
South Korea scrambles to avoid going the way of Japan - starpilot
https://www.ozy.com/fast-forward/south-korea-scrambles-to-avoid-going-the-way-of-japan/88907
======
browsercoin
> The bleak outlook is borne out across the country as industrial hubs shed
> tens of thousands of jobs. Ulsan, home to Hyundai’s heavy and automobile
> industries, was once South Korea’s fastest-growing and wealthiest city.
> Today, it represents the nation’s rust belt, the human toll of economic
> decline evident in the increasing spate of suicide attempts (nearly 200 so
> far this year). Young people are also fleeing: Having quadrupled since the
> 1970s, the population of Ulsan began to decline in 2016. Ulsan is just one
> of nine regions the government has dubbed “industrial crisis zones” and
> earmarked for almost $1 billion in support. Seoul is also in the process of
> implementing a $3.5 billion supplementary budget to create jobs and tackle
> youth unemployment, which remains intractable at about 10 percent.

I never expected to read about my hometown on HN lol. "Republic of Hyundai" is
what Ulsanites jokingly called it because they own the province. The
hospitals, public school, textbooks sponsored by Hyundai that needs to be
closely studied to do well on exams that will ultimately lead them to follow
their father's footsteps as a Hyundai employee, in order to afford Hyundai
built apartment complexes and drive to work in a Hyundai car. At one point,
Ulsan had the highest median salary in Korea. I remember hearing stories of a
Hyundai employee who came to work in a KIA car (before they were acquired by
Hyundai) and unfortunately was witnessed by the wife of a major stakeholder in
Hyundai and proceeded to rat him out and fire him. Entire apartment complexes
would be quiet with only housewives and elderly in them because the men are
all at Hyundai, the kids are at a Hyundai built school who are brainwashed to
accepting the system, one that promises to award rote memoization and
standardized tests to determine your place in what I coin here as an _Absolute
Corporatocracy_.

There were other weird incidences in Ulsan. Chinook helicopters landing in our
elementary school yard at night, pamphlets raining down on kids in playground
and air sirens announcing the beginning of civil defense exercise to simulate
a North Korean air raid. The day after Kim Il Sung died we wrote about how
unification was just around the corner and were rejoicing until North Korean
submarines started showing up in fish nets triggering a nation wide manhunt.

~~~
bane
Thanks for the first person stories! I'd love to read more. I've been all over
South Korea, but have yet to make it to Ulsan for some reason (I've been in
much of the area nearby touring historic sites, but never Ulsan). I think it's
examples like this that really make one understand why Cyberpunk authors, in
describing the future Corporatocracy, often centered their stories in Asia.

Most of them missed South Korea for some reason, but there are times when I've
been there that I've literally felt like I was in a Cyberpunk future, more
than anywhere else in the world I've been.

~~~
browsercoin
Your wish is my command....

[https://medium.com/@browsercoin/republic-of-hyundai-
chapter-...](https://medium.com/@browsercoin/republic-of-hyundai-
chapter-1-50706e9dfd5c)

------
pcurve
SK has serious culture problem. It has always been a culture of keeping up
with the Jones, where perception of wealth matters a great deal. Last year,
BMW sold more 5 series in Korea than Japan, Germany, or China.

Mercedes S-class' third largest market is Korea, after China and the U.S.
Naver's Q&A site is full of people in their 20s and 30s making $30-$50k
inquiring about purchasing German cars that exceed their annual salary in
cost.

What's more disturbing is, going into deep debt and mortgaging your future to
finance this type of YOLO life style has become socially acceptable.

