For a more sustainable economy

When it comes to money, people rarely think alike. Some save for the future. Others spend to enjoy the present and display their success. You can intuitively describe these two tendencies as “the survival economy” and “the showing-off economy.” Both forces are clearly visible in Korea today.

The survival economy is driven by caution and the need to secure essentials such as food, housing, health care, and education. In this mode, households save first and spend later, fearing the possibility of losing a job, illness or rising costs.

The figures make clear the prevalence of this mindset among Koreans. Koreans saved at a rate of 35.6 percent in the second quarter of 2025, among the highest in the world. Household consumption was just 48.9 percent of GDP in 2023, far below the global norm of 63 percent. These figures suggest that many families remain firmly in survival mode.

Soaring apartment prices keep young people living with their parents, while older generations face one of the highest poverty rates among older adults in the OECD, often relying on their children or meager pensions. The current high Won-dollar exchange rate is another challenge for them.

Yet the showing-off economy is equally strong, especially among the young. According to Morgan Stanley’s latest estimates, Korea’s millennials and Gen Z are among the world’s most devoted luxury buyers, spending nearly $17 billion a year in recent years on high-end goods.

Social media magnifies this trend, turning every purchase into a public statement of identity. One unique cultural expression, “injeungshot” (proof shot), has also emerged. It might be seen as a form of the Veblen effect.

This contrast — ordinary families saving defensively while conspicuous individuals spend boldly — creates tension for the broader economy. Too much focus on survival weakens consumption and slows growth. Too much off risks debt and inequality. Both paths carry dangers. The challenge lies in finding the right balance.

Politicians obviously have a role to play in finding the answer. But what role should that be? Just as families must balance saving and spending, so too must public policy. On the survival side, the state should strengthen social safety nets, so households need not hoard money out of fear.

On the showing-off side, policy should avoid fueling wasteful consumption through easy credit or short-term growth gimmicks. Instead, fiscal spending should focus on areas that combine personal enjoyment with long-term value.

Korea’s current situation offers both promise and warning. The nation has the discipline of savers and the creativity of consumers. Without harmony, these forces may clash rather than complement each other. Here, for politicians and citizens alike to strike the right mix, another important lesson of history must not be forgotten.

It is here that the line between survival and off shifts. Yesterday’s luxuries become today’s necessities. Smartphones, once a symbol of wealth, are now essential tools of daily life. Both economic policy and people’s economic behavior should be built on this reality. To make it easier to understand, let’s refer to this more flexible and sustainable economic style as “the showcasing economy.”

I value the positive nuance of the term “showcasing,” which is very different from “ off.” If both the country and its people work together to embrace the showcasing economy, we can eliminate the drawbacks of the survival economy and the showing-off economy while maximizing their strengths. In this way, the future of our entire economy need not be bleak.

Sho Chang-young is a retired high school teacher and former principal of Gunsan Girls’ High School.