that everyone can be proud of; and that using the law to try to fix a deeper social problem is like telling a cancer patient to use a band-aid.

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I don't know if you've taken the time to read my previous posts about the anti-discrimination bill or the gender wage gap. The one about the gender wage gap is admittedly rather TL;DR. Anyway, my approach to economics, the law, and politics in general have been affected by liberal economics (just so there is no confusion, I do mean classical liberalism). And no one has to tell me that a lot of people do not subscribe to that school of thought.

So if you are one of those people who think that Mr. Koo has a point, hell, if you are Se-Woong Koo and you'd like to take the time to respond, and think that passing the anti-discrimination bill would somehow help reduce discrimination and misogyny, I am all ears.

Monday, May 23, 2016

I am part of the problem and I want to talk about it

For those who frequent this blog, you know that I mainly talk about politics and economics. Or movies as it seems lately. That is because those are the subjects that I know best. But more than that, with the exception of the occasional heated debates that occur on social media, these are subjects that are, at the end of the day, relatively impersonal.

For example, yes, I think that a blanket increase of the minimum wage is disastrous for the poor. There are others who disagree with my assessment; and those debates often go on for an unhealthily long period of time. But, at the end of the day, it's nothing personal. Hell, I'm a blogger. No one in the Ministry of Labor is really going to care about what I or you (assuming that you are not some big shot in government) have to say about the topic, no matter how many hyperlinks you provide.

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And a lot of that is intentional. I have no problems whatsoever with discussing ideas. That's easy. The worst thing that can happen is that someone calls you stupid, and that matters only if you let the opinions of others matter. Besides, to be truthful, it's not like as though my ideas are terribly important to anyone else aside from myself. But on the other hand, sharing my feelings with others? I find that viscerally uncomfortable.

Sure, I can and have expressed anger before, but that's an easy emotion to share. In this age when people are looking for views or clicks or likes or retweets, rage (and if you can't muster the real stuff, faux rage) is one of the easiest things that anyone can tap into. But other emotions like grief... that requires the writer to make himself more vulnerable. And I have never been quite comfortable with that. So I tend to avoid those topics. Even when I wrote about the Sewol tragedy, I focused on the politicization of it -- not the actual tragedy.

But this time, I feel the need to try to get something out. And considering the fact that I am going to talk about something that I readily admit that I know little about and feel uncomfortable doing, I am fully aware that there is a very good chance that I will sound like an ass. So here goes.

By now, everyone already knows the story about the schizophrenic misogynist who randomly murdered a young woman in Gangnam. I don't think we need to rehash the grisly details.

I won't say that I was deeply upset when I first heard the story. Nor was I shocked. I was quite indifferent to it actually. I don't know about you, but I'm a news junkie. And when you consume as much news information as I do, the death of a random stranger doesn't really bother you. There are so many horrible deaths and so many vile acts of cruelty that are perpetrated in the world on a daily basis. So naturally I've become largely desensitized to a lot of violence that I read about.

I think the same can be said about a lot of other people, too. Maybe even you as well. When people say that they're not surprised to have heard that X happened, no matter how horrible X may be, I don't think that most people genuinely had the foresight to know that X was coming. I think most people have been desensitized by so many other things similar to X that by the time X happens, most people shrug and move on.

And that young woman's death was just one of those things for me. I furrowed my eyebrows a bit, shook my head, and then clicked on the next story.

If her death ended there and nothing else happened as a direct consequence of it, at least nothing else that affected anyone outside of her immediate family, I wouldn't have bothered to look through that story or think much about it again. But the protests happened. The hundreds of post-its, the flowers, the messages of grief -- they brought my attention back to the story. The message that got to me most was the one that asked why so many of these perpetrators who commit random acts of violence (RAV), 묻지마 범죄, seem to target women.

According to this article, six out of ten victims of RAV are women.

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So after having read the original article, then reading about the post-its, and then reading about the statistics, I then read about an Australian woman who was raped in Korea and how Korea is not a safe place if you are a woman, especially a non-Korean woman. Not long after that, I read about a Japanese pop star who had been stabbed two dozen times by an obsessed fan because she returned a gift that he had given her.

