How corporate-friendly newspaper abused Nobel Prize winner’s work

[box title=”Update (Oct 27, 2015)” box_color=”#777777″]Korea Economic Research Institute—sister organization of Hankyung is going to hold a symposium entitled What Angus Deaton’s winning of Nobel Prize in Economic Science means and Its Implication to Korean Economy on November 3. With the speakers including Jung Kyu-jae and Hyun Jin-kwon. The host, head of the institute Kwon Tae-shin just repeats what the two have argued about what Deaton meant in the invitation. These guys are just insistent—I can give them that![/box]

When Thomas Piketty visited South Korea, in which he had rock star status like he did in the rest of the world, and gave a public lecture last year, one of the audience asked what he thinks of Angus Deaton’s argument that “inequality is the source of growth.” Puzzled, according to an economist who was there, Piketty emphasized that what Deaton argues is not so different from what he does.

Did Deaton argue that inequality promotes economic growth? Yes, according to a South Korean business newspaper: “Princeton professor Angus Deaton’s The Great Escape is appraised to have proven convincingly and logically that how inequality stirs growth and how equal the world becomes as a result,” the Korea Economic Daily, namely Hankyung, said in its review of the Korean edition of The Great Escape, which is published by Hankyung BP, the newspaper’s publishing company, in last year’s September.

Strange confrontation

The review squarely puts Deaton against Piketty, whom the review refers to as “provocateur” and “quack.” It wasn’t the first time that the newspaper did so. “Thomas Piketty’s Capital in the Twenty-First Century is a twenty-first century version of this old delusion,” Jung Kyu-jae, chief editor of the newspaper, argues, referring to one of Piketty’s main ideas that the world is becoming more unequal, in his column written in June 2014, three months before the newspaper publishes The Great Escape.

Then Jung brings up The Great Escape, which argues, according to him, that “the world is becoming equal and it gets happier as it gets richer.” Half a year after the book was published, Jung summons Deaton again in his another column in March 2015, saying that “Angus Deaton explains that inequality is both an agent and a result of the success of capitalism.”

In his introduction attached to the Korean edition, entitled Piketty vs. Deaton on inequality, Hyun Jin-kwon, head of the Center for Free Enterprise, argued that as a nation’s income level increases, poor class’s absolute income also goes up, which, in fact, contradicts what Deaton argued in the chapter 5 of his book. Center for Free Enterprise is an offshoot of the Federation of Korean Industries, the members of which are also major shareholders of Hankyung. FKI awarded the Market Economy Award to the Korean edition of The Great Escape last December.

Then came the Nobel Prize in Economic Science. A salvo of Hankyung’s applauding articles followed. “[Deaton] has been emphasizing that capitalism is reducing inequality more than any eras in history,” its report on the Nobel Prize winner announcement said. In its news commentary with the headline Inequality is the foothold of growth… The Great Escape proved Piketty wrong, Hankyung again brought up the Piketty vs. Deaton frame.

Right-wing’s choice against Piketty

Interestingly, the news commentary reveals, out of pride it seems, how Hankyung came to publish the book. In the beginning there was Piketty, of course. And the rising awareness of inequality worldwide. “As Occupy Wall Street movement breaks out in the U.S. and the ‘1% vs. 99%’ idea pervading local political scene,” a unnamed academic was quoted to have said, “there was growing sympathy that there has to be an alternative to [Piketty and his theory of inequality.]” “Academia” chose Deaton as an “antagonist of Piketty,” Hankyung says, and here came the Korean edition of The Great Escape.

There’s no way to find out who was the unnamed academic quoted in the news commentary but the academia in question wouldn’t probably be bigger than the commentators for Hankyung and the Center for Free Enterprise. Because, as it turned out, the Piketty vs. Deaton frame does not make any sense to other economists.

“They don’t contradict each other,” Société Générale economist Oh Suk-tae told Chosun Ilbo. “While Deaton focuses on the inequalities of developing countries, Piketty deals with those of developed countries… They supplement each other and Deaton accepts it as he quotes Piketty’s study in his work The Great Escape.” Another economist thinks so. “Deaton is affirmative of Piketty’s work and Piketty was influenced a lot by Deaton’s work,” LG Economic Research Institute fellow Jung Song-tae said.

