850 FINANCIAL REFORM AN 0 THE ECONOMYvirtual monopsony of the market to force producers and merchants to sell below
cost. This mode of thought was an almost bizarre adumbration of Park Chung-
hee's nurturing care of the chaebol after 1965, by which in the current Repub-
lic of Korea the state controlled capital, savings, investment, income, and food
prices to guarantee the development of capitalism. Yet, this adumbration does
not mean that Yu had anticipated modernity, but that South Korean capitalism
in the twentieth century trod a path congenial to the traditional bureaucratic men-
tality toward the market.
Yu did not believe that the classical tradition simply meant bureaucratic con-
trol, monopoly, or obstruction of merchant or market activity, but he still felt
that bureaucratic subsidies to purchasing agents and producers and state regu-
lation of prices was necessary for the healthy practice of the taedong tax sys-
tem. He never argued that the market should be allowed to operate autonomously
and automatically without the need for any positive, government intervention
to achieve good ends. Nor did he believe that either commerce or industry should
grow so large and profitable that it would attract peasants into those occupa-
tions, reduce the number of cultivators, and decrease the volume of agricultural
production in the country.
Instead of concluding that the key to the taedong system was the shift from
a controlled economy to a free market and the development of the private accu-
mulation of capital for investment in nonagricultural production as the means
to the creation of greater personal and national wealth, Yu preferred to use the
taedong model as a scheme for funding all costs of government to reduce the
cost of government, the tax burden on the peasantry, and the root causes of bureau-
cratic corruption. Since Yu believed that the corruption of unsalaried clerks, run-
ners, and government slaves was caused by inadequate compensation by the state,
he prescribed that the government take responsibility for paying salaries for all
state functionaries down to clerks and runners, including official slaves and
women.
Although his plan for financing both government purchases and the salaries
of government officials through the taedong system consisted of an eminently
rational method of solving the deficiencies of government finance, he did not
argue that that human rationality freed from the encumbrance of inherited wis-
dom was the essence of his method. Instead, he took the theoretical basis for
his policy from the Book of History and the hierarchical model of salaries from
the feudal era of Chou China. He also admired the salary scheme that had been
worked out after the Han dynasty in China's bureaucratic age, and especially in
early Koryo in the late tenth century. By contrast he severely criticized the irra-
tionalities of the system of compensation in the Choson dynasty and compared
it invidiously to the more moral and rational methods of classical China.
Although an advocate of the total abolition of slavery, he felt he had to accept
it for the time being because slavery had become too ingrained in the psyche of
the Korean yangban to permit sudden abolition by a single decree. Nonetheless,