Small Ball Game in the Land of Black Swans

[Seoul Sinmun · Open World · August 15, 2013]

Yun Suk-myung, Director of the Pension Research Center at the Korea Institute for Health and Social Affairs (KIHASA)

I am spending a suffocatingly hot summer in a research office where the air conditioner is off. It is easy to think that power shortages, which cause great suffering, are simply due to incorrect demand forecasting and can be solved by hastily building a few more power plants. Thermal power generation results in expensive electricity, and nuclear power, which has lower unit costs, is not easy to construct due to public opposition. If electricity prices rise because of thermal power generation, concerns over the strained lives of ordinary people and the weakening of corporate competitiveness will grow.

It seems that problems that lead to such dilemmas will arise everywhere. Power shortages are the prelude to a complex problem that will become even more entangled if not handled properly. Although there were issues with public relations and the definition of the middle class, this is why our reality—where there is immense backlash against minute tax adjustments intended to meet welfare demand and address tax revenue shortfalls caused by the economic recession—seems frustrating.

A "Black Swan," meaning a black swan, refers to an event that seems impossible to occur but brings about a massive ripple effect once it does. After Europeans, who believed swans were white, discovered black swans in Australia, the term began to be used to describe "the occurrence of something that seems impossible." To me, our country seems to be a land of black swans. This is because Samsung surpassed Sony, Hyundai Motor is catching up to Toyota, and we are the only country with a population of over 40 million since the 20th century to have crossed the threshold into the developed world.

Where there is a bright side, there is also a dark side. In 50 years, life expectancy has increased by more than 20 years, and the once-high fertility rate has fallen to the lowest level in the world. Birth control, once a successful government policy, long ago became a national disaster. While it took France 154 years for the older population to increase threefold (7% → 20%), it is projected to take us about 26 years. In the eyes of developed countries, another black swan is appearing in Korea.

The issue of securing welfare funding to meet welfare needs and resolve income polarization is only the beginning. This is because we are already struggling to secure funding for the Basic Pension, the National Health Insurance, the National Pension, and the Government Employees Pension, all of which will see expenditures surge due to population aging. While most citizens call for the expansion of welfare, it is currently difficult to form a social consensus on securing the necessary funds. In a situation where conditions are changing so rapidly, would it be possible to solve these problems through what would be called a "small ball" game in baseball? Can we overcome the crisis of massive runs allowed—such as several grand slams caused by population aging—using a traditional small ball game that relies on past data and perceptions? I believe not. Small ball is a concept contrasted with "big ball," which relies on specific players capable of hitting home runs or long hits; it refers to baseball where the entire team competes through organizational strength, such as bunts, stolen bases, and advancing runners.

This is not because small ball games are inherently bad, but because various data—the foundation of small ball games—cannot be properly reflected to the public in a timely manner due to the decrease in the working-age population, the decline in the potential growth rate, and the surge in welfare demand. This is the background of my belief that we have reached a point where "total baseball" is needed: an integrated baseball that seeks a breakthrough by relying on individual creativity—represented by talented players in big ball—while simultaneously employing small ball to achieve social integration by fully exercising teamwork.

Rather than burying issues because they are difficult to solve, efforts must be made to put them to public deliberation as soon as possible. Our citizens are people who, even if cold at first, empathize more easily than expected if the reasons are properly explained. If we calmly explain that welfare is for the state to take responsibility for a minimum standard of living even when one fails in an endeavor, and that to operate such welfare systems, we must bear slightly more of a burden than we do now, a significant number of citizens will agree, despite some growing pains.

Creativity can be unleashed through challenges that risk failure only when there is a dense social safety net. Integrated baseball in the literal sense will become possible only when talented players armed with a spirit of challenge and creativity appear. The power shortages experienced in the midst of a heatwave can be a good experience for the citizens enduring the hot summer and for the future of our country. It is time we once again need our black swan examples that "turned crisis into opportunity and made the impossible possible."

Source: Seoul Sinmun (original article)