Money is limited right now. There is no new money coming in, and naturally, money should flow in according to the growth of the economy. Why isn't money flowing in? Where did it go? In fact, Korea is said to be a country without resources, but there is one very powerful resource - human labor. Yes, people. These people are exceptionally talented, globally competitive, and possess the highest level of skills that do not fall behind anywhere in the world. So, in order to harness the power of these people, it is actually the organization called a company that can operate most powerfully, right? Yes, the better the platform is set up, the better these talented individuals are structured, enabling them to exert synergy and power. Therefore, in the past, once again.

If you look at the Dutch East India Company or the era of great voyages, our people, when they have swords, are the best fighters. However, without a proper fleet, they will all be shot by cannons and die. But if you organize a proper fleet with proper ships, gather the best fighters who are good at sword fighting, then it becomes the strongest fleet. Just like that, because we have a huge and excellent workforce, if we can set up a system properly for them, and if money keeps flowing for that system, our country can become the best. Recently, I have been thinking a lot about why I can't let go of my worries. When I read this book, it helped me organize my thoughts. The ladder for social mobility seems to have been completely cut off in Korea. Although it seems completely cut off, I still have some hope.

I am feeling quite anxious right now and this anxiety continues. So, I am also worried about that. Why can't they let go of those kids? There is a house at the center of it. They have real estate. It's a certain area, and that area has scarcity. When I was talking about Mad Max earlier, that group with scarcity dominates by controlling the scarce resources. However, if you dominate something scarce, you can control the whole. But in our country, there is this anxiety that we are continuously developing that area with scarce land. In fact, the reason why our country could develop faster than other countries in Asia in the past is because those countries were very good at buying things.

Many countries in Southeast Asia, such as the Philippines, have lived better than South Korea, and if you look at the characteristics of those countries, there are powerful forces centered around land ownership. When you visit, if you look closely, the economic structure controlled by those people continues to this day. Yes, in the Philippines, a few families just swallowed up the entire country. So, those families, based on the land they own, well, yes, if you keep using cheap labor, you can provide those services and it doesn't matter if you have cheap labor.

If we only focus on making cheap money, we can't develop much. In such a structure, the pace of progress can only slow down. However, in the case of our country, in fact, land reform was carried out. In the 1950s, influenced by North Korea, South Korea also implemented land reform. Simply put, they almost confiscated the land from the large landowners at very low prices and distributed it widely to ordinary farmers. So, if we look for the fundamental reason for the failure of North Korea's spontaneous unification, economically, when North Korea came down to South Korea, what did they say? They said, People who have fallen into poverty will welcome us. But it turned out that everyone became landowners. Becoming landowners, they actually strongly opposed communism. Therefore, the country that first implemented land reform in the world, where was it? Here's a hint: It was the first country to do so globally.

Was democracy first started in the world and the Industrial Revolution first started in the UK, is that right? Yes, in the UK, Henry VIII carried out the land reform. Back then, as I briefly mentioned earlier, after the Hundred Years' War and the War of the Roses, there was no money. King Richard, well, he didn't have any money. So, as they started to succeed, those who had money before, there were only churches. They took all the church money and distributed it. They distributed it. They sold it at a double price. They needed money, so those who bought it became the origin of gentlemen, gentlemen who sparked the Industrial Revolution, and the gentry, their voices naturally grew louder, their power grew, and as a result, it led to democracy in Korea, and I think land reform in our country was also very

Currently, in our country, an important factor has become that the class system has disappeared. The aristocratic class has disappeared in our country, so in the political sphere, from the perspective of those who engage in politics, taxes are very important. Then, who should we tax? It is about collaborating with industrial forces. Therefore, nurturing industrial forces and collecting taxes from them, and now managing the country through such a system. Because this has been the case for quite a long time, our country was able to grow at a much faster pace than other countries. However, as we continue to grow, it seems that some sort of aristocratic class is emerging, which makes me quite sadly and anxiously observe. Yes, that's why it leans in one direction, causing inequality.

