Grieving Lee Kuan Yew's Passing

I go through the news at least twice a day every day. For those who frequent this blog, I am sure that it will not surprise you when I say that I have tailored my newsfeed to focus on news stories that are focused on business, finance, and economics.

However, I saw a news story pop up the other day, the kind that doesn't usually appear on my newsfeed, which grabbed my attention.

It was a headline from The Wall Street Journal – Singapore Former Prime Minister Lee Kuan Yew’s Condition Worsens.

At age 91, Lee Kuan Yew has certainly lived a long life, and it is only natural that sooner or later, death comes for saints and sinners alike. And just this morning, I saw that he has finally passed away. No one lives forever, and though his passing was expected, I still feel a deep sense of sadness knowing that he is gone.

I was fifteen years old when I first read Alex Josey's book Lee Kuan Yew: The Critical Years (1971-1978) in my school's library. As I read about the political challenges that Lee Kuan Yew had to face – striving to have Singapore become accepted and then eventually being expelled from the Malaysian Federation, the conflict with the communists, the delicate balancing act that was needed to ensure Singapore's multicultural population did not devolve into ethnic strife, the establishment of an institutional and legal order that were needed to transform Singapore from a former backwater colony to a developed nation – my respect and admiration for him knew no bounds.

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It was right around the time when the conflagration that came to be known as the Asian Economic Crisis engulfed so many lives when I first read about Lee Kuan Yew. Although Brunei, the country where I was living at the time, was not considered as one of the countries that was directly affected by the crisis, when the indirect effects of the crisis merged with Brunei's own internal problems at the time – which involved a playboy prince who had misspent billions of the country's money to maintain a hedonist lifestyle (see here, here, here, and here) – Brunei's economy went into a tailspin.

As I compared him to other Asian leaders who were in power at the time, many of them now disgraced and/or forgotten, I felt bitterly angry that there wasn't anyone else who possessed the determination, the vision, the self-confidence, and the intelligence that Lee Kuan Yew possessed. I thought that Lee Kuan Yew was a giant among men and that he was the kind of leader that Park Chung-hee could have been; the kind of leader that world leaders ought to emulate.

Then for many years after that, I had stopped thinking of Lee Kuan Yew, until now. The simple reason for it was that despite the ravaging effects of the Asian Economic Crisis and Amadeo's implosion, life still went on. I went on to graduate from high school, went on to college and then graduated from college as well, learned and experienced new things, gotten jobs, quit jobs, paid bills, accumulated debt, went through personal hardships, overcame some of them, and learned to adapt to those that I could not overcome. Life has a way of moving on, it seems, and making us forget even things that we once held most dear.

As the years passed by, after being influenced by Milton Friedman's eloquent arguments for economic freedom, Friedrich Hayek's seminal book The Road to Serfdom, and Ayn Rand's philosophy of Objectivism, my views changed dramatically. And I stopped believing that Lee Kuan Yew was the kind of leader that others ought to emulate.

I rejected Lee Kuan Yew's tribal notion of “Asian Values” – the implication that “Western-style” democracy is somehow not applicable to Asian nations because of the particular sets of culture that Asians are born and raised in. I rejected the notion that culture determines an entire people's societal structure into perpetuity.

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The United States' military adventures in Iraq and Afghanistan and its subsequent failures to “impose democracy” on those societies might have somewhat exonerated Lee Kuan Yew's belief that cultural differences could cause an imposition of democracy on those societies to become a failure.

However, comparing Asian countries – such as South Korea, Japan, Taiwan, Hong Kong, and Singapore, which have developed their economies, social structures, and their political values since the 1950s – to Iraq which had been ruled by a fascist dictator and to Afghanistan that had been ruled by the Taliban for decades is a clear attempt at academic dishonesty. As the former countries' economies transformed from labor-intensive economies to capital-intensive economies to technology-intensive economies, people's priorities, thoughts, beliefs, and political views have changed.

The idea that people's culture is static is wrong. And it is clear that Lee Kuan Yew could not have failed to have known that. In other words, his notion of “Asian Values” was no more than a bald-faced attempt at retaining his own hold on power.

I also rejected Lee Kuan Yew's reliance on Orwellian social engineering programs and Machiavellian politics to curtail social vices that range from chewing bubble gum to caning people for drug-related charges. His use of the Internal Security Act, Singapore's version of Korea's National Security Act, as well as his penchant for bankrupting his political opponents (see here, here, and here), which effectively banned them from participating in politics due to the country's Bankruptcy Laws, was just as abusive, if not more so.

