Capitalist discontent and the kimchi premium

Courtesy of Wendelin Jacober

By David A. Tizzard

The Korean economic system is creaking. The middle-class that, in part, gave birth to this nation's proud democracy is shrinking. The collective ethos that drove the country from poverty to the world stage has been replaced by a hyper-individualism, promoted by social media, manifest in a slew of neologisms, and evident in a focus on self-interest. The oft-heralded invisible hand, rather than moving money carefully around the system, seems to be content only to take money from those struggling to survive and send it upwards to conglomerates, corporations, and tax-collecting Assemblymen.

There was once a clear narrative that dominated much of Korean life. Social mobility was real, and it was possible to achieve through effort and sacrifice. You studied hard, went to university, graduated well, got a job, and then you could buy a house, have a family, and pass on your hard-earned possessions to your children ― who would then surpass you and carry the torch even further for the next generation. However, that story no longer seems to work. A growing number of young adults simply don't believe that story. It is for those reasons that they are turning off, tuning out, focusing on themselves, satiating their lives with Netflix, and abandoning ideas of family and marriage.

If the class tourism carried out by millionaires in the catharsis-inducing Parasite and Squid Game weren't evidence enough, there is real economic stagnation here in South Korea. Prices are rising across the board, purchasing a house has become a pipe dream for all but the richest, and wages and opportunities seem to be shrinking. The once cherished social mobility and security has been replaced with zero-contract work hours, fewer insurances, and the demand to work multiple jobs while adopting various different personalities.

For a country that achieved success on the back of some of the most demanding work schedules, there has been a lot of interest in the country about a four-day work week. This was present in the last Seoul mayoral election. The presidential candidate Mr. Lee Jae-myung also floated the idea on his unsuccessful campaign earlier this year. Yet while we could all undoubtedly do with more leisure time, I fear this is just a way for the entrenched powers to pacify citizen unrest rather than address the deeper structural inequalities our current economic systems are now producing.

With such hardships a reality for many in the country, the lure and promised riches of cryptocurrency have become almost impossible to ignore. It's a modern manifestation of a lottery ticket except that rather than simply spending a few pounds or dollars on a couple of tickets for fun, people are investing thousands, if not more, in the hope of overcoming the seemingly insurmountable economic and social obstacles they find in their path.

Because of my age and study of economics throughout graduate school, I've always been skeptical of cryptocurrency and its various manifestations. I get the feeling that people want you to buy in because it is that very act of you doing so that increases other people's profits. You are then left with the unenviable task of asking others to join. There is a name for such operations, I'm sure. And while undoubtedly there are times when the immediate transfer of funds between parties using smart contracts can be incredibly useful, particularly when bypassing corrupt governments and domestic cartels, for most of us in Korea, this is not really that necessary. It's also worth remembering that despite paying taxes, being a permanent resident, and personally being able to vote in local elections, I am ineligible to sign-up for an account on a Korean crypto exchange. Korea, ever the lands of contradictions, allows foreigners here to gamble but not its citizens and vice-versa for the lure of digital lucre.

While stablecoins, smart contracts, and blockchain technology are all familiar to me, during my recent podcast conversation with Hyun Joon Lee I was recently introduced to the concept of the "kimchi premium" in the cryptocurrency world. He explained how the price of Bitcoin has been, at times, twenty-percent higher in Korea than in other parts of the world. Seeing this opportunity, he understood that with the help of a friend abroad, he could buy bitcoin overseas and then sell it in Korea and immediately make a profit. There was an opportunity for him to earn a lot of money and so he took it. We should not begrudge him that.

And yet if that's how easy it is to earn money, why are our nurses still not rich? Why are the people delivering hundreds of boxes for us through all the apartments and narrow streets not sitting back with a beer as the money rolls in? Why are the teachers still on the same salaries as they were twenty years ago despite house prices and everything else skyrocketing?

There is a need for a serious conversation about South Korea's economy. The collective spirit and middle class mobility that brought it to the world stage are vanishing. We would be foolish to allow it to disappear so easily on simply the offer of one more day of watching YouTube at home and the promise, however farfetched of some of us achieving riches in a Kakao-sponsored metaverse with K-pop NFTs. The solution, however it might manifest, is likely to be more deep-reaching and fundamental. And, hopefully, more egalitarian.

Dr. David A. Tizzard (datizzard@swu.ac.kr) has a Ph.D. in Korean Studies and lectures at Seoul Women's University and Hanyang University. He is a social/cultural commentator and musician who has lived in Korea for nearly two decades. He is also the host of the Korea Deconstructed podcast, which can be found online. The views expressed in the article are the author's own and do not reflect the editorial direction of The Korea Times.