The Great Achievements Built by Inflation, and Those Who Became Jokers

When I was an undergraduate studying economics diligently, I had the opportunity one semester to take a course taught by a Deputy Governor of the Bank of Korea. He extolled central banks, saying they were regarded as the greatest invention in human history. At the time, the aftereffects of the global financial crisis had not yet fully faded, and hawks and doves were sharply divided over quantitative easing. Naturally, that Deputy Governor argued that more quantitative easing was needed to revive the economy, and in fact that view was dominant in the national economy and in policy at the time.

Quantitative easing can ultimately be described as a consumption stimulus akin to rationing. The logic is that the economy can be revitalized by artificially increasing aggregate demand through inflation. Put simply, it is like saying that if someone breaks a window, the glass factory will be stimulated, or that if someone throws trash onto the street, jobs for sanitation workers will increase. It is said that printing a single 50,000 won bill costs roughly 200 won, meaning the government can use the remaining 49,800 won wherever it wants through that 200 won outlay. For the rest of the public, this is plunder, but for the politicians spending that 49,800 won, it is booty.

This COVID crisis has left a deep scar of distrust on our society. The symbolic expression of that is the neologism “sudden beggar.” People who had lived each day diligently no matter how hard things were suddenly became poor, as if struck by lightning. Stories of couples divorcing because the wife wanted to buy a home in Seoul while the husband trusted the government and wanted to wait, only for housing prices to soar, are now so common they are no longer even newsworthy. People have simply gone about their lives earnestly day by day, yet they are falling into despair without even understanding why. The obvious cause of this devastation of ordinary people’s livelihoods is inflation brought about through quantitative easing. It is because their property has been plundered.

Inflation builds enormous castles. Through surging housing prices, it creates boundaries between the Seoul metropolitan area and the provinces. It creates boundaries between people in Seoul and those on Seoul’s outskirts. It creates boundaries between residents of Gangnam’s three districts and people in other districts. Of course, such divisions based on price differences existed before, but inflation turns them into castle walls that cannot even be challenged, stratifying society and entrenching those divisions. We now live in an age where people bitterly joke that merely being born in Seoul is an honor, while being born in some provincial backwater means living like a criminal. One is left with no choice but to be content living as a crayfish, minnow, or frog in a little stream. A person’s address has come to symbolize class itself.

For those living inside the castle, quantitative easing is a heaven-sent blessing. Even if they run their household finances on debt secured by the home they already live in, housing prices rise so quickly that their debt effectively shrinks on its own. For those without a home, by contrast, it is a disaster. No matter how much they save, there is no way to buy a house. Even if they try to meet the loan-to-value ratio and purchase one with a loan, the cash required is far too great, and even then housing prices rise much faster than they can save. It is the ironic reality that the harder one saves, the less likely one is to be able to buy a home. By now, even I am ashamed to say, “You need to buy a house before it’s too late.” What could be more insulting than asking a farmer who has lived for generations as a tenant, “Why don’t you save money and buy land?”

The psychology of the masses can be inferred from the culture and art they consume. Looking at the films people passionately embrace and the heroes within them, one can tell that something fundamental has changed from the past. During times of raging war, people were enthralled by “Superman,” who could save humanity. They believed that such overwhelming power could rescue civilization. As urbanization increased crime in the shadows, people became enthralled by “Batman,” because they needed a hero who would protect them even in places they could not see. But now Batman’s “Joker,” once regarded as a villain, has become the hero people are obsessed with. People understand Joker, sympathize with his situation, and identify with him. That is because the anger inside them has accumulated to the breaking point.

In the film Joker, Gotham City is a city that grew through Thomas Wayne, a financial tycoon and Batman’s father. At the same time, it was corrupted because of Thomas Wayne. Those who are able to spend newly created money first through inflation can enjoy maximized wealth. By contrast, ordinary people and the working class, who are the last to spend that money, have no choice but to remain poor. It is structural plunder. Thus the castle of Gotham City grows ever taller and more magnificent, while outside that castle everything becomes a garbage dump. Those pushed outside the castle can no longer identify with Batman, the hero within it. Rather, they identify with the villain called Joker, who will tear the castle down. That is because the castle must be destroyed for a road to be made. People think this way: “If a castle where people cannot live and that does not care for people blocks even the road, then that castle must be destroyed.”

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Original title: 인플레이션이 쌓아올린 거대한 성과 조커가 된 사람들

Author: Kyung-mo Son

Date: 2021-07-27

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=10&idx=24068