Lessons and Impressions from Korea

Recently, I spent a week in Korea to speak at the World Knowledge Forum in Seoul. It was fun spending time with the other speakers, such as David Epstein, author of the provocative book The Sports Gene, and friends Tyler Cowen, Jeff Jarvis, and Andy McAfee. Prior to the event in Seoul, I spent a few days in Jeju island on my own, just reading and hanging out.

My big picture, touristic impressions of Korea:

• It felt very similar to Japan, which isn’t surprising given the country was ruled by Japan in the early 1900’s. Korea is wealthy and boasts advanced infrastructure—just like Japan, a rare thing in Asia. So it’s a super easy country to navigate, tourist-wise. I should note that Korea didn’t seem as weird as Japan, at least on the surface. Korea felt more Western in certain cultural respects whereas Japan is all its own.
• 60 years ago Korea was one of the poorest countries in the world. Today it’s one of the richest. Despite a jaw-dropping economic transformation, indeed one that’s notable in all of human history, today’s Koreans do not seem exceptionally self-confident about their economic future. Several folks I spoke to worried about whether their culture accommodates entrepreneurship. They see their famous tech giants as imitators more than innovators. These anxious attitudes may, of course, actually help explain their past and potential future success: Koreans are incredibly hard workers, they believe mightily in education, and they take success very seriously. It stands to reason that business leaders would not rest on their Samsung and Hyundai style national laurels and instead collectively stress about their economic prospects.
  • If there’s one reason for Koreans to stress, it’d be because of the demographic trends–it’s the most rapidly aging country in the world.
• In terms of the local labor market, you might think ideas in The Alliance would not be relevant. It’s true that Korean companies have been “families” for most of recent history. The company-man, die hard loyalty, and so on were strongly held beliefs for decades. But it’s changing. As companies seek to adapt to the global economy, they’re implementing more flexible labor compacts. Most young Korean workers today, according to surveys, say they’d switch employers if there were a better opportunity, and most say they don’t feel particularly loyal to their current employer.
• Some of the restaurant customs are interesting. Most restaurants have water dispensers that you use to re-fill your glass on your own or they put a pitcher of water on the table right after you sit down. For a water guzzler like myself, this is a great perk. Less fun is Korea’s default choice of napkins. They use the thin, small square napkins that are used in Chile as well. It’s so odd–the napkins are skimpy so you have to use three or four to wipe your hands of even the littlest bit of sauce. At least in Korea, unlike Chile, several causal restaurants will put a mini-trash can at your table so you can dispose of the dozens of napkins you use as you use them!
• I do not like kimchi.
• “Selfie sticks” — if that’s what they’re called — are all the rage. On Jeju Island, where I spent a couple days, everyone hiked with a selfie stick that held their phone camera out at a distance to take a nice selfie. One odd consequence is that nobody asks anyone else to take their picture, a usual moment of forced social interaction amongst strangers.
• I didn’t make it to the DMZ on this trip. Next time.
• A college degree is a commodity. 98% of young Koreans have degrees from a junior college or university–the highest rate in the world. Amazing.

All in all, Korea doesn’t have any show stopping tourist attractions. But because of its importance to the global economy, it’s a country and culture worth understanding.

Flying there, I read a great general survey book on all things Korea by Daniel Tudor called The Impossible Country. The perfect pre-read for anyone visiting who needs to brush up on their basic history and culture. Below the fold are my extensive highlights from the book.

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As recently as 1987, South Korea was a military dictatorship, but today, it has stable, democratic leadership. As other Asian nations like Singapore, and now China, promote a mix of authoritarianism and capitalism, South Korea stands out in the region as an example of a country that values not just wealth but also the rule of law and rights.

In 1894–1895, China—Korea’s long-standing “big brother” state—and Japan went to war, principally over control of Korea. Japan’s victory ended Chinese influence over the peninsula and coincided with the official ending of the Joseon social structure based on yangban, jungin, sangmin, and cheonmin classes. A process of brutal colonization culminated in the Japan-Korea Treaty of 1910, granting Japan “all rights of sovereignty over the whole of Korea.”

Particularly during the 1930s and early 1940s, Japan governed Korea with extreme cruelty. As many as 200,000 women were made into sex slaves. Men were used as forced laborers. All people were required to take Japanese names, speak Japanese, and worship at Shinto shrines. And while Japan did pursue industrialization, particularly in the north of Korea, the beneficiaries of the ensuing economic growth tended to be either Japanese, or their Korean collaborators.

Though the defeat of Imperial Japan in 1945 resulted in Korean liberation, joy was short-lived. The Allied victors, the United States and the Soviet Union, occupied and divided the country on a supposedly temporary basis (without consulting Koreans), with the former responsible for territory south of the 38th Parallel and the latter the north.

On September 15, acting for UN Command, U.S. general Douglas MacArthur staged a landing at the west coast city of Incheon, with 40,000 American and South Korean troops. By September 25, they had retaken Seoul and began pressing into North Korea, with the intention of reaching the Chinese border. China, which had been under Communist control since the previous year, sent 200,000 troops down into Korea across the Yalu River on October 25, in support of Kim Il-sung. For the rest of the war, the South Korea-UN and North Korea-China forces fought each other to a stalemate.

the end of the 1950s, GDP per capita was well below $100.

