Geopolitics

Dickens Revisited, "End Of History" To Endless Strife

Instead of global stability, the end of the Cold War has ushered in an age of high-tech changes and social turmoil. New tales of two cities for the 21st Century.

A tale of two cubic cities
A tale of two cubic cities
Ricardo E. Lagorio*

BUENOS AIRES â€" When Francis Fukuyama wrote his revolutionary article "The End of History" in 1988, communism was collapsing and the historic ideological clash between the political Left and Right seemed to be fading away. The dawn of a new era seemed inevitable.

Instead, 28 years later, we might call ours a Dickensian era, one "of two cities," where the spring of hope lives alongside a winter of despair.

Duality seems to be constant, though not necessarily consistent, in our globalized world. Ours is a world marked by cohabitations and impositions, interdependence and local autonomies, by symmetrical and asymmetrical patterns.

And as such, the Dickensian comparison can be made: We have two worlds (rather than two cities), the Westphalian world of nation states and the hypertechnical, interconnected world of the 21st century, that live side by side.

And therein lies the tension, and challenge. Today a leap in global governance is needed in the face of an ongoing technological revolution. The rising power of new communication technologies, which link people with massive amounts of information, will make the 21st century one of surprises, ambiguity and instability. But, yes, also one of great opportunities.

Continuous innovation and an increasingly interconnected global population will present peoples and governments with complicated challenges. The nation state has already ceded part of its authority and influence in world affairs. With the increase of non-state actors and private and individual networks, state power is being challenged from above and below, respectively by supra-national and local currents.

In our time, power is increasingly in networks not hierarchies, and one must learn to interact with a growing body of regional and international entities and leaders. Many sectors of the state apparatus, especially foreign ministries, are currently suffering from a reduction of their decisive role in global affairs. But since there is no replacing diplomacy for now, they continue to exercise leadership, through coordination.

There are also worrying signs of degradation, as traditional, Westphalian-type conflicts erupt alongside new, asymmetrical threats. Expect to see more wars inside states than between them, and more conflicts involving non-state actors. These will emerge and spread like epidemics, as will the kind of inequality that weakens institutions, erodes social fabrics and threatens the very existence of states.

Non-polar, non-state

It seems as if the world were caught in an argument between the worst of the old ideas and the latest advances. We are in a kind of non-polar situation: Power has been distributed among a vast range of state and non-state actors, all potentially able to exert influence.

In this world of greater autonomy, cooperation is possible and necessary, and our need is to forge a shared agenda, global in its scope and with sustainable development as its road map.

As internal and external domains permeate each other, sovereignty becomes relative and yields territory to connectivity. As Parag Khanna observes in his book Connectography, with millions of kilometers of cables, tubes, rail tracks and roads being built compared to just 500,000 kilometers of land frontiers around the world, connectivity may well become the new sovereignty.

Now this interconnected and interdependent world presents us with challenges and moral dilemmas: How do we safeguard certain principles in the face of the requirements of growth and development? How does one balance the national interest with the undoubted need for humanitarian interventions in faraway lands? How should global governance be used to attain national objectives? How can we establish an agenda to make international systems truly representative? And how can we work for peace, development and a measure of stability that might just manage to turn our winter of despair into a new spring of hope?


*Ricardo E. Lagorio is a longtime member of the Argentine Foreign Service.

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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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