By Alex Gratzek – Originally published in The Korea Times
Following the end of the Cold War, it appeared as if capitalism was the undisputed victor.
However, since the Great Recession of 2007-08, capitalism has come increasingly under strain as it becomes evident that the huge wealth created by it is not spread evenly enough throughout society.
The gap between the elites and masses is increasingly turning into an unbridgeable chasm.
In a 2012 survey of 1,000 Americans, a staggering 45 percent wished they could skip Christmas because of the financial pressures they faced, while six in 10 didn’t have savings to cover an unexpected bill between $500 and $1,000.
For a large percentage of Americans, their economic situation is tenuous at best while for those at the top of the economic pyramid, things continue to improve.
The same goes for Korea. Young adults are increasingly unable to find decent jobs and are living longer at home with their parents. When the time comes to strike out from the nest, parents are often needed to provide money to their children so they can obtain housing or furnish any homes they can find because the costs are so prohibitive.
On the other hand, people born into families related to the leaders of chaebol or other elites are set for life, regardless of their ability or temperament.
One only has to look at the cashew nut lady on Korea Air or the girl who obtained entry into Ewha Womans University because of her mom’s connections to impeached former President Park Geun-hye. These elites are succeeding because of connections, not through their own ability.
In both Korea and America, success in life is not determined by ability but by the sheer happenstance of being born from the appropriate womb. Such a system, where working hard does not give one a leg up in society, is not one built upon strong foundations.
The delusion of being able to work to achieve success in life is increasingly being undercut by the grim realities that unfettered capitalism has created.
This disappointment in the system is manifesting itself throughout the world. A large number of Obama supporters switched over to support Trump in the latest U.S. election, while in Europe, the far left and far right have seen significant gains at the expense of the center.
In 2012 and 2016, Mitt Romney and Hillary Clinton were rejected because they were seen as manifestations of the status quo. Obama and Trump, despite being on opposite sides of the ideological spectrum, found victory because they were seen as outsiders.
In the aftermath of the 2008 Great Recession, the average person lost a significant amount of wealth ― whether it was their houses or savings ― while bankers, the ultimate creators of the mess, retired with “golden parachutes.” The average person suffered with no bailouts or relief, while those who were already the “haves,” thrived.
After President Park’s impeachment for corruption and influence peddling, Moon Jae-in was elected president. When he ran for the presidency, he ran on a platform of widespread economic appeal; taxing the wealthy, raising wages, increasing the housing supply, expanding the social safety net, while increasing money for job training and education.
He was seen as a relatively clean candidate, free of the taint and corruption which permeates Korean politics; allowing him to win.
Moon and Trump’s success can be ascribed to anger at the corruption democracy has seemed to spread. The elite are increasingly able to buy influence and increase their own personal wealth, clout and benefits in society at the expense of all others and the health of the society itself.
There is coming a point where the system needs to either correct this through the democratic process or a more dramatic reckoning will occur. It’s not a matter of if, but a matter of when.
One needs to look at the examples of England and France. The English allowed for the gradual expansion of the vote to the under-classes and created regulations to prevent their exploitation by factory owners.
In France, the elites tried to keep a complete monopoly on political power, an inequitable system, and the result was the French Revolution.
The police become absolutely necessary, only at the juncture in human society where there is a split between those who have and those who don’t. This gap can never be completely done away with but when the gap becomes too large, the police aren’t able to maintain order.
At that moment, the result is either revolution, rule at the point of a bayonet as towards the end of Czarist Russia or the implementation of reform to gradually reform society as did the English.
It is natural for capitalism to create a system where a child born into a certain area is more likely to succeed than a child born in another area. But when the situation arises where a child born into a certain area or segment of society is unable to escape it, regardless of effort or ability, is where problems arise.
Capitalism has allowed for the creation of mind-boggling wealth along with an unfathomable distribution of this wealth. Eight people own as much as $3.6 billion. The problem is it promotes the pursuit of wealth at the expense of individuals’ wellbeing.
Americans have been waiting for a chicken in their pots since Hoover ran for the presidency in 1928. Since then, the national wealth of America has skyrocketed but there are increasing numbers of empty pots.
The crucial issue for the future is addressing these shortcomings of capitalism. Democracy and capitalism “won” the Cold War.
However, if these imbalances aren’t addressed, then communism or socialism might very well be the victor. Although capitalism seemed unquestionably the ultimate success, it is increasingly under siege.