From an economic perspective, hosting the Olympic Games is often considered a poor investment. They are frequently touted as catalysts for explosive job, infrastructure, and economic growth. These results, however, are generally short lived: increased employment in the hospitality and service sectors only lasts until the end of the Games. Rapidly constructed infrastructure often falls into disuse, leaving vacant housing and sports venues. Economic growth fueled by tourism quickly fades after the end of the Games, returning cities to their pre-Olympic state, and often saddled with exceptionally large amounts of debt.

The 2016 Rio de Janeiro Olympics provides a typical example. In its Olympic bid, the Rio government estimated the costs of the Olympics to be approximately $3 billion. However, at the start of the Games this cost had increased to approximately $4.6 billion, ballooning to a final tally of over $13 billion after the Games had concluded, according to an article in popular statistics website FiveThirtyEight.com. Frequently, winter Olympics are even more expensive than their summer counterparts, with the 2014 Sochi Games in Russia resulting in a total price tag of around $50 billion, according to the Washington Post. The Pyeongchang Olympics, for its part, has a stated cost of around $12.9 billion, compared to its estimated cost of $7 billion – $8 billion. With such a high up-front cost, South Korea must consider the potential social, diplomatic, and economic benefits it may receive to offset the large amounts of debt hosting the Olympic Games in Pyeongchang is likely to incur.

From a social standpoint, many citizens in Korea, and Pyeongchang specifically, support hosting the Games, with 92.4 % considering it a “good thing,” according to several public opinion polls tabulated by the International Olympic Committee (IOC) in its Olympic Games Impact Study. For many, hosting the Olympic games is a point of pride, and similarly contributes to the host city and country’s international reputation. Due to the popularity of the Olympics (with approximately 3.6 billion people watching some part of the Rio Games — almost half of the world’s population), international recognition is unavoidable, and often the Games provide a cultural and societal value beyond that quantifiable by objective economic analysis.

Currently, the Korean peninsula is facing a time of increasingly tense international relations, exacerbated by the development of nuclear weapons in North Korea and threats of conflict between North Korea and the United States. A major hope of South Korea’s President Moon Jae-in is that the 2018 Games will help ease these tensions, echoing the “ping pong diplomacy” policy seen in the 1970s, in which table tennis players competed in Communist China and helped create the opportunity for President Nixon to visit the country in 1972, which had largely shunned interaction with the United States. This move towards unification, whether truly a representation of a unifying sentiment or merely a symbol of diplomacy, is epitomized by the decision for the North and South Korean teams to march together for the first time since 2007, following discussions in the Demilitarized Zone bordering the countries. The gesture of marching together in this Olympic Games, however, is particularly significant given the current diplomatic climate. Increased militarization and development of nuclear weapons in North Korea, as well as comments from both Kim Jong Un and President Trump, have likely increased tensions between North Korea and the USA. From a practical standpoint, the addition of an “Olympic Truce” in the 2018 Games ensures athletes’ safe travel, providing a conduit for athletes to leave North Korean.

Although the economic benefit of the Games tends to be overstated, it is not absent, as countries often experience an economic boost following a winning bid. A major challenge for Pyeongchang in generating economic growth will be in eliminating runaway costs, as was seen in the Sochi Games and its $50 billion price tag. In fact, the Hyundai Research Institute estimates that the Games will add over $61 billion into the South Korean economy — a $52 billion net economic benefit. It is estimated that over 2.6 million people (both local residents and visitors) will attend events associated with the Games, driving economic growth in a variety of sectors: from construction to hospitality and food service. A common issue to Olympic host cities is vacancy and a return to the former employment rate following the conclusion of the Games. In the case of Pyeongchang, however, city officials believe that they will be able to utilize the buildings constructed for the Games, coupled with the international recognition the Gangwon province will receive, in order to drive long-term growth in the area’s currently underdeveloped tourism industry. In this way, they hope to avoid the common pitfall of explosive growth followed by excess capacity and a return to the prior unemployment rate that appears to be endemic in hosting the Olympic Games.

