The dual structure and extremity of the economy / Stiglitz

On the streets of Korea, the number of rear cars picking up waste paper is increasing rapidly. The signboards of small stores are turned off in the early evening. The atmosphere of a lively evening that was enjoyed during the boom one day is gradually decreasing. It is said that it is a problem not only in Korea but also around the world. It seems that there was already a promise to experience the problems of neoliberalism with a time lag. It is only now that people around the world say that we should get out of the recession by expanding domestic demand. Even in the United States, the center of the economic world and the ideal of liberals, the prevailing public opinion seems that the crisis of the poor and the collapse of the middle class has become a reality.

 

Joseph Stiglitz, an economist who was vice president of the World Bank, describes the U.S. economy as this.

 

There are two futures in the last half-century of American history. One is a society where the gap between the haves and the have-nots has widened, and the other is a society where the gap between the popular and the unpopular has narrowed. I believe that the latter future is the only hope that fits our traditions and values.

 

- Among the books of Japanese economic journalist Satoshi Higashitani -

 

Then, with President Obama's appearance and Trump's appearance as the next presidential candidate, the U.S. seems to have become immersed in the left-right frame of mind. What matters is that the balance economy activates the link between the two, but the view seems to be focused on the issue of distributing the share of the haves to the haves or protecting the have-nots. As this view becomes more active, mass manipulation and populism seem to gain strength. In the U.S., a liberal country that is more susceptible to emotions than reason, the emergence of a figure like Trump may be a natural reality.

 

Escalov, who won the Nobel Prize in Economics along with Stiglitz, also known as an information economist, refers to the lemon market caused by information asymmetry. In fact, the U.S. and Korean economies tend to become increasingly double-structured. Just as the difference between rich and poor villages becomes clear, the economic world seems to be becoming distinct. These problems eventually spread emotional problems, leading to political instability and attempts to solve them with left or right concepts. Economically, by securing only half of the domestic market, we will see conclusions that do not help the spread of market demand and subsequent economic growth. In fact, this problem seems to be becoming a reality in Korea, not a prediction. Worse still, Korea does not have substantial government control over businesses, especially large corporations. And if the government attributes the defense industry corruption to the capture of interest groups, it feels like seeing an "strange connection" unique to the superstructure of politics and the economy. It seems that Korea is in a much worse situation than the United States, which is rich in basic material and human resources.

 

On the one hand, I wish the government, which cannot control the huge problem, would not control small citizens like me. I am a poor citizen like myself who continues to think by himself like an autistic person, let alone an interactive education like Stiglitz.

 

In his book "The Road to the Market", Stiglitz also criticizes the neoclassical economic theory that socialism has collapsed because market principles are correct. In some cases, socialism that has accepted competitive markets has failed (in Eastern Bloc countries such as Russia). As I always think, economic problems do not seem to be a problem that can be solved by ideology. Somehow, we have to find a link that can solve the dual structure that arises realistically. In the end, it seems that we need to create an alternative for the utilitarian welfare of the entire people. And it seems that ideological controversies such as the occurrence of a far-right regime that is in danger of reemerging worldwide or the occurrence of left-wing alternatives to counter it should be prevented in advance. It is strange that it is extreme. In the end, there is a possibility of being involved in an internal conflict or civil war without finding a consensus.

Friday, June 24th, 2016