However, stemming from Korea’s ancient past, it is fundamentally a form of animism. In animism, every natural entity in existence has a spirit or life force in the same way that people do—even things Westerners consider inanimate, like rocks and trees.

Furthermore, materialism of the God-wants-you-to-be-rich variety appears to be much more prevalent in Christianity in Korea than elsewhere in Asia. Arguably, this relates the practical or materialistic aspect of shamanism that is still manifest today. Performing a Musok ritual at the opening of a shop is not so different from praying to God for long lines of customers.

Today, 23 percent of the population counts itself as Buddhist. Buddhism trails Christianity slightly in terms of its number of adherents, and it has less influence: according to the 2005 census, 29.2 percent are Christian, and the percentage of Christians in high-ranking government and corporate positions is higher. Notably, an estimated 40 percent of South Koreans are believed to have no religious faith at all. Yet, Korea still needs Buddhism, as can be witnessed every time one visits a beautifully restored temple and sees the devotees

The importance of collectivity is also reflected in Korean businesses, for the progress or success of a company is considered a reflection of group effort, not the triumph of a single leader. Unlike in the United States, there are no rock-star CEOs with nine-figure stock

During the Korean War, up to one a third of the population was made homeless, yet the imperative to learn was so strong that universities set up tents in the mountains and students would receive lectures there by gaslight.

The trading of benevolence in return for loyalty is still a factor in Korean offices: whistleblowing is rare, as it goes against the employee’s obligation to his superior. A typical Korean boss is also more paternalistic than one from a non-Confucian society. He will take greater interest in the personal lives of his staff, and feel the need to treat them to lunch or dinner with regularity

Furthermore, the power of these companies, supported by the state, meant that there was no real culture of entrepreneurship in South Korea. For a talented young person, the most attractive jobs other than in the professions of doctor or lawyer were either in the civil service or entry-level positions with the likes of Samsung or Hyundai. The possibility of having a truly self-made Korean Bill Gates was little more than zero. If one looks at the Kospi-100 index of the largest Korean firms (the equivalent of the Dow Jones or FTSE indices) even now, one still find

The chaebol-government compact of the 1960s and 1970s suited its time. It is not a system suited to a large, modern economy, but it did, despite its faults, enable South Korea to generate enormous economic growth and dig itself out of poverty

Jeong demands loyalty and sacrifice between those who share it. It also requires forgiveness: “There is no ‘sorry’ between friends,” runs one Korean maxim. Jeong is not a matter of choice. When Koreans talk about the beginning of a jeong-filled relationship, the expression “jeong deul-eottda” is used: “Jeong has permeated me.”

By the same token, a Korean who causes outrage overseas is considered to bring shame upon the nation, rather than merely himself. When Cho Seung-hui committed the Virginia Tech massacre in 2007, killing more than thirty students, President Roo Moo-hyun issued an apology on behalf of the country.

After General Park took power in 1961, the people were exhorted to work around the clock in order to improve South Korea and help it do better than others—particularly Japan, the former colonizer. Koreans who remember this period can recall posters encouraging them to “Beat Japan” (through industrialization) and spurring them on to break ever-increasing national export targets. The people were transformed into “industrial soldiers” who could help overcome the nation’s poverty, tragic history, and the North Korean threat through long days at shipyards, factories, and industrial plants. Six-day workweeks were the norm; Saturday was just another weekday.

A BBC News article reported that: “By conservative estimates, 50 percent of South Korean women in their twenties have had some form of cosmetic surgery.” It is so completely normal and stigma-free that many parents encourage their daughters to have something done—the highly routine double eyelid procedure, for instance.

Yet even finding such a stressful job is difficult. Koreans are overeducated—because of the perceived necessity of possessing academic credentials, over 98 percent of South Koreans between the ages of 25 and 34 have graduated from either a junior college or university, the highest rate in the world —so there is always a large pool of well-qualified applicants for every position. As a result, companies create extra criteria, such as English test scores, by which to judge candidates.

South Korea’s response to this sort of vulnerability has been to enact a “real name” law, by which Internet users must enter their national ID numbers when registering for forums. This requirement leaves users open to being exposed and possibly sued. For celebrities terrified of having their honor attacked, it is a godsend.

Because of han and heung, such classic East Asian stereotypes as inscrutability and extreme self-control are rendered absolutely false when applied to Korea. This is a country where people wear their heart on their sleeve.

Shinparam may have a Buddhist underpinning as well as a shamanist one, since it involves the acceptance of suffering (or the fact that “life is pain”) and seeing that the way around this is through transcendence rather than the pursuit of revenge or correction.

Drinking (and drunkenness) is more socially acceptable here than in neighboring countries like Japan, as well as most of the rest of the world. According to the World Health Organization, South Koreans drink slightly more alcohol than the Irish and the British and almost double the amount drunk by the Japanese, on average.

