Korean Job Discussion Forums

[mindmetoo]

The last Econtalk podcast had a rather interesting point that a nation like the USA should throw opens it borders to free trade even if the other nation refuses. The refusing nation will only hurt itself in the long run. This seemed a little counter intuitive until I remember where I was living. Korea.

Consider, Korea will sell an MP3 player in the USA for $60 but sell it in Korea for $120. In the USA, Korean MP3 makers have to compete on the same playing field with Japan, China, etc, all who sell similar MP3 players. In Korea, where if you want to import a Japanese MP3 player, you're going to pay a significant amount in duty. Samsung, however, will not sell the $60 MP3 player to Koreans for $60. Since the restrictive duty raises the price of Japanese MP3 players, Samsung will, at best, raise the price to just slightly below the price of a Japanese MP3 player (or since they have a built in patriotism premium they'll charge even more than evil, inferior Sony products).

Now, in America, instead of spending $120 on an MP3 player, you buy a $60 MP3 player and spend the $60 on a dinner for two and a movie. The American enjoys a significantly better quality of life.

While Samsung and Hyundai enjoy profits and provide Koreans many jobs, it is little good in the long run that a Korean has a job at Samsung at a high wage if most of his wage is going to buy products made needlessly more expensive because of trade restrictions. The price of rice, is of course, a class example or the price of many fruits and vegetables. Koreans pay an enormous mark up on rice because of the barrier imposed on foreign rice. So again, while Samsung enjoys a free market in the USA, the Korean government only hurts its own consumers by imposing trade restrictions.

http://www.econtalk.org/archives/2007/12/munger_on_fair.html

[sojourner1]

That's an interesting analysis of why things are artificially expensive in Korea. I am not here to change anything, but just learn in perspective of it being an global economy case study. The macro-economic analysis you present does make sense, but the other side to it is where it's a protectionist economy in support of it's elite to farm the regular populace for the fruits of their labor and their money which is the ideal of capitalism. That's great if the job market produces plenty of good jobs and the elite pour money back into investment for business and job growth which it appears that Korea does that as there are still many new tall buildings being built which you don't see happening in western countries anymore. In a way their trade policies are effective in protecting Korea's economic interests, but at the same time, it's regressive and oppressive to the majority though they don't know different since they are taught that it's the best way to go.

[CeleryMan]

Bro, Samsung and others are in the business of selling a lifestyle. The premium Koreans pay for goods sold in the domestic market has little to do with patriotism or economic policies.

In the case of Samsung they get the sale and than some mo' on the back-end through consumer financing at a retarded APR.

It's all about flaunting whatcha don't got in this country so it behooves Samsung to charge double. Ironical ain't it?

[jeffkim1972]

I always like to say Korea is "overpriced" rather than expensive.

Calling something expensive also means it has a high value.

But a 10,000Won fried rice dish is overpriced.

No reason to charge 17,000Won for a Ramen with hotdog, imitation crab meat, mondu, and some of those fish cakes thrown in.

you can go on and on..

[itaewonguy]

supply and demand!

[bassexpander]

Gotta pay for the room salon visits their workers get to charge on company credit cards somehow! Those million-won nights enjoyed by middle-management at local branches on up aren't for free -- the company raises the price of those .mp3 players, TVs, etc., so their kids, wives, and family members end up paying for daddy's sexy night at the bar.