However, Hankyung took the lead in showcasing Deaton’s thoughts in Korea and the rest of South Korean media followed. For a while, Deaton remained in Korea as the archenemy, or better yet, the slayer of Piketty.

How The Great Escape was distorted

About a week later the Nobel Prize announcement, a Korean economist wrote an analysis on how Hankyung “distorted” The Great Escape in translation. Gimm Gong Hoe, Hankyoreh Economy & Society Research Institute fellow, found out that Hankyung removed the whole preface, two thirds of the original introduction, and many paragraphs out of the Korean edition; changed the titles of most of the parts, chapters, and sections, distorting what Deaton actually meant to argue about inequality to a considerable degree.

Hankyung BP explained that they intended to make the original text easier to read while maintaining what the Nobel laureate meant intact, in regard to removing the preface and two thirds of the introduction out of the translation, in its statement released after Gimm’s analysis stirred controversy. “Though there’s suspicion over distortion of the original text, we state clearly that we did not distort or change any of the original contents,” Hankyung BP said.

In response to Hankyung’s statement, Gimm wrote an extensive comparison of the original text and the Korean edition.

Among tons of examples of the arbitrary changes and omissions in the Korean edition Gimm has found out, most telling are the willful omissions of sentences in the chapter 5, Material Wellbeing in the United States. The following sentences are omitted in the Korean edition: “Powerful and wealthy elites have choked off economic growth before, and they can do so again if they are allowed to undermine the institutions on which broad-based growth depends.” “If bankers and financiers have private incentives that exaggerate their social incentives, we will get too much banking and financing, and there is no defense for the inequality that they cause.”

“By changing titles and omitting important parts which reflects the author’s view, Hankyung BP seriously distorted what The Great Escape was meant to be,” Gimm said. “I suspect that this is the result of the ideology of Hankyong and Center for Free Enterprise being projected over the book.”

Deaton mobilized

The right-wing, corporate-friendly ideologues behind Hankyung “mobilized” Deaton in order to refute Piketty and the left, Gimm says in his analysis. Piketty and his work ignited the everlasting debate between the left and the right in Korea, in regard to economic system including taxes, welfare, and chaebol. Piketty’s rock star status supported a lot to the left’s argument so the right had to pick up a counterpart, which happened to be Deaton.

While Piketty argued that inequality is a serious contradiction of capitalism and a high tax on capital in the hands of a small number of rich should be levied in order to correct the inequality, Hankyung argues, in the name of the Nobel laureate Angus Deaton, that inequality is, in fact, the driver of growth and it tends to decrease throughout growth so it shouldn’t be artificially, in other words, by governmental intervention, reduced.

“Hankyung BP has agreed to remove the current Korean-language edition from sale,” Princeton University Press, publisher of the original work said in its press release on October 22. “They will release a new edition, with a new translation of the text that will be independently reviewed, to accurately reflect the original text of Prof. Deaton’s book.”

Should Hankyung be allowed to publish the new edition? Kim doesn’t think so. “The society, the academia, and the readers should not allow Hankyung to publish the new edition.”

More importantly, is Hankyung capable of publishing the accurate translation?

What Hankyung wanted to say (in the name of Nobel laureate)

Right after the book was published in September 2014, Hankyung published an interview with Deaton. Under the headline ‘Good inequality’ grows economy and improves life… I don’t understand why Picketty thinks absolutely ill of inequality, Deaton is reported to have said that “inequality is not only the result of growth but also the driver of growth and progress.”

“While Thomas Piketty’s Capital in the Twenty-First Century was instigating inequality last year, Hankyung published Professor Deaton’s major work The Great Escape, introducing an appropriate theory of economic development,” Hankyung wrote in its editorial a day after the news of Deaton winning the Nobel Prize broke out.

“Those who are regressive and deny growth while saying that they are criticizing the gap are not inconsiderable,” the editorial says. “So are the ideas of economic democracy, indiscriminate welfare, and distribution-first. If we stop growing, we are only to be regressed into more unequal society.”

“We need to listen carefully what Deaton said,” the editorial concludes.

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