And that was when I learned something about being desensitized. It's a temporary state of mind. If you keep staring into the abyss, you stop caring about it for a while, even when the abyss stares back into you. But then when you look long enough and you see the rot and the decay that is hiding in the abyss, it does get to you eventually. And it got to me. Just when I thought I couldn't feel worse about what was going on, I read about members of Ilbe -- that rot and decay I just mentioned -- doing what they do best. Trolling mourners. A bunch of classy motherless assholes, those guys are.

It's easy to offer solutions -- harsher punishments, longer sentences, heftier fines, abolishing anti-defamation laws so that perps can be named and shamed so that they can be shunned by society for the rest of their lives, etc. It would be easy because I can then slip back into my "let's talk about ideas" mode of thinking. Plus, no one in the Ministry of Justice is going to listen to me anyway. So it's no skin off my back.

The hard part is that I have to accept that I am part of the problem.

I'm a Korean male in my 30s. I served my time in the Korean Army and I am fluent in both Korean and English (more fluent in English than Korean to be honest). I am a business owner, a blogger, and a columnist. I'll never be as rich as Lee Kun-hee, but I live comfortably. Plus I weigh about 200 pounds. So that means that if I were walking alone in Itaewon pissed drunk, and I have on numerous occasions, I will be left alone. And I have never been bothered by anyone. In fact, no matter how many times I've heard of racist taxi drivers who attempt to stiff their customers from expats, I can say with certainty that no taxi driver has ever tried to stiff me.

If you knew nothing else about me except for that brief description I gave of myself, there would be a good chance that you'd call me a gaejeossi, a term that I find about as endearing as doenjangnyeo.

So, why would I think that I am part of the problem? What has any of that got to do with anything? And why does this make me feel sick? It's because I don't usually feel there is a problem.

To explain, of course there are troubles in my life just like everyone else. But I don't perceive any of my problems to be things that a little work and a little discipline can't resolve. Oh, I'm not the next Robert Koehler? Whatever. I'll just keep doing what I do best and see where things go from there. Oh, boohoo, paying bills and taxes are hard and running a business is even harder? That's when I down a few shots of soju and tell myself to man up because nothing ever good has ever come easy! Yes, life is tough. Wear a helmet and soldier on.

But I never have to worry about getting drugged and gangraped in a seedy motel. I never have to worry about getting killed because someone hates my gender. I never have to worry about some random drunk ajeossi groping me because this stranger somehow feels entitled to my body. I never have to worry that a cop is going to believe someone else's ludicrous accusations and neglect to hear anything I have to say because he doesn't understand a word I say. I never have to worry about being denied entry to any bar or business establishment because my skin is a shade too light or a shade too dark.

And this is a problem because when you don't ever experience the problems that others endure, then those things don't exist -- at least not in your mind. It's not something that anyone can be blamed for. It's human nature to see everything from our own perspectives, to often be blinded to the problems that others face. When people have their own problems to deal with, concerning themselves with problems that others face is not something that a lot of people have time for. And when these things don't exist for you, you don't ever talk about them.

And I think that's why I think I'm part of the problem. I don't talk about the kinds of problems that so many other people face because it's not part of my experience. And I don't think nearly enough people talk to each other.

Yes, people talk to each other plenty on social media. But I think most of the time people talk at or talk over one another on social media, rather than talk to each other. Plus, I think social media is part of the problem (yes, I am using social media to say that social media is part of the problem; the irony is not lost on me). Social media might have made it much easier for people to communicate with one another, but the impersonal nature of it all has it made damn near impossible to talk about anything of substance to our personal lives. So I think the genuine conversations that need to occur are among families -- face-to-face. I just don't think there is enough of that going on.

We know the usual stories. Mom and dad are both busy working. They have to stay late at work. They are tired by the time they get home from work and/or hweshik. The kids are tired, too, because they spent the whole day at school and at a million hagwons. Neighbors don't know each other. Etc. Etc.