Although the Games will likely result in a significant economic burden for South Korea in the long-run, there are additional non-quantifiable factors that could contribute to its ultimate success. It will assuredly increase the area’s international recognition, due to the worldwide popularity of the Olympic Games. It has the potential to catalyze discussions between the North and South, which could result in de-escalation at a time when nuclear tensions between North Korea and the rest of the world have never been higher. And it is certainly possible that Pyeongchang will be able to accomplish the unlikely, and utilize the Games to establish long-term, sustainable growth in the Gangwon region. With this in mind, the ultimate success of the Pyeongchang Olympics will not be determined by two weeks in February, but rather will take decades to be evaluated.

“Kim Nam-joon! Kim Seok-jin! Min Yoon-gi! Jung Ho-seok! Park Ji-min! Kim Tae-hyung! Jeon Jung-kook! BTS!” Probably for the first time ever, the audience chanted Korean names as BTS made an appearance on the Ellen Degeneres show last year.

BTS, a seven-member South Korean boy band, has been gaining widespread attention outside their home country. In the four years since their debut in 2013, the band has broken records unprecedented for a non-American artist. In May 2017, BTS got 320 million votes for Billboard’s Top Social Artist award, surpassing artists such as Justin Bieber, Taylor Swift and Ariana Grande. Recently, BTS ranked as high as 28th on the “Billboard Hot 100” and 11th on “Billboard’s Artist Chart” — achievements that are unprecedented for an international artist outside of Latin America. With their latest album “DNA,” BTS ranked number one in the iTunes album charts of 73 countries in 3 continents, according to CNN.

While the Korean Pop (K-pop) industry has produced artists and tunes, such as Psy’s “Gangnam Style,” that have achieved viral success, BTS’s level of sustained growth and recognition is unprecedented for Asian artists. Seemingly out of nowhere, BTS caused a frenzy in a music industry long dominated by American pop artists. So, how was BTS able to gather so much popularity and loyal fandoms in countries with very little knowledge of the Korean language? And more broadly, is the K-pop idol industry a fad, just as short-lived as “Gangnam Style”, or is it sustainable in the long-term?

Jeff Benjamin, a Billboard journalist specializing in K-pop, explains how a multitude of factors explain why fans — with little to no knowledge of the Korean culture or language — are attracted to K-pop artists: they’re great performers, singing, rapping, and dancing at the same time; they’re meticulously trained; and their primary mode of distribution are music videos, creating a music experience that is heavily focused on visuals and effects. The well-synchronized dance moves, vibrant colors and catchy EDM beats create an immersive experience.

Additionally, nearly all successful K-pop artists are in groups. Entertainment companies craft a narrative for each member whom fans can empathize with. Each member is given a role – the leader, lead singer, lead dancer, rapper, entertainer, and even the designated “good-looking one.” K-pop companies do not just sell music, they sell an experience created by meticulous branding.

As a result, K-pop is a multi-billion dollar global industry. Korea Creative Content Agency reported that the total export revenue of K-pop industry in 2016 was 4.7 billion dollars. The industry employs approximately 80,000 people.

Yet, while K-pop may seem flashy and has captivated the fascination of millions, there is a darker side to the business. In December 18, 2017, Kim Jong-hyun, the lead singer of SHINee — one of the most popular groups managed by SM entertainment, the largest entertainment company in Korea — committed suicide, prompting both national and international debate over the demands of the industry.

The business model in K-pop is unlike that of American pop. For example, American record labels have a relatively limited scope compared to the equivalent K-pop “entertainment companies.” Most American record labels manage strictly business activities such as the production, marketing and distribution of music. Korea’s entertainment companies do all that, but also recruit and train potential artists starting from an age as early as 10, loan mandatory housing in company facilities that artists later pay off with their own money and manage the diets and lifestyles of their artists. Korean entertainment companies construct agreements that specify nearly all aspects of the artists’ career and personal lives while under contract.

As a result, K-pop “idols,” as they are referred to in Korea and within their fandoms, are an all-in-one package gift-wrapped by their entertainment companies. In order to ensure that the idols are following their protocols, the company watches them for 24 hours a day, according to Hankyoreh Media Group. The idols are under tight restrictions by the management company that directs their whole lives—how to sing, how to present themselves in public, what to wear, what to eat, what to say, who they can meet and cannot—as many experienced K-pop idols, such as Girl’s Generation, have reminisced in interviews. In other words, Korea’s entertainment companies are the brains and muscles behind their artists.

