Sunday, May 3, 2015

Movie Review: Ode to My Father

WARNING: The following blog post contains a lot of spoilers. If you have not yet seen Ode to My Father and wish to do so without having the plot given away, then do not read this.

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I did not watch Ode to My Father in the theater when it was released in December last year. I watched The Hobbit: The Battle of the Five Armies instead; much to my utter disappointment. But that's another review for another day.

I watched Ode to My Father for the first time at home yesterday when I saw that it was on VOD. Before having watched it, I refused to read any review or plot summary of the movie. I read the first paragraph of a review once accidentally, where I learned that some have described the movie as Korea's version of Forrest Gump. Anyway, I was very grateful that I watched it at home because for most of the movie's running time, I was either on the verge of tears or I was actually bawling. The movie unashamedly uses cranked-up melodrama and string-heavy musical scores to squeeze as many teardrops as possible from its viewers.

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Let's back up a bit and breeze through the plot. The movie starts with the Hungnam Evacuation. The Yoon family, like countless other families, are fleeing North Korea. In a dramatic scene when the family climbs up a rope net to board a ship that would take them away from North Korea, the story's protagonist, a young boy named Deok-soo loses his younger sister whom he was carrying on his back. His father gets off the ship to find his daughter but not before telling his son that Deok-soo will have to be the head of the family until he comes back. He tells Deok-soo to go to his aunt's house in South Korea where she is running a shop and that he would meet them there later.

After arriving at his aunt's house/shop, Deok-soo keeps the promise that he made to his father and assumes the role of the family's breadwinner. When he grows up, Deok-soo (played by Hwang Jung-min) heads to West Germany to work in a coal mine in order to pay for his younger brother's college tuition. While in West Germany, he meets his future wife, Young-ja (played by Kim Yun-jin). A few years later, Deok-soo heads over to South Vietnam to work as a private contractor (it is never specified what kind of work he does) during the Vietnam War in order to pay for his younger sister's wedding (a different sister) and in order to buy his aunt's shop from her drunkard husband – the same shop that Deok-soo's father told him to wait for him at.

In 1983, Deok-soo manages to find his long-lost sister (played by Stella Choewhom he had lost in Hungnam through a television program, which helped to reunite family members who had lost each other during the tumultuous days of the Korean War. It turned out that his now grown-up sister had been adopted by an American family after she was found by an American soldier in Hungnam and shipped off to an orphanage in Busan.

The movie then fast forwards to the present-day when an aged Deok-soo (in rather unconvincing makeup) who is now in his twilight years tells his wife that perhaps the time had come to sell his shop, the same one that he and his family fled to all those years ago. The movie ends as Deok-soo wistfully says that his father probably won't be able to come to see him at the shop now because he is too old.

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The Absence of Foreign Devils

One of the things that I really appreciated about this movie is the absence of foreign devils. In a movie that starts out with the Korean War, it would have been easy to portray American soldiers as snarling warmongers, as was the case in Welcome to Dongmakgol.

Instead, the movie showcases an American major general who chooses to dump weapons and supplies into the sea so that there would be more room for refugees to board the ship to safety. This unnamed major general was actually based on Leonard LaRue, the skipper of the SS Meredith Victory, a United States Merchant Marine cargo freighter.

In a different scene, a German manager prevents Korean coal miners from attempting to rescue their co-workers from a collapsed mine, not because it is not worth saving those workers, but because it is unsafe to do so. Of course, the miners refuse to heed the manager's warning.

More importantly, however, during a scene in present-day Korea when a group of Korean juveniles hurl racist epithets at South Asian immigrants living in Korea, the aged Deok-soo comes to their defense as he knows just how difficult it is to live as a working class immigrant in a foreign country.

I spent the first twenty-eight years of my life as an immigrant in foreign countries as well. I could not help but feel moved when I saw that scene. Considering the fact that Korea is one of the least welcoming countries to foreigners, I thought that this was an important scene for all Koreans to see.

Not that Americans didn't have much of a PR nightmare...
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The Forrest Gump Comparison

The movie begins with a fluttering butterfly that flies around Seoul before landing close to an aged Deok-soo. And the movie ends with the butterfly fluttering away. It was clearly a homage to Forrest Gump's opening and closing scenes.

