[Editorial] As debate over excess profit distribution spreads, corporate autonomy must not be undermined

Debate is intensifying over whether companies' excess profits should be redistributed to subcontractors and other stakeholders. After Kim Yong-beom, senior presidential secretary for policy at the Blue House, sparked controversy with remarks about a "national dividend policy," Minister of Employment and Labor Kim Young-hoon proposed social redistribution. In response, Minister of Trade, Industry and Energy Kim Jung-kwan said it was "a critical moment to connect profits to productive reinvestment for the future," rejecting the labor minister's argument.
We previously said, in connection with the Samsung Electronics labor union's demand for performance bonuses, that Samsung Electronics' excess profits were made possible by the contributions and cooperation of the government and subcontractors, and therefore should not be monopolized by union members. In the outcome of Samsung Electronics' labor-management negotiations, the two sides largely accepted the union's demands and also agreed to invest 500 billion won over five years to support partner companies. It may not be enough, but it will be the first case of using excess profits for mutual growth.
However, distributing excess profits to subcontracted workers and other stakeholders is a different matter. It is unclear where the line should be drawn in defining excess profit, and if overseas firms are included, the number of subcontractors and sub-subcontractors runs into the thousands, making it difficult for Samsung Electronics, as the prime contractor, to bear the burden.
Above all, state intervention in distributing profits to stakeholders infringes on corporate autonomy and private property rights. In short, it undermines the principles of a market economy. A prime contractor may use part of its profits to support subcontractors in the name of mutual growth, but that decision should be left to the company's voluntary and autonomous judgment.
As the industry minister said, the right course is to invest excess profits in a company's growth and development. Samsung Electronics and SK hynix already have to pay a large share of their profits as performance bonuses to union members, which has reduced their investment funds accordingly. They must also pay a huge amount of corporate tax to the state. If those profits are then redistributed again to other stakeholders, the money available for investment could be nearly exhausted.
This ultimately comes down to the same debate as capitalism versus socialism: investment for growth versus redistribution for welfare. The same applies at the national level, not just within companies. If most of a budget is spent on welfare, there will be no money left for the country's growth. Likewise, if a company simply gives away all of its profits after making a strong showing, it has no future.
The labor minister spoke from a redistributionist perspective, while the industry minister viewed the issue from a growth-oriented standpoint. Modern capitalist states do not reject or ignore redistribution. They seek a balance between redistribution and growth, while placing growth first. The same applies to excess profits. In principle, there is nothing wrong with using part of the profits to support subcontractors. But if most of the profits are spent on redistribution, it becomes difficult to expect corporate development.
Once again, even if profits are redistributed to stakeholders, the company must retain decision-making authority. Government intervention or involvement in that process would shake the foundations of a capitalist economy. For companies such as Samsung Electronics, even meeting union demands is already a heavy burden. If they are also made responsible for redistributing profits to stakeholders, they may no longer see any need to earn large profits in the first place.
The scale of investment in the semiconductor industry is astronomical. If a company falls behind in investment even once or twice, it could be permanently left behind in competition with global rivals. From that perspective, it is clear where unexpected profits should go at this point. Rather than sharing the pie, companies should use excess profits for investment and generate even greater returns.