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Ukrainian soldiers train along the frontlines of the war with Russia on Jan. 1, 2026. (Reuters/Yonhap)

By Lee Bon-young, senior economy and business reporter

Say that someone knew a year ago what is happening in today’s financial markets. What sort of choices would they make in 2025? No doubt they would take everything they had, maybe even more than they had, and pour it all into key stocks listed on the KOSPI.  

The activation of buy-side circuit breakers that momentarily paused trading on Monday and Tuesday displayed just how stock-crazy people are these days. Samsung Electronics, SK Hynix, and the Hyundai Motor Company — if you want your jaw to drop, just pull up the 10-year charts for these standout stars on the KOSPI. What you’ll find is not a gentle increase in slope, but an exponential cliff. 

While it’s easy to dismiss the recent stock surge as a sign of an abnormally frothy market, it’s harder to console those who have been left out of the rally.  

For those who aren’t exactly fans of the chaebol system, the situation leaves an unpleasant taste in one’s mouth for another reason: everyone and their brother have now tied their own fates to those of Samsung’s Lee Jae-yong, SK’s Chey Tae-won, and Hyundai’s Chung Eui-sun. 

Regarding the influence that stocks have on the workers’ consciousness, people often point to the privatization of dozens of public British firms in the 1980s under Prime Minister Margaret Thatcher. People who once considered themselves employees began to identify as asset holders once they owned some stocks, creating a more compliant workforce. 

It is undeniable that the assets of owner families increase as more people buy more stocks.  There is also the effect produced by reducing taxes for inheriting assets and/or transferring ownership. 

However, investing in chaebol firms while calling for reform isn’t as contradictory as it may seem. It’s a call for fixing problems; it’s not lambasting productivity and innovation.  

A concern of a different nature pops up when one looks at share prices for defense firms, which make up a fair chunk of chaebol. Those in the financial industry seem optimistic when it comes to the prospects of defense stocks this year. In addition to Korean cultural exports, people are now talking about Korea’s defense industry exports. Considering that Korean soldiers used M16 rifles supplied by the US during the Vietnam War, the world has changed considerably. 

While Korea’s manufacturing power is behind some of this change, there is also the critical element of timing. We are in the fourth year of the war initiated by Russia’s full-scale invasion of Ukraine in February 2022. The US and Europe provided massive amounts of military aid, and US President Donald Trump has pressured allies to increase defense spending since taking office in January 2025. By relying on the US for defense while saving on its own defense costs, European nations that have benefited from such “peace dividends” now find themselves in a position where they have to rearm. Europe has now overtaken the Middle East to become the largest market for the American defense industry. 

Korea has benefited from this change. Kang Hoon-sik, the Blue House chief of staff, is currently touring several countries under the grand title of “special delegate for strategic economic cooperation.” The term “military-industrial complex” acknowledges that the military and the defense industry are inextricably linked. Now, amid the trend toward “state capitalism” led by US President Donald Trump, politics and industry seem to be jelling into a political-industrial complex on a global scale. 

Since those countries’ governments are the ones buying Korea’s arms, it’s understandable that our government would help how it can. After all, it’s the government’s job to maintain the stability and growth of the national economy. 

However, we need to think seriously about the complete disappearance of the concept of ethical investments. Isn’t investing in merchants of death ultimately rooting for an increase in the production of lethal weapons?

Just take a look at the war in Ukraine. If the war ends suddenly and peace reigns throughout Europe, the demand for weapons could flounder. Share prices of defense firms could also drop. If that’s the case, hoping for the war to drag out or intensify is logical from the standpoint of a person who’s “purely investing.”
 
For a while, people have been saying that lobbying from US defense firms and the revolving door with government officials have played a part in the continuation and expansion of the war. 

As usual, money is the biggest enemy of ethics and principles. Many national pension funds of European nations are forbidden from investing in fossil fuels or the defense industry due to demands for “socially responsible investments.” Russia’s war with Ukraine is changing this attitude. As Europe now faces direct military threats, it cannot realistically continue to exclude investments in the defense industry. The geopolitical risk is proving bigger than the ethical risk.  

Norway’s national pension fund, the world’s largest, has started reconsidering its ban on investing in major defense firms based in the US and Europe. 

Other national funds are beginning to ease restrictions on capital used for investments in private and military industry. Unless it’s a weapon subject to international sanctions, like cluster bombs, they seem willing to invest in it. Yet national security is the justification; the real reason is profit.  

South Korea is now selling weapons, while North Korea, having nothing left to sell, is exporting young soldiers. 

“From Mount Halla to Mount Baekdu / Be gone, all you scraps of steel / Let only the fragrant bosom of dirt remain,” the poet Shin Dong-yeop wrote in his poem “Be Gone, Husk.” Those words ring empty like never before. Such is our harsh and heartbreaking reality. 

Please direct questions or comments to [english@hani.co.kr]