Family is vital. But when that most basic and vital of relationships breaks down, it's only a matter of time before society itself begins to break down. I'm no Jerry Falwell-conservative who thinks there ought to be one mommy and one daddy and that they have to stay married with legal custody of their biological offspring for such a unit to be called a family. Admittedly, that's the kind of family that I grew up in, but I recognize that there are other kinds of families. It doesn't matter what the family looks like and how the individuals are related to one another. What's important is that families get together to talk to one another. Otherwise, we get a bunch of kids addicted to smartphones, gaming, and the Internet and the only place where they get to learn about morals is from the comments section of Internet forums and they end up relying on a steady diet of stupid and ramyeon.

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I don't have children of my own (which I am grateful for!) so I don't think I'll ever be part of a parent-child conversation where I get to dispense wisdom to my younglings. But I'm going to stop being part of the problem by talking to others. And this meandering ramble is my opening salvo. I am willing to talk to others and, more importantly, I am willing to listen.

I might not know a whole lot about the patriarchy or the fragility of the male ego or about the problems that women or other minorities face in their daily lives. I might not ever understand some of them. But I'm willing to take part in a conversation. Perhaps you should, too. Talk with a friend, a colleague, a child. Post your own stories on your social media pages or blogs if you can't bring yourself to have a face-to-face conversation. Whatever. Hopefully, this will lead to more people talking to one another and sharing each others' stories.

I think this is vital because I am convinced that the majority of people in the world are good. I just think that one of the biggest problems facing the good people of the world is that many people have become isolated from one another. When enough good people get together, I think these evil cretins will crawl into whatever hole they came from.

And then maybe, just maybe, we can at least start to act like civilized beings who don't get too desensitized to murder.

Saturday, May 7, 2016

Random Thoughts about Captain America: Civil War, a Movie Review about it, Objectivism, Ayn Rand, and Hell Joseon

WARNING: The following may appear to be the ramblings of a madman regarding various topics such as Captain America: Civil War, libertarianism, Objectivism, Ayn Rand, and Hell Joseon. And it's going to be a long read. In other words, it's going to be one of those K-blogger nerd rages. Also, this is not a movie review. Rather, it is a review of a movie review. So, if you are a productive member of society and you have better things to do with your time, I suggest you go on your merry way and continue living a rewarding life. However, if you can't take your eyes off train wrecks and you have an unhealthy obsession with watching people putting up half-baked ideas on the Internet, then, please, go on. You have come to the right place.


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The Movie

I went to the midnight showing of Captain America: Civil War (CACW) on opening day. In light of the fact that the last movie that I had seen prior to CACW was Batman v Superman: Dawn of Justice (see my review of that movie here), a movie that I found thoroughly disappointing in almost every way, I found CACW quite enjoyable.

(Minor spoilers ahead)

In the movie, as a result of the destruction that the Avengers tend to leave in their wake, the United Nations has declared that it would have direct oversight of the superheroes.

Iron Man aka Tony Stark (Robert Downey Jr.), who is stricken with guilt over those who have lost their lives, directly or indirectly, because of his actions, is in favor of the decision. In light of the popularization and use of the term "blowback," which is a result of a series of tragedies all on its own, and the manner in which so many people have become desensitized to the phrase "collateral damage," I think that it is a good thing that at least a fictional character from a fantastical fictional world seems to be taking civilian deaths seriously.

On the other hand, we have Captain America aka Steve Rogers (Chris Evans) who thinks that agreeing to acquiesce to the authority of the United Nations would mean that they would lose their freedom to do the right thing when they deem necessary and would force them to become pawns in a global chess game and is, therefore, against the decision.

This ideological divide pits various superheroes against each other to the point that they find it necessary to physically fight one another. And I don't care what anyone else says, that airport fight scene was awesome.


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The Random Review


The politics in the movie is not exactly subtle. The political rhetoric that was jammed into the movie was so hammy that Kevin Feige may as well have been bashing people on the head with Mjölnir. But that was fine. I doubt anyone went to watch the movie to learn about the basic principles of Lockean Natural Rights. I enjoyed the movie for what it was and that was that (for anyone who wishes to read an excellent review of CACW, check out Kevin Kim's review here).

