The Economy is a Chain Reaction System

To engage in economics is to share. Efficiency comes from sharing. If you use a hoe alone, you generate income of 1, but if ten people share it, the benefit is 10 times greater. The Ford production system shares the production line. Division of labor combines the strength of multiple people. In other words, the economy is socialism. However, it's not one-dimensional but four-dimensional.

Rather than one worker making a handmade car alone, it's more efficient for a hundred workers to work together to make one car. The Ford system provides traffic control so that movement lines don't get tangled. If working alone is point-based work, the conveyor belt advances to line-based work, making a dimensional leap.

Here, Lanchester's laws (from military strategy) apply. The economy ascends in dimensions from point to line, to surface, to solid, to fluid. Planting beans one by one is a point, a plow passing through is a line, and spraying pesticide from an airplane is a surface. Lanchester's law states that higher dimensions provide quadratic advantages.

This is where a chain reaction system like Cao Cao's chaining of warships at the Battle of Red Cliffs operates. Cao Cao chained his fleet together with iron chains, creating a playground on the Yangtze River. He expected quadratic advantages by creating a surface, but it burned quadratically fast in Zhou Yu's fire attack. The risk was also quadratically amplified.

Economics doesn't need calculus. Understanding dimensions is important. Whether it's fiscal policy, exchange rates, or interest rates, the economy doesn't produce expected results in expected areas. This is Lucas's rational expectations - since opponents respond accordingly, action creates reaction, and they cancel each other out, resulting in a zero-sum game.

The truth of economics is productivity innovation. Productivity is determined by various factors such as geopolitics, resources, technology, and human resource development. The common point is the chain reaction system. Can you create a Ford production system? Can you share? Geopolitics is important because a country's location is about monopolizing and sharing ports and strategic points.

Singapore is like this. It shares the crossroads between East and West. The Suez Canal shares the Mediterranean and Indian Ocean. Korea shares the Old World and New World. The Pacific and Asia share the Korean Peninsula. Britain shares the North Sea, Mediterranean, and Atlantic. The national territory is an automatic Ford system.

The Ford system has a hundred workers sharing a conveyor belt on a production line, while Europe has a hundred countries sharing Britain as an unsinkable aircraft carrier. Just as fighter planes share one aircraft carrier deck, many countries share Britain's ports, which block and monopolize strategic points.

The problem is that risks are also shared. The economy is socialism. Communism was definitely inspired by the Ford system. As the efficiency of the sharing economy increased, risks also increased together, leading to its downfall. The reason economists' tiresome calculus is unnecessary is because the outcome is decided by sharing.

Isolated countries have no efficiency. Because they don't share with neighboring countries. The reason stores at intersections do good business is because they share four-way roads. They are four times more efficient. The hundred-year debate between leftist demand economics and rightist supply economics is meaningless nonsense.

The economy is efficiency, and efficiency is sharing. You must create sharing. That's the funnel of structure. Keynes's idea of creating demand is just talk - what's important is creating the funnel. In other words, market participants must attach themselves to the Ford system. If everyone goes home during a recession, the system dies.

When the economy improves again, are you prepared to capitalize on it? Schools of fish came, but the fishermen scattered. It's not demand that revives the economy, but the Ford system. The reason the American economy revived is because it won the war. The tide came in again, and they were ready to pick up wallets.

Yeom Kyung-yeop's aggressive baseball failed with base-stealing, but team morale improved instead. Bento's build-up didn't meet expectations, but teamwork improved. Unexpected jackpots hit through various attempts. Why? Because of productivity innovation. It wasn't Kim Dae-jung (former president, 1998-2003) who revived the economy, but the internet.

It wasn't Roh Moo-hyun (former president, 2003-2008) who revived the economy, but the venture boom. It wasn't Moon Jae-in (former president, 2017-2022) who revived the economy, but smartphones. It won't be Lee Jae-myung (opposition leader) who revives the economy, but artificial intelligence. Next comes the turn of humanoid robots. Claims about what people do are all lies, and the reason progressives are strong on economics is because of sharing.

When the tide comes in, you must cast nets, but with rightist economics, fishermen go home and can't cast nets. Park Chung-hee (former president, 1961-1979) revived the economy thanks to the Vietnam War (Korean involvement 1964-1973). The Japanese economy revived thanks to the Korean War (1950-1953). The question is whether you can capitalize on the Vietnam War windfall. What if you're not prepared?

The wallet called productivity drops probabilistically. Since you don't know when the wallet will drop, the system must always be on standby. To stand by, the state must pour in finances to put the entire nation in standby mode. You must raise university students just in case. What if the tide comes in but there are no college students?

