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Kings, Kims and chaebol

2012/01/14 | 799 views |  | Permalink | Source

By Andrew Salmon

On the face of it, Korea's last royal dynasty, the House of Yi, fell in 1910. Since then the peninsula has suffered a traumatic colonization; division into two republics; a civil, then international war; and ongoing division.

Since the war, the two competing republics have moved in radically different directions. One wrote the 20th century's greatest national success story; the other drove a national train wreck.

Given the wealth of incident that has rocked the peninsula since the Yis exited, observers might conclude that Korean royals have disappeared forever from the pages of history.

Or have they?

Recent events indicate that a royal dynasty is now firmly entrenched in the peninsula's northern half. With the Pyongyang Kims entering their third generation in power, it is no longer appropriate to label North Korea a communist state.

Comparisons to royalty are germane. Kim Jong-un, who lives in as much secrecy as any palace-dwelling tyrant, is a man whose only qualification for leadership is bloodline.

We know little of his lifestyle but may conclude, if his figure is any indication, that he dines royally. And if the example of his father is any example, we may assume he has a personal bodyguard regiment, palatial facilities and possibly a harem of concubines at his beck and call.

And although his peasantry suffers isolation, repression, malnutrition and even starvation, Kim III has mastered certain regal skills: standing on balconies, waving and hand clapping.

Still, the above is madcap North Korea. Surely, there are no royals reigning in the sophisticated South?

In politics? No. In commerce? Think again.

At the head of some of this nation's leading conglomerates, royal-style dynasties are as firmly entrenched as the Kims are in Pyongyang and they, too, are now bequeathing power to their third generations.

Seoul's corporate dynasties certainly act in a manner befitting royalty. They inter-marry and live secretive lives in fortress-like homes guarded by bodyguard detachments.

They rarely appear in public and speak to the media even more rarely; a reporter is more likely to land an interview with a member of de facto European royalty than with a top-tier chaebol chairman. Yet unlike European royals, chaebol royalty have no fear of a muckraking media ― their advertising budgets (allegedly) buy editorial quiescence.

They also fear no law. Witness repeated crimes, ranging from financial fraud and embezzlement to kidnapping and violence, followed by no punishment, minimal punishment, or pardons.

Above all, they run their firms like fiefdoms. The chaebol's subjects ― their shareholders ― are among the most discriminated against in the capitalist world. They have virtually no oversight, receive low dividends and are rarely granted even a glance at their august leaders, who don't attend such vulgar events as annual general meetings.

"Aha!" you say. "But the companies run by these families are hugely successful, they have enriched Korea beyond imagining!"

I don't deny it. But let us remember, that chaebol were not built solely on the capital of the founding families. For much of modern history, they were granted beneficial terms and conditions from government, including preferential access to capital ― i.e. public money. (Some small enterprises say, bitterly, that these privileges continue today.) In short, many chaebol have enjoyed the benefits usually associated with nationalized industries.

Still, I cannot criticize the founders of the richest dynasties. Legendary entrepreneurs like Lee Byung-chull and Chung Ju-yung rank among the greatest businessmen of modern times. But are their descendants best-placed to reign over their empires?

Questions hang over the qualifications of certain chaebol princes. I could mention (but won't, for legal reasons) two who attended overseas MBA courses, but never finished them. Recently, an elderly friend who worked alongside a famed chairman at a young age almost choked when I suggested said chairman must be one smart cookie. During his youth, my friend shot back, the man was viewed as a sub-average manager.

"Aha!" you cry again. "But these firms continue to do well. Surely, this proves the brilliant management of ruling families?"

Perhaps _ but their corporate decision-making is so opaque that we cannot really know. Still, I will grant you that delegation of responsibility is a key leadership skill, and having met and interviewed a number of their loyal lieutenants, it is obvious many chaebol boast highly capable players in their executive ranks.

That leads me to pose a question: "Is the ongoing success of the chaebols because of their ruling dynasties? Or despite them?"

As a loyal Englishman, I am pro-royalty. The House of Windsor is a core pillar of "Brand Britannia", increasing tourism revenue, operating as a diplomatic asset and above all, generating international interest in the country.

However, it is a constitutional, not an absolute monarchy; the family members who sit on the throne do so at public sufferance. On a wintry day in 1649, a king's head rolled, an event that boldly asserted the primacy of governance by the people.

Will the 21st century royal families on both sides of the DMZ ever find themselves facing demands for accountability ― or even The Executioner's axe?

That is a question only the Korean people can answer, for just as kings live at the sufferance of their subjects, so a successful overthrow best comes from within.

Andrew Salmon is a Seoul-based reporter and author. His latest work, "Scorched Earth, Black Snow", was published in London in June. He can be reached at

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