I also found it hypocritical that his government intruded so much into Singaporeans' daily lives despite his proclaimed belief that “the ruler or the government does not try to provide for a person what the family best provides.” The extent that is Singapore's Nanny State is especially glaring considering the fact that over 80% of the Singaporean population lives in public housing.

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However, Lee Kuan Yew's most lasting legacy, which will last into the future long after he is gone, is that he was the intellectual voice behind the foisting of authoritarian capitalism. He succeeded where Park Chung-hee failed. Unsurprisingly, Singapore has long been China's source of inspiration in its plans to develop its political structure as well as its socio-economic engineering programs (see here, here, here, and here).

Considering China's economic might, it is possible that the authoritarian capitalism that Lee Kuan Yew advocated and championed will define the twenty-first century as much as liberal capitalism defined the twentieth century, which would seemingly nullify Francis Fukuyama's theories in his book, The End of History. If Lee Kuan Yew's version of capitalism replaces the liberal form of capitalism in much of the world's zeitgeist, which I think it could, the social changes it could bring to the world will be enormous, in both good and terrible ways.

It has been many years since I thought that Lee Kuan Yew was the kind of leader that world leaders ought to emulate. As I said earlier, I stopped believing that a long time ago. Now, I have lost all faith in the benefits of concentrated political power even if it is in the hands of wise and benevolent leaders of whom I know none.

Although I now stand firmly against many things that Lee Kuan Yew stood for despite my youthful dalliances with authoritarianism, I am still grieving now that Lee Kuan Yew has breathed his last. Although I have come to stand opposed to his leadership style and philosophy, and dearly hope that his legacy will not be as widespread as I fear it will be, what no one can deny is that he was still an intellectual giant among men who had achieved more than most can even dream. Though perhaps not goodness, he has certainly achieved greatness and immortality in his own right. As Richard Nixon once said, had Lee Kuan Yew “lived in another time and another place, he might have attained the world stature of a Churchill, a Disraeli, or a Gladstone.”

Though I am grieving his passing, I do not grieve the authoritarian that he became. Rather, I am grieving the man that he could have been – an intellectual titan who might have attained the world stature of a Locke, a Jefferson, or a Tocqueville – a man who, above all else, might have used his staggering and formidable intelligence to champion the cause of freedom and liberty.

Unless you are on your deathbed
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Trickle-Down Economics Redux

The Straw Man Argument is a type of argument that is used to misrepresent someone else's argument, by way of exaggeration or misrepresentation or complete fabrication, with the intention of making the other person's argument easier to attack. It is a dishonest method that almost always undermines rational debate.

As such, almost everyone hates this form of argument. However, many people still resort to this kind of argument on a daily basis – some deliberately, while others unknowingly. And one of the most prominent Straw Man Arguments that have been used so excessively that many people have come to accept the Straw Man as gospel truth is the concept of Trickle-Down Economics.

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It is very easy to find arguments against trickle-down economics.

President Obama referred to it as “thinly veiled Social Darwinism.”

Senator Elizabeth Warren said that trickle-down economics “devastated U.S. workers while propping up the wealthy.”

Pope Francis pontificated against it, calling it a “a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.”

(I am not sure if Pope Francis is the right person to talk about naïveté or the idiocy of faith. See here and here.)

Economists have argued against it, too. For example, Paul Krugman said that trickle-down economics is “being nice to the wealthy and cruel to the poor.” And Robert Reich says that it is one of the “big lies” conservatives promise voters.

The OECD released a report that said that “the benefits of growth do not automatically trickle down across society.”

Trickle-down economics has also been attacked and criticized by thinkers, academics, politicians, activists, and journalists in Korea as well (see here, here, here, here, here, and here).

The case against trickle-down economics is clear. It is also clear that it has some very powerful enemies.

Not a friendly face in sight...
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But who actually supports trickle-down economics? Who is actually championing giving more to the rich? The answer is “No one.”

As I already said in a previous post:

Trickle-Down Economics does not actually exist. It is a lie. “Trickle-Down Economics” was a phrase that was devised in the United States in the 1980s when the Democratic Party needed a a catchy zinger to attack President Reagan's economic policy. The phrase was a remarkable political slogan as it painted Reagan and other advocates of tax reduction as sycophants who had all been bought and paid for by greedy billionaires at the expense of the poor and the middle class.