The moment you think that strengthening and then the impossibility of upward mobility, the vitality of society decreases, there is no change, new forces cannot rise, just the birth rate decreases, just like some Southeast Asian countries that have declined without change, isn't Japan a typical example of that again? Recently, if we look at it in that way, aren't we going in that direction if we make mistakes? Japan, I have been closely observing Japan's current situation for the past year, and well, Japan has been implementing policies related to yen depreciation and finally, very reasonable policies, not like Abe's unreasonable policies, recently, they have also implemented policies artificially raising wages for people, and so on.

It seems like there is a possibility of success, but there are some concerns. Why are we worried that if things go well over there, we might have a hard time? So, while having some concerns, we have been watching. It doesn't seem to be going well. People attribute the reason to the real estate market that collapsed in Japan over 30 years. They see it as the Plaza Accord. Yes, they see it as the Plaza High, but in fact, the reason it became expensive due to the Plaza Accord did not cause such a huge downfall in Japan. In my opinion, after a few years, about 4 to 5 years later, they started to regain that level of technological prowess that matched the yen price. They began to find it again because car sales started to increase. So, the high yen was not the biggest issue. However, due to the high yen, people were worried about the temporary downturn in the economy, so they thought anxiously and lowered interest rates. Yes, they poured money into it.

Invested heavily in real estate, so it became a kingdom of real estate. It became a real estate kingdom. So when that bubble burst, the biggest reason Japan has become like this for the past 30 years is because of real estate. I also see that. So, I think that such a thing should not happen in Korea. Looking at Japan now, it seems like it will be tough in the future as well. Therefore, it seems like the policies are not working well. The GDP for this quarter was in the negative. Policies to increase income don't seem to work well. Only big companies are making money, not small and medium-sized enterprises. So, maybe export companies will say they have reached the highest level ever, but if the money doesn't flow down, it's a dead end. Because more than 90% of the companies are small and medium-sized enterprises. So, in the past, Spain from overseas...

No matter how much gold you bring, even if you bring all the gold in the world, if it's not connected to the common people, it will eventually collapse. Just like Japan, some major companies making money, but the income doesn't link to people, like minimum wage or income growth for ordinary people. That's why they implemented policies to artificially raise salaries. It seems like it's not working well. It seems like only big companies are raising salaries, so it only applies to some sectors. It appears to be a failure. Where can we see that again? If you look at the interest rate increase, it has never been done. If you see this, you can judge competitiveness, it's a direct indicator. Because that's how I think. Look at the United States; they do this. Lowering interest rates significantly controls inflation and prevents economic collapse.

You know, yes, but I've already stopped taking morphine and painkillers. In the United States, it's like over 5% interest rate, really stopped everything. Even after stopping everything, I'm walking around fine, living and doing things now. Yes, yes, this is the stamina of the United States. The UK has reduced it a bit. They used to give it three times a day, but now they only give it once. So even in our country, we used to give it three times, but now we're reducing it to once. We stopped like this, stopped, but in Europe, they reduced it. Oh, it's tough, give a bit more. So maybe now, they will probably reduce the interest rate back to twice a day. That's the level of stamina. Then Japan, they can't stop it at all, can't reduce it even once. That's the level of stamina they show. So, it seems a bit difficult for Japan to rise again.

So, in the generation of Jeonghee, it seems clear that there will be a reversal with Japan, but for that to happen, our capital shouldn't be like that. Yes, it shouldn't be like that, and for the economy to become a bit more active, ultimately, summarizing what you are saying, for capitalism to exert much more power, it should be well combined with economic democratization, expressed as economic democracy, based on democratic principles. So, in other words, everyone can hope to move up a class if they work hard. If they work hard, they can succeed. I will try hard once and live with this mindset. Democratization is not something great or extraordinary, but it is based on the idea that I can do it if I do it. People work hard, and with this foundation, capitalism will flourish and work well, right? Yes, that is democracy, capitalism. Capitalism, that... studying that is good in the Netherlands, it was the first to do that.