One part of the K-pop industry that recently came under intense scrutiny is the trainee system. Entertainment companies have many “trainees,” who are potential idols recruited from an early age that practice their skills under the company’s instruction. According to the Fair Trade Commision of South Korea (FTC), the average training cost the company invests in per trainee is only $90 dollars a month. Since it does not cost much money for the companies to retain trainees, companies can afford to retain trainees as long as they desire. As a result, trainees are kept in a constant state of uncertainty, often not even getting a chance to debut before they get too ‘old.’ Further, companies create contracts with high penalties for quitting or moving to a different company. The trainees, as young as they often are, often sign the contract without fully realizing the consequences. According to the FTC statement, six entertainment companies, including JYP and FNC, have imposed a penalty much larger than their investment on the trainees, keeping the trainees and even debuted singers in debt of the company. Thus, singers were effectively forced to listen to the protocols of these entertainment companies. The Fair Trade Commision has recently updated on their “Standard Contract” that is enforced on the companies in order to ensure fair conditions for the idols.

Underneath the glitz and flash, K-pop is a calculated business. The entertainment companies behind K-pop artists strategically convert artists into brands that transcend differences in language and culture. Although entertainment companies wielded incredible bargaining power due to the nearly endless supply of K-pop hopefuls, they appear to be treading more carefully owing to recent scrutiny from government organizations and bad publicity. Yet, given the recent backlash against these entertainment companies, a reckoning appears to be brewing.

Back when I lived in South Korea, video games were a big part of everyone’s lives even though many parents forbade their children from playing and going to PC bangs—rooms full of high-speed computers accompanied by plush, rolling chairs.  My dad, however, allowed us to play video games and even played with us. In our living room, my dad set up three computers so that he, my brother and I could play together. Despite much effort on my dad’s part to provide us a safe environment in which to play games, thus preventing the need to go to a PC bang, my brother still went with his friends. There was just something about those rooms full of computers that attracted my brother again and again.

Seth Schiesel, a writer for the New York Times introduced South Korea as “a home to world’s most advanced video game culture: where more than 20,000 PC bangs attract more than a million people a day.” Ubiquitous and popular, each PC bang has site licenses for various computer games, which eliminate the need for the players to buy game subscriptions themselves. Charging $1.50 per hour, PC Bangs are incredibly cheap and encourage their customers to stay for hours by offering reduced charges per each additional hour and serving food directly to computer stations. With everything a person could need, PC bangs have become South Korea’s central social hubs. Even couples can be spotted going on dates to PC bangs.

Because groups of friends often play together, heated conversations and intense whispering frequently break out among the background noises of key pressing and mouse clicking. These self-produced sounds provide immediate feedback, making the players become part of the games themselves. Karen Collins, author of “Playing with Sound” believes that these self-produced sounds help “players to become a character, or perhaps more accurately, their character can become a part of their sense of self.” The game’s background music, which seeps in through headphones, is also included in the soundscape of a PC Bang. With this symphony of varying noises, players experience what Collins calls the “envelopment,” which is “a sensation of being inside a physical space” that reduces sense of separation between the player’s game and the real world.

This envelopment becomes even more prominent inside a Korean pro-gaming tournament. With more than 40,000 enthusiastic and emotional fans filling the live audience of the high-profile matches at the World Cyber Games, the players must sit in soundproof cubes to avoid being distracted by the noises of the fans and announcers. Lee Jung Hoon, one of Korea’s most famous e-sports athletes also known as “Marine King,” has even experienced fans walking right up to his playing station, giving a crisp bow and handing over an armful of gifts. After such an overwhelming encounter with a celebrity, fans often turn away and cry. Another instance of extreme gamer fandom occurred when a female fan of CJ Entus, a team that came in second in the 2012 “League of Legends” world championship, followed one of the players for two years taking photos. Ultimately, she sent him an album of all the shots she had taken.

