To relax I watch a lot of videos of South Korean street food vendors, and small specialty shops making exquisite treats. I can’t get over how spotless everything is compared to indie NZ food stores, and how much love and care and time is put into the food. And I marvel people can cover rent and food costs and OMG the labour costs, and still make money making small batches by hand.
It really only crossed my mind this weekend, when I was watching a documentary on growing household debt in South Korea, that maybe they’re not actually making money.
At 27:15 there’s a snack shop owner talking about his financial ruin, and mentions his machine for trendy ice creams cost US$9700, which he funded borrowing from third-party lenders at 28%. (The subtitles say ‘stick’ ice cream, but whoever wrote those wasn’t hooked on YouTube food porn, as these were actually Jipangyi, or ‘cane’ ice creams, popular around 2015-2017.)
Here’s the machine that makes the cones, which explains why he spent US$9700. (Well, not why, but you can see this kind of food engineering is spendy).
He says he “couldn’t use” the machine after a month and I have questions. Because cane ice cream was no longer fashionable? Because it broke down? Because his business has gone under by then? I vote it broke down, because that equipment looks like Finicky Trouble
Exactly how many ice creams was he expecting to sell, and at what price, to make enough to cover that kind of investment for a fad product, in an industrial city that might on paper have a high GDP per-capita, but that figure is generated by the world’s largest ship-building yard, the world’s largest car assembly plant, and the world’s third-largest oil refinery?
Because the vendors on the street food-porn channels I watch make the food service industry look idyllic, I want to believe they make a prosperous living for their owners and workers: enough for a happy, peaceful life. Watching the debt documentary brought home to me that’s very likely not true. That instead, the workers are underpaid and exploited the same way they are everywhere in the world, and the owners lie awake at 2am stressing about overheads and negative gearing. And although this is a weird way to get there, it makes it so happy I have a basic call-centre job that covers my living costs and makes me enough to commission a book cover now and then, and lets me write books I want to write, and I don’t have to worry about those books making any money. I have a tiny, happy, peaceful life, which is a gigantic privilege. It means so much to be able to put the stories in my head out into the world. Thank you so much to everyone who bought Home. And who pre-ordered it, even! You’re incredibly kind, and I just hope you enjoyed reading it.
My daughter used to work at a pub, and her colleague said there was a ghost in the pub, stuck there, hanging around, and immediately Ethan popped into my head, and I knew I had to write Home. Although Home will never fund the repairs to my leaking roof, it’s out there in the world, and if even one person likes it, that’s enough. And I didn’t have to borrow $9700 from loan sharks to see my vision turn into reality. Wooo!
May you all experience happy, peaceful lives this week, friends, especially those of you in the United States. Be kind to yourselves, and stay safe.
With a Squid Ink Pen 
S. Korea has the most complicated distribution system designed by the Chaebols to profit the Chaebols. The people be damned. As a result of the Chaebol-controlled economy, normal price control mechanism doesn’t work in S. Korea.
The Chaebols earn hard currencies abroad by selling their products AT A LOSS, bring home those hard currencies so the government can roll over their foreign debts. They then turn around to increase domestic prices to make up for the overseas losses. That’s why prices can only rise in S. Korea including real estate prices. Everything is controlled by the Chaebols in collusion with successive governments. Everything is for the purpose of rolling over foreign debts.
The moment some private enterprise shows a sign of success, the Chaebols come and take over. Almost all businesses are controlled by the Chaebols.
It’s a weird corporate dictatorship system they’ve got there.
I guess the only people who really know the structure of S. Korean economy are Japanese bankers and Japanese trading companies. They know about S. Korean economy better than anyone. For instance, S. Korean exporters need L/Cs issued by Japanese banks coz S. Korean banks cannot issue them due to the lack of international credibility.
A Japanese banker once told me it’d take Japan approximately five minutes to crush S. Korean economy. All it takes is some Japanese banking regulator saying ‘Isn’t S. Korean risk rising?’
The reason they’re Asia’s most indebted nation in the household sector is, since 1997, that’s when they went bankrupt (and they very nearly went bankrupt again in 2011, too), successive S. Korean governments have been trying to boost the economy by making their people load up on private debts and spend.
