The Neoliberal Strategy of South Korean Conglomerates

Abstract

Neoliberal strategy, which was adopted and implemented after 1987, lies behind the success of South Korean conglomerates (chaebols), and it was strengthened during the Asian financial crisis in 1997. Faced with new spatio-temporal conditions and the massive struggle of workers, the chaebols started a project to restore capitalist power. To this end, the chaebols actively supported the political powers who represented them and adopted American and Japanese strategies for globalization and flexibilization. After enduring the 1997 crisis, the chaebols shifted from growth- to profit-orientedness due to external pressures, and neoliberal strategy intensified due to an emphasis on globalization and flexibilization. However, the chaebols’ neoliberal strategy should be defined as distinctly Korean. They still maintain corporate governance in which the ownership and management are combined, mobilize resources for the owners’ objectives, and conduct unrelated diversification. In addition, the chaebols have accumulated capital by transforming themselves into industrial, commercial, or financial capital since the 1950s.