At that “League of Legends” championship event, countless fans filled the outdoor soccer stadium to watch. Two teams of five players each—Korea’s Samsung White and China’s Star Horn Royal Club—sat in front of computers on the stage while huge screens displayed their actions for the audience. Although inside soundproof booths, players could still make out the sounds of their fans even while wearing ear buds and listening to the game’s background music. Moreover, the self-produced sounds—communications to team members, speedy mouse clicks and quiet squeals of joy—created an atmosphere that extended into the game world. These sounds were heard by everyone via speakers, allowing the fans to experience the same emotions as their idols. These sorts of events have served to legitimize video games throughout their epic rise in popularity, bringing the virtual closer to the real world.

Today, e-sports are recognized and respected by most South Koreans. Professional gamers train vigorously like athletes. Hoon, a member of a top South Korean team, for example, trains for eight to ten hours every day and earns $105,000 annually. Another gamer, Jung Jong-Hyun, earns $250,000 annually. In Korea, these gamers are celebrities. Lim Yo-Hwan, Korea’s most famous gamer, does not go out in public without wearing a disguise. An estimated 10 million South Koreans regularly follow e-sports while some fan clubs of top gamers have more than 700,000 members according to Schiesel’s New York Times piece titled “The Land of the Video Game Geek.”

A CNN survey found that this widespread South Korean obsession stems from a need to relieve stress. In a country where academic and job competition dominate, games are regarded as good, clean fun. For Hoon, “StarCraft” served as an outlet from academic pressure. When he picked up “StarCraft” in first grade, he immediately fell in love with it. As he drifted further into the game, skipping classes to go to PC bangs, his parents became concerned and sent Hoon to the treatment center. When the treatment didn’t work, they threw him out of the house. Hoon took this as an opportunity to enter an e-sports tournament, which he subsequently won. To this day, Hoon has stated that his ultimate goal is to prove “to his parents and to himself that he was not addicted to the video game that had come to dominate his personal and professional life—that he’s a pro, something his mom and dad should be proud of” according to CNN.

In addition to exciting games, government involvement has played a major role in the rise of e-sports and PC bangs. In 1994, the Korean government established the Korean Information Infrastructure (KII) to promote affordable nation-wide telecommunication technology. KII stimulated competition among the telecommunications companies, resulting in the expansion of high speed information and communication networks. With this increase in Internet access, PC bang industry began as “internet cafés”— these very first PC bangs provided café-like environments for people to gather and use online services to check emails and to play simple games. Then, with the onset of the financial crisis in 1997, the South Korean government again focused on Internet infrastructure, pushing to install ultrafast internet connection nationwide. With this intense government push and the release of the game “StarCraft,” the PC Bang industry took off to provide Internet access for the country’s many fans of “StarCraft.” By 2000, a vibrant community of gamers emerged.

The government also created the Korean E-Sports Association (KeSPA) to manage e-sports. KeSPA’s main goal is to make e-sports an official sport in Korea, and it does so through organizing new competitions and teams and regulating television broadcasting of tournaments Today, gaming channels, such as MBC game, GOMtv and Pandora TV are among the most viewed. In addition to government support, big technology companies like Samsung have begun to sponsor gamers by providing dormitory housing for pro-gamers and high-tech computers to help with vigorous training that can last over 12 hours a day.

South Korea’s craze for e-sports goes beyond sheer enthusiasm.  An individual’s needs to release bottled up frustrations, prove themselves and have fun are guaranteed by the games. Moreover, in a country with high-speed Internet connection that allows downloading to happen almost instantaneously and with Wi-Fi wireless hot spots in almost all public spaces, gaming is an accessible and easily part of daily life. The pervasiveness of virtual games in Korea—through the involvement of the government, sponsorship by big companies, and television channels dedicated to viewing game tournaments—blends video games with reality.

The sounds of Korea’s game culture are heard everywhere. The screaming of the frantic fans, the intense whispers, the agitated shouts among the pro gamers and the rapid clicking and pressing all blend together, triggering emotions from players and fans alike. Korea’s unique culture allows collaboration and competition to happen naturally, and the emotions that arise from them are very real. So games, which many may acknowledge as “virtual or unreal” have become a pseudo-reality inside the soundscape of Korea.