Also, through several twists of fate that can only exist on the silver screen, Deok-soo gets to meet several historically important Korean figures such as Chung Ju-yung, Andre Kim, Lee Man-ki, and, Nam Jin.

However, this is where the similarities to Forrest Gump end. When it comes to addressing historical facts, though it was certainly done in a lighthearted and comical manner, Forrest Gump did not shy away from America's darker past. For instance, the movie does not try to brush aside the Ku Klux Klan, the immorality of segregation, the hypocrisy of some in the anti-war movement, or the drug abuse that existed within the counterculture movement. The movie also did not shy away from the corrupt politicians of that era – in particular Kennedy's philandering ways (or the fact that he and his brother, Robert, were assassinated) and Nixon's Watergate scandal (and his subsequent resignation).

On the other hand, Ode to My Father deliberately makes no mention of any of Korea's darker past. There is no mention of the corrupt Syngman Rhee government, the student protest movement, the Park Chung-hee dictatorship, the Chun Doo-hwan junta government or the Gwangju Uprising. The movie treats Korean history as though none of those things ever happened.

It's true that the movie does not pretend that life was happier under the authoritarian regimes of the past. No one can watch the scene where blackened and grimy Korean migrant workers toil away in coal mines and then think that people's lives were being portrayed overly idealistically. That being said, however, those are some pretty big chunks of history to gloss over.

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Philosophical Objection

Before Deok-soo leaves for Vietnam, his wife Young-ja angrily objects to his decision. When Deok-soo tells his wife that he is obligated to head to Vietnam to earn more money for the family because it's his role to play as the eldest son, Young-ja asks him why he seems to be the only one who seems to be making sacrifices. She tells him to stop living for others and to live his own life. She asks him rhetorically why he seems to be absent from his own life.

However, as soon as she says that, the national anthem plays for the day's flag-lowering ceremony and everyone has to stand at attention and place their hands on their hearts while looking at their closest flag. While the flag is lowered, a speaker plays the Pledge of Allegiance to the Flag, which states:

나는 자랑스런 태극기 앞에 조국과 민족의 무궁한 영광을 위하여 몸과 마음을 바쳐 충성을 다할 것을 굳게 다짐합니다.

It translates to: “I pledge, in front of the proud Taegeukgi (the name of the Korean flag), to devote my body and soul for the eternal glory of our country and our people.”

Koreans had to participate in a nationwide flag-raising ceremony twice every day until the mid-1980s.

During the Pledge of Allegiance to the Flag, as Deok-soo dutifully makes his pledge, Young-ja refuses to stand until she notices a random stranger glaring at her disapprovingly for her lack of patriotism.

Young-ja then reluctantly stands up and also pledges her fealty to the flag, the country, and her compatriots; thus answering her question as to why Deok-soo cannot seem to stop living for others and start living his own life.

In part, this scene was reminiscent of Franz Kafka's The Metamorphosis, whereby the protagonist, Gregor, slowly turns into a cockroach after he has spent many years working at a job that he hates because he feels obligated to pay off his father’s debt and care for his family (although it turns out that his family members are more than capable of taking care of themselves after it is revealed that Gregor's mysterious and unexplained condition prevents him from working).

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I was also reminded of Ayn Rand's quote from Philosophy: Who Needs It.

Now there is one word – a single word – which can blast the morality of altruism out of existence and which it cannot withstand – the word: “Why?” Why must man live for the sake of others? Why must he be a sacrificial animal? Why is that the good? There is no earthly reason for it – and, ladies and gentlemen, in the whole history of philosophy no earthly reason has ever been given.

It is only mysticism that can permit moralists to get away with it. It was mysticism, the unearthly, the supernatural, the irrational that has always been called upon to justify it – or, to be exact, to escape the necessity of justification. One does not justify the irrational, one just takes it on faith. What most moralists – and few of their victims – realize is that reason and altruism are incompatible.

This brief scene encapsulated all the things that I detest about Koreans' belief system – the collectivist nature of 우리 (our or us) – the subjugation of the individual to the group. It is the morality that states that the only meaning and value that an individual possesses is only insofar as he is able to serve the collective; that the group may sacrifice him at its own whim to its own interests.

It is a poisonous philosophy that I learned to reject a long time ago, a philosophy that I think that the Korean people have been marinated in for far too long.

