On January 25, Consul General CHANG, See-jeong delivered a lecture in the Moot Court to discuss German and Korean economic models and explore how the two exceptional cases from global economic history can learn from one another.
Following an introduction by Bucerius Law School Dean Prof. Dr. Dr. hc. Katharina Boele-Woelki and the President of the Federation of Commercial Enterprises of Hamburg and Schleswig-Holstein (UVNord), Ulrich Wachholtz, Chang addressed the following points in his one-hour lecture.
At present, market economies are quite diverse. In addition to the neo-liberal Anglo-American model whose ideal embodies the American dream, there exists the German model, which is based upon a coordinated market economy. The collision of these two models is expressed in the Brexit debate, the proposed referendum on withdrawal of United Kingdom membership from the European Union.
In the period after the First and Second World Wars, the German economy grew at breathtaking speed—114 percent in the 1950s. Following Agenda 2010, conversations have gone so far as to mention a second “economic miracle.” At the root of this lies the Rhenish economic model that is characterized less by modern technology than by vocational training, technical refinement and incremental adjustment.
Continued development of the German model is expected in spite of current challenges such as demographic changes, the influx of refugees and current lack of investment. During reunification as well as the last financial crisis, the German model has proven its effectiveness. It is crucial, however, that the model adapt itself to the cross-sector competition of Industry 4.0.
The Korean model, which includes an export-oriented growth policy, is a successful example of limited competition. Within a span of 30 years beginning in the early 1960s, Korea experienced rapid growth (an average of 8 percent per year), became a member of the OECD and G20 and has reached a high trading volume. According to the "Better Policies" series of the OECD, Korea has managed to increase its level of prosperity in such a way as to gain a place among top-ranking member states. There remains, however, a need for continued innovation and increased competition.
Korean and, more generally, East Asian models that have long thrived from limited competition cannot endure the era of free trade and globalization brought about during the 21st century. Change is called for to bolster innovation and competition.
