Yet these ubiquitous corporations have done little to improve the lives of most South Koreans. Today, chaebols employ only about one-tenth of Korean workers and are drivers of social inequality. Decades ago, they began to move much of their industrial operations abroad, where they can pay workers less; at home, they continue to project a C-suite fantasy of white-collar wealth that few can attain. Meanwhile, South Korea has among the O.E.C.D.’s highest rates of poverty; the rate for the nation’s seniors tops the list. Koreans also work some of the longest hours in the world but experience little social mobility.
When Mr. Moon became president of South Korea in 2017, he pledged to undo the legacy of President Park Geun-hye, his corrupt, impeached predecessor, and that of her father, the military autocrat Park Chung-hee, whose governing blueprint throughout the 1960s and ’70s involved gross abuses of human rights and the introduction of the chaebol business model. Mr. Moon vowed early on to curb the dominance of the chaebols, improve wages, increase welfare benefits and boost small and medium-sized businesses. He succeeded in raising the minimum wage, expanding child-care credits and pensions for seniors and establishing a government office to support innovation. Yet he has been unable or unwilling to cross the chaebols.
Conglomerates like Samsung, Hyundai, Hanjin, Lotte and LG once helped many workers enter the middle class and made South Korea a booming “East Asian tiger.” But the chaebols also embraced offshoring, outsourcing and price-gouging while lobbying for closed markets. Their executives have amassed billions speculating in real estate and transferring wealth to relatives: The South Korean version of the Asian financial crisis of 1997 was spurred in part by chaebol malfeasance.
Why, then, does the political class still pay them tribute? In 2018, just months after Samsung boss Lee Jae-yong was released from prison on a suspended sentence, Mr. Moon took him on a diplomatic trip to Pyongyang, hoping to parade the benefits of capitalism before North Koreans. Mr. Lee was put back in prison after a remand, but he has since hired a former legal secretary of Mr. Moon to represent him — most likely in an application for a presidential pardon. A growing number of South Korean politicians have preemptively urged the president to exercise mercy for the sake of the semiconductor industry. Indeed, throughout the Covid-induced economic downturn, Mr. Moon has looked to the chaebols as a desert traveler would an oasis. “We will safeguard our national interests by using the current semiconductor boom as an opportunity for a new leap forward,” he said in a speech earlier this month.
For people in the U.S., the chaebols may recall Amazon and other tech conglomerates that dominate not only computing and retail but also data storage, entertainment, media and transportation — and shape worker’s rights. (One key difference: Some of the chaebols were eventually forced to negotiate with South Korea’s unions, thanks to years of militant labor actions.) Earlier this month, Amazon announced that its profits for the first quarter of 2021 more than tripled those of the same period last year. A dominant part of its operation was Amazon Marketplace, which lets small and medium-sized businesses pay to sell their wares on Amazon and use Amazon’s logistics network — but renders them vulnerable to being deleted from the platform or having Amazon use their data to create competing products. (In an email, an Amazon spokesman said, “We strictly prohibit our employees from using nonpublic, seller-specific data to determine which private label products to launch.”)