Yesterday, however, by chance, I came upon a review (of sorts) of the movie on OhMyStar, which is the entertainment division of OhMyNews, a Korean online newspaper. I would have skipped it had it not been for the fact that I noticed that the opening paragraph started with Ayn Rand's name. 

For anyone who still doesn't know, I am a student of Objectivism (I know, booooo!), and therefore deeply interested in all topics related to Ayn Rand. I discovered Ayn Rand and her philosophy of Objectivism when I was in college and have read all of her major works. In fact, some time ago, I had the great pleasure of purchasing rare copies of The Fountainhead and Atlas Shrugged that had been translated to Korean (I was pleasantly surprised to see that the translation was quite faithful to Rand's original work). However, the fact remains that the vast majority of Koreans have never heard of Ayn Rand. So, I tend to get excited when I see any mention of Rand and/or Objectivism in the Korean media.


I know, I know!
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While reading the review, however, I could not help but feel dejected as the writer seemed to have had only a surface understanding of Rand's philosophy.

The writer gave a very brief introduction about her childhood and explained how she eventually became "the godmother of the Conservative Right." Then the writer stated that her philosophy could be summarized as "absolute freedom for the elites" because Rand thought that society is able to progress only through the achievements of the elites and that elites produce their best work only when they have the most freedom. That is why, the writer explained, Rand opposed regulations and taxes.

On the other hand, the writer continued, her ideological opponents believe in the power of governmental regulations and reject the Invisible Hand of the Free Market while calling for welfare programs to help the poor.

The writer then placed Captain America into Rand's camp and Iron Man into the opposing camp, which he referred to as the libertarian camp and the communal camp respectively.

These superheroes, by fault of birth or accident or some other reason, are the elites, the writer claimed. And these elites are often forgiven for the destruction they cause because it is often perceived that their violence is carried out in the service of a greater good. But now, these elites have decided to square off against one another. And Captain America, who has decided that he can neither retire nor be part of "the system" decides to stand his guard -- even though that means opposing every government in the world, much like the way Rand and her disciples like Alan Greenspan insisted on doing things their own way.

The writer then ended his review by stating that the question that people have to ponder is what the difference is between Rand and Captain America.

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Team Captain America?

I felt almost depressed after reading the whole thing because of how much Rand had been misunderstood by this writer and how much more misunderstanding is likely to be caused among even more people who have never had any first hand information about Objectivism.

For one thing, it is absolutely amazing to me that anyone could think that Rand advocated "absolute freedom for the elites!" Although it's certainly true that Rand thought that the masses owe a deep sense of gratitude to producers, none of her heroes could ever be seen as "elites." Howard Roark, Rand's protagonist in The Fountainhead, was a penniless architect throughout most of the novel and his mentor, Henry Cameron, died broke. Many of the villains in Atlas Shrugged such as James Taggart and Wesley Mouch were wealthy CEOs and high-ranking government officials who often colluded with one another.

If anything, Rand had nothing but disdain for the collectivist notion of "elites."

As for Captain America himself, his words in the panel that I shared above could just as easily have been said by Howard Roark or John Galt. After all, one of John Galt's more succinct quotes from his 60-plus-pages-long speech in Atlas Shrugged was "There are two sides to every issue: one side is right and the other is wrong, but the middle is always evil."

So on the surface, it might seem that Ayn Rand would have been on Team Captain America. But to be honest, that's not entirely clear. The heroes that she created, Roark and Galt, were an architect and an engineer respectively. As heroically as Rand may have portrayed those occupations, in real life, they are just a couple of regular Joes with white collar jobs -- just some guys who want to do what they think is right and make an honest buck preferably while being left alone.


Captain America, on the other hand, is an enhanced supersoldier who uses a physics-defying shield to pummel Nazis and aliens into pulp. And to be frank, Captain America's popularity notwithstanding, his superpowers aren't that impressive. At least not when you compare him to some of his other teammates like Thor and The Hulk -- a literal god and a monster that smashes puny gods. In fact, they get compared to thermonuclear weapons in CACW.

