'Bobusang' offers model for fair trade
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“Bobusang” or peddler merchants played a pivotal role in connecting consumers, producers and middlemen during the Joseon Kingdom. / Courtesy of Lee In-hee
Latest find gives peek at old Korean global traders’ practices
Lee In-hee, CEO of Korea Creative Management
By Chung Ah-young
Rising out of the ashes of the Korean War (1950-53), Korea has joined the world’s economic powers within a very short period of time. Within about half a century, the country has become home to powerful enterprises flexing their muscles on international markets.
But while rushing for economic achievements, Korea is now struggling under the burden created by some entrepreneurs laden with corruption and an absence of ethics.
Some experts believe that Korea should find inspiration in efforts necessary to restore business ethics from Korean history in which ancient merchants called “bubosang” (peddler merchants), including Gaeseong merchants, left a legacy of fair trade along with advanced business skills.
“Bubosang” refers to both “busang” and “bosang” during the Joseon Kingdom (1392-1910). Busang or sack peddlers usually moved large or heavy items, such as fish, salt, pottery, wooden vessels, metalware and bamboo crafts using a variety of tools, such as “jige,” or A-frame back racks, to carry their heavy loads.
Bosang or bundle peddlers carried their goods in wrapped cloth or used shoulder straps, and handled items of relatively high value such as cloth, cotton, silk and ginseng, as well as gold, silver and bronze. Other products carried by bosang included stationery items, ornaments and cosmetics.
Lee In-hee, CEO of the Korea Creative Management and visiting professor of Kwang Woon University, said that the bubosang, once the key retailers, were vital to pre-modern economies in their role of providing a connection between consumers, producers and middlemen. .
“The bubosang were retailers and traders and at the same time walking enterprises back then. They were the backbone of the Joseon economy. They had strong business ethics to operate the nationwide networks,” he said.
The Namdaemun Market in the 19th century where “bobusang” gathered and traded their goods. / Courtesy of Lee In-hee
These operated under strict rules with merchants looking to help each other out and impose rules to establish order in commerce and transactions between busang and bosang.
“Their code of ethics and trade rules is very strict and hard to find in other cases of merchants from around the world. If today’s businessmen learn from them, they might be more responsible for society,” he said.
The bubosang grew out from the Gaeseong merchants whose business skills were high at that time, making the region a hub for global trades throughout the Goryeo and Joseon Kingdoms.
Some aristocrats from the Goryeo Kingdom who resisted a revolt for the new monarchy of Joseon and were strictly banned from landing governmental posts became bubosang to make a living.
But after the state adopted Confucianism as the national ruling ideology, it strongly discouraged commerce and trade.
“Under the social hierarchy shaped by the ruling ideology, tradesmen were treated as one of the lowest class during the Joseon Kingdom. The elite classes disdained any money-making or practical behavior, only respecting scholars or seonbi. Despite the rigid social system, the bubosang found their own ways to survive by keeping themselves more strictly,” he said.
The merchants strictly regulated their members not to deceive customers or make excessive profits and helped others who needed money without any collateral.
The ancient state didn’t acknowledge their growing presence until the Japanese invasion of Joseon in 1592 left the nation devastated.Then, the bubosang played a crucial role in distributing the goods from various regions. Around the 1700s, about 1,000 five-day traditional markets were created nationwide due to increased activities of the peddlers.
This allowed “bubosang” to gather more easily and frequently, while the increased profit from their business provided the wealth to enable the organizations. The merchants were incorporated into the governmental organization called “Sangmusa” in 1883 and received official rights from the government to trade the goods.
However, when the Japanese imperial government colonized Joseon, it dispersed the merchants. “The peddler merchants who survived under the Confucian state with their own ways lost their presence under Japanese rule,” Lee said.
“Looking back, we have a great legacy in which the peddler merchants played a pivotal role for the pre-modern economies while strictly keeping their codes of ethics. We should learn from the past and think about the prevalent corruption and unfairness in our business sectors,” he said.
Jun Seong-ho, a professor at the Academy of Korean Studies, found in his recent research that the Gaeseong merchants used a modern double entry bookkeeping method that records balance sheet, income statement, and allocation of interest.
He studied 14 volumes of accounting books with more than 1,000 pages kept by Park Yeong-jin, a descendant of a Gaeseong merchant, containing detailed accounting information about ginseng farming and trade, cotton and cotton textile trade, and financial businesses from 1887 to 1912.
The documents include account books that record in detail, debt and daily accounting and balance sheets, income statements, and allocation of profits to investors.
“The accounting system used by the Gaeseong merchants has been rarely found in the pre-modern era. This document displays the skills of the Korean merchants,” Jun said in the recent research.
Known for their respectful entrepreneurship, the Gaeseong merchants established their own networks for international trade connecting China and Japan despite the social atmosphere of looking down on merchants.
“It is hard to find the accounting records in this perfect form that records the entire accounting process in the modern double entry bookkeeping system before the 20th century,” said Jun said. “The documents show that Korea used a systematic, modern accounting technique in a unique form which was not influenced by China and Japan in the late 19th century.”