Introduction

There are three sources that hinder the unity of our nation. First is class conflict based on economic interests. Second are pseudo-political parties that are solely preoccupied with private interests. Finally, unreasonable and absurd faction- alism … people are organized around family connections, clan organizations, regionalism, and school ties. These groups are organized to occupy powerful positions in order to secure opportunities to aggrandize their wealth and to fill their stomachs. They are interested solely in enriching themselves without considering other people. Such factionalism and partisan struggles, which have been the sources of national misfortunes and tragedies throughout our history, ultimately brought about the downfall of our country and the loss of our nationality at the end of the Chosun dynasty. Reflecting on our historical records and experiences, we should not tolerate them. —Park Chung Hee, 1969

Once groups are organized based on school, regional, and family ties, they easily develop into particularistic entities beyond friendship. They divide us from them and fall into exclusivism by distinguishing friends and enemies. Thus, those who do not belong to the same school, or hometown, are hated, and if they are hated, their parents and siblings are also hated. The practice of being exclusive is what Korean society is right now. —Park Chung Hee, 1965

Every country absorbs industrialization into its own tradition; every country assimilates the process in a manner peculiar to it alone; in every country there emerges an amalgamation of cultural tradition and ramifications of industrialization characteristic of it alone. There are as many modes of industrialization as there are industrializing countries, and every one of them needs to be understood in its own terms.

—Ralf Dahrendorf, 1967

Korea’s economic development appears to contain a paradox: an ultra-modern industrial economy alongside traditional networks of obligation and solidarity, such as blood, school, and regional ties, which profoundly affect fundamental aspects of Korean politics and socioeconomic relations. But this situation is not actually a paradox, for the course of Korea’s late economic development deliberately entrenched these ties into Korea’s politics, society, and economy. Analysis of the persistence and predominance of what I call “neofamilism” reveals distinct social phenomena that arose through interactions between the developmental state, traditional institutions, and economic tasks.

Why could Korean president Park Chung Hee (1963–79) not avoid the chronic familism, regionalism, and other cliquishness that he hated so much and wanted to eliminate, even in the aftermath of the rapid industrialization that he himself launched? Contrary to Park’s expectation, the social characteristics of which he was so critical were reinforced by the imperatives of late industrialization. Late industrialization is understood as an attempt to catch up with a country’s earlier-industrializing counterparts, and its main features are speed and high economic growth. Why and how does late industrialization incorporate traditional institutions and values? As we will see, something unusual happened in Korean society during the critical period of economic development during the 1960s and 1970s.

Ulsan, a port city in the southeastern part of South Korea, is an example of how rapid industrialization brought change to a typical urban area. Before 1962, when the city was designated as a special industrial zone, Ulsan had a populace of 85,000, but with the infusion of heavy industries, such as shipbuilding, chemical, and auto industries, the city became one of the most industrialized areas in the country. By 1982, the population had grown to 476,000 (mostly industrial workers) due to in-migration. However, rapid urbanization did not diminish primary tie–based forms of organization. On the contrary, organizations such as clans, hometown associations, and school alumni associations emerged as important sources of identity.¹ Moreover, in the heavily working class–based area, the son of the founder and chair of Hyundai Heavy Industries was an elected member of the National Assembly from the Eastern District of Ulsan City from 1988 to 2004.²

On the political question of how kin-like or family-based ties affected elections of the president and National Assembly in Korean society in general, in a 2015 survey, 37.8% (40 out of 106) of respondents said they enormously influenced elections, 48.1% said considerably influenced, and 9.4% said somewhat influenced. Altogether, 95% said social ties affected elections one way or another.³ Actual election results reflect the survey findings. In the 1987 presidential election, the first free democratic election since 1960, Kim Dae Jung received 88.4% of the vote from his home region in the southwest and only 2.5% and 6.9% from the two southeastern provinces.⁴ In 1992, Kim picked up 91% of his own region and only 10% and 8.7% from the two southeastern provinces.

