Toxic clauses in the social economic framework bill

Friedrich Hayek, a liberal economist, wrote in his book “The Fatal Conceit” that the word “social” is like a weasel word. Like a weasel, which sucks the yolks of eggs leaving only the empty shell, the word “social” sucks away the substance, leaving the noun that it elaborates unscathed. Dr. Kwon Hyeok-cheol says on the “social economic framework bill,” which some politicians are trying to legislate, “As the `economic,` which “social” elaborates, disappears and is replaced by politics, it will be only a variation of a controlled economy of a socialist country or the resurrection of the government-controlled economy.”

The social economic framework bill, sponsored by Rep. Yoo Seung-min, the ruling Saenuri Party’s floor leader, and Rep. Shin Gye-ryun of the main opposition New Politics Alliance for Democracy Party, is about government support to social economic entities such as social enterprises, cooperatives, and village enterprises. It also contains creating a fund by setting up a social economic committee under the president. A social economy refers to economic activities seeking social values such as cooperation and alliance. However, the definition is not clarified even in developed countries.

If the bill is passed into law, the government and politicians could legally intervene in the market and the freedom of individuals and distribute resources artificially. The central and local governments may give favors to groups that are favorable to them. Cha Gi-hwan, a lawyer, says, “It would lead to an increase in the establishment of committees and research institutes, the number of public officials and quasi-government officials, and politicians’ power over budget allocation.” It could encourage moral hazard of the participants and be misused as a means to an end for activists. Adam Smith, the father of economics, said, “I have never known much good done by those who affected to trade for the public good.”

Rep. Yoo and Rep. Shin agreed to pass the bill in the extraordinary parliamentary session, which ends on May 6, but many in the ruling party oppose it. Some say that it is self-righteous to push for the controversial bill, saying, “It is the party’s opinion because I am the floor leader.” The National Assembly should not pass the bill with numerous toxic provisions, which could be hazardous harm to the national economy.

shkwon@donga.com