b. ㉡ Economic Capacity

㉡ Economic Capacity

 

Secondly, economic capacity refers to the amount of goods, in other words, property^{[Def. 1.2]}. The more natural resources, commodities, real estate, and production facilities one possesses, the larger their economic capacity. Essentially, this is the ability to make people materially abundant in terms of consumption.

 

The definition of economic capacity here considers only "goods" and excludes "services." In contrast, in economics, economic behavior is generally considered as "human behavior related to acquiring and consuming or using property (wealth)," including both tangible goods and intangible services. However, the reason I primarily exclude services from the definition of economic capacity is that, amid the confusing basic discussions in political science, the definition of economic concepts that include services has been excessively expanded to cover explanations of the political realm.

 

The object of economic activity, "services," can be viewed as part of economic phenomena, but it is also a political phenomenon. For example, the legal services responsible for handling the century-long lawsuit between Samsung and Apple over smartphone and tablet PC patents could be classified as an economic service, but the act itself should be seen as a political activity that changes the legal and power structure. The activity of private military companies that act as military agents for corporations is also a political activity, such as warfare. Furthermore, many service activities have the essence of being activities of people that cause changes in power and rule systems. To reduce this ambiguity, I will mainly exclude services from economic capacity and include only goods for discussion.

 

Examples and means of acquisition for economic capacity are as follows.

 

[Tab.3.13] Means of Acquiring Economic Capacity and Political Effects

Scale of Phenomena	Examples of Economic Capacity	Means of Acquisition	Political Effects
㉠ Macro- level	Large-scale natural resources, multinational production organizations, etc.	International investment and development	Global economic change
㉡ Middle- level	Factories, high-rise buildings (real estate), etc.	Corporate investment and development	Regional economic change
㉢ Micro- level	Consumer goods, cash, etc.	Individual labor income and savings	Individual abundance and poverty

 

As shown in the table above, economic capacity will be classified as "macro-level economic force," "middle-level economic force," and "micro-level economic force" depending on the scale of the phenomenon.

 

 

Macro-level Economic Force

 

Macro-level economic force refers to large-scale strategic assets such as natural resources, multinational production organizations, and national budget organizations, such as the oil in the Middle East or state-of-the-art aircraft production facilities of multinational airlines, and the IMF's annual budget. To obtain these vast economic capacities, international cooperation and investment development among various countries are necessary. A superpower like the United States in the 21st century could develop and own these strategic assets alone without the cooperation of other countries. Such global strategic assets directly affect changes in the world economy.

 

An example of macro-level economic force exercise is the so-called first oil shock, which occurred as a result of the 4th Middle East War in October 1973. The six oil-producing countries in the Persian Gulf began to raise prices and cut production, causing the price of oil to quadruple and leading to stagflation, where double-digit inflation and negative growth overlapped, which most developed countries in 1974 had to experience.

 

 

Middle-level Economic Force

 

Middle-level economic force includes factories in the region, real estate such as high-rise buildings, and important technological patents. In addition, department stores, bridges, islands, and large-scale farmland are also included. While these may be considered significant assets from an individual's perspective, they may be relatively small economic assets from a national perspective. Examples of even greater economic force include port facilities, highways, and airports, which can be considered either macro-level economic force or middle-level economic force depending on the level of discussion. To acquire middle-level economic force such as factories or buildings, corporate investment and development are necessary, which requires organized activities on a scale greater than what is currently present.

 

Middle-level economic force can either make or break regional communities with a scale and temporal range similar to its own. For example, the entrance of a large discount store, which is an example of middle-level economic force, can increase local tax revenue such as registration and acquisition taxes, increase regional income due to job creation, and lead to an increase in land values, as well as economic effects such as the loss of sales at existing retail stores and resulting unemployment issues, and encouraging local residents to redirect their out-of-town consumption to the local area.

 

 

Micro-level Economic Force

 

Micro-level economic force primarily includes an individual's possessions, such as homes, clothing, vehicles, food, and cash. These micro-level economic forces are typically acquired through individual hard work or savings. Possession of these properties allows individuals to have material abundance, while the lack of them results in poverty.

 

Micro-level economic force can either make individuals affluent or destitute. While its effects are most apparent in the wilderness, the “small luxury” craze in Korea in 2016 exemplifies how micro-level economic force can create material abundance or poverty even in a relatively affluent society. Small luxury refers to a phenomenon where people who cannot afford expensive cars or clothing purchase high-end products like toothbrushes and toothpaste, to derive a sense of happiness from small and affordable luxury. Underneath the surface, we can also find a sense of poverty that individuals experience without even possessing small consumer goods.