A survey in South Korea conducted in the early 1980s—two decades into industrialization—intriguingly showed that more than 70% of the respondents said school and regional ties were essential for survival in Korean society.⁵ Another survey affirms the same societal trend, with more than 85% of the respondents saying that blood, school, and regional ties play some role in making important decisions in Korea.⁶ A labor relations survey from the early 1990s indicates that only 11.8% regarded labor-management relations as being based on equal contract—that is, freely chosen by autonomous individuals—while 28.6% said they were modeled on pseudo-father-son relations.⁷ The same survey found that familism served as a constraining factor on the formation of class consciousness and participation in labor union activities. More strikingly, a labor union official said in an interview that 90% of his daily life revolved around regionalism, such as meeting with labor union members with the same regional ties, contacting relatives in different sub-regions of the province in which he lived, and visiting clan organizations in the same region.⁸

Are these phenomena merely anecdotal, circumstantial, and transient in nature? Are they essentially informal and residual, as the school of modernization would lead us to believe?⁹ This book contends that these are in fact the consequences of late industrialization and that they show how traditional institutions and values are introduced and reinforced through the mediation of the state. How did South Korea’s industrialization assimilate Korean traditions? What are the patterns of the amalgamation of cultural tradition and ramification of industrialization? Did these processes produce distinct, socially meaningful units other than class in South Korea’s late industrialization? While the singular path of South Korea’s rapid economic development has been well documented, the distinct impact that late industrialization brought to Korean society remains an understudied terrain of research.¹⁰ This book analyzes the macrosocial implications of the impact of late industrialization.

SOCIAL AND INSTITUTIONAL IRONIES OF LATE INDUSTRIALIZATION

South Korea’s successful pursuit of late industrialization invoked and reinforced traditional institutions and values, regarded as resistant to change, to achieve rapid economic success. The distinct social and institutional changes in late industrialization cannot be properly understood without exploring these social and institutional ironies of economic success in late industrialization. The huge gap between political economy and sociology is a persistent anomaly in studies of late industrialization. The state has been considered to be of primary importance in achieving rapid economic development, as it provides various institutional and policy incentives for business in capital formation and technological development.

The social implications of what the state does, however, have seldom attracted attention. An example is the literature on embedded autonomy, which considers how the state is embedded in society through various networks such as school ties but simultaneously maintains sufficient autonomy to draft and implement policies, despite societal resistance.¹¹ Such autonomy is regarded as the key to economic success. Social and cultural factors have been drawn on to explain economic success, but no effort has been made to explicate what happens to society in the process of industrialization because of this embeddedness. The complexity of society under state-led industrialization has thus seldom gotten due attention. Moreover, when the state has been “brought back in” to social science analysis, it, too, has been only in the context of debates within political economy theory. Bringing the state back stopped short of reaching a deeper sociological level.¹² Conventional sociological categories, such as class and stratum, are heavily relied on in studies of nations that are latecomers to industrial development, including the case of South Korea.¹³

Although late industrializations share structural similarities, such as economic backwardness and the role of the state, structural features differ, making it impossible to anticipate similar social consequences. This nature of late industrialization requires highlighting historical specificity and considering contextuality of industrialization and social consequences.¹⁴ Only through such an approach is it possible to discern and explain alternative dimensions of social change beyond class or stratum.

NEOFAMILISM AS SOCIAL CONSEQUENCE OF TRADITION–LATE INDUSTRIALIZATION NEXUS

Social and institutional ironies arise from the need to facilitate late industrialization. Feelings of backwardness, insecurity, and inferiority within the psyches of the leading elite induce a sense of urgency. Traditional institutions and values are then reintroduced as tools to address this by providing familiarity in communication and institutional operations.¹⁵ Thus, traditional institutions and values can be seen as institutional imperatives of late industrialization, manifesting in different forms, depending upon domestic social and historical contexts.¹⁶

In the case of South Korea, familial, school, and regional ties were incorporated and reinforced through the state’s recruitment and relations with business, a dynamic that can be defined as neofamilism. Familism is not limited to a conventional family; it incorporates broad primary ties based on kinship, school, and region. The prefix neo is meant to emphasize that traditional relationships have been revived and changed in an industrial setting, making neofamilism different from the traditional familism found in agrarian settings. Thus, neofamilism denotes the dynamic process of reinforcement of social ethos and relations based on primary ties that occurred during Korea’s industrialization. These processes addressed issues of identity, provided a strategy for survival, and shaped the operations of institutions.

