Squid Game is back. The market voted with its clicks and wallets and Netflix obeyed, producing two more seasons of the hit Korean thriller, which many have argued is a critique of capitalism. The show follows desperate and greedy contestants as they try to make their fortunes in a deadly underground game. Their suffering is watched by the ultra-wealthy VIPs who fund the sadistic spectacle. While they may enjoy the show’s pulp violence, some Netflix subscribers surely like to think they are consuming thoughtful social critique at the same time. However, Squid Game’s critiques of capitalism miss the mark.

Squid Game fits the anti-capitalist mould with its themes of exploitation, inequality, and ruthless competition. Nonetheless, the game is a poor metaphor for market capitalism. The contestants are recruited under false pretences and prevented from leaving. In a free market, people enter into contracts voluntarily, without fraud or coercion. Forced labour—literally at the point of a gun in the show—is more characteristic of pre-capitalist systems like serfdom and anti-capitalist systems like communism. Under the latter, all labour is forced in the sense that everyone must work for the state and attempts to leave that state can be deadly. However, some have it worse than others. Many Marxist regimes have used labour camps to brutally exploit and punish suspected enemies.

Communists can also sell their subjects’ forced labour abroad. Cuba sends thousands of doctors to work overseas while its own healthcare system crumbles. The regime converts their labour into both propaganda and hard cash, keeping up to ninety percent of their earnings. These doctors endure isolation, threats of retaliation, and harsh working conditions. Life is even worse for the North Koreans who toil in Chinese factories. They describe “enduring beatings and sexual abuse, having their wages taken by the state, and being told that if they try to escape they will be ‘killed without a trace.’” Their hard currency earnings are stolen by the regime to buy the loyalty of the elites. Imports of luxury items more than doubled in the year after Kim Jong Un became the third Supreme Leader. Tens of millions of dollars were spent on imported high-end alcohol, electronics, and luxury watches in a country that is chronically reliant on foreign food aid. North Korea’s juxtaposition between the lavish lifestyles of regime VIPs and the suffering populace hews closer to Squid Game than does South Korean capitalism.

Squid Game is also a poor guide to how markets create and allocate wealth because it is a zero-sum game. There is a fixed amount of prize money and each contestant’s share increases as other contestants die off. Many critics of capitalism see wealth in these zero-sum terms. It is one of the reasons behind their fixation on wealth inequality and calls for aggressive redistribution. To them, the poor are poor because the wealthy took their wealth. However, this focus on redistribution detracts from the market’s capacity to enrich entire societies by generating new wealth.

The market can be a positive-sum game because it is possible for all participants to walk away with more than they started with. For example, Korean poverty was at African levels when the peninsula was split into a communist North and a capitalist South after World War Two. South Korea’s increasingly market-based system encouraged entrepreneurs to build successful businesses like LG and Samsung. They created better-paying jobs and grew the economy. Quality of life surged. South Koreans even grew taller as their nutrition improved while their Northern siblings starved and shrank. Today, the country boasts one of the world’s highest standards of living and the average South Korean is more than thirty times wealthier than in 1960. Night-time satellite photos show the Southern half of the peninsula literally aglow with prosperity while almost all of the North is shrouded in darkness. Prosperity also led to greater freedom. At the end of the 1980s, South Korea’s growing middle class facilitated its transition to democracy.

Squid Game’s creator Hwang Dong-hyuk has told reporters that the new seasons of the show explore the question of whether the majority is always right. In Season One, with one exception, all decisions about the contestants’ lives are made by the game’s authoritarian controllers and brutally enforced by armed guards. The game resembles a communist gulag in which the inmates are worked to death. In Season Two, after every round, surviving contestants vote on whether to end the game. A majority vote to stop would supposedly allow everyone to go home with an equal share of the prize money accrued thus far. But most contestants vote to keep playing. By doing so, they increase the prize pool while reducing the number of living contestants with whom it will be shared. Contestants thus vote away others’ rights and even lives. Hwang may be making a classical liberal case for the need to balance democratic rule with rights-protecting institutions to prevent the tyranny of the majority.

A Violent History Obscured

South Korean Nobel laureate Han Kang’s literary experimentation thwarts rather than advances her professed concern for the suffering of everyone, everywhere, all the time.

QuilletteBrad Strotten

Intentionally or not, the show certainly makes a case for limited government. Socialism politicises the economy by having the state take it over. Routine economic questions of what is to be produced, how, and for whom become political instead of being decided by the marketplace. This is a recipe for conflict because, even in democracies, politics is often a zero-sum game. The Squid Game contestants cannot vote to both go home and keep playing. Most vote to sacrifice the rights of those who wish to leave in favour of the needs and ambitions of those who want to stay. Only one option can win. In the real world, there is likewise only one German chancellor, British prime minister, and American president. Hillary Clinton had to lose in 2016 for Donald Trump to win. Riots and impeachment followed. More riots and an impeachment inquiry followed Trump’s loss in 2020. Of course, none of this is as awful as the blood purges that dictators often use to cling to power. Democracy is the superior form of government. But even democratic politics can get ugly, especially when the stakes are high.