Korean university students started getting jobs after graduation from the 1980s. Before that, university graduates all became lumpen. Most 1970s novels were about protagonists who graduated from university but couldn't find jobs and became vagrants. Progressivism = socialism = educational investment = just as the tide came in, jackpot.

With rightist economics, you become the Philippines. Raise university students. They can't find jobs. Close universities. The tide just came in but there are no college students. Perish. Vietnam can't grow conglomerates on its own and depends on foreign investment. Korea's conglomerates grow, but why does Vietnam cling to Korean investment?

They weren't prepared to pick up wallets even when they dropped. They didn't raise experts in each field while practicing communism. Because of the formula expert = bourgeois class. As you can see in the Three-Body drama, doctors are branded as bourgeois rightist counter-revolutionaries. Such preparation cannot be done through market principles.

There are areas where leftist economics produces results. The right says leave it to the market, but the market can't function after people have already starved to death. The result of leaving it to the market became India. India produced domestic cars from the 1950s. Until Tata Motors, it regressed and remained in the 1950s.

The economy is simply a blackout. When a major power outage occurs, it takes a week to restart the power plant. You need to start the generator, but that also requires electricity. The generator won't start because there's no electricity. It's like the molten iron in Pohang Steel's blast furnace cooling and hardening.

What makes the economy prosper is a chain reaction system, and what makes it collapse is also a chain reaction system. The greater the multiplier effect = Lanchester effect, the greater the risk. Private sector can't prepare for risks. Private sector has no room because it's pressed by competition. The government, which can print unlimited money, must handle it. Pass the consequences to consumers by raising prices.

Lee Jae-myung's hotel economics is poorly explained. A guest made a reservation for 100,000 won. The 100,000 won goes to a bakery, then to a clothing store, creating 500,000 won of economic activity. The chain reaction system operates and the entire market comes alive. At that moment, a wallet must luckily roll by. That depends on probability.

Just then, someone won the lottery and booked ten hotel rooms. The person who initially made the 100,000 won reservation canceled, but it doesn't matter. It's a battle of probabilities. What if it goes the other way? Because no one initially made a 100,000 won hotel reservation, the hotel failed. The bakery also failed and everything failed. The lottery winner went to another city.

100,000 won can save an entire city. However, countries that work work, and countries that don't work don't work. Appropriately, Japan needed the Korean War, Korea needed the Vietnam War, Kim Dae-jung needed the internet, Roh Moo-hyun needed the venture boom, Moon Jae-in needed smartphones, and Lee Jae-myung needs artificial intelligence to explode. If the wallet doesn't come, you perish.

Africa doesn't work. Hotel economics only works for Korea. But countries that work work probabilistically. America lived on automobiles and electricity, Japan lived on electronics, Korea lived on the internet, and something keeps coming out. Communism perishes because it doesn't prepare for industrial innovation.

Communism – advance planning → destruction 

Capitalism – probability preparation → success

Planned economy can't prepare for sudden innovations. Who predicted the internet? Nobody foresaw it. Did Park Chung-hee plan the Vietnam War? Did Kim Dae-jung plan the internet? Did Roh Moo-hyun plan the venture boom? If you plan, you fail; if you prepare for probability, you prosper. This is possible through leftist demand policies.

Economists' gains and losses - arithmetic progression 

Structural theory's multiplier effects and risk effects - geometric progression

The economy prospers geometrically when it prospers and collapses geometrically when it collapses, so if leftist plans go wrong, they collapse geometrically, and rightist supply is also belated, so it collapses geometrically. Japan's following market principles and moving factories to Southeast Asia and becoming beggars is rightist destruction economics.

Left wing - Planning in advance leads to failure. However, developing countries are exceptions. Developing countries imitate the pre-verified economies of developed countries, so there's no risk from uncertainty. The left wing perishes by imitating developing countries.

Right wing - Leaving it to the market means you can't respond when opportunities come, leading to failure. Preparing minimal priming water for when chances suddenly come is the government's role. Private sector can't prepare because it's pressed by competition.

역주:

• Romance of the Three Kingdoms (Chinese classic): The Battle of Red Cliffs is a famous naval battle where strategic chaining of ships backfired
• Yeom Kyung-yeop: Former Korean baseball manager known for aggressive tactics
• Bento: Paulo Bento, former Korean national soccer team coach
• Lumpen: Short for lumpenproletariat, referring to unemployed intellectuals

The Economy is a Chain System (Yeonhwan-gye)

Translation of Kim Dong-ryul's Economic Theory from Gujo-ron Perspective

To engage in economics means to share. Efficiency emerges from sharing. If one person uses a hoe alone, they generate an income of 1, but if ten people share it, the benefit increases tenfold. The Ford System operates by sharing production lines. Division of labor combines the efforts of multiple people. In essence, economics is socialism—not one-dimensional, but four-dimensional.