One of the most prolific economists of our time, Thomas Sowell, once challenged anybody “to quote any economist outside of an insane asylum who had ever advocated this “trickle-down” theory.”

To date, no one has ever adequately answered that challenge.

Quoting Thomas Sowell again:

Let’s do something completely unexpected: Let's stop and think. Why would anyone advocate that we “give” something to A in hopes that it would trickle down to B? Why in the world would any sane person not give it to B and cut out the middleman? But all this is moot, because there was no trickle-down theory about giving something to anybody in the first place.

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Those who advocate lower taxes, of which I am one, have never made their case by supporting the idea of transferring wealth from the masses to the rich. Rather, they emphasize the creation of additional wealth and jobs when businesses are not hampered by burdensome regulations and steep taxes.

However, even that is only half of the argument. Those who champion lower taxes do not support lowering taxes only for the rich, but also for everyone else. Crazy as it may sound, no free market capitalist has ever claimed that society would become wealthier because the rich would spend more. Rather, they argue – correctly – that tax cuts in general would stimulate the economy. That is because lowering taxes is based on the idea that if the government lowers taxes, the people – both rich and poor – will have more of their own money and will, therefore, tend to engage in more economic activity.

What is undeniable is that reducing taxes does help the rich more than it helps the poor. However, that is incidental. After all, the rich pay far more than their “fair share” of taxes. Therefore, it becomes all too easy to caricature any tax cut as “tax cuts for the rich.”

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Tax cuts might help the rich more, but it also helps the poor. After all, there are only four ways to spend money:

• Spend your own money on yourself.
• Spend your own money on somebody else.
• Spend somebody else’s money on yourself.
• Spend somebody else’s money on somebody else.

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Therefore, the phrases “trickle-down economics” and “tax cuts for the rich” are nothing more than the inventions of a desperate political mind that did not have the ability to debate the merits of an opposing viewpoint. After all, what easier way can there be to “win” a debate than to invent a viewpoint that no one holds, attack that viewpoint, and then claim intellectual victory?

This is not to say that there is no need for a real debate about which policies are needed in order to promote economic growth. With all due respect to Grover Norquist, God knows that lowering marginal tax rates alone is not a panacea (see here and here). That debate is badly needed. Unfortunately, however, demagogues are far too busy trying to slay the imaginary “trickle-down” dragon.

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Movie Review: "The Royal Tailors" and "C'est Si Bon"

The first time that I recall ever having watched a Korean movie was when I was in second grade. I was living in Brunei with my family at the time and the Korean government was just beginning to take its first steps in exporting modern Korean culture. Sponsored by the Korean government, three Korean movies were aired for free in a fancy cinema.

I went to watch all three movies with my family. I do not remember what movies had been shown but I do remember being nearly bored to death. Especially considering the fact that the Japanese government had done something similar a few months prior, and the fact that I had enjoyed those Japanese movies, the thought that Korean movies are terrible became permanently ingrained in my mind.

Even to this day, I still hesitate to watch Korean movies, even when I do not have to pay any money to watch them. Therefore, it came as a huge surprise to me when I watched TWO Korean movies recently and, more importantly, actually enjoyed watching them.

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The first movie was “The Royal Tailors” (aka Sanguiwon/상의원) and the second movie was “C'est Si Bon” (aka 쎄시봉).

Both movies depicted different eras of Korean history; though I am sure that the filmmakers took quite a few liberties with the truth for the sake of making their respective movies more entertaining.

“Tailors” is a movie about a royal tailor (played by Han Suk-kyu) who after having served the royal family for decades, is given a rare opportunity to be accepted as a member of the nobility. He was born a commoner who rose up the ranks due to his skills. However, the royal tailor's world is turned upside down when the queen takes interest in another tailor who is younger and very unorthodox but highly skilled.

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“C'est Si Bon” is a bit more... rudderless. When the movie starts, it seems like it is a movie about the formation and the rise (and fall) of Twin Folio, a popular pop-duo from the 1970s. However, as the movie progresses, it focuses more on the romance between one of the singers (in the movie, before Twin Folio was a duo, it was a trio that was called “Trio C'est Si Bon”) and a budding actress.