This is an important distinction because Ayn Rand was quite specific regarding the use of physical force, which she defined as the threat of physical destruction. According to Objectivist ethics, no one is allowed to initiate the use of physical force against others. The only time that Rand thought that people could legitimately use physical force is only in retaliation and only against those who initiate its use. In other words, Rand championed self-defense, but not murder. Nothing controversial, right? So far, all of that sounds quite libertarian.


"OMFG! AYN RAND! HOW DARE YOU MENTION THAT SOCIAL SECURITY-COLLECTING WITCH WITHOUT SIMULTANEOUSLY GNASHING YOUR TEETH AND STOMPING YOUR FEET?! WHY DO YOU HATE THE POOR, YOU CAPITALIST PIG?"
- Practically almost everyone who thinks Ayn Rand is evil but that Che Guevara guy seems cool
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Objectivism =/= Libertarianism

And this is one of those points where Objectivists and libertarians part ways. Admittedly, libertarianism, like any other political philosophy is not a monolithic idea. Hell, Bill Maher used to call himself a libertarian before Ron Paul showed up and turned it into a political movement, which later morphed into the Trump-supporting Tea Party that people know today. Yes, the whole thing has turned into one giant clusterfuck.

Anyway, when libertarians take their philosophy to its logical conclusion, quite a number of them begin to champion a form of anarchy. To be specific, it's called anarcho-capitalism. And many of these anarcho-capitalists, who have been influenced by the likes of Murray Rothbard and Lysander Spooner, are inherently hostile toward anything that resembles a State. They see the existence of the State itself as immoral because they view it as a coercive entity, which by definition violates the Non-Aggression Principle (NAP), a cornerstone of libertarian tenets.

By using the word "libertarian" in his review, that writer from OhMyNews gave meaning to Rand's philosophy that she never intended. For many who have only second-hand knowledge about Ayn Rand, it comes as a surprise when they learn that Rand despised libertarians. She called them second-handers and accused them of stealing some of her ideas and perverting them because libertarians did not accept some of the underlying ethics and metaphysics that went into her philosophy. Further, she never had anything nice to say about anarchy in any of its forms.

Contrary to what many of Rand's detractors at Salon or Slate or Alternet have to say about her (most of whom I think have not actually read anything that she wrote), Rand thought that the government was absolutely necessary for a free society to exist. And in her ideal world, she thought that the government's function was strictly limited to protecting people's rights. And in order to protect people's rights, she thought that the legal use of all physical force had to be under the control of only the government.

In her book The Virtue of Selfishness, a collection of her non-fiction essays, Rand said:

The use of physical force -- even its retaliatory use -- cannot be left at the discretion of individual citizens. Peaceful coexistence is impossible if a man has to live under the constant threat of force to be unleashed against him by any of his neighbors at any moment. Whether his neighbors’ intentions are good or bad, whether their judgment is rational or irrational, whether they are motivated by a sense of justice or by ignorance or by prejudice or by malice -- the use of force against one man cannot be left to the arbitrary decision of another.
Visualize, for example, what would happen if a man missed his wallet, concluded that he had been robbed, broke into every house in the neighborhood to search it, and shot the first man who gave him a dirty look, taking the look to be a proof of guilt.
The retaliatory use of force requires objective rules of evidence to establish that a crime has been committed and to prove who committed it, as well as objective rules to define punishments and enforcement procedures. Men who attempt to prosecute crimes, without such rules, are a lynch mob. If a society left the retaliatory use of force in the hands of individual citizens, it would degenerate into mob rule, lynch law and an endless series of bloody private feuds or vendettas.
If physical force is to be barred from social relationships, men need an institution charged with the task of protecting their rights under an objective code of rules.
This is the task of a government -- of a proper government -- its basic task, its only moral justification and the reason why men do need a government.
A government is the means of placing the retaliatory use of physical force under objective control -- i.e., under objectively defined laws.