It's quite astounding to see such rapid transformation cycle of a country, its
rise and stall in just matter of a few decades.

~~~
mrtksn
I see this as a pattern in any society getting wealthy because the blueprint
seems to be about the same across the board.

When you are financially successful, you buy a nice car and clothes to display
that success. You travel to Europe and the world and post pictures from iconic
places. At some point getting a nice car or travelling to places no longer
impresses anyone because these days everyone can do it, so you seek other
things like education, art, philanthropy, title etc.

In ex-soviet countries, for example, it used to be that your college degree
would not impress anyone because everyone can get one and end up in a low-
paying job as a medical doctor or nuclear physicist but a pair of western
brand shoes went long way for a while until they became widely available.

I wouldn't judge people on their way of displaying success. Each culture has
its own ways that come and go out of fashion as things are getting hard or
easy to obtain.

~~~
bane
This is really insightful. I've been dealing with South Korea for almost two
decades, and the changes there are absolutely incredible. I don't just mean in
terms of the visible, but in how people live their lives.

For example, when I first started going there, "foreign" food was hard to find
and expensive (I still remember the "steak and spaghetti" places), nobody
really had meaningful hobbies, there weren't all that many chain stores and
restaurants and most places were mom and pop, everybody smoked, and the idea
of having animals as pets was still kind of new.

Fast forward to today and you can find tacos and American BBQ, Pho and Curry
-- hell churros are pretty popular. Tons of people have all kinds of hobbies,
cafe culture is huge, there's large and mature domestic and foreign chains,
but also a renewed "indie scene" for coffee shops and hang outs and the sort.
Lots of the more questionable street stalls have moved in doors and come under
better safety regulation, smoking is on the way out and the pet craze is
virtually out of control.

There definitely was a period (and to much of an extent still is) of over
leveraged young people driving luxury cars, first domestic now foreign
(several of my acquaintances had SsangYong Chairman cars, now they all have
foreign cars), and people dipping into "hobbies" like photography buying
$20,000 starter camera kits and other such clumsiness. But the society is
maturing incredibly rapidly.

I think what really showed off this level of maturity was the way they handled
the recent Presidential protests, removal from office, criminal probe, and new
election. It was incredibly civilized, democratic and an example to the world
for how a stable, thoughtful and intelligent society should deal with big,
difficult issues. I'm unsure if my own country, or most of the Western world
would handle it as well.

------
Animats
_" You've got a duty to die and get out of the way. Let the other society, our
kids, build a reasonable life."_ \- Colorado Gov. Richard Lamm, 1984. (He's 83
now and still alive.) That's one approach.

[1] [https://www.nytimes.com/1984/03/29/us/gov-lamm-asserts-
elder...](https://www.nytimes.com/1984/03/29/us/gov-lamm-asserts-elderly-if-
very-ill-have-duty-to-die.html)

~~~
mcny
I once talked to a radiologist who said something similar but not about the
elderly. He claimed there is a lot of money being fruitlessly spent on the
last six months of a patient's life. He explained that a problem is that we
don't know before hand when someone will die but in hindsight it is obvious
that a lot of the money to keep someone alive is waste.

Then I started hearing about the death panels. I sincerely thought death
panels are a great idea. If it costs to much to keep someone alive with little
or no chance of a recovery, it might be better to put someone down.
Thankfully, most people are more sensible than I am. Turns out there was no
death panel.

I still think about this issue though. I read somewhere that we spend about
18% of our GDP on healthcare. Maybe we just need slightly different priorities
and try to go for most bang for the buck. Thoughts?

~~~
repsilat
If there's a limited amount of money to be spent, "most bang for your buck" is
a moral imperative. We do it to some extent -- measures like the "QALY"
("quality-adjusted life-year") attempt to quantify "bang", though I'm not sure
how rigorously we apply them in determining whether to follow some course of
treatment.

(It's also fairly standard to give a QALY some fixed dollar value.
Uncomfortable, perhaps, but again -- necessary from a moral perspective, at
least if you're a utilitarian deciding what to spend on healthcare.)

------
wgerard
Super interesting, and definitely seems smart of SK to be that forward-
thinking.