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The cinematography in “Tailors” was excellent. Its story was told in a humorous and light-hearted way (at least in the first half of the movie), which made watching this period-piece a delight. Its trippy dream sequence that involves giant rabbits on the moon was a laugh and the clothes – the clothes were colorful, bold, vivacious, and beautiful. It was a feast for the eyes.

“C'est Si Bon” had different strengths. The mellow music was a welcome break from the usual bubble gum pop that is K-pop's bread and butter. For older viewers, the movie brought pangs of nostalgia as the movie carefully shows what was beautiful about the past and hides the uglier and seedier aspects of it.

However, both movies had their weaknesses; and it is the same set of weaknesses that plague many Korean movies. Both are unable to maintain the frenetic energy of the first act. Whereas the first act is comedic, light-hearted, and fun, both movies fall into formulaic melodrama in the second half. The romance in both movies are very traditional and chaste (yet far more watchable and tolerable than anything in the Twilight film series). And both lead actresses' characters (Park Shin-hye as the queen in “Tailors” and Han Hyo-joo as the actress/the trio's muse in “C'est Si Bon”) were underused and underdeveloped.

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Both movies had their strengths and weaknesses. However, there is one element that I thought many film reviewers missed. It is that both movies contain messages that are anti-authoritarian and pro-freedom.

In the case of “Tailors,” the younger tailor (played by Go Soo) represents rebellion against the established order. Instead of designing clothes the way they have always been designed for no other reason than that has always been the way clothes were designed, the young tailor laughs. He is a man of integrity who knows what he wants – to design beautiful clothes the way he wants – damn what others say or think. Unlike Han Suk-kyu's character, Go Soo's character refuses to sell his soul. After all, selling one's soul is the easiest thing in the world. That's what everybody does every hour of his life.

I don't know if the filmmakers behind “Tailors” were channeling Howard Roark but that was all I saw.

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As for “C'est Si Bon,” the movie's main protagonist (played by Jung Woo) represents one person out of countless many who had been brutalized and victimized by an authoritarian government. His crime – having smoked marijuana at a time when there were no laws against the consumption of marijuana. His punishment – becoming the victim of retroactive laws, the loss of his friends, the loss of his reputation, and the loss of the woman he loves.

The movie was as much an anthem to the victims of dictatorship as it was also a comedy and a drama.

Movies are important tools to disseminate ideas and to shape the social/political/cultural/economic zeitgeist of the age. Although two movies do not make a trend by any stretch of the imagination, considering the pro-freedom and anti-authoritarian messages within other movies as well, such as “Snowpiercer,” I certainly hope that more movies of this nature will continue to be produced.

For those of you who do not speak Korean, I do not know when there will be English subtitles available for either movie. However, when there are English subtitles available, I recommend that you watch them.

“The Royal Tailors” was produced and distributed by Showbox Mediaplex Co., Inc. and “C'est Si Bon” was produced and distributed by CJ E&M Pictures.

Welfare vs. Taxes in Korea: Nobody wants to Pay the Piper

It might appear that Korean politicians are not complete fools after all.

When President Park Geun-hye was campaigning to become president, she promised that she would deliver a lot of goodies, and much more, without ever raising taxes.

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A few days ago, however, Representative Kim Moo-sung, the chairman of her own party, said, “It is impossible to finance welfare without tax hikes, and it is inappropriate for politicians to deceive the people.”

Representative Kim was not alone in voicing this sentiment.

So do Koreans want a greater welfare state? The answer seems to be “yes and no.”

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As Steven Denney said in his recent article in the Diplomat, in a poll that was commissioned by JTBC, 46.8 percent of the public favor welfare cuts over a tax increase. 34.5 percent of the public think that a tax increase is needed to pay for welfare; and 18.7 percent didn’t know what to think.

So it might seem that many people do not support expanding the welfare state. However, one always has to remember the old adage about lies and statistics. That is because 52.8 percent of the respondents, a clear majority, supported increasing the corporate tax rate.

What Mr. Denney got absolutely right was when he said “The simple fact of the matter is that South Koreans might not support more welfare, if it means that they have to pay for it.”

(What Mr. Denney got absolutely wrong was that he thinks Korea needs a welfare state.)

Isn't that typical? Everybody wants to go to the party, but nobody wants to pay the piper. Case in point, when salaried workers angrily protested that many of them were likely to pay additional taxes this year instead of receiving a tax rebate, a move that was made by the government in order to help pay for its welfare programs, Finance Minister Choi Kyung-hwan said the government would consider revising tax return regulations.

