THE MYTH OF FREE LABOUR MARKET IN KOREA

The paper challenges the conventional view that a free labourmarket has played a crucial role in producing good growth andequity performance in Korea. The paper first shows that thisview is based on problematic models of growth and equity, andthat it is not supported by the empirical evidence from Koreaeven in its own terms. Then we discuss the conceptual problemswith the notion of ‘free labour market’. It is pointedout that, without explicit moral judgement concerning the underlyingsystem of rights, it is not possible to maintain a coherentnotion of ‘free labour market’. It is then shownthat, contrary to the conventional wisdom, the Korean labourmarket has been heavily regulated, with the state taking anactive role in the management of conflict and in the promotionof learning. We show that the Korean state has tried to manageconflict in the labour market through a combination of politicalrepression, appeasement and mobilisation and has tried to promoteskill formation and learning through manpower planning, subsidiesto education, and various training and retraining schemes. Itis argued that, while by no means unambiguous successes, suchstate involvements in the labour market have been critical inthe industrial success of Korea.