In the Netherlands, there is Dutch painting. So, in the beginning, when you look at the paintings with people that Rembrandt painted, they are completely different from the previous paintings. In Dutch genre paintings, citizens become the main characters. So, as much as that, citizens started to have something. All that power was about money. So, citizens had money through the stock company system. And in the beginning, through Amsterdam and such, within that system, people transferred wealth well. Because the wealth transfer was successful, what did the maids or servants do? They invested in stocks. They invested in shipping. They invested in stocks, but back then, there weren't that many stocks. But they made money. So, with money, what did they do? Since they made money, they gave gifts like money in and out of the door. They also invested.

So, it means that the peasant economy was good enough to the extent that they could afford maids. In fact, those who had money to invest invested it. That's right. If you study that well, it would be nice. In the past, only the nobles could afford to hire artists to paint portraits, so only extraordinary people did that. Therefore, if someone was commissioned to paint a portrait, it was only those people. Now, it's been introduced in paintings that the citizens' financial status has improved to that extent. In the Netherlands, at that time, citizens actually commissioned portraits, and it was a trend. So, I also wanted to try something like that, but I thought I had the money now and could do that. Then, going back, the real path for our country to live is for individuals to fully demonstrate their abilities.

When a platform system comes in, if it can be embraced, it seems that Korea could be really powerful, right? Yes, that's right. However, when it comes to ventures, we work hard. If you look, everyone is working hard. They work hard, but in reality, to make that continue, it needs financial support. Yes, when this financial support continues, the difference in the possibility of success or failure is huge. In order for that to happen, like in the United States, you need to keep growing little by little in the stock market. That's right. It means that there needs to be a track record of money continuously going into the side where there are dreams and hopes. People who earn money here invest elsewhere.

Currently, in our country, it's not about increasing wealth together due to economic growth. It's a system where people who were doing business elsewhere come here and take the money. Isn't it an IPO system? Yes, in fact, things like IPOs are allowed. Originally, markets were created for things like that. The problem is, the money entering the stock market should increase in proportion to the economic size. It should increase, but the money is always lacking. I don't know where people's money went. The money in the capital market is limited. So when you invest, it gets sucked in that direction, and there's only this much money available elsewhere. Since it keeps growing, that's how it goes. So, overall, there isn't enough money here, so by doing IPOs, in fact, by pulling in money like that, and doing business with others, and new companies getting listed, it goes like this.

To be able to continue, capital support must be provided continuously. The first reason it doesn't happen is that it's completely outdated. One of the characteristics of the Korean stock market is that the market cycle, the circulation, needs to be improved. Why? Because money needs to flow out of here. Why is there no new money coming in? Because there is not enough capital. Compared to the size of the Korean economy, the size of Korean companies, it's like that. Korea's exports account for just over 2% of the global GDP, but the stock market accounts for only 1.5%. It's dropping. I didn't even look at that data. It's obvious without looking. In terms of the economy, the size of the capital market is too small. For example, if you compare market capitalization with other countries, even countries that don't make sense surpass us.

This will happen. Right now, what is Korea doing in the AI revolution? I studied and researched it myself. I studied semiconductors. This is truly similar to the nation's prosperity. The door to good fortune has opened for the rising country. Semiconductors, why? Because in AI, the most important thing is semiconductors, right? GPUs, memory is overwhelmingly important. So, CPUs, GPUs, what kind of chips, MPUs, TPUs, what are they? Many people need to use the same memory. The demand is huge. But the stock prices aren't going up. Of course, some of it is because they can't do it themselves. Yes, they are not going up. That ultimately leads to the answer you just mentioned. There's no money. The money is limited. It's just going around in circles now. There's no new money coming in. Naturally, as the economy grows, money should flow in. Why isn't it flowing in?