Neofamilism has an outward and mobility-seeking orientation commensurate with Korea’s export promotion strategy. It also denotes a narrower and thus more specific structural configuration than broader concepts such as traditionalism.¹⁷ Overlapping familial, school, and regional ties are used separately and together to seek access to incentives from the state.¹⁸ What needs to be emphasized here is not that traditional elements persisted during and after industrialization, or that they are universal in time and space, but rather that certain traditional primary ties were reinforced and strengthened during the course of state-led industrialization. Neofamilism is also different from clientelism in that the former can take many different forms of relations, one of which can be clientelism. For instance, school ties can be invoked almost any time and any place without any conscious effort to manage them, and they can take contractual, noncontractual, or clientelistic formats.

Neofamilism can be understood as a part of network analysis, but the term neofamilism is chosen to denote the social ethos and structural features unique to Korea, such as the corporate family; regional solidarity; and the link among family, school ties, social mobility, and status. Autonomous, individual- based network analysis is limited in understanding neofamilism, which is based on corporate and familial units. The term also serves to clarify the dynamic process of reinforcement of these ties in the course of industrialization, which is usually taken for granted in network analyses.

Thus, neofamilism can be understood as the social consequences of the state’s introduction of pre-industrial social patterns that were reinforced in the process of late industrialization. Neofamilism has become an important, deeply institutionalized source of identity, a key survival strategy, and the basis for organizational operations in South Korea. Neofamilism further emerged as a distinct social structure coexisting with and mitigating class relations, and this requires a serious and systematic inquiry within the context of Korea’s late industrialization. This book is an attempt to clearly define the conceptual status of neofamilism and its theoretical implications for social change, recognizing specific forms as unique to Korea in terms of substance, although the pattern of interactions between industrialization and tradition has broader applicability.

LATENESS, THE STATE, AND SENSE OF BACKWARDNESS

The distinctive features of social change in late industrialization can be understood through an analysis of interaction between late industrialization and tradition through the mediation of the state. This requires examining the aspects of late industrialization that are conducive to the persistence of tradition and how the state is related to this process. The first observation to make is that late industrialization starts with the awakening of elites about the backwardness of their own countries.¹⁹ Why, when, and how elites begin to perceive the lateness of their countries is an important question in understanding patterns of late industrialization.

What is universal in elites’ perception of backwardness is the feeling of relative underdevelopment vis-à-vis their neighboring countries, region, and the world. At the same time, in most cases elites are in a precarious position in terms of legitimacy with regard to other elite groups and larger society. Japanese elites, for example, felt a deep sense of backwardness vis-à-vis the West at the time of the Meiji Restoration and were under pressure to establish a new order in terms of administrative and economic system building.²⁰ Likewise, Stalin, right after the establishment of the Soviet Union, felt a relative backwardness vis-à-vis Europe and was under constant pressure from the capitalist world.²¹ South Korea’s president Park Chung Hee was also fully conscious of relative backwardness vis-à-vis not only North Korea but also Japan and the West.²²

The perception of backwardness also arose due to personal insecurity or regime instability. Meiji leaders faced the urgent task of nation-building; Stalin had to demonstrate the validity of the new ideology of communism; and Park Chung Hee had to justify his military coup d’état to the masses and the old political elites. As such, the sense of backwardness accompanies the sense of inferiority.²³ The sense of inferiority, in turn, leads to the sense of urgency, which causes leaders of late industrialization to be overly ambitious in setting the goals of industrialization and to be highly conscious of the speed at which industrialization is pursued. Leaders of late industrialization often urged early accomplishment of economic targets and a high economic growth rate.²⁴

