Conglomerated South Korea

"According to the logic of conglomerated South Korea, a few large firms control most industries and determine both supply and demand, funneling wealth to the top.

The chaebols are inescapable: As the novelist Kim Young-ha has written, an average South Korean could begin her day in a Samsung-built apartment, watch a video on a Samsung smartphone and get informed by a news broadcast on a Samsung TV, all paid for on a Samsung credit card.Yet these ubiquitous corporations have done little to improve the lives of most South Koreans. Today, chaebols employ only about one-tenth of Korean workers and are drivers of social inequality. Decades ago, they began to move much of their industrial operations abroad, where they can pay workers less; at home, they continue to project a C-suite fantasy of white-collar wealth that few can attain. Meanwhile, South Korea has among the O.E.C.D.’s highest rates of poverty; the rate for the nation’s seniors tops the list. Koreans also work some of the longest hours in the world but experience little social mobility. 

When Mr. Moon became president of South Korea in 2017, he pledged to undo the legacy of President Park Geun-hye, his corrupt, impeached predecessor, and that of her father, the military autocrat Park Chung-hee, whose governing blueprint throughout the 1960s and ’70s involved gross abuses of human rights and the introduction of the chaebol business model. Mr. Moon vowed early on to curb the dominance of the chaebols, improve wages, increase welfare benefits and boost small and medium-sized businesses. He succeeded in raising the minimum wage, expanding child-care credits and pensions for seniors and establishing a government office to support innovation. Yet he has been unable or unwilling to cross the chaebols. 

Conglomerates like Samsung, Hyundai, Hanjin, Lotte and LG once helped many workers enter the middle class and made South Korea a booming “East Asian tiger.” But the chaebols also embraced offshoring, outsourcing and price-gouging while lobbying for closed markets. Their executives have amassed billions speculating in real estate and transferring wealth to relatives: The South Korean version of the Asian financial crisis of 1997 was spurred in part by chaebol malfeasance."