There goes Hankyung again, a strange conference on Deaton was held.

In my last two posts, I introduced issues brought up by Gong-hoe Kim regarding manipulated translation on Angus Deaton's book <The Great Escape> by Hankyung BP, their hypocritical reaction to Kim's argument, claiming that there may be a connection between Corporate-driven organizations, newspaper, and a publishing house which was accused of such manipulation WHICH SHOULD BE KNOWN TO ANY SCHOLARS OR ECONOMISTS ABROAD, WHO CAN BE NEXT VICTIM OF MANIPULATION.

I hoped that their 'Free Economy Brigade' came clean of their guilt on publication ethics, or at least stop abusing Deaton's arguments to denigrate Piketty's study on inequality. But on Nov. 3, they went into whole different stage of forging a scholar's lifelong studies as something different; a cancelled symposium suddenly resurrected out of nowhere, and in no time, articles containing its key messages struck like a tropical squall in the right-wing media.

This article attempts to track these rather strange series of incidents, and further reveal the detailed connection between corporate and its various agencies, such as suspicious civilian groups and its think tank, news media and their subsidiary publishing company which serves as a factory of refences for this 'Free economy' ideology, or fantasy.
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Korea Economic Research Institute(KERI) was going to hold a symposium <<The meaning of Angus Deaton's <The Great Escape> and its implications on Korean Economy>> on Nov. 3, at FKI Conference Center, where FKI is abbreviate for Federation of Korean Industries, an interest group of South Korean corporates. Below is the words from their invitation.

In his <The Great Escape>, he [Deaton] analyzes massive and real-world statistics data, concluding that humanity has won a great achievement, escape from poverty and disease, and it is solely by economic growth resulting from humanity's relentless endeavor. He goes on to stress out that it is growth which freed mankind from poverty and disease, lead them to happiness; not distribution. His such claim exactly describes Korea's triumphant growth from bleak poverty into the threshold of world economy leaders.

This stands as an exact opposite from Thomas Piketty's <The Capital in the twenty-first Century>, which created an uproar in S. Korea for Piketty asked for progressive tax on capital and income because growth does not improve distribution, but fixates the inheritance structure. In S. Korea where demand for distribution and welfare prevails even though the momentum for growth is plummeting, Deaton's argument stands out monumentally.

This invitation is now hard to find, for KERI cancelled the symposium on Oct. 29, after debates and concern about manipulation done on Deaton's book turned out to be a serious one. It's just rational for them to evade such risk on their reputation in holding such a conference like that. Is that right? ... No. not this time.

IMES, an institute whose homepage suddenly resurrected from 2-year cryogenic sleep for this symposium, took over and ran another symposium under exactly same name. It's not only name that is identical, but the content of the symposium itself resembles each other very much. Below is the comparison between two programs. Left is KERIs, and right is IMES' [links to their program]

1. Opening statement  → Not Available on IMES program
• Byeong-rak Song (Chairman, Center of Freedom and Creativeness, which happens to be operating under FKI)
• Kyu-jae Jeong (Editor in chief, Hankyung, who you may be familiar with from my last post on his fanatic rant).
2. Session I : Presentation
• Key Messages in <The Great Escape> by Dong-geun Cho (Professor on Economics, Myungji Univ. and chairman of IMES)
  →  Name of the keynote not available in IMES program, but lecturer is the same.
• <The Great Escape> and the Korean Economy by Jeong-geun Oh (Fellow researcher, KERI
  →  Name of the keynote not available in IMES program, but lecturer is the same.


3. Session II : Discussion
   
• Moderator : Jeong-geun Oh (same as above, Same on both program)
• Panels :
  - Jung-sub Shin (Professor on Ethics, Kangwon Univ., Same on both program)
  - Chang-hyeon Yoon (Professor on Management, University of Seoul, Same on both program)
  - Jin-kwon Hyun (Chairman, Free economy institute, as seen on my previous post, Same on both program)
  - Dong-geun Cho (same as above, only on KERI program)

Even though the program seems to be very same, one thing was very different in these two symposiums; its SWIFTNESS. The announcement was posted in 10:40, Nov. 3. in IMES homepage and Citizens Union for Better Society(CUBS, under which IMES is operating). The symposium itself was held the same day at 14:30, and in 18:45, two articles regarding this symposium's key findings were already posted in Hankyung. If the programs were the same, IMES symposium would have ended on 17:30. Two articles were finished, ran through the editorial desk, graphics were made, posted to web in mere 75 minutes. A sure Blitzkrieg.
  
