If you’re reading this, then the news that Koreans now spend more and save less than Americans may well come as a bombshell.
I base that on the assumption that, as an English speaker interested in Korean sociology, most of your earliest and most-deeply held views on the subject were likely gained from English books. Nothing wrong with that of course, but in a society as rapidly changing as Korea, these can get dated rather quickly.
In turn, if one’s original views are not regularly updated by practical experience of the country and/or Korean-language sources, then they can easily become ossified. Alternatively, they can become hostage to those Koreans with English skills, whom — with no offense intended to the Korean journalists I very much rely on as a blogger — are generally well educated and more affluent than average Koreans, and undoubtedly have class-based agendas to the ways they present Korea to the outside world.
I realize that I’m very much projecting here. But then so fundamental has Korean’s high savings rate been to its postwar economic development, that I’d wager most readers shared my image of Koreans as relatively frugal (as a whole), either by reading that explicitly for themselves or by inferring it from other aspects of Korean sociology. Indeed, this ostensibly dry economic factoid had a profoundly gendered impact in the Korean context.
With apologies for the following necessarily simplistic account, a high savings rate was the natural consequence of the fact that, until the Asian Financial Crisis of 1997-1998, Korea had the most “salarymen” in the world (despite the term being associated more with Japan). As salarymen generally worked at the same company for most of their lives, and made enough of an income and side-benefits to provide for their wives and children, then there was only a minimal welfare state to provide for them should the need arise: hence, these savings provided the safety net that the state didn’t (as well as investment funds for Korean business).
Which brings us to the graph on the right, which shows that the books were not wrong. It would have been very difficult for historiography to have caught up with the massive drop in 1999 however, which the Washington Post article describes as “the steepest savings decline in the developed world.” In hindsight though, somehow Korean society had to pay for its huge transition from having the most salarymen in the world in 1997 to having the most irregular, part-time workers in the OECD less than a decade later. And the money certainly wasn’t obtained by women entering the workforce either, as despite having the lowest rate of women’s participation in the workforce in the OECD in 1997 – so the potential certainly existed – it has resolutely stayed at the same level ever since (see here and #2 here), not unexpected given that women were explicitly targeted for lay-offs as part of the economic recovery.
But this process of “housewifization” is the natural corollary of a male breadwinner system, and has in fact occurred in every developed capitalist economy as women became more valuable as consumers than as factory workers: Korea is merely the most extreme example. Hence prominent 1960s feminist Betty Friedan’s thoughts on the impact on women themselves still have a certain poignancy for Korean women even today:
Why is it never said that the really crucial function…that women serve as housewives is to buy more things for the house… somehow, somewhere, someone must have figured out that women will buy more things if they are kept in the underused, nameless-yearning, energy-to-get-rid-of state of being housewives…it would take a pretty clever economist to figure out what would keep our affluent economy going if the housewife market began to fall off (The Feminine Mystique, 1963, p. 197).
Friedan also pointed out that this consumption was a source of false autonomy, and that marketers in women’s magazines:
“…manipulated housewives into becoming insecure consumers of household products, by giving the housewife a ’sense of achievement’ to compensate her for a task that was ‘endless’ and ‘time-consuming’ (Oh & Frith, 2006, p. 10*).”
(See here for a discussion of the above advertisement)
In this vein, one does not have to subscribe to a belief in, say, a vast patriarchal conspiracy or historical-determinism to acknowledge that housewifization — and the accompanying cultural changes – have capitalist imperatives. What makes Korea (and other “developmental states“) unique, however, was that from the outset economic growth was explicitly conflated with national-security and anti-communism by the Park Chung-hee (박정희) regime of 1961-1979. Hence upon reaching a consumer-driven stage of development, the Korean government promoted consumerism with a zeal more akin to what one would expect from a communist regime (see this series for an in-depth look at this).
Part of that was the slogan “Consumption is Virtuous” that I originally planned to use in the post title, which comes from a translation of a late-1970s Korean newspaper report I read at university, and indeed the original Korean – “소비가 미덕이다” – rings a very faint bell in my wife’s mind. And given that Korea’s intense economic nationalism and high tariff barriers largely remain, then this is very much a phase that Koreans haven’t really left yet either, as reflected in the common theme to both of the advertisements in this post and the following commercial, which as I put here as being their:
…hyperreal associations of apartments and modern appliances with modernity and civilization, [so intense as to be] a huge qualitative and mental leap beyond any such links in the minds of Westerners. Or rather a leap backward to 1950s and 1960s, because, as with so much about Korean society, perhaps the Western concepts of consumption during and immediately after suburbanization there are a much more appropriate parallel.
And, from this related post, an apt demonstration of the fact that changing social mores are often difficult to disentangle from the capitalist imperative to create false needs for new products:
On that note, I accept (again) that the above is a very simplistic account of the history of the Korea economy, and if you’re after a more detailed economic discussion of this news about the savings rate specifically, then the comments to this post are a good place to start. I also accept that Koreans by no means consume to the extent that they do simply because of government policies, and so by all means read the additional reasons and examples mentioned in the Washington Post article. To which I would add this post and the following article from an old Korea Herald I’ve scanned, which explain why Koreans continue to buy so many large cars despite living in one of the most mountainous, densely-populated, best-served with public transport, and smallest countries in the world:
Consider also this excerpt from p. 103 of Social Change in Korea, published in early 2008:
Back in the 1980s, owning a car – any car – was a status symbol. Now, size matters. Among the sedans sold before 2000, there were more subcompact or compact cars than mid-size or larger models. Since then, mid- and full-sized sedans have come to occupy a greater market share than smaller ones. Only 16.3% of the sedans sold in 2006 (as of July) were smaller models, as compared to Japan’s 61.2%, Italy’s 55.3%, Britain’s 52.1% and Germany’s 23.3%. The United States is the only nation among car-manufacturing countries that sells a smaller proportion of small cars than Korea (emphasis added).
Considering the surge in oil prices at the time that would have been written, and the travails of the US car industry just a little later, then this is probably no longer the case, and an apt symbol of Koreans displacing Americans as the “avatars of consumerism gone mad.”
In hindsight though, this shift is less of a surprise and more the logical culmination of Korea’s particular path of capitalist development. Unfortunately, like the Washington Post noted, is also part and parcel of a society currently under extraordinary stress, as is Korea’s steadily deteriorating economy. But one wonders when Koreans will realize that they can no longer afford to fritter their money away on mere status symbols.
(For all posts in the “Korean Sociological Image” series, see here)
*Oh, Hyun Sook. and Frith, Katherine (2006) “International Women’s Magazines and Transnational Advertising in South Korea”, Paper presented at the annual meeting of the International Communication Association, Dresden International Congress Centre, Dresden, Germany, Jun 16, 2006.