Has anyone really ever dug into what happened to Japan's economy (i.e. what
caused the stagnation)? A cursory Google search returns a lot of well thought-
out speculation, and I realize cause/effect is often difficult to establish
with global economies, but curious if there's anything more rigorous out
there.

~~~
mrb
"Stagnation" in Japan is widely misunderstood and a consequence demographics.
It's one of the only developed countries with a declining population:
[https://www.zerohedge.com/sites/default/files/images/user5/i...](https://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/24/20160227_japanpop.jpg)
So of course, with all else remaining equal, declining population = declining
GDP. Duh! This does not imply anything is wrong with their economy.

In fact, for a fairer comparison between countries, look at the GDP _per
capita_ : [https://snbchf.com/wp-content/uploads/2013/11/GDP-Per-
Capita...](https://snbchf.com/wp-content/uploads/2013/11/GDP-Per-Capita-
Developed-Nations.jpg) We see that Japan is actually growing _faster_ than the
US, Canada, New Zealand, France, etc.

~~~
trynumber9
Doesn't look so hot to me. From the world bank:

Japan GDP per Capita: $34,808 (2003) to $38,424 (2017)

US GDP per Capita: $39,677 (2003) to $59,531 (2017)

[https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017...](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017&locations=JP-
US-CA&start=2003)

~~~
mrb
You're looking at the wrong data (nominal GDP instead of PPP.) PPP is what I
meant and what matters, economically. Japan (+44%) and the USA (+50%)
experienced very similar growth:
[https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2...](https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2017&locations=JP-
US-CA&start=2003)

~~~
trynumber9
In that graph their GDP per capita is growing on par with the U.S. The US
added 35 million people in that time frame and started from a higher base
where you would expect growth to be more difficult. That meets my criteria of
a relative decline, especially considering the Japan of the early 90s.

~~~
mrb
« _started from a higher base where you would expect growth to be more
difficult_ »

This is an incorrect intuition. Compare to a few other similar (ie. developed)
countries of different sizes like Germany, Canada, South Korea, the growth per
capita is roughly the same:
[https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2...](https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2017&locations=JP-
US-CA-KR-DE&start=2003)

« _GDP per capita is growing on par with the U.S_ »

That's exactly my point. Japan is not "declining".

------
thoughtstheseus
The Chaebol situation is certainly a unique position to be in. The Economic
rise post-war is amazing.

~~~
gumby
Is it unique? Seems a lot like the zaibatsus of prewar Japan (which became
today's kairetsus), hence their concern.

~~~
devonkim
Part of the differences between chaebol and zaibatsu is in the restrictions on
banking that may have helped Korea keep chaebol from collapsing.

You’re correct that chaebol are far closer to preWW2 zaibatsu overall.
Keiretsu are professionally managed and more decentralized though than family-
owned and managed chaebol. It’s not really clear if Japan would have fared
much better by staying centralized or if South Korea could be doing even
better with decentralization. I have my doubts that Samsung could have made it
to where it is on an international brand scale if it was forcibly
decentralized (Korea has the most bizarre record when it comes to branding
arguably due to lack of innovation).

------
graeme
Originally a financial times article, incidentally. I thought they stole it
but it seems they have a partnership.

Good to see this get a wider readership, it was a good article.

------
emsy
Is GDP stagnation actually a problem or is it made out to be a problem (for a
first world country)?

~~~
sandworm101
It is a problem when savings, retirement, is based on the assumption that the
economy will continue to grow. A shrinking economy throws the entire live-off-
investments retirement rubric out the window. Any government back plans,
social security etc, become unstable and/or have to increase the contributions
(taxes) paid by those still working.

It isn't as much a problem for people who earn money for actual work, as
opposed to investors. Those earning wages may see those wages increase as
labor becomes scarce. Unless of course they find themselves having to carry
everyone else.

------
XalvinX
I've lived in South Korea for a long time. It has deep, deep cultural issues
that are bound to drag it down eventually. Until the education system
completely changes, the political system reforms, and people's attitudes
change about many things, it will be doomed to be a small-time player that
continues to make copies and continues to have a handful of large
conglomerates that support the economy. I could write a book about it.