What is absolutely true is that this philosophy has been part of the Korean people's worldview for a very long time. It would have been dishonest to pretend that it has never existed. And to be fair, I think the director, Yoon Je-kyoon, leaves just enough room to let viewers decide for themselves whether living for others is the proper way to live one's own life.

However, what is also true is that all forms of art are selective recreations of reality as perceived by the artist. It is the artist's way of expressing his own metaphysical value-judgments. Yoon Je-kyoon does his best to obfuscate his own personal views in this movie.

Regardless of his view, taking the middle-of-the-road approach, especially in regards to something as profoundly important as an entire people's philosophical approach to life seems like it was more of a disservice.

It is my view that the Korean people need to have a soul-searching discussion about what it means to live for others and to live for oneself. Though there is no guarantee whatsoever that people on my side of the debate will win, if this movie helps to nudge people toward having that discussion, then I think the movie would have succeeded in more ways than just box office returns.

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I highly recommend this movie for those who are looking for a good cathartic release that can only come with crying. However, it isn't just tears. The movie manipulates your emotions by taking you on a roller coaster ride full of laughs and tears, even if the laugh is made uncomfortable by the fact that there is one scene that makes light of male rape.

If that is what you are looking for, this movie will deliver in spades.

However, if you are looking for something that is more historically accurate, or if you are looking for something that treats philosophy more seriously, this movie might not be for you.

I give it three-and-a-half out of five stars.

Tuesday, April 28, 2015

Sweatshops vs. Social Justice Warriors

One thing that the world never seems to have enough of is economic knowledge. The other day, John Oliver produced yet another segment on his show that was full of heart and low on gray matter.

(I know. A third post about John Oliver? At some point, I might have to pay him royalties.)

In this segment, John Oliver took aim at some of America's biggest retail clothing stores and put them to task for continuing to use sweatshop child labor in third world nations.

One of the clips that Oliver used in this video was a news clip from the BBC that was taken in 2000. At the time, it was discovered that some of Gap's clothes were manufactured in a sweatshop in Cambodia, which employed underage children. Specifically, the video shows two young girls who were twelve and fourteen years old at the time. They had lied about their age to work at the sweatshop factory.

Gap announced its plans to enhance its age verification requirements after the BBC aired that discovery. Oliver gives them a backhanded compliment but then the video moves on to show how despite those promises, Gap and other retailers are still continuing to employ child labor throughout the world.

Well, so fucking what?

It's incredibly easy to get on a high horse and start moralizing. Any idiot can do that. And many idiots do. But what Oliver fails to do, yet again, is to ask the more pertinent questions. Case in point, why would a twelve-year-old Cambodian girl lie about her age to work in a sweatshop? Could it be that working at a Gap-owned sweatshop is preferable to the alternative?

In a country that is as poor as Cambodia (the country's GDP per capita is a little over US$1000), childhood, which is very much taken for granted in affluent societies, is a luxury that very few can afford. So, Cambodian children have to work.

If they can't work at Gap-owned or any other clothing apparel-owned sweatshop, a practice that Oliver seems to want to see ended, Cambodian children do have other alternative types of employment to choose from.

For instance, another alternative source of employment that Cambodian children can look forward to is prostitution (see here, here, and here). Of course, prostitution is not the only kind of employment they can pursue. There is also begging (see here, here, and here).

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If sweatshop work is actually put to an end, might that inadvertently condemn those workers, children and adults, to even worse conditions? Maybe it's possible that working at sweatshops is not the worst thing that could happen to children who live in countries like Cambodia?

But who has time to ask such questions? There are social justice warriors who want to watch faux-intellectual comedy shows and feel smug about their sense of self-righteousness!

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Wednesday, April 22, 2015

Sustainability, Horse Manure, and Carbon Emissions

Seeing how today is Earth Day, it wouldn't be appropriate for me to pass this day without mentioning it. What I want to focus on is what many environmentalists call “sustainability,” and explain why it is quite an odd concept.

The word “sustainability” has been part of our zeitgeist for so long that many people from environmentalists to economists bandy about the word without ever seeming to clearly define it first.

So, we must first define “sustainability.” Especially when it comes to political rhetoric, words can oftentimes mean something that is different from what the words mean in everyday speech. Therefore, in order to get a proper definition of sustainability, I thought that it would be best to get the definition from Greenpeace itself.