A survey by the Peace Research Institute showed that 30 percent of South Koreans now agree with the statement “In the past they [North Koreans] were our ethnic brethren, but now I am beginning to feel that they are foreigners.” Another 9 percent went so far as to say, or agree with the statement: “North Koreans are as foreign as Chinese.” It is often assumed that the greatest obstacles to reunification are the presence of two very different political systems and ideologies on either side of the border, and the influence of China over the North. However, the ultimate stumbling block to reunification may prove to be a simple lack of desire for it.

Working for a Korean firm, particularly a chaebol, was never a matter of merely exchanging one’s time and labor for money. Firms like Hyundai wanted to hire young men who would sacrifice themselves for the overall corporate cause and stay with the firm throughout their careers.

devote themselves to their companies and think of their companies as being like family, there was no real “jobs for life” culture in exchange, as there were in Japan. Workers were expected to be loyal to their employers rather than move from place to place as is the norm in Western countries. Their loyalty was not fully reciprocated by the company, though, as most workers were forced into retirement around the age of fifty. Unless a worker was promoted to an executive role, it was expected that he would take retirement without making a fuss. Partly this was because older workers earn higher salaries than younger ones, but age hierarchy was also an issue. In Korea, one is expected to show respect to one’s elders. It is very uncomfortable for all concerned when a forty-five-year-old boss has to deal with a fifty-five-year-old subordinate. There was even an expression that crystallized the company point of view: “oryukdo” is a contraction of the Korean words that mean, “If you’re here in your fifties or sixties, you’re a thief.” Forced early retirement still exists, and as a result there are many middle-aged and old men scraping a living driving taxis, operating small convenience stores, or working as security guards.

Though South Koreans worked long hours and faced enforced early retirement, there had at been least a tacit understanding that by joining a Korean firm, one would have a long, stable career. That changed in the wake of 1997. The implicit contract of job security was gone. Even Hyundai, which, more than any other chaebol, inculcated its workers to believe in the company-as-family mindset, was not immune to layoffs.

One Hyundai Capital employee says, “Some of our staff are loyal, but not me. In fact I’m grateful to those loyal guys, because it means less competition for me if I apply for other jobs.” He is not alone: a recruitment agency, Job Korea, found that 70 percent of Korean workers would now switch employers if given a better offer; only 12 percent of men and 4.6 percent of women stated they were “truly loyal” to their firm. This would have been imaginable in 1980 or 1990.

Another survey by TNS in 2003 showed that Korean employees were in fact the second most disloyal out of a cohort of thirty-five different industrialized countries. At the time, this was taken as a surprise, as Korean workers were still perceived to be company loyalists. According to the survey, women and older male employees were especially disloyal. This is because Korean firms still discriminate against both these groups.

Only 48 percent of Koreans would recommend their employer as a place to work, compared to 75 percent of employees worldwide, according to TNS. It is commonly believed by

This kind of zero-sum demand—one that will hinder other applicants—is emblematic of the two-tier labor system that has come into being since 1997. Those with long-term work contracts at highly profitable companies like Hyundai Motor are extremely well protected; meanwhile, the rest of the workforce faces poor job security.

Among products promoted in the name of romance are “couple rings,” which are a step down from engagement rings but still signal to the world that a person is attached. A rather bizarre fashion trend is known as “couple style,” in which the besotted pair dress in the same way: if the woman wears a red sweater and blue jeans, the man will also wear a red sweater and blue jeans.

As reported in the New York Times as well as many domestic newspapers, there are doctors in South Korea who offer special tongue surgery that some people believe will lead to better English pronunciation. The operation is called lingual frenectomy and involves cutting through the part of the tongue connected to the bottom of the mouth to free the tongue up more.

The heartland of this new elite is the Gangnam area of Seoul. Children from Gangnam and, increasingly, an area of western Seoul called Mokdong have great advantages over others.

Tellingly, Gangnam also contains 70 percent of Seoul’s plastic surgery clinics but only 5.5 percent of its population.

women do not want to marry poor farmers is resulting in a huge influx of Vietnamese, rural Chinese, and Filipina women whose families can only dream of the kind of wealth even the poorest Korean men possess. It is very much like the “mail-order bride” phenomenon found in the West, but on a grand scale: in 2009, 43.5 percent of male farmers marrying in South Jeolla Province tied the knot with foreigners, the vast majority from one of the three aforementioned countries.

The reason is demographic: South Korea’s boom generation of the late 1950s and 1960s is of course aging, while today’s Korean women have on average just 1.2 babies each over the course of their lives. The consequence of these two trends is that South Korea is now the most rapidly aging country in the world. By 2026, it will be a “super-aged society,” according to the UN.

“Per year, we increased our spending on promoting traditional Korean culture by around 2 percent but increased our spending on K-pop by 12 percent.” This weighting reflects the philosophy of Korean governments since the days of Park Chung-hee that part of its role is to choose potential “national champions” and that it is a correct strategy to support them at the expense of others, as General Park did with Samsung and Hyundai.