Going back to the MCU, we have to remember that in Captain America: The Winter Soldier, it was revealed that SHIELD, which was a covert agency under the control of the United States government that the Avengers belonged to, had been infiltrated by Hydra terrorists on all levels and had to be disbanded. A big deal was made about how Black Widow aka Natasha Romanoff (Scarlett Johansson) decided to hack into SHIELD's database to leak classified information in order to expose Hydra to the public. From that point forward, as far as the law was concerned, the Avengers were individual citizens (With perhaps the exception of Thor. I think it's safe to say that Thor is an illegal alien, but who's going to tell him, right?) who were taking action against a perceived enemy on their own free will without being held responsible to any higher authority -- i.e., vigilantes.

Ayn Rand would not have been all right with that. On some level, she might have sympathized with Captain America, but at the end of the day, she probably would have said that he needed to stand down.


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Team Iron Man?

So does this mean that Rand would have been on Team Iron Man instead, advocating the United Nations' absorption of the Avengers? The short answer is "Hell no!"

In 1971, the United Nations General Assembly passed Resolution 2758, which recognized the People's Republic of China (PRC) as "the only legitimate representative of China to the United Nations" and expelled "the representatives of Chiang Kai-shek from the place which they unlawfully occupy at the United Nations."

In short, Taiwan was out and Red China was in for no other reason than the fact that the communist government seized control and used terror (see Cultural Revolution and Great Leap Forward) to stay in power. Rand used the word "monstrosity" to describe the United Nations that day. On her calmer days, she said that the United Nations was responsible for allowing the Western world to be swallowed in cynicism, bitterness, hopelessness, fear, and nameless guilt.

So, no, Rand would not have been on Team Iron Man either. She would have despised Iron Man's capitulation, and she would have called it that. And the irony is that Iron Man is the closest thing that Marvel has produced to an Objectivist character! Think about it. Iron Man is a wealthy entrepreneur and brilliant industrialist, and above all, an intelligent and rational man who is driven strictly by his own ego and who will only work on his own terms. And he has none of that obsession with guilt over his dead parents or unhealthy sense of obligation that Batman suffers from. Iron Man is an Objectivist through and through!

And for anyone who has ever seriously read either of Rand's novels, it would be as clear as day that even Iron Man's enemies are Randian villains. Don't believe me? Let's do a quick roundup.

  • Islamic militants from Iron Man -- Mystics. Enough said.
  • Obadiah Stane (Jeff Bridges) from Iron Man -- Moocher who tried to steal Stark Industries from Tony Stark by subterfuge and then by murder.
  • Senator Stern (the late Garry Shandling) from Iron Man 2 and Captain America: The Winter Soldier -- Looter who tried to force Tony Stark to turn over the Iron Man technology to the United States government because reasons.
  • Justin Hammer (Sam Rockwell) from Iron Man 2 -- Second Hander who lacks Tony Stark's ingenuity and tries to sell his own inferior war machines to the United States government via crony capitalism rather than by producing a better product that can compete with Stark's merchandise.
  • The Mandarin aka Aldrich Killian (Guy Pearce) from Iron Man 3 -- Nihilist who chooses to ignore good and evil or anything that resembles morality and just destroy everything.

Deal with it!
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So instead of being on one team or another, in my educated guess, Rand would have chosen neither. Instead, she might have suggested a third solution -- establish another governmental agency like SHIELD but this time, make it transparent and force it to be answerable directly to the White House and to Congress.

Or perhaps she might not have had an opinion because she didn't like any of the MCU movies because of the movies' growing focus on moral grayness, something which she found deplorable especially in works of fiction because she thought that the best works of fiction dealt not with things as they are, but with things as they might be and ought to be. Or maybe she might not have been that big a fan simply for no other reason than the fact that it's no Charlie's Angels, a show which she was actually quite fond of.

Either way, it's nowhere near as clear cut and simple as the way this OhMyNews reviewer made it out to be.

What does any of this have to do with Hell Joseon?

WARNING: Please note that I'm done talking about the movie or the movie review now and the remainder of this post will deal with Objectivism itself and how I wish for it to apply to Korea.


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As far as I know, the movie itself has nothing to do with Hell Joseon. What I do find sad is the dearth of knowledge about Objectivism in Korea, where I think a healthy dose of Objectvism can do wonders for Koreans.

