Trends of Marxian Ratios in South Korea, 1980–2014

ABSTRACT

This article explores the dynamics and contradictions of capital accumulation in South Korea from 1980 to 2014 by analysing the rates of surplus value and profit and criticises two theses of financialisation and income-led growth. The rate of surplus value soared after 2000 because the real wage growth was contained by the neo-liberal onslaught against workers. The profit rate consistently declined after 1987, paving the way for the 1997 crisis and its main driver was the rising organic composition of capital. After the 1997 crisis, the profit rate rebounded for six years thanks to the intensified exploitation of workers. From 2002 until the 2008 global financial crisis, the rate of profit dropped again. However, contrary to the financialisation thesis, there has been no substantial transfer of surplus value from the real sector to the financial sector. Our results also show that the accumulation rate determined income distribution, not vice versa, contradicting the income-led growth strategy, now popular among the Korean progressives. Marxian macro-dynamics is operating as usual in Korea.