Two points have to be made. 1) Free Economy Institute and CUBS shares agenda such as; Strong support on loosened regulation, hatred upon labor union (especially Teacher's Union, which was outlawed by this government), pro-corporate issue making and education of such, abolishing government-certified textbooks and introducing single government-issued textbook in history education. 2) This pro-corporate issue surprisingly resembles FKI, Hankyung, and Hankyung BP's agenda. By coincidence, the last caused a turmoil by distorting arguments of Deaton by wrongfully translating and manipulating his text. Only the magnitude of provocativeness is different among them.

You can wonder and ask, how this mere coincidence be an evidence of their fraternity, in forefronts of 'Free Economy Brigade'? I'll answer to that question as, there is no evidence yet, like the relation between Americans For Prosperity and Koch industries remained hidden before media coverages. Like I did before, I'll translate two articles by Hankyung as before, to show that how pro-corporate ideologue -- not scholars in economics -- are trying to push their issues, to prevail the discourse on economics in Korea.

[Symposium on <The Great Escape>] "Korea is a country of The Great Escape. For the benefit of the poor, growth must go on"

Implication on Korean Economy : Low growth rate causes worse distribution

"'Miracle on the Han River' is THE great escape from poverty and disease"

Jeong-geun Oh, a fellow researcher in KERI said so in symposium <<The meaning of Angus Deaton's <The Great Escape> and its implications on Korean Economy>> held Nov. 3 in the Press Center at Taepyeong-ro, Seoul. He said that "Deaton, professor in Princeton Univ., stressed out in his book that mankind has achieved a great escape in 250 years after industrial revolution, during which dramatic economic growth led to increase in income and life expectancy, resulting in better life quality." and explained "Korea has achieve such escape by economic growth after 1960's".
GDP per capita of Korea in 1962, when first five-year economic development plan was initiated, was $90, about 45% of Myanmar. Last year, GDP per capita was $29,673. In 52 years, it grew approximately 311 times GDP back then.

Oh's analysis is that Korea achieved a great escape within rapid growth, but as growth rate decreased, distribution also got worse. Oh emphasized that "After General Labor Strike in 1987, annual growth rate rose up to 20%, which intrigued fixation in high-salary-low-yield-tendency. For that, Korean companies left Korea." Oh went on saying that "As a result, Korea went into Mid-growth era by 1992". Korea's average annual growth rate 9.5% in 1963~1991, fell down to 5.1% in 1992~2011. This year, it can be low as 2%.

He said that "When growth rate rose by 1%, Gini coefficient, which represents the magnitude of inequality, goes down by 0.3%", and concluded that "regress in growth rate lead to higher Gini coefficient, collapse in the middle clase, resulting in worse distribution scheme." Gini coefficient which was 0.255 in 1990, rose up to 0.308.

Oh emphasized that "To rebound economic growth rate and leap into the league of developed countries, we must succeed in labor reformation and regulation breakdown, to regain momentum for growth via revitalizing investment and foster high-valued service industries" and emphasized that "The most important thing is our strong will to achieve the great escape, to stand up on our feet, again."

Seung-woo Lee,  leeswoo@hankyung.com

Second one even gets worse.

[Symposium on <The Great Escape>] The Pikettian Jealousy mentality will let us fall into poverty again

IMES symposium <<The meaning of Angus Deaton's <The Great Escape> and its implications on Korean Economy>>
There's stark difference in Deaton's diagnosis and prescription from Piketty's
Globalization, Progress in technology gave rise to inequality -- Inequality in system must be fixed VS Inequality is deepened by inheritance -- Taxation on rich must be made;

The symposium to re-visit the argument in the book <The Great Escape> by Angus Deaton, Professor at Princeton Univ. and Nobel laureate of this year. Participants including Dong-geun Cho, Prof. at Myungji Univ. called him as a 'skeptical optimist' who emphasizes the advantage of inequality, while keeping one's eye on negative impact. His view is still on opposite french economist Thomas Piketty's. In Deaton's view, problems of poverty and 'bad inequality' is not solved by heavy taxation on rich people.

