AI and KOSPI Alone Won't Guarantee 'Success for All'

Despite the South Korean government's focus on AI and semiconductor-driven industrial innovation, public sentiment regarding the economy remains largely negative. Citizens are grappling with rising housing prices and extreme stock market fluctuations, even as the government champions its technological advancements. The central problem, according to the article, is that the fruits of industrial growth are not effectively reaching the majority of the population through employment, income, or social welfare programs. This has led to a deepening societal reliance on assets like real estate and stocks for survival and future security.

The government's strategy hinges on fostering an AI-centric economic paradigm, with public infrastructure supporting corporate development and a portion of the generated wealth being reinvested into public initiatives. While the direction is commendable, structural challenges persist. One significant hurdle is scalability: the trickle-down effect of corporate success is uncertain. Despite strong growth in the semiconductor sector and positive earnings for leading companies this year, the daily lives of citizens, marked by inflation, employment concerns, and income inequality, remain difficult. Another challenge is the time lag: long-term projects yield results over years, but public opinion operates on a much shorter timescale, leading to a disconnect between policy visibility and public perception. The root of these difficulties lies in the inadequacy of alternative support systems for employment, income, and welfare.

The void left by these weak social safety nets is increasingly being filled by private avenues like real estate and stock investments, fueling intense desires and frustrations within South Korean society. The government has pursued a dual approach of 'real estate suppression' and 'stock market activation.' However, the more fundamental issue than whether money flows into real estate or stocks is the extent to which these private assets encroach upon labor and public services. Overlooking this can lead to attempts to fill the gaps in corporate-centered industrial policy with stock market gains, thereby underestimating the risks of an asset-dominated society.

In contemporary capitalism, an individual's economic resources are built on three pillars: income, assets, and welfare. The emphasis on each pillar shapes consciousness, life, and political discourse. Traditionally, the primary distribution of income by the market and redistribution by the government were the main sources of political and social division. However, as asset accumulation mechanisms have become more sophisticated and asset-based stratification has solidified, 'assets' have emerged as a central theme in politics and culture. The concept of an 'asset-based class' cuts across traditional capital-labor divides, fragmenting the middle and working classes. This is evident in the housing market, where homeowners and renters are divided, and in the financial sector, with distinctions between large investors, individual investors, leveraged investors, and those excluded from investing. These asset statuses create significant differences even among individuals with similar occupations and incomes.

While modern welfare states collectively manage individual risks through taxation and social insurance, 'asset-based welfare' relies on individuals accumulating housing and financial assets to prepare for unemployment, illness, and old age. Many develop an 'investor' identity and culture, aligning their policy demands and political choices with their asset-based class interests. In such a society, focus is concentrated on asset acquisition and growth, leading to resistance against government spending and taxation aimed at social integration. South Korea, with its vulnerable welfare system, income disparities, and job insecurity, pushes people towards 'assets.' With a projected non-regular worker rate of 38.2% in 2025, an average exit age from primary employment of 50.5, and a life expectancy of 84, the line between desire and necessity blurs. Unable to precisely calculate the risks to their future, people strive to accumulate as much as possible while they can.

Real estate is the sector where the desire for asset growth and its negative consequences are most pronounced. South Korea's household assets include over 60% in non-financial assets, significantly higher than the 30% range in the U.S. and Japan. Polarization is also severe, with the country experiencing some of the world's highest increases in high-priced housing. However, viewing homeownership itself as speculation is extreme. The Korean housing system has historically maintained a balance between homeowners and renters, with a national homeownership rate of 56.9% in 2024. The government must carefully balance multiple objectives: curbing ultra-high-priced and speculative properties, protecting ordinary homeowners, improving conditions for acquiring homes, and supporting renters.

The most confusing area currently is financial assets like stocks and funds. Stocks, in particular, have become rapidly popularized in recent years. According to the Insurance Research Institute's 'Structural Increase in Stock Investment Population and Implications,' the number of stock investors surged from 6.19 million in 2019 to an estimated 14.56 million by 2025, representing 31% of the adult population. The proportion of stocks and funds in household financial assets also rose from 18.1% in 2019 to a projected 26.5% in 2025.

However, stocks are not necessarily a more 'sound' asset than real estate. Extreme short-term volatility can occur, potentially sacrificing economically vulnerable individuals during structural transitions. Stocks are not inherently more egalitarian than housing. An analysis of data from the Korea Securities Depository by independent lawmaker Kim Jong-min's office shows that the top 10% of individual investors held 83.7% of total stock assets in 2025. Furthermore, financial assets often lead to real estate investments, meaning the equation of 'stocks instead of housing' does not hold true. A Bank of Korea report on 'Evaluation of Stock Wealth Effect in Korea' indicates that Korea invests the largest portion of its stock capital gains into real estate compared internationally. Households without homes transfer 70% of their stock capital gains into real estate investments. While low-income individuals, the elderly, and those with lower net worth use stock profits for living expenses, high-income and high-asset individuals utilize them for real estate transactions.

The government's current task is not simply to boost the KOSPI index again. The stock market, being open to the global economy, cannot be permanently stabilized by government efforts alone. Instead, the policy framework needs to be broadened to ensure societal stability even amidst a volatile market environment. In an era of upheaval and uncertainty, the political challenge lies in...