However, when I went to Greenpeace's website, I learned that there is no fixed definition that everyone can agree with. For instance, this one writer thinks that sustainability means:

  • No longer being necessary to bulldoze forests, erode soils, drain aquifers, dam rivers, deplete non-renewable resources, and fill the atmosphere, land, rivers and oceans with our waste.
  • Valuing localized trade over globalization, without relying on fossil fuels to ship food and materials around the world.
  • Including social justice, because our current state of injustice breeds conflict, violence and additional destruction of nature.

And those were only three of his very long list of what he thought had to be achieved for his definition of sustainability to be satisfied.

The most succinct definition that I found is a quote from the World Commission on Environment and Development, which defines sustainability as:

Meeting the needs of the present generation without compromising the ability of future generations to meet their own needs.”

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That sounds like it would be difficult to argue against. However, there is a problem with that logic. The logic only makes sense if we know for certain that the things we do today will be the same things that future generations will be doing in the indefinite future.

A good example that shows that we cannot know for certain how the future will unfurl is the Great Horse Manure Crisis of 1894. In the nineteenth century, cities such as London and New York City were home to tens of thousands of hansom cabs. All those horses, of course, produced massive amounts of manure and urine, which attracted flies, which in turned caused further problems such as the spread of typhoid fever.

That year, The Times newspaper predicted:

“In fifty years, every street in London will be buried under nine feet of manure.”

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Obviously, that prediction never came to pass due to the invention of the automobile (not to mention Henry Ford's ability to mass produce them).

Had the governments of the world at the time heeded the environmentalists' dire predictions, and adopted sustainability as an important goal of environmental protection, such a program might have included the preservation of grazing land for all those horses into the indefinite future and the creation of jobs that involve manure removal. In other words, the government would have prepared for a future that was never going to come.

So we have to ask ourselves this important question. Are we today so much wiser than our ancestors that, unlike them, this time, we know for a fact that what we are doing today will still be done in the indefinite future? We have not yet even seen the full potential of Bitcoins and 3-D printing!

Today, the concerns of environmentalists is not drowning in horse manure, but rather from the melting polar ice caps due to the increase in the amount of man-made carbon gases.

But is the emission of carbon gases something to be that overly worried about? Case in point, the cost of producing solar energy is getting cheaper. Furthermore, industry experts also think that even with the recent fall in oil prices, increased oil consumption will not come at the expense of solar energy. Assuming that current trends continue, in about a decade or two, fossil fuels will no longer be needed for much of their current purposes.

Also, there is a team of young scientists here in Korea who are currently developing a new plasma technology that could potentially convert carbon dioxide and methane into hydrogen and carbon monoxide, which could then be sold at a hefty profit. Assuming that this technology pans out, and combine that with continuously declining costs of solar energy, it becomes conceivable that worrying about carbon emissions might become a thing of the past.

Of course, this is not to suggest that people ought to pollute like as though there will be no tomorrow. After all, breathing in clean air is much more pleasant than breathing in air that has been saturated with coal ash.

However, the rush to cut oil consumption or coal consumption, finite sources of energy, in order to ensure that the needs of the present generation are met without compromising the ability of future generations to meet their own needs, might be an unwarranted act of fear.

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Thursday, April 16, 2015

In Defense of Payday Loans

In August last year, Last Week Tonight with John Oliver did a segment on payday loans. The video can be seen here below.

This is not the first time I am writing about a video segment that was aired on this show. I have written about the show's segment on Ayn Rand before. That post can be seen here.

The video was full of humor and compassion. But just as the previous video about Ayn Rand was based on puddle-depth knowledge about Rand or Objectivism, this video is based on economic ignorance.

Oliver does not come out and say that they ought to be regulated. He simply points out how payday loan companies use various legal loopholes to avoid regulations. One of the regulations that he mentions, which failed, is the interest cap that was imposed on payday loan companies by the Illinois state government.

Never mind that price controls have been attempted many times throughout history much to everyone's pain and suffering (see here, here, here, and here).

Lately, I've been reading a lot of Thomas Sowell's articles. Sowell is not a libertarian or an Objectivist. He is certainly an old-school conservative. Therefore, I do not agree with everything that Sowell says. However, when it comes to economics, the man is as sharp as a razor blade.

