How Korea Found the American Dream
Readers of this blog know we love a good story about how the world works. Culture drives people, and economics drive culture. Follow the money and you can usually understand how the world is changing, and what the future will look like.
Which is why it’s time to look at South Korea, a country you’ll be hearing about much more. Korea is one of few democratic and capitalist countries and Asia, and while the eyes of international media weren’t watching, it has managed to balloon. Since 2000, South Korea has doubled its per capita GDP and is on target to do it again even quicker, a spurt no other non-oil-striking country can boast. In five years, once you control for purchasing power parity, Korea will have a GDP per capita of $47,134, giving it a higher standard of living than Italy, Japan, or Spain, and on par with France and the U.K. (The U.S. GDP is projected to be around $67,000.)
This comes, of course, from a country that 60 years ago was crumbling. The Korean War left the country severely depleted, having killed 1 million people and demolishing large chunks of infrastructure. Even today, technically, South and North Korea are still at war, but the two have evolved almost into separate planets, with differences most vividly on display at night from space.
How did South Korea do it? A nice confluence of events began with the war, which wiped the country clean of entrenched industries and political traditions. A report from Quartz notes that the U.S. spent billions of dollars to quickly improve infrastructure, and state-led industries like manufacturing and electronics initially helped Korea boom in those markets and export abroad. It helped that the war never really ended, keeping people motivated on a singular nationalistic goal and boosting the defense industry. And that’s where the post-war American-style dream comes in. A newly empowered generation was motivated to work extremely hard for the future it wanted.
On its current path, Korea will continue to attract money, power, and tourism. It has, after all, one of the lowest rates of unemployment in the world—3.0 percent. The big question is whether it can control the region’s instability. A flood of refugees from North Korea would make its per capita GDP plummet. Low birthrates and a high average age could make that growth taper off in the coming decades. And working so hard isn’t good for the human psyche. Just ask their schoolchildren who are, according to one report, some of the least happy in the world. Hard work was the former struggle. Making it last is the new one.