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It yet again goes to prove that Frédéric Bastiat was absolutely right when he said, “Government is the great fiction through which everybody endeavors to live at the expense of everybody else.”

So who will be made to pay more taxes? The easy answer seems to be to raise the corporate tax.

After all, Finance Minister Choi said that the government may consider raising corporate taxes and that “the government does not regard corporate tax as too sacred of a realm to enter.”

But will raising corporate taxes come at no cost? I will let the maestro speak for himself.

However, as succinct as Milton Friedman was, this video did not even cover other questions. Could it cause domestic corporations to invest less in order to pay less corporate taxes? Or might it cause them to invest elsewhere? Could it lead to more corporations hiding their money in overseas bank accounts? How much more will it cost taxpayers for the government to investigate and try business owners for tax evasion? Could it dampen foreign investments? If so, by how much?

Assuming that we can even find answers and practical solutions to those questions, then we have to ask the second batch of questions. Will welfare benefits remain constant? Will increasing welfare benefits help to lift the poorest Koreans out of poverty so that they will no longer need to rely on welfare? How will aging and low birth rates affect welfare programs, future taxation, and the national debt?

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In regards to the Saenuri Party's leadership's dithering about welfare benefits and taxes, Mr. Denney rhetorically asks “Is this strategic dissonance, or does Saneuri simply not know what it wants?”

It is certainly not the latter. All political parties in the world want the same thing. They either want to attain or retain political power. Ipso facto, the correct answer is the former.

However, this dissonance is not limited to the Saenuri Party. It is an ailment that the entire country is suffering from. To use an analogy, all democratic republics in the world act like a mirror; and are, therefore, a reflection of the body politic. And as I said earlier, everybody wants to go to the party, but nobody wants to pay the piper.

Mr. Denney, (and other like-minded people) was wrong then, and assuming that his position has not changed, he is wrong now. Korea does not need a welfare state. If anything, it is the very last thing it needs.

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Random Thoughts: Compensating Suicide, Economic Illiteracy, Porn, and Honey Butter Chips

State compensation for inability to learn English

According to this report from the Korea Times, the Supreme Court of Korea ruled the family of a worker who committed suicide after suffering depression due to his inability to learn English was entitled to state compensation; claiming that the man's death was the result of an industrial accident.

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So does this mean that the multitude of Korean high school students who cannot get into the university of their choice because of their poor performance in their English scores in the suneung exams are also entitled to state compensation? There are, after all, quite a number of them who commit suicide every year as well.

Or what about foreigners who wish to work in Korea, but cannot, due to their inability to learn Korean? Are they also not entitled to state compensation? After all, their inability to obtain a visa to come to Korea is the direct result of a government-created barrier, which is far closer to a state responsibility than an industrial accident.

So, dear foreigners who wish to work in Korea but cannot, I'm not saying that you should do this, but if you ever feel like committing suicide, you ought to consider leaving behind a suicide note claiming that it was because of your inability to learn Korean. At least there might be a small sliver of a chance that your family members might get a nice paycheck from the Korean government after you die.

An Economist wins Saenuri Party floor leader primary!

When I saw this headline in the Korea Herald, I braced myself for crushing disappointment. I was thankful that I did. After all, economics is a dismal science whose thinkers range from the likes of Ludwig von Mises, Friedrich Hayek, and Milton Friedman on the one hand, and Paul Krugman, Joseph Stiglitz, and Thomas Piketty on the other.

This economist, Yoo Seong-min, is a three-term lawmaker and an economist who worked at the Korea Development Institute before entering politics.

So did Mr. Yoo say anything wise or thought provoking or even non-nonsensical? No. What he did say was that he would “support policies that have the support of our people... I will strictly follow what our citizenry demands.”

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Yes, I know this meme is not being used correctly, but it was just too perfect.

Then I wonder if it is safe to assume that Mr. Yoo will support more populist policies, more welfarism, more economic democratization, less economic liberty, and all the while oppose tax hikes for nearly everyone? And will it also be safe to assume that we will see many more things like this recently released report about National Health Insurance Service giving out more benefits to people than it is able to take in premiums?

It seems like no one even cares about economic literacy anymore.

Porn in Twitter

The Korea Communications Standards Commission appears to be preparing to investigate (though the findings seem to have been found already) Twitter for the ease of which it allows some users to distribute pornography.

