“Jangmadang” and the “New Economic Paradigm”

In North Korea, “Jangmadang” serves as an extraordinary platform, which refers to more than 430 black markets approved by the North Korean authority. Jangmadang has played a major role in maintaining the economy for more than a decade despite strict sanctions from the international community. Jangmadang even stabilized food prices and activated real economy.

The success of Jangmadang provides us with a great lesson. Jangmadang did not receive a large amount of government funding, and the North Korean regime did not have enough funding to provide. Jangmadang simply is a capitalist platform that has given the North Korean people hope for a growth engine. It is an economic paradigm that can provide hope to the North Korean people by recognizing the privatization of surplus assets, and can allow people to accumulate wealth and procure scarce commodities through an exchange system. Jangmadang indicates that the economy of the private sector can be recovered only by the economic interest (or will) of the people without any government intervention.

Jangmadang also teaches us what an income-driven growth policy cannot teach. Individuals are not incapable; the people do not spend money without control even when they are given a large amount, and money does not necessarily serve as a growth engine for economic development. This is because the growth engine of the economy comes from Heung, or “excitement.”

When we have a platform to invoke “excitement” to express that the economy will go well, we do not need to increase minimum wage or spend tax revenues to solve a problem on our own. In the history of five thousand years, we went through the Asian financial crisis and the global financial crisis; we definitely have capacity to find a solution.

What we need is a Jangmadang platform for South Korea. We need to create a completely different economic paradigm where the people can have “excitement” to join economic activity. However, there is a limit to the current economic system in order to encourage excitement.

The banking sector is not providing enough support for companies and individuals, but still records KRW 20 trillion of net income each year. Insurance companies are supposed to protect ordinary citizens, but instead are earning KRW 20 trillion of net income each year. Hyundai Motor Company and Kia Motors spent KRW 10 trillion on real estates after being challenged by Chinese companies in the eco-friendly vehicle market; large corporations are simply carrying out a “standing high jump” strategy, meaning that are not actively participating in the inter-Korean economic cooperation. The economy is stagnant and does not get any “excitement.” The Korean people blame the government all the time.

Under the existing economic paradigm, the only way for ordinary citizens to join the middle class is to win a lottery. The existing economic system cannot unlock the capacity to use more than 300 digital devices that are expected to emerge in the future. Industry 4.0 will expand digital benefits, but they will only be shared among the wealthy. Real estate speculation is the only factor that can change one’s life; in fact, ordinary citizens are subject to regulations that do not even allow them to participate in the speculation. The current economic paradigm does not allow a jump for one’s life even when welfare benefits and minimum wage increase.

Now we have to give the people a new “excitement.” What we need is an environment (economic paradigm) that allows individuals to become more confident and optimistic because they can enjoy lives, share digital benefits, and connect their jobs and skills with something new. During the Asian financial crisis, the venture economic paradigm provided “excitement” to the people to overcome the crisis.

Indeed, the venture economic paradigm led to incredible results. Chair LEE Chan-jin of Naver used to be just one of the Samsung employees in the past. SM Entertainment led by Chairman LEE Soo-man, game companies, and new companies including Ticket Monster represent the new wealthy. Their success gave dream and hope to the people, and they were able to revive the economy based on a venture.

Simply put, people want to feel the joy of planting and harvesting potatoes; just having boiled potatoes can only satisfy pigs. In this process, people can save money, purchase a house, enjoy a trip, and so on.

The optimal economic paradigm in Industry 4.0 is the “crypto economy.” The crypto economy is free of centralized vested interests and free from the existing financial system. Moreover, it can reduce the risk of failure by investing in real estates and financial products that are highly regulated and lack information.

In the crypto economy, we can surpass Samsung, Google, or Naver. Academic backgrounds, gender, or age cannot limit us. In the crypto economy, we can equally compete with Samsung in finding our own territory.
That explains why I have “excitement.” I hope that this “excitement” and “hope” remain with us, and hope that our “excitement and hope” are not taken away by Singapore, Malta, Switzerland, or another country.
 

Professor PARK Hang-joon(Sehan Univ) (news@dailycoinews.com)의 기사 더 보기

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