Understanding the Differences between North and South Korea’s Economic Systems
One of the biggest considerations when unifying the two countries is understanding how different both their economic systems are. Whether one side adopts the system of the other or there being a compromise between the two systems is something to consider when proposing a system of mutual economic development.
Comparison of Economies between North and South Korea, source
South Korea’s Economic System
South Korea’s growth rate for GDP, source
South Korea is very interesting in that I like to think of South Korea as economically capitalist, but has a socialist social structure. In a fast-paced developing economy like South Korea, they adopt an East Asian model of capitalism, where their respective government invests in certain sectors of the economy in order to stimulate the growth of new industries in the private sector.
Other key characteristics of this kind of economy include:
* direct support for state-owned enterprises,
* state control of finance,
* a lofty rate of savings,
* and a rather high dependency on the export market for growth.
Specific to South Korea in comparison to the United States, South Korea highly values high educational standards, a high rate of savings and investments, and asserts a more export-oriented policy. An economic system like this is vastly different from a centrally planned economy, where the national government would take advantage of the resources that they have.
North Korea’s Economic System
Unlike South Korea’s capitalistic economy, North Korea has more of a command economy, where the country’s government regulates and controls the distribution, production, and prices as a communist society. In comparison to planned economies, where investment and the allocation of capital goods take place according to economy-wide economic and production plans, command economies use similar regulations, but have substantial public ownership of industry, therefore command economies can be considered planned economies, but never the opposite.
Command economies are more associated with authoritarian governmental institutions, where they determine what goods should be produced, how much of those goods should be produced, and the price that these goods should be sold at. This system also designates its own national priorities, such as when the country should prepare for war, and when / how the country should generate its economic growth.
That Compromise between the Economic Institutions
I feel that China has an interesting economic system, where they transitioned from having a command economy to more of a mixed economy, where it is a planned economy where it allows for privatized ownership for certain means of production. China has that fine balance of government-owned businesses, in addition to supervised private businesses. I believe that this contributes greatly to China’s economic success. In addition to looking at China’s system of an economic institution as a precedent, I also have looked up a political theory called Agonistic Pluralism.
What is Agonistic Pluralism?
Essentially, Agonistic Pluralism is a political theory that stresses the potential outcomes that can be positive in select forms of political conflict, where this theory has Marxist-like views on both democracy and communism. There is a thesis by Chantal Mouffe that argues how current democratic theory needs to acknowledge the inevitability of antagonism and the impossibility of reaching a fully inclusive rational consensus, and agonistic pluralism can can assist in provide a solution for several problems that democratic politics face today. The idea of a truly idealistic democratic society is the creation of a consensus, and that consensus is possible if people are only able to leave aside their particular interests and think as rational beings.
- Deliberative Democracy or Agonistic Pluralism, by Chantal Mouffe
- Wikipedia Article on Agonism
- Wikipedia Article on Marxism
- Wikipedia Article on Materialism