An official at the commission reportedly said “We won’t let this harmful content damage our children.”

I will admit freely that I could be very wrong, but I have a hunch that this official has never actually met a child before in her entire life.

Also, if this official actually wants to protect children, she might need to straighten out her priorities.

Honey Butter Chips

I was finally able to try this incredibly-hard-to-find bag of chips. For the life of me, I could not understand what the whole damned fuss is all about.

Maybe I'm just a little old fashioned, but I infinitely prefer a bag of good old fashioned Saewookkang.

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The government has a plan to prevent child abuse. Be afraid.

In case there are those of you who have not been paying attention to Korean news, people have been sent into fits of outrage over a spate of child abuse that has been reported around many of the country's daycare centers and nurseries.

In order to appear as though the government were doing something constructive (something that never ceases to instill fear in me), as it was reported in the Korea Herald, the Korean government plans to introduce a state-run qualification examination for daycare workers. Like as though Korea didn't have an excessive number of standardized exams already, the same article reported that the Korean government plans to require a set curriculum and a personality test for those who seek to take the national daycare exam.

And in the long term, the Ministry of Health and Welfare, which is overseeing this whole mess, plans to restrict the exam applications to those who major in child-related studies.

But will this help to end the spate of child abuse in the country's daycare centers? I remain unconvinced. Also, there are many other problems that the government's proposals can lead to.

1) Standardized Exams for Daycare Workers → One-Size-Fits-All Education

A standardized exam that will limit who can and who cannot work at a daycare center will also likely standardize daycare service itself. That is because those who are allowed to work in the daycare industry will eventually all have the same educational background and views. When a one-size-fits-all education model is then imposed on Korean students from the moment they learn to walk and talk, this could potentially further stunt Korean students' critical thinking abilities.

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2) Growing Role of Bureaucrats and Politicians

As the role of the government increases in how daycare centers operate, it will enlarge the role of bureaucrats and politicians. And any time the government gets involved in anything, there is almost always a glut of taxpayers' money. When there is that much “free money” available, it will further cement the destructive symbiotic relationship that already exists between bureaucrats and those people who run daycare centers. Skip to Number 8 on this list for more about this.

3) Standardized Personality Tests are likely to be ineffective

Setting up yet another standardized personality test, which this national day care exam will require, will not be helpful in any way. Does anyone think that this is somehow a novel idea? The Ministry of Defense has required Korean soldiers to take such tests for decades. In fact, while I served in the ROK Army, my battalion forced us to take these kinds of personality tests at least once every two months, which is standard practice throughout the ROK Armed Forces.

Yet those tests have done little to nothing to prevent suicides, desertion, murders, harassment, or hazing in the military. So why does anyone think that personality tests will somehow lead to a different result for the daycare industry?

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4) Surveillance cameras obviously haven't worked

The government also plans to force all child care facilities to install surveillance cameras, and threatened that those without cameras will be barred from operations in the future. However, I do not understand what this law will accomplish. After all, those people who have recently been arrested for abusing children were CAUGHT ON CAMERA!

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5) And who is going to pay for this?

The government plans to raise the number of assistant teachers at facilities to reduce the workload of daycare workers while improving the quality of daycare services. To be specific, the government plans to provide 6,500 assistant teachers nationwide and “all costs will be borne by the state.” Of course, when they say “the state,” what they really mean is “taxpayers.”

The government plans to earmark around ₩200 billion to ₩300 billion for the move. Of course, experience says that whenever governments say something will cost so much, it's a safe bet to assume that it will cost much more than that amount. Which is just perfect! Yet another reason for the government to whine about its tax deficit (here's an idea – how about just reducing spending?) and to impose yet more taxes on people! Like as though that hasn't been yet another mess!

6) Show me the data!

The government also plans to open an additional 450 public daycare centers nationwide by 2017. Aside from the need to impose further taxes on people and the other related problems that that could lead to, have people forgotten that Korea has one of the lowest birth rates in the world? Will opening so many daycare centers be profitable in the long run? Will the demand for daycare centers be consistent? If so, how long will it remain consistent? If it will remain profitable, how long will it be before the losses start? Will the losses be politically viable? Will it be economically sustainable?

Where is the cost-benefit analysis? All I see is a whole lot of nothing.