Ironically, the greater the sense of backwardness, inferiority, and urgency, the more likely traditional institutions and values are introduced. This seems ironic because rapid industrialization would entail the disappearance of traditional institutions and values, as modernization theories assume. Yet the more leaders pursue rapid economic growth, the more they are likely to depend on familiar institutions and values. Thus, in order to generate a high economic growth rate with a high sense of urgency, it is rational to take advantage of familiar institutions and values so the populace experiencing this transition would feel more comfortable. This explains the apparent paradox of late industrialization: the speedier late industrialization is pursued, the greater the dependence on traditional institutions and values.²⁵

A related question is whether and to what extent leaders of late industrialization are conscious of the use of traditional institutions and values and view them positively as a way to facilitate industrialization process. Put differently, a crucial factor in understanding social changes of late industrialization is the extent of the invention of traditional values and institutions.²⁶ On the one hand, leaders may adopt a “harnessing” strategy, whereby they adopt tradition to facilitate industrialization, frequently without consciously thinking about the need for the “invention” of tradition. Even though leaders may not be aware of traditional practices, or even view them in negative terms, traditional institutions and values may be still operating—and ultimately affecting social and institutional changes in late industrialization. This may be termed the introduction of tradition through the backdoor.²⁷ The second strategy involves the invention of tradition. Leaders are fully prepared for a comprehensive invention of tradition, the full scope of which can affect social change on two levels: modes of recruitment of officials who are actually involved in daily implementation of industrialization tasks and social institutions that are related to the management of social conflicts.²⁸

Late industrialization involves the strong role of the state, and its impact goes beyond the economic level. Sociologist Reinhard Bendix, for example, remarks that government is an integral part of the social structure and that the state has the capacity to change society.²⁹ What sociologist Theda Skocpol refers to as the Tocquevillian perspective of the state also speaks to the state capacity to change society, culture, and beyond:

This second approach (sociopolitical impact of the state) might be called “Tocquevillian,” because Alexis de Tocqueville applied it masterfully in his studies The Old Regime and the French Revolution and Democracy in America. In this perspective, states matter not simply because of the goal-oriented activities of state officials. They matter because their organizational configurations, along with their overall patterns of activity, affect political culture, encourage some kinds of group formation and collective political actions (but not others), and make possible the raising of certain political issues (but not others).³⁰

As Bendix and Skocpol mention, in most non-Western developing countries it is the government that needs to be seriously considered in understanding social and institutional changes. Functionally, in the cases of late industrialization, the state can exercise its influence on the economy in multiple ways through capital formation, production, and distribution. The state may exercise strong influence in the financial sector either by directly establishing a development bank, sponsoring loans, or heavily regulating financial transactions. The state may also directly participate in basic industries such as steel, coal mining, and socioeconomic infrastructure building and may make inclusive or exclusive policies in the area of social welfare.³¹ The implications of different state roles in different areas for social changes are clear. State intervention brings about different rules of the game than those of the market, and the coexistence of the market and the state means a continuation of multiple sources of identity and loyalty. The various sources of identity not only lead to multiple forms of organizations and institutions, but they also affect the nature of the modus operandi of newly created industrial organizations.

Modes of recruitment of officials constitute another important factor in changing patterns of late industrialization as these officials will actually formulate and implement economic and other policies related to industrialization through interactions with non-state actors. Crucially, this entails whether and to what extent leaders feel competent in securing reliable, trustworthy, and capable people they can mobilize. Furthermore, whether recruitment is based on merit or particularistic grounds is important in that each mode of recruitment has different implications for human groupings, as state-led industrialization involves frequent interactions between state officials and business sectors. As such, modes of recruitment of state officials may also affect those of business sectors. When particularism in recruitment of officials is predominant, outside influence on the officials can be stronger than when recruitment is based on merit. Thus, state modes of recruitment are bound to affect business modes of recruitment.³²