Wouldn't it be possible? Where did they go? It's a pity. That's right. Industrial capital is very important. For our country's leap forward, yes, that's right. If we do that, we can beat Japan. Actually, the fact is that Korea is a small country, but it is one of the top 5 countries in the world. Even among the advanced countries in the world, there are small countries, right? Yes, that's right. Like Singapore. These days, Singapore issues business cards. So, just because we are small, it doesn't mean we can't issue business cards. Depending on whether the capital market is functioning well, Korea can enter the so-called Big 5 or Big 3. It might be difficult to enter the Big 3. It will depend on whether we can break into the big leagues. Yes, that's how it should be. Yes, but because there are always gloomy stories... But it's a bit sad. Even though they talk about thinking about the country as a whole and the future of the country, they are only faithful to their own interests.

It's the same. That's right. Yes, that's right. Yes, that part is very unfortunate. So, many policymakers in our country believe that a substantial portion of their investments should be made in the stock market, at least half of their assets. Because they want to create such an environment, they have come to know about public officials' stock investments. If you invest more than 30 million won in a single stock, you must report it. You must report it. Why? Because there are such things, right? Perhaps someone might think, If I buy stocks of this company, they might help my other company. There are quite a lot of such thoughts. So, the aim is to fundamentally prevent such investments. On the contrary, in the U.S., there are no such restrictions on stocks. In the U.S., even pension funds are allowed to invest in stocks. There are pension funds for public officials, right? A significant portion of them is invested in stocks. And even our general pensions are encouraged to invest a significant portion in domestic stocks. By doing so, policymakers in our country...

The economy needs to improve for our country's stocks to do well, and the stock market needs to thrive for the economy to prosper. If I have this much of my pension in stocks, then I will likely think a lot and worry a lot about that direction. I will likely implement policies that way and take action. However, if you can no longer hold stocks, you might only have real estate. But how do those people think about making real estate better? It seems like they only focus on that thought. Those policymakers are making policies as if their arms are twisted inward. Actually, during the years from 2011 to 2015, while working in the region where I worked, there were quite a few retired bureaucrats or people related to bureaucrats living there. At that time, I felt, Ah, these people have real estate as a significant asset. Therefore, they might make policies based on just one or a few properties they own.

When you turn inward, the most representative thing is actually black, for example, the members of the Monetary Policy Committee, for example, it's not actually true, but if all the members of the committee only have real estate as their assets, then they won't be able to raise interest rates. If they also have loans, then when they formulate policies for the economy of the country, they should do it for the country, but in reality, because people's instincts are like that, even if they try to be rational and fair, there are instincts, so it can't be helped. When we talk, we will definitely have parts where we talk more favorably about stocks. But in reality, when we look at the entire country, is it good for the whole country for the stock market to be activated? We really want to talk about it. Is it good for companies to improve and industries to be activated?

Is it good for the country and the future that prices are getting better? But personally, I think the key is not giving up on having children. So, is it too late now? No, if we give up hope now, it won't work. So, even now, we need to continue in that direction with hope. We have already started the Value-Up program, and it will continue. In the future, regardless of the policy direction, if individuals abandon their greed and focus only on the national economy, thinking about the nation's economy and the people's economy, the Value-Up program can only continue. And if we keep investing capital in the capital market like this, we have no choice but to implement such policies. So, if that happens, if that happens, I think the birth rate could increase again. That's how I think. Here, we are talking about the activation of the industrial sector for the national economy.

I've done that, but what else do we need additionally? The first point is the amendment to the Commercial Act, and the second point is the amendment to the three laws. The core of these three laws is what? It's about separating the dividend income tax from the dividend income tax, and including it in the financial investment tax. It should be excluded from comprehensive income, so the comprehensive income includes the money we earn from labor and then the money we invest in non-risky areas like bank deposits. We should include only the interest from investments in risky assets, such as bank deposits that invest in non-risky areas, and so on. Alternatively, I think the financial investment tax should be changed to include all financial investments in risky financial assets, all losses and profits from investing in risky financial assets should be aggregated, and taxes should be imposed in that direction.

So, when it comes to stocks or bonds, losses from these are offset against profits, and if there is a profit, taxes are paid on that. Also, to ensure that money keeps flowing into the capital market like in the U.S. and other advanced countries, we shouldn't impose too high taxes. By adopting a separate taxation system and ensuring a reasonable tax rate, the overall tax revenue in the country will increase because more dividends will be distributed. Even if the tax rate decreases in separate taxation, the total dividend income tax will increase. For your information, as I have been looking into the Korean stock market, the dividend yield is generally around 1.2 to 1.3 on average. So, even if the tax rate in separate taxation decreases, the overall dividend income tax will increase.