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7) Treating the Symptoms vs. Treating the Disease

This proposed law does not even seem to pretend to look to solve the cause of the problem. And what is the cause? The main cause for so many of the problems that exist within the daycare industry is that there isn't a single daycare center throughout Korea that is allowed to run as a for-profit business. In fact, every single daycare center, whether they are public daycare centers or privately-run daycare centers, is forced to operate as a non-profit because, as far as the Ministry of Health and Welfare is concerned, “the very idea of trying to make money while taking care of children is an anachronism in modern society.”

Yes, they actually said that. So if there is anyone who is reading this who happens to teach young children or happens to be a nanny, the Korean government's message to you seems to be to go screw yourselves. How dare you think that investing your time, energy, and soul into taking care of the children of others could mean that you deserve to make money, you greedy boor?

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In effect, the government has prohibited economic competition among the 45,000 or so daycare centers around the whole country. Some people might think that this is a good thing because parents are financially struggling and that, therefore, parents need all the help that they can get. However, what those people also seem to be forgetting is the maxim “you get what you pay for.”

As daycare centers are not allowed to run as for-profit institutions, they have no choice but to obey government diktats when it comes to pricing, services provided, etc. Therefore, as many of these daycare centers do not have the funds that they need to provide competitive services, many of them cannot afford to provide high quality amenities or teachers or service workers.

In an attempt to make everything equal, the government has made the entire industry, which happens to be the one of the industries that parents trust to take care of their young children, to become equally mediocre cesspools.

8) How to get Rich in the Daycare Industry

But does that mean that people who run daycare centers do not make money? Many do struggle to survive. However, there are those who do make money. Typically, I see nothing wrong with making money. However, in the case of some of these daycare centers, everyone ought to have a problem with the way they make money.

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As mentioned earlier, every single daycare center in Korea is forced to run as a non-profit. Therefore, they are one of the most regulated industries in the country. However, where there is regulation, there is always room for corruption.

Case in point, according to this article in the Sunday Newspaper, one of the easiest ways for a daycare center director to make a lot of money is by pilfering the children's lunch money. Firstly, as the government promised to provide “free” lunch meals to students, the government has to spend a total of ₩1,745 per child per meal per day.

The following are translations from that article about what some of the more unscrupulous daycare center directors do to make money:

• Some daycare center directors make deals with the businesses that provide the meals that the children eat. To explain, the directors and the the food companies agree to create a separate bank account into which the government will allocate the promised lunch money. For example, if a daycare center has 100 students, the government will allocate ₩174,500 per day into that account. Assuming that the children attend the daycare center for twenty days out of a month, the government will allocate a total of ₩3,490,000 into the account.

The deal that the director and the food company will make is that the latter will provide only up to (for argument's sake) only ₩3,000,000 worth of food. The the two parties will split the remaining ₩490,000 among themselves.

• Some daycare center directors also charge what they call “special expenses,” which are expenses that do not include English, art, or music lessons. These expenses can cost anywhere between ₩100,000 to ₩200,000 per child per month. It was reported that much of this money ends up becoming part of the directors' personal slush funds.

• Some daycare centers also employ what are known as “ghost teachers.” After submitting fabricated documentation, instead of hiring actual teachers and daycare workers, some directors employ part-time workers. Some of them even employ their own family members. That is because the government provides subsidies for each teacher that a daycare center employs.

• Some daycare centers also enroll what are known as “ghost children.” Currently, the government subsidizes daycare centers that have enrolled children. The government provides up to ₩394,000 per child who is less than a year old, ₩347,000 per child who is a year old, ₩286,000 per child who is two years old, and ₩220,000 per child who is between three to five years old.

Therefore, even though some daycare centers may be filled up and can no longer accept any more children, some daycare center directors still register even more children as having enrolled in their school. That way, the daycare center director will pocket that subsidy money, which he/she might split with the “ghost child's” parents.

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Conclusion

As I said earlier, where there is regulation, there is always room for corruption. Also, where there is regulation, there is always the possibility of mediocrity. In the case of the government's regulation of the country's daycare centers, there seems to be more than a lot of each to go around.

If the government truly wishes to improve the state of the country's daycare centers, the best thing that it can do is to lift all of its ridiculous regulations and allow them to compete like businesses ought to compete.

This state-run qualification examination for daycare workers will do nothing to solve the pre-existing problems of the industry, and will likely only make things even worse than they already are.

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