[Gangnam Perspective] Why Conservatism Became What It Is

During a conservative administration, A, then the senior presidential secretary for economic affairs at Cheong Wa Dae, once explained to the president the dangers of price controls. He began with an example from 250 years ago.
In 1775, during the American Revolutionary War, the Continental Army lost the Battle of Bunker Hill against the British Army, but was still praised for its strong performance. When people said it would have won if supplies had been sufficient, the Continental Congress issued irredeemable paper money called Continental currency. The aim was to secure war supplies, but the result was the opposite. Merchants did not trust the paper money, and some even supplied goods to the British Army, which paid in gold and silver. As issuance surged, the currency lost value and prices soared.
Cornered, the Continental Congress turned to price controls. Producers blocked by price ceilings sent goods to the black market in search of higher prices. Supply shrank, and civilians and soldiers could not obtain basic necessities. Speculative transactions became more profitable than honest trade, and debtors delayed repayment until the currency weakened further. Economic trust collapsed, and social cohesion loosened. In the end, George Washington, then commander in chief of the Continental Army, told Congress in 1779 that he doubted whether he could sustain the troops and that the biggest obstacle was the state of the currency. It was a bleak judgment that no measure could restore the currency’s value. The cause was reckless money printing and price controls. The American Revolutionary War nearly failed because of inflation.
This was not an exceptional event limited to a particular era. It is a structural failure that repeats whenever prices are artificially suppressed. Even so, a past conservative government ignored that lesson. It tried to control everything from milk and ramen to soju prices. A stepped down just six months after taking office. The policy remained, and the warning disappeared.
If I ask acquaintances to define conservatism, words like law, security, tradition and liberal democracy come pouring out. But progressives do not necessarily ignore law and security or seek to destroy tradition.
The most persuasive definition of conservatism, in my view, is 'the spirit of recognizing everything that is alive and moving.' It echoes Edmund Burke’s view that society is an organic body shaped by experience and trial and error, and that trying to redesign it all at once through human reason is dangerous. The clearest example of something alive and moving is price. When prices rise, the answer is not to crush them, but to ease them through competition and substitution. That is the conservative way.
But the conservatism of reality was different. Intervention became routine, from the MB Consumer Price Index, which managed prices of 52 essential goods, to the Mobile Device Distribution Improvement Act, which capped handset subsidies, and even pressure to cut telecom fees and interest rates. Conservatism, which should respect the market, tilted toward controlling it. Some inside the conservative camp even asked, 'Can an economy without political logic really exist?'
Conservatism derives its legitimacy from respecting the living order of markets and prices. But the moment it directly intervenes in inflation, interest rates and rents, the issue becomes not just policy choice but identity. The more it chases short-term popularity, the less room remains for the principles of freedom, responsibility and order that it has long championed. The crisis facing conservatism did not come from outside. It is the result of forgetting who it is and trying to suppress the organic system called price, thereby eroding political trust.
What about the approach on the other side? Progressives see prices as shaped not only by supply and demand, but also by market structure and power relations. From that perspective, when price increases threaten livelihoods, intervention by power is justified. Fuel price regulation and tax-based efforts to restrain real estate prices come from this view.
The problem is the outcome. There have been many cases in which interventions launched with good intentions moved in a different direction than expected. Sharp rent increases after the Housing Lease Protection Act, job losses after minimum wage hikes, and supply contraction after the price ceiling system for new apartments are representative examples.
In the end, history shows that a conservative approach has produced better results on price issues. Even so, conservatism abandoned that ground itself. And now it is paying the price.
syhong@fnnews.com Hong Soo-yong, columnist Reporter