Friday, February 23, 2018

Korea hates a free market

There are times when I think Korea has pockets of pure, raw capitalism that put the American version of capitalism to shame. A foray into Namdaemun Market, where the marketing is in-your-face (you've got actual guys standing on carts, shouting down at you) and the prices are generally negotiable, is proof enough of that. But when the Korean zeal for capitalism intersects with Korean xenophobia, Koreans feel a sudden need to roll back the free market in favor of a less free, more protectionistic stance that drives out foreign competition. I think Koreans secretly fear what might happen if they opened the South Korean market to foreign products and services: they'd have their asses handed to them. While Koreans are perfectly capable of global-level quality (see Korea's IT sector, for example, or its car and shipbuilding industries), quite a few companies, farms, and other entities crank out crappy, substandard goods and services that would never be able to compete on the global stage. I see this all the time in my everyday life: poorly made kitchen utensils and plasticware, easily worn-out clothing, shoddy wiring and plumbing inside older (and newer!) buildings, and so on.

As I've written before, Koreans tend to Koreanize. When the ride service Uber tried to penetrate the Korean market, Koreans responded by creating the Kakao Taxi app (now known more generically as Kakao T), which operates in a way that's similar to Uber. Rather than allowing in foreign competitors, Koreans would rather reinvent the wheel, thus permitting them (1) to feel a certain nationalistic pride in knowing that they are capable to creating a version of someone else's product/service and (2) to keep the foreign invader outside the safe space of the peninsula. As I mentioned in the above-linked post, when Doritos came to Korea, Koreans immediately set about creating their own triangular, faux-cheesy corn chips. While Korea didn't kick Doritos out of the market, the country did ensure that Doritos would never get as large of a market share as it desired. The old iRiver was a response to the iPod, and Samsung is constantly creating new cell phones to compete with the Apple iPhone. Sometimes, when a foreign product or service enters the Korean market, it does well enough to stomp the Korean competition: we almost never hear about CyWorld these days, thanks to the amazing success of Facebook in the Land of the Morning Calm, and while Samsung cell phones have a huge market share in Korea, so do Apple iPhones.

By closing itself off from the world, Korea betrays and underserves its own consumers: Korean electronics are of high quality, for example, but they cost about twice as much as the exact same products in the United States (you read that right: a Samsung HDTV might cost 2X in Korea while costing only X in the States). I've heard of Korean families who visit the US and make their electronics purchases there, despite voltage-compatibility issues (we use 110V sockets; Koreans, like Europeans, follow a 220V standard). From a consumer's point of view, Uber would have been a cheaper option than regular Korean taxis, but Uber is now gone, having been successfully shooed out of the ROK.

This article, however, suggests that taxi drivers may have something new to worry about: ride-share services that are home-grown. Joe McPherson gleefully tweeted that this is karma coming back around to bite this sector of the market:

For every asshole taxi driver that refused a ride, refused to stop, drove away as I was opening a door, tried to cheat me, or even stopped to argue with a bus driver while the fare was running--Karma's a bitch, huh?

I'm with Joe on this. I feel a certain amount of Schadenfreude because, like Joe, I've had to put up with my share of taxi-ajeossi rudeness over the years. True, I've written before that my experience with taxis hasn't been terrible in Korea, but this isn't to say that it's been perfect. I still get the occasional driver who ignores my attempts to flag him down; in such moments, I wish I had a gun to shoot out the fucker's car tires.

What's interesting is what the article says about the taxi lobby in Korea: it's vociferous and energetic—this despite the fact that the average age of a Seoul cabbie is now sixty. Step into any given taxi, and it's likely that an old man is driving it. As energetic as this lobby might be, if the average age of taxi drivers is that high, then we're looking at a dying breed, and taxis will eventually have to make way for other ride-service paradigms.

Like it or not, the free market won't be silenced, and it's a delicious irony that, given Korea's constant, desperate efforts to shut out foreign intrusion into the peninsular market, Adam Smith's invisible hand has nevertheless arisen from within to bitch-slap a sector of South Korea's economy. Ha! I wish Luxi and Poolus, the new ride-sharing services, great success.

1 comment:

Charles said...

It's common practice among academics going to the US for sabbaticals to buy Korean cars at half the price and bring them back to Korea.