When people speak of Hell Joseon, they are typically referring to the highly competitive education system and the lack of guaranteed high-paying jobs while the children of chaebol owners seem to do their utmost to become modern-day versions of little Neros.

However, I am convinced that it is more than just that. I am convinced that Hell Joseon is the verbalized admission that we are currently living in an age of moral crisis. During such times, conservatives are quick to say that people need to rediscover their traditions, their roots. Like Rand, I disagree. Too often people understand that something in their lives is wrong, but rarely do people question their morals. Instead of returning to past morals, I think Koreans need to discover new ones.


Conservatives are wrong? You don't say!
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When people hear the word selfishness, people immediately associate the word with people who will do anything, including harming others and committing immoral and illegal acts simply for their own benefits. It is for this very reason that Stephen Colbert rhetorically asked if the world really needed more selfish people. In Korean, the word is called 이기주의, which is closer to sociopathy or extreme narcissism than to the Objectivist notion of selfishness. Extreme altruism at the cost to one's own life or sociopathic narcissism at the cost to someone else's life -- those seem to be the only two choices people seem to think are possible when in reality, life need not be a zero-sum game.

One often hears that Koreans are a materialist group of people -- people who are obsessed with physical beauty, status (how else can people explain the business card culture?), college background, etc. And it's all mostly to get financially ahead. But why? Why is getting financially ahead the main goal? Money is certainly important in Objectivism, but it draws a clear line between deserved wealth and undeserved wealth.

Sacrifice is a word that one hears regularly. Every able-bodied man must sacrifice by serving in the military to serve the country. Senior citizens sacrifice their own livelihoods to support their unproductive adult children. The fact that Koreans once donated their gold and family heirlooms to the government when the economy crashed and burned in 1997~1998 is spoken of in reverent tones. But why? Why is that the good?

Objectivism does not deny compassion. Concern for the welfare of those one loves is a rational part of one's selfish interests. No one loves simply for love's sake. People love for the joy, the good, the happiness that the object of one's love brings to them. Love is selfish. But Objectivism rejects the adoption of false compassion. It states that people should not sacrifice (which specifically means to give up something one values in exchange for something one values less) for the happiness of strangers if it comes at the cost of one's own happiness. Objectivism states that one's highest moral purpose is the achievement of one's own happiness.

Korea is often referred to as a highly competitive society. But what does it mean to be competitive? Rand stated that "competition is a by-product of productive work, not its goal. A creative man is motivated by the desire to achieve, not by the desire to beat others."

Why do so many Korean children languish in hagwons after school for hours upon hours? Is it done so that the children can get better education so that they can become better versions of themselves? Or is it to beat other students for grades or bragging rights?

Objectivism also advocates laissez-faire capitalism to help to bring about real competition in the economy, which Koreans sorely need. There may be laissez-faire capitalism within the fried chicken restaurant industry, which has resulted in a cutthroat competition where many often find themselves losing everything. But what about competition in the overall economy? It becomes harder to find when we see chaebols being coddled and subsidized, when chaebol leaders are seldom held responsible for their wrongdoings and failures, when foreign companies are blocked or harassed.

Instead of seeking a new sense of life, a new morality, young Koreans have instead opted to embrace Hell Joseon, which is nihilism wearing a Korean mask -- a philosophy that rejects everything and condemns oneself to live in misery instead of doing what one can to achieve one's own happiness.

Koreans badly need Objectivism.

There is a glimmer of hope. Recently, Yaron Brook, the executive director of the Ayn Rand Institute traveled to Japan and China to introduce new audiences to Objectivism and he mentioned that there is a tentative plan to visit Korea next year. He's certainly not a cultural icon like the way Ayn Rand was (and I doubt there will be another revolutionary figure like her ever again) and so it will be slow going, but it seems that maybe, just maybe, more and more people in Asia are ready and will be able to free themselves from their old morals and shackles. I think it is long past due.

I don't know if it is something that I will ever see happen in my lifetime. But one can certainly hope.


"If you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down upon his shoulders -- what would you tell him to do?"
"I don't know. What could he do? What would you tell him?"
"To shrug."

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