South Korean Chaebols

Still on the same Carter Eckert article The South Korean Bourgeoisie (Hagen Koo ed. State and Society in Contemporary Korea, Cornell University, 1993).

Apparently, the popular term chaebol itself carries the negative connotation of "business clique."

Although more sympathetic critics have called the chaebols a "necessary evil", it has become increasingly common for Korean conglomerates to be referred to as "octopus tentacles" - a reference to their concentrated and expanding power over the South Korean economy.

A particular source of public anger had been the constant speculation of chaebols in real estate. This had reportedly diverted capital from productive resources, and sent the price of land in certain areas of Seoul and other cities to "astronomical levels."

As Eckert wrote: "It has been very difficult for South Korean capitalists to mount a successful defense against public criticism. Perhaps the strongest argument they have been able to muster is that they have tried to return some of their profits to society by using portions of their corporate shareholdings to set up tax-free private social welfare foundations, which, in turn, have used the money to build hospitals and support needy students and scholars ... (but) some critics have charged ... that the foundations permitted "legalized tax evasion by the chaebols."

Perhaps such a skeptical view of chaebols should not come as a surprise. After all, as Eckert pointed out earlier on in the article, the pursuit of personal profit had never been raised to the level of a moral precept in Korea. "And even today the right of private property, though guaranteed by law in South Korea, falls far short of being the sacrosanct tenet it has long been in the West."

This was also coupled by the fact that Confucian scholars during the late Chosun dynasty had been steeped in a neo-Confucian tradition that emphasized communitarian values. Indeed, these scholars were interested in capitalism mainly as a way to "augment the wealth and power of the country to save it from imperialist domination."

"Ideas of Confucianism, nationalism, and capitalism thus all fused in the late nineteenth-century Korean intellectual milieu to produce a moral vision of capitalist activity stressing national needs and goals and denigrating the purely private pursuit of wealth."

To make things worse, chaebols had always been perceived as recipients of a wide range of special privileges and favors from the state. So much so that Korean capitalists had often been described as "state-made men", as they had seldom taken the type of risks often associated with bona fide entrepreneurs.

Furthermore, the close collaboration between chaebols and the government had also eroded the business elite's moral standing in South Korean society. Most chaebols were seen to have, and had indeed supported past authoritarian governments and politics.

As Eckert concluded: "In spite of their great wealth and growing political power, South Korea's capitalist elites have been forced to live and operate in an ethical world that is not of their own making ... even more important in the long-run, perhaps, is the problem that Korean capitalists face in winning the hearts and minds of the people. As this chapter tried to show, a highly critical, even negative, attitude towards the chaebols runs deep in South Korean society and cuts across class and occupational lines."

But despite that, don't most Koreans generally still want to work for chaebols?