The Changing Economic Models of Chaebol Capitalism
In late November, 1997, yet another horde of invaders landed on the Korean soil, this time wearing three-piece suits and carrying briefcases. These "invaders" were a large group of numbers crunchers from the International Monetary Fund and their target was the infusion of up to $55 billion in IMF funds to the ravaged Korean economy. Richard Lacayo, in the December 3, 1997 issue of Time Magazine points out: "Just a few weeks before they arrived, Seoul had been calling the idea of an IMF rescue unthinkable. Now the unthinkable is fully under way, and the fund's inspectors have become supervisors of the world's 11th largest economy" (Lacayo, 1997, 37). The real target of the IMF, despite those headlines, is nothing less than the Korean chaebol. Richard Hornik, in the same issue, points the finger of blame squarely on the top-down management structure that characterizes the Korean chaebol. He finds that "this model bred complacency, cronyism and corruption. Isolated from public opinion, just as they insulated bankers and businessmen from the market forces... the iron triangle of bureaucrats, businessmen and bankers... led inevitably to decisions based on personal relations" (Hornik, 1997, 40).
In the Cold War and into the 1960s, the term "Southeast Asia Domino Theory" was often used in the headlines of media around the world. During that period of time, the alleged enemy was Communism. As the argument went, "If one country topples to Communism, the other Asian countries will topple like dominoes." Today, the domino theory is being resurrected in the world press, but this time the perceived threat is Communism's sometimes unruly twin, Capitalism, or to be more specific, a hybrid known as "Chaebol capitalism" (Chaebol economy at stake..., 1997, 24).
In addition to the economic crimes almost daily blamed on the chaebols, the South Korean economy has been the focus of wo...