Geopolitics

Manichaean Democracy, What’s Wrong With Referendums

Momentous national referendums in Colombia and Britain have shown how dangerous it can be to put complicated decisions in the hands of a fickle populous.

Colombians voted regarding the peace agreement between the government and the FARC
Colombians voted regarding the peace agreement between the government and the FARC
Graciela Römer*

-OpEd-

BUENOS AIRES â€" Do referendums, plebiscites and other methods of direct public participation serve democracies? Are they really compatible with representative government?

Such direct votes block debate and put off a search for consensus. Instead, they deepen divisions between voters and widen chasms between political parties tasked with resolving conflicts.

In its recent referendum, Colombians rejected a peace deal between the government and the country's longstanding FARC rebel group. Before that, in a similar referendum, Britons chose to opt out of the European Union. In both cases, the results were very close. Voters seemingly considered not just the question at hand. They also evaluated the government's legitimacy.

What’s wrong with citizens helping solve problems that governments are finding hard to overcome? A democracy demands participation but it also needs citizens who are willing to carefully consider the options â€" an increasingly unlikely proposition in today's world.

Democracy requires that people are not just familiar with alternative courses of action but also the consequences of those actions. Above all, democracy needs the kind of information that many political leaders are reluctant to provide. The fact that leaders are using referendums to boost the legitimacy of their governments suggests that something is wrong. The plebiscite has become an instrument of political marketing.

The Colombian case is telling. Complex problems divide the political system. FARC’s killing of hundreds of thousands of people over the years has left many people angry. But the result was bad news, regardless of one's opinion of the peace deal. The very low voter participation muddies the legitimacy of "asking the people". The narrow margin of voters in favor of rejecting the peace deal paved the way for different interpretations of what the people "really" meant to say.

What can the elite propose now after they’ve already given the public the final decision-making power on the deal? A deal that has seen complex negotiations that the public has broadly been shut out of?

How were there massive demonstrations for a Yes vote just days before there was a victory for the No camp? This referendum showed the limitations of direct democracy in resolving complex issues.

Manichaean campaign formats, such as the one that prompted Britons to vote to leave the EU, have replaced the required education and enlightenment of citizens that are needed to make informed decisions. As political debate and democracy become the playthings of the chattering, or Tweeting, masses, false promises have gained sway instead.

As far as one can tell, the yes or no votes cast in recent referendums did not involve considered deliberations of any kind.

*Graciela Romer is a sociologist.

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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