The invention of tradition at the social-institutional level refers to the coordination and management of social conflicts that result from industrialization. Here the question is whether and to what extent leaders utilize traditional institutions to determine the forms of business organizations and to prevent and resolve social conflict. One example is labor-management relations: leaders invent traditional social institutions, such as paternalism, in coordinating labor-management relations. Thus, leaders may be conscious of the need for invention but end up with a different level of invention of tradition, depending on how they perceive the extent of social conflicts that may emerge in the course of late industrialization. When leaders may be less acutely aware of the need to manage social conflict, traditional institutions may affect social and institutional changes more or less spontaneously, without much invention.³³

An important social implication of the strong role of the state is the persistence of an already established social structure in the process of late industrialization. Political economist Joseph Schumpeter stated that once social structures are formed, they persist, possibly for centuries, and different structures and types display different degrees of this ability to survive. Bendix was much more specific in terms of context in which established social structure does not disappear. He mentioned that even after a considerable degree of economic change, the consequent social structure will not take on universal forms; instead, it will depend on the “pre-industrial conditions, the particular impetus to develop, the path which modernization takes, the significant differences that persist in developed economies, and finally with the impact and timing of dramatic events.”³⁴ He further observed that the roles and functions of traditional groups, such as kinship ties and collectivism in the pursuit of late development, played a positive and compatible role with modernization.³⁵

Here, as Bendix emphasized, another important factor to consider for social change in late industrialization is whether traditional social structures remain and to what extent they exercise political, economic, and social influences.³⁶ If a traditional social structure is still strong, social consequences will be affected by the degree to which the dominant group resists or participates in industrialization. Also, the traditional institutions will affect social consequences by the degree to which they serve as a source for the recruitment of bureaucrats.³⁷ However, where traditional structure breaks down without any dominant hegemonic social group or class, the social consequences of state-led industrialization will greatly depend on the top leadership’s attitude toward traditional values and institutions. That is, social consequences will depend on whether leadership positively views tradition as a way to promote industrialization or negatively views (or has a lack of awareness of) tradition. A negative orientation can take the form of either rejection of tradition without any alternative idea of how to build a new society or an attempt to make economic and social changes by reinventing tradition. Thus, the social consequences of late industrialization will be greatly affected by the leadership’s orientation toward tradition.

Following Bendix, our overarching concern in this study is to determine what makes each case of industrialization and also late industrialization distinct, if not unique. What are the context and ways in which tradition interacts with industrialization? The essential contextual factors particular to different countries are the status of traditional social elites and the degree of the state’s autonomy.

Assessment of the kinds of social units that may emerge from late industrialization requires that the following issues are specified: First, when and why did leaders of late industrialization begin to feel the sense of backwardness? Second, to what extent does the sense of backwardness lead to the sense of inferiority and urgency in pursuing late industrialization? Third, how ambitious are economic goals, and with what speed is late industrialization implemented? Fourth, do leaders have both the motivation and personnel pipelines to recruit loyal and competent people whom they can mobilize to implement industrialization tasks? Fifth, the degree of particularism in implementing industrial policies will affect patterns of interactions not only between state officials and business sectors but also between state officials and the rest of society. Finally, whether traditional social structure persists needs to be considered, and at the same time the orientation of leaders toward traditional institutions and whether they invent traditional institutions to manage social conflict in particular and social interactions in general need to be analyzed.

While conventional sociological categories assume a clear demarcation between political, economic, and social arenas, in societies undergoing state-led industrialization, the boundary lines between different institutions are at first unclear and systems are only slowly differentiated. The social impact of industrialization in these societies can be properly understood by looking into the complex interplay between the state and other actors involved in industrialization and by carefully examining state economic policy.

With empirical evidence from the mid-1960s through 1980 in South Korea, this book analyzes the role of the state in reinforcing traditional social relations in Korea during this period of rapid industrialization. The analysis of state economic policy and the interactions among government, industry, and society during this period demonstrate (a) that certain traditional primary social ties, such as blood, school, and region, were unintentionally reinforced rather than weakened; and (b) that in place of class, new social units—amalgams of modernity and tradition—were created. This outcome can best be understood as neofamilism. Most importantly, because these new social units were systemic—not intermittent, partial, or anecdotal—understanding how they arose and functioned is essential in understanding the development of Korea both socially and economically.