Yes, that's right. So, if the country collects a lot of taxes, it's good. In that case, in order to make that amount, you need to pay income tax as well. I think it's possible like that. The reason is, when the dividend income tax goes in that direction, Korea's discount will decrease significantly. If the Korea discount decreases significantly, it means the stock market will go up. Then, it seems like people won't mind paying the income tax. So, if the market goes up and you keep making money steadily, well, you pay taxes. Nowadays, in the United States, it's 20%, right? People just pay it and invest in the U.S. market. So, it seems like Korea will become like that. That's why the capital gains tax should be abolished. It's not necessarily about completely abolishing it, but it's like saying, I won't not pay taxes. That's how it sounds to me, not necessarily abolishing it completely.

When introducing it, we should make some modifications to align it more towards benefiting the capital market as a whole. I think that by making such adjustments, a well-prepared tax incentive will be introduced. Although offering tax cuts may pose short-term challenges, I believe that in order for the country's economy to function, we need to do things through such taxes. We need to pave roads, ensure that our country's roads are well-built, invest in systems like trains, which are funded by taxes, and have a well-functioning subway and bus system. In our country, even billionaires take the subway, showing how well-developed our system is. Therefore, we need to pay taxes for such things. If we earn money well, we should be able to pay taxes. Also, the income tax brackets seem outdated, right? However, that's why I

The debate is about the comprehensive income tax, that's right, that's correct. But when it comes to income tax, if you say that we are paying too much income tax, that issue should be sorted out later. It's an issue that needs to be organized while talking about income tax and property tax. Because all taxes are divided into income tax, property tax, and consumption tax. Ultimately, the key point is that we need to pay this fairly from where we should pay more. It's important. However, in our country, it's not going well, right? So, that topic, however, has no limit. Yes. But now, here, rather than the issue of income tax, the tax rate of the fighters is, well, the income tax, so, first of all, if we move the dividend income to this side and the income to this side, the tax rate of the fighters should be adjusted to the level of corporate tax. About corporate tax. So, if it's less than 200 million, the corporate tax is about 10%, right? If it's more than 200 million, then the profit is more than 200 million, the corporate tax is 20%, like that.

If that's the standard, wouldn't it be similar to other countries like the United States? Yes, we always talk about many collapses. No, no, no, this is too biased. Today, I had a calm conversation with Professor Seo, but it really ignited my heart and made me passionate. Of course, we clearly have biases as people who like stocks, so there is definitely more bias in terms of stocks. But if we think rationally for a moment, about the long-term future of our country, the lives of our descendants, the revitalization of our country, and the competition from neighboring countries, especially powerful countries like Japan and China, shouldn't we be aware of the reality and not weaken ourselves? If we want to protect our country by competing with these rival countries, what should we do well?

Should we really be thinking about these things overall? It would be nice if there was a kind of atmosphere in the country where we could think about these things a little. While we are also thinking about these issues, of course, we have our biases, and it may be a bit one-sided to talk about it from our perspective, so there may be things that could go wrong. Nevertheless, if you could understand that this is still a step in a better direction, it would be good. This way, we can avoid making the same mistakes as in the past and not go down the wrong path. Of course, there are individuals who act differently when they go outside, but we could become a warm and good country. It's not like the Nordic countries; we can be a country that can show such a model in East Asia. Therefore, it was a time to think about how we can become like that and how this investment industry can contribute to the country's revitalization. It was a time to think about how we can address these concerns and have a positive impact.

I would like to express my gratitude once again to Professor Seo Jun-sik, who guided us and provided great insights, and I would like to thank all the viewers who have been with us for a long time. Thank you. Thank you.

한국 주식시장으로 새로운 '돈'이 유입되지 않는 이유 | 서준식 교수 #2 [월간 서준식]

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