There are two ways to boost an economy, right? One is, typically, government spending, which only wealthy economies can do. They issue government bonds for which they know they can find buyers. Ideally, buyers should be its own people coz they tend more to hold the bonds to maturity. But it must be a nation with HUGE ASSETS and SAVINGS. Also, wealthy countries have a hard currency which financial markets trust. There’s actually only a handful of such hard-currency nations. The US, the UK, the EU, Switzerland and Japan.
S. Korea is a low-saving, soft-currency nation. People don’t buy their government bonds. Most Koreans cannot afford to. They have no savings to do that. Therefore S. Korea cannot afford to resort to such economic measures as issuing public debts, hence mountains of private debts.
The root cause is, in my opinion, S. Korea started their economy with tons of debts, that is, other people’s money. And their governments have been lying to their people that it was their own money. To save face, to gain popularity, to look good to their people. Once you take on huge debts, you need more and more debts to pay down debts. The endgame is bankruptcy. Debts that cannot be paid, won’t be.
During the Cold War, Japan built S. Korea coz S. Korea was their defense line against China. Remember the Korean War? When China invaded the Korean Peninsula? The US and Japan NEEDED to create a buffer state between China and Japan. S. Korean economy was created by US military and Japanese mega-banks in collaboration with Japanese mega-companies. Just like West Berlin back in the day, S. Korea was their window dressing country to showcase the benefits of capitalism. In the eyes of any banker, it was a great investment for Japan, as evidenced by their seventy years of trading surpluses vis-à-vis S. Korea. Anyone would wish they could make that kinda investment and establish that kinda cash flow. Someone must’ve been super smart in Japan.
Now things are changing. China is taking over S. Korea and Japan is on the verge of deciding that maybe their defense line is going to be, as the US decided right after WWII, the Acheson Line, that’s between the peninsula and Japan.
I was in government bonds when I was working for an investment bank. This topic is endlessly fascinating. A lot of finance is about history. How do you decide who is trustworthy? You look at their track record, right? And people lie all the time. So do countries. Finance people do not trust what they SAY. They look at what they have been DOING long term. In my experience, the best historians are in finance not in university.
I’m super glad you started writing again. I loved ‘MINE.’
wow, this is great information. Very interesting. Thank you 🙂
I’ve been totally nerdy about economic history for a while coz it‘s so so interestingly complex and full of true history as opposed to a piece of historiography which is basically full of sentences about the past which cannot be proven neither true nor false, with no truth value, no clear truth conditions, except ‘I’m a historian so just take my word for it.’
I’m glad I could entertain someone with my nerdy fascination.
Allow me to add. To me the most poignant aspect of S. Korea’s recent history is that they abolished the use of Chinese characters in 1970. Understandable in a way, given their absolutely gut-wrenching sinophobia. But at the same time, totally inscrutable. They’d been using Chinese characters for a thousand years.
In the Korean Peninsula, every document, poem, essay was written in Chinese characters. Today, except for a small section of elites, they cannot read them anymore.
Just imagine, you can no longer read English literature or anything written in the Latin alphabet that was penned before 1970.
Besides, in the Korean language, 70% of modern terminology in whatever genre, science, philosophy, engineering etc., is of Japanese origin.
About two hundred years ago, Japanese scholars translated from Western languages and invented, literally, hundreds of thousands of new words to express new ideas, new theories, anything related to modernization. This ‘Great Translation Movement’ lasted for fifteen years. Today both Chinese and Korean people use their invented words. Those scholars coined new words by using the visually evocative nature of Chinese scripts (every character is a picture that contains certain images and ideas).
Those words were not meant for mere phonetic comprehension. Understanding Chinese characters was totally presupposed, actually it was an absolute given. This is why Chinese and Japanese students today can study quantum physics in their respective native languages, which Korean students cannot coz their new script system is 100% phonetic.
In the long run, this is their greatest tragedy. I think. Culture is longer than economy. Debts can be restructured or even wiped out. Financial markets will shut you out for a while but you can get back in. Ten years ago, Finland defaulted on God only knows how many millions of debts but they’re doing okay now. In a way, there’s something illusory or even fantastical about debts and credits. An economy can be rebuilt as long as there are people who want to live. But once you lose touch with a significant cultural tool like a traditional script system, you may never be able to get it back. And the last generation of Koreans educated in Chinese characters are dying out.