In <<The meaning of Angus Deaton's <The Great Escape> and its implications on Korean Economy>>, a symposium held by IMES at Press Center, Nov. 3, focused on the right way to read Deaton. Efforts on finding his key message marched on. Prof. Cho let out a lengthy remark in his keynote announcement about Deaton's 'ladder of progress'; In fifth chapter of his book, Deaton reviewed the changes in America's poverty rates. The rate went down to 22% in 1959 to 11% in 1973, but rebounded to 15% in 2010. Income per capita rose 60% during 1973~2010 period, but it didn't result in reduced poverty rates. For this fact, some argued that the economic growth is not efficient in reducing poverty.

"Systematic emphasis on positive effects of inequality"

But Prof. Cho explained that "Deaton criticized that the poverty standard was set a long time ago" and "his claim is that the other qualitative factors of 'well-being' must be considered". He said that living in Democratic Society, getting education, living in health, etc. also matters. He said that "It is an immovable fact that world has made a significant progress in health, life expectancy and education, by economic growth" and "this is the key message of Deaton's argument".

In discussion, he focused on Deaton's interview right after his award ceremony in which he mentioned the inequality as 'two-edged sword'. According to Deaton, inequality has a right function to motivate people to get better education and find a job. Prof. Cho added that "Deaton may be the first scholar with systematic emphasis on positive effects of inequality".

He pointed out that Deaton didn't lose his alert on negative effects of inequality. Deaton acclaimed Piketty's work on inequality, in Chapter 5 of his book. For this point, some regard Deaton as sharing a view on Piketty's one on inequality. But Prof. Cho stressed out; "That does not mean that Deaton agrees on Piketty, nor their arguments supplement each other." and "there's stark difference in Deaton's diagnosis and prescription from Piketty's."

"That does not mean that Deaton agrees on Piketty, nor their arguments supplement each other."

Piketty claims that inequality gets worse as the profit rate on capital exceeds economic growth rate. On the other hand, Deaton saw that not only the share of top income class is changed, but also its constituents and types is as well. Globalization caused the enormous amount of wealth flow into those with higher level education such as Bill Gates or Steve Jobs.

In discussion, a claim was raised that the solution on inequality resides in resolving 'inequal competition' backed by political lobbyists. Jung-sub Shin, Prof. of ethics at Kangwon Univ. said that "Deaton does not see that the inequality can be solved by ditching progress and focusing on distribution" and "he even opposed on the idea that aid on poor country can reduce poverty." 

Inequality is bad, if the system is unfair

Panels all agreed that the discourses on must not be fragmentary. Chang-hyeon Yoon, Prof. of Management at Univ. of Seoul said that "Who can say we should abolish cars because they let out exhaust gas?" and "Those who simplifies Deaton as a champion of inequality is, just wrong." 

Jin-kwon Hyeon, chairman of Free Economy Institute, said that "We must consider economic growth, inequality, rate of extreme poverty at the same time" and "resolution in poverty and growth in economy cannot be separated." He also said that "The Pikettian Jealousy mentality that the growth is based on poor people's sacrifice will let us fall into poverty again."

Prof. Cho claimed that "The fact is, in last 100 years, 'dramatic concentration of wealth' and 'democratization in quality of life' happened simultaneously" and "I suggest that we focus on the latter." He said that "As we saw on last Financial Crisis, Crisis on economy dramatically deepens inequality" and "there is nothing more important in resolving inequality than accelerating our economic growth in steady rate."

Key messages in Deaton's <The Great Escape>

1. In modern age, Humanity achieved a great escape from the poverty
2. Inequality is a byproduct of growth, and inequality is in itself the momentum of growth
3. There's a bad inequality, where the winner exercises plutocracy to kick the ladder he climbed on
4. Financial instrument which brings higher incomes to certain class, is weapon of mass finance destruction
5. Aid to (poor) countries usually caused bad outcome

Yu-mi Kim, warmfront@hankyung.com

How far will they go? What is their limit of shamelessness? I now start to wonder.