Rather than having one worker craft an entire automobile by hand, it's more efficient for a hundred workers to collaborate in producing a single car. The Ford System serves as the traffic controller, preventing workflow entanglements. If individual work represents point-level operation, the conveyor belt elevates this to linear operation, achieving a dimensional leap.

Here, the Lanchester Law comes into play. Economics progresses dimensionally from point to line, to surface, to solid, to fluid. Planting beans one by one represents a point; a plow's path forms a line; spraying pesticide from an airplane creates a surface. According to Lanchester's Law, higher dimensions provide quadratic advantages.

This is where a yeonhwan-gye (chain system) operates, similar to how Cao Cao chained his warships together at the Battle of Red Cliffs. Cao Cao bound his fleet with iron chains, creating a stadium on the Yangtze River. He anticipated quadratic advantages by creating a surface formation, but Zhou Yu's fire attack caused his fleet to burn quadratically faster. The risk had also expanded quadratically.

Economics requires no calculus—understanding dimensions is what matters. Whether dealing with fiscal policy, exchange rates, or interest rates, economics rarely produces expected results in anticipated areas. This is Lucas's rational expectations: since counterparts respond accordingly, every action produces a reaction, resulting in mutual cancellation and zero-sum outcomes.

The truth of economics lies in productivity innovation. Productivity is determined by various factors including geopolitics, resources, technology, and human resource development. The common thread is the yeonhwan-gye (chain system). Can you create a Ford System? Can you share resources? Geopolitics matters because a nation's location enables it to monopolize harbors and strategic passages through sharing.

Singapore exemplifies this—it shares the crossroads between East and West. The Suez Canal shares the Mediterranean and Indian Ocean. South Korea shares the Old and New Worlds, with the Pacific and Asia sharing the Korean Peninsula. Britain shares the North Sea, Mediterranean, and Atlantic. The territory itself becomes an automatic Ford System.

While the Ford System allows a hundred workers to share a production line via conveyor belt, Europe operates with a hundred nations sharing Britain as an unsinkable aircraft carrier. Just as fighter jets share a single aircraft carrier deck, numerous countries share British ports, which monopolize and control strategic passages.

The problem is that risks are also shared. Economics is socialism. Communism was certainly inspired by the Ford System. As the efficiency of shared economy increased, risks increased proportionally, leading to its downfall. Economists' tedious calculus becomes unnecessary because the outcome is determined by sharing.

Isolated countries lack efficiency because they don't share with neighboring nations. Corner shops at intersections thrive because they share four-way traffic—they're four times more efficient. The century-long debate between leftist demand-side economics and rightist supply-side economics amounts to meaningless busywork.

Economics is about efficiency, and efficiency comes from sharing. You must create sharing—that's the structural funnel. Keynes's notion of demand creation is just talk; creating the funnel is what matters. Market participants must attach themselves to the Ford System. If everyone goes home during a recession, the system dies.

The question is whether you're prepared to capitalize when prosperity returns. When schools of fish arrive but fishermen have scattered, demand doesn't revive the economy—the Ford System does. The American economy recovered because it won the war. Water flowed back in, and they were ready to scoop up the windfall.

Manager Yeom Kyung-yeop's aggressive baseball failed due to base-stealing, but team morale improved. Coach Bento's build-up play fell short of expectations, yet teamwork improved. Unexpected jackpots emerge through yeobuddaegi(collective momentum). Why? Because of productivity innovation. Kim Dae-jung didn't save the economy—the internet did.

Roh Moo-hyun didn't save the economy—the venture boom did. Moon Jae-in didn't save the economy—smartphones did. Lee Jae-myung won't save the economy—artificial intelligence will. Next comes the age of humanoid robots. Claims about human agency are lies. Progressives excel at economics because of sharing.

When the tide comes in, you must cast nets, but if you pursue rightist economics, fishermen go home and can't cast nets. Park Chung-hee's economic success came courtesy of the Vietnam War. Japan's economic revival resulted from the Korean War. The question is whether you can capitalize on Vietnam War windfalls. What if you're unprepared?

The wallet of productivity drops probabilistically. Since you never know when it will fall, the system must remain constantly on standby. To maintain readiness, the state must pour resources into keeping the entire population in standby mode. You must educate university students just in case. What if opportunity arrives but there are no college graduates?

