< Alternative Economic Model for Korean Progress – The ‘European Model’ is on the verge of collapse.>

Looking back on the history of Korean progress, the ‘economic alternative model’ has been steadily pursued. The summary by historical period is as follows.

◆ 1960s-70s – National Economic Theory and Taiwan Model

In the 1960s and 1970s, Korean progressive forces were strongly influenced by . The core of Park Chung-hee’s economics was export + large corporation + unbalanced development, and the national economic theory emphasized domestic demand + SMEs + balanced development.

At that time, the country close to the economic alternative to Korean progress was the Taiwan model. This is because the Taiwan model at that time was a model centered on SMEs compared to Korea. On the other hand, Korea was a model centered on large corporations.

However, since the 2010s, when TSMC became important, none of the capitalist advanced countries, including Taiwan, is centered on ‘small and medium-sized enterprises’. Small and medium-sized enterprises are also generally activated when ‘large corporations’ play a pivotal role in the global economy, including Germany.

◆ 1980s – NL/PD and Soviet model

After Gwangju in 1980, the student movement became radical and actively accepted socialist theory. South Korea’s operational control lies with the United States, which began with the question of whether Chun Doo-hwan and Roh Tae-woo could have staged a coup without the consent of the United States.

Eventually, the US tentatively concludes that it acts as a ‘backbench’ for Chun Doo-hwan’s military, and the anti-dictatorship theory develops into an anti-American-anti-capitalist theory.

At that time, the alternative to Korean progress became the or . The former was the PD, and the latter was the NL. Both PD and NL were based on socialist economic theory.

The core of socialist economic theory was to pursue nationalization and planned economy, seeing goods, markets, money, finance, and private property as objects of abolition. That was the core of the . However, in 1991, the Soviet Union collapsed.

◆ 1990-2000s and later – European models

The ‘socialist theory’ completely lost its power when it encountered the collapse of East Germany in 1989, the sequential collapse of communist countries in Eastern Europe in 1990, and the collapse of the Soviet Union in 1991. It was a period of great ideological confusion for the Korean progressive, who had just begun to study socialism.

After the collapse of the Soviet Union, the majority of Korean progress proceeds in the direction of accepting the . The European model itself was a liberal democratic model strongly influenced by socialism.

For those from the student movement (86/97 generations), who were strongly influenced by NL/PD, the “American Model” had a great emotional rejection. However, the European model relatively had less emotional rejection.

This is because the European model was a capitalist model ‘mixed with socialist colors’. From a psychological perspective, the European model was less ‘changed’.

The European model was the model. This was the biggest difference between the European and American models.

Since the 1990s, social democracy and welfare state discourse have become active. As an extension of that, a progressive party was formed. In January 2000, the Democratic Labor Party was founded, and after receiving about 1 million votes in the 2002 presidential election, it will enter the floor for the first time in the 2004 general election.

The entry of the progressive party into the floor also affects the institutional parties, and free school meals emerged as a key issue in the 2010 local elections. After the issue of free school meals, Korean politics experiences ‘welfare being the ticket’. You experience the mainstreamization of welfare politics.

As a result, in relation to social democracy and the welfare state, ① ideological discourse → ② political change → ③ policy change sequentially. ① Social democracy-welfare state discourse → ② emergence of progressive parties and partial acceptance of institutional rights → ③ welfare policies have become mainstream.

At that time, I was also one of the people who spread the “social democracy, welfare state discourse”. At that time, I was one of the key activists of the ‘socialist faction’ within the Democratic Labor Party and also served as a policy member for the welfare state society.

◆ 2008 Global Financial Crisis – Significant Decline in the

The European model was ideologically social democracy and, in reality, a welfare state. However, it has been rapidly declining since the 2008 global financial crisis.

The European model seems to have at least reached its “expiration date” limit. Since the global financial crisis in 2008, the gap between U.S. and EU GDP has been widening “as we go.” (See the attached [Figure-1] and [Figure-2].)

In terms of GDP comparison, the European Union has also been reversed by China. They are competing with each other on a similar level.

There are several diagnoses of causes for the decline of the European model. The failure of digital transformation, excessive influence on trade unions, lack of adaptability to economic environmental changes, excessive regulation, and rigidity in fiscal and exchange rate policies caused by the European single currency are pointed out.

The point we should pay attention to here is the point of widening the gap between the United States and Europe. Prior to the 2008 global financial crisis, both the European Union’s GDP and GDP per capita moved in a similar trend to that of the United States. The breakthrough point in which the gap widens rapidly is after the 2008 global financial crisis.

This suggests that the European model lags behind the U.S. and Chinese models in terms of resilience to economic crises and adaptability to environmental changes. This is why the excessive influence of trade unions, excessive regulation, and contradictions in the European single currency (=Russia) system are pointed out as the cause of the decline of the European model.

Of course, soaring energy prices, rising prices, and nuclear power plants after the Russia-Ukraine war in 2022 are also pointed out as reasons for reducing the competitiveness of the European model and Germany. Nevertheless, it should be noted that the US model and the have been since the 2008 global financial crisis.

Some emphasize “diversity within the European model”, and some emphasize that the European model is not ‘the same model’. It is a criticism that is reasonable enough, and there are many points to be engraved.

In terms of GDP, the largest countries in Europe are ① Germany ② Britain ③ France ④ Italy ⑤ Spain ⑥ the Netherlands. The European Union had 28 countries