This article was featured on the DBJ Instablog on Seeking Alpha.

Three months after the “nut rage” scandal sparked international ridicule and debate over the abuses of family-run Korean conglomerates, a court has convicted and sentenced former Korean Air vice president Cho Hyun-ah on Feb. 12 to a year in prison for illegally forcing a flight to change its route.

Cho, the daughter of Korean Air chairman Cho Yang-ho, forced a taxing plane at Kennedy International Airport to return to the gate in order to remove the chief steward. She was angry because a first-class flight attendant served her macadamia nuts in the original packaging, rather than on a plate.

Passengers in the cabin reported that Cho forced the chief steward to kneel before her and beg for forgiveness. She reportedly threw papers at him, screaming because the flight attendant served macadamia nuts in the “wrong way.”

Since the Dec. 5 scandal, Cho resigned from her post, was arrested for violating aviation safety laws and instigated national debate regarding the perceived arrogance of Korea’s business elite.

This incident, however, is more than an isolated case of “nut” behavior or individual inanity. It provides a glimpse into the larger structural dynamics of power and wealth in South Korea.

Namely, the sense of entitlement and authority that led Cho to turn around a 250-passenger plane illustrates Korea’s chaebol economic structure and the incredible power chaebol families wield. But the overwhelmingly negative reactions to Cho’s actions also demonstrate the growing resistance against the perhaps all-too-powerful chaebol.

The chaebol’s grip

 Chaebol refers to Korea’s largest conglomerates, which are most often controlled by and passed on to family members of the original founder. Internationally known chaebol include Samsung, Hyundai, LG and Hanjin (the holding company of Korean Air), and domestic conglomerates include Lotte, SK, GS and Hanwha. Members of the founding families still largely control these conglomerates, and as a result, their influence in Korea is far and wide.

Samsung, for example, singlehandedly contributes approximately a fifth of South Korea’s gross domestic product, according to a 2011 Economist article. Though known elsewhere in the world for its electronic products, Samsung has a stake in almost all aspects of South Korea’s society and economy. It sells life insurance, builds amusement parks and apartments, produces credit cards and has its own professional baseball team. The company’s subsidiaries build roads, manage oilrigs, operate hotels and hospitals, and even produce chemicals, ships and weapons.

“You can even say the Samsung chairman is more powerful than the South Korean president,” said economist Woo Suk-hoon in 2012.

In fact, Samsung’s influence is so great that the South Korean president pardoned chairman Lee Kun-hee 2009 of his tax evasion and embezzlement convictions. Lee was considered “too important” to the economy to be imprisoned.

Relatives of Lee also wield incredible power. The daughter of Samsung’s founder is the chairwoman of Shinsegae Group, one of the largest department store and discount retailer chains in South Korea. The grandchildren run CJ Corporation, one of the largest food and entertainment companies, known for its movie theaters, pharmaceutics and films.

Similar accounts of incredible power hold true for any of the other dynastic conglomerates in South Korea. Power and wealth are concentrated in a few families, and their personal decisions have the potential to change the daily lives and experiences of South Koreans.

It is not particularly surprising then, that these chaebolfamilies exert such enormous influence. Given the structural dynamics of power and wealth at play, it appears conceivable, that when the Korean Air heiress ordered the plane to turn around, not even the pilot could have overturned her decision.

Growing wealth inequality and resistance

 The chaebol control a significant portion of Korea’s wealth, and income inequality appears to be growing even greater.

South Korea’s GINI coefficient, which measures income inequality, climbed from .306 in 2006 to .315 by 2011. As of 2012, the upper tenth possess 46 percent of wealth, while the bottom half controlled only 9.5 percent.

This growing disparity in wealth has given the chaebol an overwhelming advantage in expanding their economic dominance. These conglomerates often acquire promising start-ups or outcompete mom-and-pops businesses by mobilizing their massive resources. This has stunted entrepreneurship, compelling many of Korea’s most talented to work for these conglomerates their entire careers.

