It used to be incredibly poor but within some few decades it's become one of the strongest economies in the world
I'm having trouble finding Austrian perspectives, so anything would be appreciated
TheFinest:It used to be incredibly poor but within some few decades it's become one of the strongest economies in the world. I'm having trouble finding Austrian perspectives, so anything would be appreciated
Asian Tiger or Asian Kitten?
South Korea & Taiwan.
Debunking a Reported Defiance of Economic Law in South Korea
PostWar South Korean Economy
North Korea: a Land of Milk and Honey (not South, but still)
This is a huge question, and one that I think can be too easily tossed aside by focusing on how interventionist this economy really is. I think it's important to remember that intervention can take a long time to strangle out the good in a market, and here is some of the good as I see it:
(1) Interest rates on basic savings' accounts here are not uncommonly 4-6%, which I think accounts partly for the unusually high savings' rates here
(2) The cost of living is such that the average national income (about $30k US) is more than enough to support an active family of 3 on a single income without living hand-to-mouth. Compare that to the US.
(3) 7-10% growth rates mean that the material quality of life doubles every 7-10 years, so to arrest that rise requires a lot of government interference (and believe me they're becoming more effective at being more destructive). Compare that to the 2-3% growth of the US--meanign that it takes 23-35 years to double the material quality of life (assuming that inflation is properly accounted for against that growth) and it becomes a lot clearer how far those few extra % points really carry the day.
(4) The social saftey net is still comparatively small in Korea, but that appears to be changing, and rapidly, unfortunately.
(5) Income and Corporate taxes are very low here, and while there seems to be some kind of new sales tax floating around, very few vendors actually include it.
(6) Businesses don't all need licenses to operate--plenty of people in local markets can just set up and sell year round. If they don't have money to rent a little spot, they sometimes set up shop after hours or operate out of their vans etc without any hassle from the authorities. In other words, little Mom and Pop outfits that support only a few people are left to their own devices, which is a hell of a lot better than nickle-and-diming them to death with licenses and fees that put them out of business and force them into unemployment or onto welfare.
That's all I can think of off hand...
People work hard, save instead of spending beyond their means and the state doesn't do any over the board madness.
Their inflation is at 4% though...
That's true, but supposedly the listed growth % takes that into account as a matter of course (that's why I noted above: "assuming that inflation is properly accounted for against that growth"). Whatever the case, this was basically a third world country 30 years ago, so the balance of growth over inflation is pretty tangible.
http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates What does the SK individual tax rate part mean? Seems pretty rigid going from 6 to 15 to 24, etc. and the reason I even brought up this topic is because one of their most well known economist I believed claimed that SK got the way it did not because of free markets but because of protectionism and government control, and believes that the success of his country deals a deathblow to total free markets http://en.wikipedia.org/wiki/Ha-Joon_Chang
Statist friend of mine showed me this video
It basically says that Chung-hee's government investing in major industries is what made it rise so fast along with foreign aid. My friend pretty much used this video as proof that capitalism when properly overseen and invested by government can be incredibly beneficial. He says that a country that poor couldn't have risen so fast without it. I think he mentioned Singapore being the same way.
Belated thanks to NEPHiLiX and JJ btw, I appreciate the help and insight thus far.
I'm hoping to go over to South Korea to teach in a couple years if all works out so I have a deep interest in learning a great deal about this country before then!
Look at the savings rates of east asian places like that compared to elsewhere. It's a simple case that despite other factors they have a huge advantage in the long run based on cultural tradition.