The following are some of the highlights of Sowell's views on the media's witch hunt against payday loans. The original article was published in The Washington Times and the entire post can be found here.

Yet there is remarkably little concern on the political left as to the actual consequences of the laws and policies they advocate. Once they have taken a stance on the side of the angels against the forces of evil, that is the end of the story, as far as they are concerned.
The interest rates charged on such unsecured loans to people with low credit scores are usually higher than on loans to people whose higher incomes and better credit histories make them less of a risk.
Because those who take unsecured short-term loans are usually poor and often ill-educated, the political left can cast the high interest rates as unconscionably taking advantage of vulnerable people. However, similar economic principles apply to more upscale, short-term lending to well-educated people who have valuable possessions to use as collateral.
Editorial demagoguery against “predatory” lending might well be called predatory journalism — taking advantage of other people’s ignorance of economics to score ideological points and promote still more expansion of government powers that limit the options of poor people especially, who have few options already.

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Wednesday, April 15, 2015

You Didn't Make Sense With That (from Cafe Hayek)

Back in July 2012, when President Obama was running for reelection, he gave a speech that encapsulated everything that I despised about him. Today, that speech is known as the “You Didn't Build That” speech. The portion of the speech that got so many people's attention reads as follows:

There are a lot of wealthy, successful Americans who agree with me – because they want to give something back. They know they didn’t – look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something – there are a whole bunch of hardworking people out there.

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business – you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.

The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.”

Of course, President Obama didn't come up with that on his own. He was actually channeling Elizabeth Warren who said something just as daft before President Obama did. She said:

There is nobody in this country who got rich on their own. Nobody. You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

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There has been an ungodly amount of political commentary that was made about these two speeches – both for and against. However, I discovered the most impassioned, intelligent, and cogent criticism of this particularly mendacious view yesterday at Cafe Hayek ( It was written by Donald Boudreaux who is an economics professor at George Mason University.

So, I have decided to share Professor Boudreaux's post in full here:

You Didn't Make Sense With That
By Donald Boudreaux, April 12th 2015

I’m sick of hearing the “you didn’t build that” mantra trumpeted whenever someone feels the need to flaunt his or her faux sophistication about the way the world works.

Yes, it’s true that entrepreneurs and investors who profit in the marketplace typically don’t build much of the infrastructure they use to connect with their input suppliers and with their customers. But this fact proves far less than those who shout it out think it proves.

First, and least importantly, the fact that government in practice supplies X amount and Y kinds of infrastructure does not necessarily mean that that infrastructure would not have been provided – and provided better – by the private sector had government not entered that arena.

Second, no serious proponent of free markets has ever denied the reality that government supplies a great deal of useful infrastructure. Nor has any serious proponent of free markets denied that the use of infrastructure built by others, government or not, is beneficial to all of those who use it productively.

Third, and relatedly, all serious proponents of free markets understand that every person in a free market today, every minute of every day of every year of his or her life, depends upon the productive efforts of hundreds of millions of people. The fact that some of the hundreds of millions of people upon whom each of us depends are government employees, or are set to their tasks by politicians, does not make those particular workers or those particular tasks any more important to each individual’s success in markets than are the tasks that are performed by the private sector. A government-built road might have contributed to Smith’s success, but so, too, did the privately produced truck that he uses to serve his customers. Likewise with the privately produced fuel for that truck and the privately produced and manned filling stations* where that fuel is pumped into the truck. So, too, for the food that Smith eats to stay alive and alert, the privately designed and manufactured clothing that he wears, and the privately supplied financing that tides his business over during a slump and privately supplied insurance that makes his business risks more bearable.

Fourth – and following closely from point number three – those who scream “You didn’t build that!” are oblivious to the importance of the margin. The government-built road that Smith uses to earn handsome profits by serving consumers might well be absolutely essential to Smith’s success, but this fact doesn’t mean that the road’s contribution at the margin to Smith’s success is significant. Smith’s profits depend upon what he adds to the road’s services – how Smith himself uses the road to create value for consumers. If Smith uses the road to ship truckloads full of ordinary toothpicks to market, he might earn just enough to continue in that line of work, but he’ll not earn magnificent profits. If instead Smith uses the road to ship truckloads full of new’n'improved toothpicks – toothpicks that sell at prices only slightly above that of ordinary toothpicks but, in addition to doing what ordinary toothpicks do, also are guaranteed to prevent gum disease, cavities, bad breath, insomnia, and erectile dysfunction – then Smith profits magnificently. Smith’s “above normal” profits (as economists call them) have nothing to do with the road (or with, say, the private efforts of entrepreneurs who are responsible for the delivery truck Smith uses) and everything to do with Smith’s own innovative efforts.

