Have you ever heard about Adam Smith, Keynes and Marx? If you have studied economics, you may have heard of them. If so, do you know who the most famous economists are in Korea? Most people-even people who have studied economics-may not come across them directly. Because the economics, we are studying is influence by western economists and theories.
However, there have been many economists in Korea as well as in western countries. The representative economists in Korea are Lee Ik, Park Ji-won, Jung Yak-yong, Park Je-ga and so on. They studied economics in the latter half of the 18th century (Chosun era) that was the Renaissance of academic theories. In those days, the theories of economics were divided into physiocracy and mercantilism.
Physiocracy is a theory that farming is the most important thing to develop a country. The economists who supported it were Lee Ik, Yoo Hyung-won and Jung Yak-yong. The physiocrats claimed that accomplishing land reform and it would make the country powerful economically. On the other hand, mercantilism is a theory that commerce and industry, rather than agriculture makes a country economically strong. A country could become revitalize and an advanced country. The representative economists of this theory were Park Ji-won, Park Je-ga and Park Gyu-su.
It is surprising that at the end of the 18th century, the western economists also studied physiocracy and mercantilism similar to Korean theories. Besides, if physiocracy and mercantilism made in Korea can be kin to macroeconomics the western economists made, an economic theory – its contents are concerned with people’s daily life- studied by Seo Yoo-gu can be compared to microeconomics of the west. Furthermore, Lee Joong-hwan, the representative economic geographer in Chosun era, studied about where the good condition was to farm or to exchange with other countries. This study is similar to theories that Thünen and Weber (they are German economists) studied.
Because of this, we can conclude that Korean economics are not different with Western economics. However, modernizing in Korea, western civilization has governed Korea. Moreover, it has made Korean economics hard to live by in native country, being pushed by western economics.
From now on, we should be interested in not only Western economics but also Korean economics that our ancestors made by the sweat of their brows.
THEIR SIGHTS ABOUT KOREAN ECONOMY
Kang: My name is Kang Byung-jun, the moderator of this forum. In this forum, we invited economists from the Chosun era, who studied the economy of Chosun and formulated many theories; we are here to talk about the current Korean economy. Let me introduce to you 4 members of the panel in the forum. First, we invited the most famous physiocrats of the Chosun era, Jung Yak-yong and Lee Ik. In addition, we invited famous mercantilists of Chosun era, Park Ji-won and Yoo Soo-won. They are economists who represent the Chosun era. Although they have had their differences of opinion about economy, they must have had the same wish for the development of our country’s economy. Now, let us talk about the current economic situation of Korea. First, Lee Ik will give his opinion first
Lee Ik: From the world beyond, looking at our country’s economic situation, I am very proud of our country’s rapid economic development. With the achievement of economic development, the quality of life for people has improved, and people are living a life better than that of the Chosun era. However, as wealth increased, people began to live in extravagant ways because of the comfort of money and devoted themselves to intemperate spending. This will be the road to poverty for everyone. When people practice austerity and thriftiness with the money, which they made with their own labor, everyone will be rich.
Park Ji-won: I agree with you in that people should be frugal and thrift. However, it is not necessary to see luxurious living style as bad. The luxurious living style involves only certain classes of people, such as when spending helps the economy grows dynamically. Because an active spending causes vigorous production activities, and in turn, it will lead to expend their spending, the economy will be revitalized. My old colleague, Park Je-ga, had the same idea. He compared wealth to a water well, and explained that it is the same logic as that of pumping out more water only to see that the well remains full, however, an unused well will dry up in the end. Due to the presence of such spending, the current economy of our country was able to develop. In addition, at the root of the development, there were brisk commercial activities.
Jung Yak-yong: Unlike in Chosun era, the current economic activities in our country are achieved through the free market principle. Therefore, I agree with the revitalization of spending and production that was the claim by Park Ji-won. However, the problem is that certain people monopolize the market and make profit inappropriately because the market is too free. This will instead hurt the spending and production. Therefore, I think that the government must correct the abuse of monopoly by national intervention.
Kang Byung-jun: Thank you for your opinions. You have pointed out the problems about what is happening in the economy of our country when it is run by free market economic principle. I think the problems from economic phenomenon and the thoughts on them by scholars are similar regardless of the period. Then, I wonder about what you think of FTA with the U.S. That will affect our economy significantly.
Yoo Soo-won: At the heaven, I have closely watched situations in other countries. Just like what I have thought, countries, which opened their doors and traded well have become a powerful country later. The most famous country is Japan. Because Japan opened its door earlier than other Asian countries, it was able to accumulate wealth. I see the reason for the demise of Chosun as the policy of seclusion, which cut off exchange with other countries. The fundamentals are the same whether it is in the past or present. I think that the signing of FTA with the U.S. is a very good achievement. If we trade actively with the U.S., an economically powerful country, enormous amount of capital will flow into our country. In the end, our country can also be a powerful country.
Park Jib-won: I also agree. When I was alive, I visited China during the Qing Dynasty. China, which I witnessed, was a country that had the world’s best economic power, military power, advanced culture and scientific technology. After I realized the awesome level of standards in China, I thought we should learn such advanced culture of China. Even if they are enemies, we should visit there and treat them as a teacher to learn from them. This is the way to for our country to become a powerful country. The U.S. is the most powerful country of current time, therefore we should learn a lot through the FTA with the U.S.
Lee Ik: The origin of wealth was farming in Chosun era when I lived, but the situation has changed. Therefore, I think it is unreasonable to claim that farming must be considered the most important. However, the foundation of Korean farming should not collapse because of FTA with the U.S. I was heartbroken to see farmers who were protesting against FTA with the U.S. Although it is an unavoidable phenomenon to open the doors and trade with foreign countries, at least, the farming in our country should be protected. For such purpose, the government should actively guarantee its survival and financially support it. In addition, farmers should make quality products by developing new farming technology in order to win in the competition against American farm products.
Jung Yak-yong: You are right. I think that in terms of FTA with the U.S., other industries should not benefit from the sacrifice of farming. Agriculture, manufacturing and commerce should all develop together in harmony. For all our descendants, this is the way to be on equal terms with other powerful countries as a citizen of an economically powerful country. I trust that the current president of our country will achieve it.
Kang Byung-jun: I deeply thank you for openly giving us advises for the future of your descendants. It was a great opportunity to reflect our current economic situation through your knowledge and ideas from your studies. I think that our country was able to develop so much economically because of their ideas and knowledge. Therefore, please also take interests in our economics as well as western economics. I believe that our country will someday become an economically powerful nation. That is all for our forum. Good-bye.