Korean university graduates began finding employment only from the 1980s. Previously, college graduates all became unemployed drifters. Most 1970s novels featured protagonists who graduated from university but couldn't find jobs, becoming social outcasts.  

Progressivism = Socialism = Educational Investment = Jackpot when opportunity arrived.

Rightist economics leads to becoming the Philippines. You educate university students. They can't find jobs. Universities close. Opportunity arrives, but there are no college graduates. Collapse follows. Vietnam fails to nurture its own conglomerates, depending on foreign investment. While Korean chaebols grow, why does Vietnam depend on Korean investment?

They weren't prepared to pick up the wallet when it dropped. Communist focus on ideology prevented them from developing specialists in various fields due to the "specialists = bourgeois class" equation. As seen in the Three-Bodydrama, doctors are branded as bourgeois rightist counter-revolutionaries. Such preparation cannot be achieved through market principles.

There are areas where leftist economics succeeds. Rightists claim to "leave it to the market," but markets cannot function after everyone has already starved. Leaving it to the market resulted in India. India produced domestic automobiles from the 1950s but regressed, remaining stuck in the '50s until Tata Motors.

Economics is simply about blackouts. When a major power outage occurs, restarting power plants takes a week. You need electricity to start the generators that produce electricity. Without electricity, generators won't start. It's like molten steel cooling and solidifying in POSCO's blast furnaces.

Economic prosperity operates as yeonhwan-gye, and economic collapse does too. The greater the multiplier effect (Lanchester effect), the greater the risk. Private entities cannot prepare for such risks—they're too pressed by competition to maintain reserves. Only governments with unlimited money-printing capacity can handle this, passing costs to consumers through inflation.

Lee Jae-myung's hotel economics explanation was flawed. A guest makes a 100,000 won reservation. That money goes to bakeries and clothing stores, generating 500,000 won of economic activity. The yeonhwan-gye operates, reviving the entire market. At that moment, a wallet must luckily roll by—that depends on probability.

Suppose someone wins the lottery and books ten hotel rooms. The original 100,000 won reservation gets canceled, but it doesn't matter—it's a probability game. What if the reverse happens? Because no one made the initial 100,000 won hotel reservation, the hotel fails. Bakeries fail, everything fails. The lottery winner went to another city.

100,000 won can save an entire city—but only in countries where it works, not where it doesn't. Appropriately, Japan had the Korean War, Korea had the Vietnam War, Kim Dae-jung had the internet, Roh Moo-hyun had the venture boom, Moon Jae-in had smartphones, and Lee Jae-myung needs artificial intelligence to hit. Without the wallet, collapse follows.

Africa doesn't work. Hotel economics only works in Korea. But countries that work, work probabilistically. America thrived on automobiles and electricity, Japan on electronics, Korea on the internet—something continuously emerges. Communism collapses because it fails to prepare for industrial innovation.

Communism - Predetermined planning → Collapse
Capitalism - Probability preparation → Success

Planned economies cannot prepare for sudden innovations. Who predicted the internet? No one foresaw it. Did Park Chung-hee plan the Vietnam War? Did Kim Dae-jung plan the internet? Did Roh Moo-hyun plan the venture boom? Planning leads to failure; preparing for probability leads to success. This is achievable through leftist demand policies.

Economists' profit and loss - Arithmetic progression
Gujo-ron's multiplier and risk effects - Geometric progression

Economics prospers and collapses geometrically, so when leftist planning goes awry, it fails geometrically, and when rightist supply policy proves belated, it also fails geometrically. Japan's adherence to market principles—moving factories to Southeast Asia—resulted in impoverishment through rightist economic destruction.

Left-wing - Planning ahead leads to failure. Exception: developing countries. Developing countries imitate proven advanced economies, eliminating uncertainty-based risks. Leftists fail by mimicking developing countries.

Right-wing - Leaving everything to markets results in failure to respond when opportunities arise. Preparing minimal pump-priming for sudden opportunities is the government's role. Private entities, pressed by competition, cannot prepare adequately.

Translator's Note: This column demonstrates Kim Dong-ryul's application of Gujo-ron (Theory of Structure) to economic analysis. The term "yeonhwan-gye" (chain system) represents his concept of interconnected economic systems that amplify both benefits and risks through dimensional scaling—a core principle of his structural theory. The analysis critiques both pure market capitalism and rigid socialist planning, advocating for a systematic approach that prepares for probabilistic opportunities through shared infrastructure and education.