Fifth, government-supplied infrastructure doesn’t guarantee entrepreneurial success – a reality that is not as trite as it might seem in this context. If government-supplied infrastructure did guarantee entrepreneurial success, then everyone with access to that infrastructure would be a successful entrepreneur. Precisely because government-supplied infrastructure is supplied widely, and typical free of any marginal cost to users, the very fact that only some of the people who use it do so entrepreneurially – and, of this number, only a fraction do so successfully – means that successful entrepreneurs contribute at the margin things creative and unique above and beyond the value of whatever inputs, including portions of the infrastructure, that are used to make these creative and unique contributions. Entrepreneurs’ profits come from, and reflect, the value that they add.

It’s true that, because the various pieces of infrastructure (and the inputs used to produce and maintain them) are scarce, infrastructure has a cost. Everyone who uses it should pay his or her appropriate share of this cost – but the amounts due to government as payment are not some open-ended claim on successful entrepreneurs.

Again, the fact that only a relatively small handful of entrepreneurs succeed at the level of achieving a net worth of (say) $10 million or above means that such success is not at all easy and that such success is not remotely guaranteed or even made likely by government’s provision of infrastructure. The marginal contributions of successful entrepreneurs depend far more upon their own contributions. The reality that infrastructure in developed countries is supplied widely (and, again, is often available to users at zero marginal cost) is evidence – when set beside the other fact that relatively few individuals today earn as entrepreneurs even as little as hundreds of thousands of dollars of net personal wealth – that market entrepreneurship is far more scarce than is infrastructure. So to discourage market entrepreneurship with higher taxes and more government-dictated regulation is insane.

Finally, sixth: If market entrepreneurs didn’t build the infrastructure they use to earn profits, nor did consumers and salary and wage workers build the infrastructure they use to get to shopping malls, supermarkets, vacation destinations, and their places of work. Yet those who benefit the most from competitive, innovative markets are the masses. If government’s provision of infrastructure justifies politicians and professors pointing accusing fingers at people who benefit from government-supplied infrastructure and accusing those people of not paying their ‘fair’ share for it, then pointing fingers only at successful entrepreneurs makes no sense.

There’s more to say, but this post is already too long.

* A genuine example of private infrastructure.

Monday, April 13, 2015

Did Korea's Economic Development Require State Protection?

A common argument that is often brought up to argue against free market capitalism is Korea's economic development. Many argue that despite the fact that President Park Chung-hee was a dictator, one thing that people cannot argue against is the economic development that Korea enjoyed under his 17-year-long rule.

Specifically, what those people are usually referring to is the series of protections, quotas, tariffs, and subsidies that President Park had given to what were then nascent chaebol companies.

One such defender of that point of view is Professor Ha-joon Chang, an economics professor at the University of Cambridge, and the author of such books as Bad Samaritans, Kicking Away The Ladder, and 23 Things They Don't Tell You About Capitalism.

Professor Ha-joon Chang
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Much can be said about his books, and I plan to do so in the future. For now, however, I will focus only on his defense of the infant industry argument, which is an idea that argues that emerging businesses and industries require government protection – in the form of tariffs, subsidies, and quotas – from their more entrenched competitors, particularly foreign competitors.

In that article that I linked earlier from The Independent, Professor Chang compares nascent industries to his six-year-old child. If this weren't a cringe-worthy moment of stupidity and/or academic dishonesty, I don't know what is.

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Moving on, in Bad Samaritans, Professor Chang makes the argument that Korea's economy did not develop because of neo-liberal economic policies, but rather due to heavy government involvement in the economy. There is no question that that is true.