Yet, there appears to be a growing resistance among Koreans against the vacuum-like power and perceived high-handedness of the chaebol. The “nut rage” incident has sparked contentious dialogue and debate for the past few months in South Korea.

“Cho Hyun-ah’s ‘nut rage’ could have resulted in no jail time. But public sentiment seemed to influence the court’s ruling, and they gave her an actual prison sentence,” South Korean lawyer Kim Kwang-sam told Arirang News that “The public’s hostile view of chaebol families – privileged, with an easy life coming from wealthy parents – was loud and clear this time.”

In the days following the incident, South Koreans flooded social media and other websites with content ridiculing Cho and denouncing the abuses of other chaebol. Many called for a boycott of Korean Air, and analysts have speculated that the 6.6 percent drop in passengers in Dec. 2014 from the holiday season a year earlier can be attributed to the “nut rage” incident. During that same period, Asiana Airlines, Korean Air’s primary rival, experienced a 13.2 percent increase in passengers.

A bill called the “Conglomerates Ethical Management Law,” commonly referred to as the Cho Hyun-ah law, is to be introduced February 2015. It will detail punishments for “high-handed conduct” and crimes such as embezzlement committed by chaebol.

While anti-chaebol sentiment has been present in South Korea for quite some time, the “nut rage” incident might signify the first spark that mobilized the government and South Koreans to change the chaebol structure.

Why the chaebol can’t be touched

South Korea, however, has been historically reliant on the entrepreneurial capabilities of the chaebol.

Any account of South Korea’s meteoric economic rise following the Korean War must acknowledge the chaebol’s role. Park Chung-hee, the military ruler who seized power in the 1960s, devoted scarce capital to the chaebol under the condition that they expand Korea’s export economy.

This concentration of economic power had dramatic effects on Korea’s market system. The chaebol spearheaded the industrialization of Korea, converting the country’s agrarian economy into an export powerhouse within a few decades. Between 1960 and 2000, the chaebol were responsible for creating a 13-fold increase in output per capita, enabling the country to be the 10th largest exporter by volume.

Today, the chaebol are even more vital to the Korean economy than they were in the past. As of now, these conglomerates are the only realistic outlets through which Korean manufacturers can export products to the outside world. To hastily decentralize the oligopolistic power of the chaebol is analogous to potentially dismantling South Korea’s export economy, a decision that would undoubtedly be catastrophic to many South Koreans. The collectivization of wealth in so few companies means that any regulation must be approached with extreme caution.

In addition, while many South Koreans harbor misgivings about the chaebol, they also revere the business superstars who carry South Korea’s economy. Some 70 percent of household expenditures, according (incidentally) to the Samsung Economic Research Institute, are used towards private education, often in the pursuit of helping children perform well on tests, gain acceptance to the country’s top universities and then obtain a job in one of the conglomerates.

This is because, realistically, working for a chaebol is one of the few ways Korean youth can secure a stable occupation, accumulate some wealth and climb South Korea’s social ladder. Being hired by a chaebol is considered to be a major life accomplishment, and the prestige of working for a chaebol carries a similar weight as a job at a Wall Street firm does for American students.

“Many Koreans right now have dual minds about chaebols,” lobbyist Lee Cheol-haeng told the Washington Post in 2012. “They say, ‘I hate chaebols, but I want my son to work for one.’”

In an economic environment that is dominated by a few dozen families, many South Koreans resent, ridicule and revere the chaebol all at the same time. As much as people want to weaken the chaebol structure, they simply do not possess the money or resources to compete with the chaebol. Since the chaebol also hold a position of reverence and deep regard, they are viewed as untouchable and their words are absolute.

The result of South Korea’s initial collectivization of wealth has been a self-perpetuating vicious cycle. The larger structures of power and inequality place South Koreans in a position where they must all compete for a spot within a chaebol, rather than compete against the chaebol. But with its endless supply of Korea’s brightest minds who have devoted their adolescence to South Korea’s spartan education system, the chaebol only become stronger, causing even further distrust and dissent among South Koreans.

But the “nut rage” incident has brought to surface the long-suppressed grievances of South Koreans. A scuttle over a bag of macadamia nuts might represent a precursor to change.