There is also no question that Korea's rapid economic growth was nothing short of miraculous. There is a reason that it is often referred to as the Miracle on the Han River. But is that proof that protectionism was what allowed Korea's economy to develop so quickly? Well, that's quite hard to confirm considering the fact that Singapore and Hong Kong, which practised freer trade policies, went through much quicker and greater economic development.

“But they are city-states; they cannot be compared to a country that is so much bigger like Korea,” I often hear people say.

Fine, fair enough. Then one has to wonder about China and India. Both countries are much bigger than Korea and their economies grew much more quickly after they began to liberalize their respective economies (see here and here).

Of course, this is certainly not to say that government controls and economic programs are non-existent in Hong Kong or Singapore or China or India. They are not free market economies. But they have shown that freer markets do lead to greater growth.

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Another point that Professor Chang does not mention is that subsidization and other forms of government protections do not guarantee economic survival or development in any way, stretch, or form.

Yes, Korea is an example of an economic success story. However, we also have to look at other examples where protecting infant industries were not successful. For example, African cotton farmers want their governments to end the subsidies programs for their respective national industries so that they can finally compete in the international market; and which African country's economic development could ever compare with Korea's economic growth?

The problems of protecting infant industries are not limited to African countries. In the United States, despite the government's efforts to prop up Solyndra, a company that specialized in manufacturing solar cells, with up to US$535 million of taxpayers' money, the company still declared bankruptcy.

Similar examples can be found in Korea, too. Samsung was certainly one of the chaebol conglomerates that the Korean government helped to protect and nurture. However, Samsung is not the only business that got so much love from the government. Another industry that has gotten a lot of love from the Korean government is the rice industry. So why has Samsung become an internationally well-known name but there isn't a single Korean food-producing company that is as well-known outside of Korea?

In other words, no amount of subsidies or trade protections ever seems to be able to prevent what was always doomed to fail from failing.

So what does Korea owe its economic success to? That is a difficult question to answer; much more difficult than Professor Chang would like for his readers to believe. It's certainly not free market economics. As Professor Chang has shown, the Korean government has been heavily involved in Korea's economy. But as I have shown, freer markets like Hong Kong and Singapore have grown more quickly than Korea and subsidies do not guarantee success.

Though that specific question may be harder to answer, what is much easier to answer is that Korea's economy did not develop because of the government's protections, subsidies, and overall involvement in the economy, but rather in spite of them.

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Friday, April 10, 2015

The Politics of Good and Evil

One of the most unfortunate things about modern day politics is that there is no shortage of cheap moralizing, which often has the tendency to allow people to fall into the us vs. them” mentality.

For example, when people say that they want to push for free lunches for all school children, or greater welfare programs for the poor, what they are doing is essentially positioning themselves into different camps. However, it is not as simple as merely declaring one's position. That is because this us vs. them” mentality also allows people to place themselves on the side of caring and compassionate people, while (consciously or unconsciously) castigating those who disagree with them as uncaring monsters.

The fact is that cheap moralizing allows people to make a moral claim without having to go into too many details. And what a wonderful political tool it is! It allows people to feel good about themselves when they, for example, claim to support greater welfare without having to show much in the way of evidence in regards to its moral shortcomings or success (or the lack thereof) ratios.

Once people have convinced themselves of the “goodness” of a particular cause, it is very hard to get them to see reason. For instance, when South Gyeongsang Governor Hong Jun-pyo announced that free lunches would no longer be provided for all students, but only for those from poor families that qualified for the program, Governor Hong's opponents predictably went on the offensive. While they heralded themselves as angels who were trying to achieve the utopian dream of economic justice for all, they castigated Governor Hong and his supporters as monsters who abandoned the people.

It is no wonder that so many politicians love to engage in cheap moralizing. It is the easiest way to whip up support and votes.

However, there is another reason why this is so dangerous. As Milton Friedman once said:

“Nothing is so permanent as a temporary government program.”

To explain, once something has been whipped up to be good, and once enough people have bought into that idea, it becomes nearly impossible to reverse it. It's the main reason why so many people oppose Governor Hong's plan to scale back the free lunch program.

After all, if people agree to reverse “good” policies, it would mean that those who once supported those “good” policies would, by definition, have to admit that they are now “evil.”

Perhaps it is time that people put away their religiously guarded morals, and reflect on that thought just a bit, and wonder just how reasonable it is to claim that the opposition is simply evil.

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