In Squid Game, politicising the contestants’ lives and property by making them things they must vote on leads not only to polarisation but to a kind of civil war. The scenario resembles many real-life cases in the Third World, especially in countries afflicted by the “resource curse”—a term that describes the tendency of resource-rich Third World countries to become mired in poverty, dictatorship, and conflict. Many Third World governments are captured by narrow interests, often representing one or more of their nations’ ethnic, tribal, or sectarian groups. These groups use their control over the state and its control over the economy to engage in plunder while excluding rival groups. The presence of precious resources like oil or diamonds makes political power especially lucrative. Politics rather than entrepreneurship becomes the most reliable means of attaining wealth. Having gained political power and the wealth that it brings, elites resort to extreme measures to stay in charge and stay rich. In many cases, excluded groups respond by attempting to seize the state for themselves, resulting in coups and civil wars. See, for example, the current score-settling in Syria against the previously dominant Alawites. The greater the state’s role in the economy, the higher the stakes in the zero-sum political process, and the uglier that process tends to become.  

It is the size of the cash prize pool and their power over each others’ lives that bring out the worst in the Squid Game competitors. Shrink the stakes and you’ll see their better qualities emerge. Similarly, reducing the government’s reach into our lives and pockets would make its zero-sum politics less significant and thus less nasty. This requires more tolerance of other people’s decisions about their lives and property. It requires accepting that individuals will make different choices and that this will lead to different outcomes. Some people will be foolish or lazy like the broke crypto gamblers in Season Two. Others will be wildly successful and productive like Sergei Brin, the Soviet-born co-founder of Google. The zero-sum mentality whispers that his self-made billions come at our expense—but that is not the case. We need more successful entrepreneurs like Brin because economies stagnate without them. Europe is a case in point. Only one of its firms, Deutsche Telekom, is among the world’s top twenty digital companies. Samsung ranks third and the rest of the top five are US companies like Apple and Brin’s Alphabet. Europe is falling behind because its excessive regulations and taxes suppress innovation. Entrepreneurs need the space to take risks and prosper. This is why, with the exception of China’s captive market, the top online streaming services are US-based. Netflix is one of these and, whether or not its makers agree, Squid Game is another capitalist success story.  

Steve Jobs did not invent the computer mouse. It was patented by Douglas Engelbart in 1970. However, it was under Jobs’s leadership that the 1984 Macintosh became the first commercially successful computer with a mouse and a graphical user interface. Jobs was an entrepreneur with a gift for combining technology, talent, and capital in ways that changed how we use information. In the 1940s, long before “disruptor” became a Silicon Valley buzzword or Mark Zuckerberg adopted the motto “move fast and break things,” the Austrian economist Joseph Schumpeter explained how entrepreneurs drive innovation by finding new and better means of satisfying the public’s needs and wants. Schumpeter coined the term “creative destruction” to describe how they disrupt and replace old practices. In his time, Henry Ford’s moving assembly line transformed car manufacturing. More recently, Jeff Bezos changed how we shop while Elon Musk is changing how we travel on this planet and beyond.

In 1997, Marc Randolph and Reed Hastings set out to change how we access movies. They founded Netflix as a mail-order DVD rental service. A decade later, Netflix debuted the first popular video-on-demand streaming service. It subsequently began producing its own content. This includes Hwang’s Squid Game. Hwang himself did not invent the deadly game genre. Indeed, the plot of Squid Game was inspired by the Japanese manga Kaiji, which follows an indebted gambler who competes in dangerous underground games for cash rewards. Hwang moved the story to South Korea and wrapped it in the mix of sentimentality, odd-ball humour, shocking violence, and slick visuals that had already brought acclaim to Korean films like Oldboy and Parasite. Like an entrepreneur, Hwang noticed a gap in the market and assembled the pieces to fill it. The result was Netflix’s top hit. Merchandise followed, including Squid Game-themed toys, games, and McDonald’s meals. 

Squid Game is the kind of success South Korea’s perennially starving communist counterpart could only dream of producing. A North Korean website even referenced the show as further evidence of the iniquities of capitalism. Nonetheless, Squid Game is banned from the socialist state like most outside media. A man has even reportedly been sentenced to death for smuggling and selling copies of the series. This brutality reflects the desperation of a regime whose populace craves everything Western. The communist economy cannot compete with capitalism in producing enjoyable popular culture. This is because, in a capitalist market, cultural products need to appeal to the public. Under socialism, they must appeal to the political authorities, which in North Korea means the Kim dynasty.

North Korea’s second Supreme Leader Kim Jong Il was a cinephile who even authored a guide to filmmaking. This had to be obeyed religiously like all the great man’s works. Blissfully ignorant that he was the cause, Kim despaired at the state of the national film industry. His response was characteristically totalitarian. In 1978, North Korean spies abducted Shin Sang Ok. The star South Korean director made seven films for his captors before escaping. His last production was about a monster that grows by eating iron. Having grown to Godzilla-like size, the monster spearheads a proto-communist peasant rebellion against an exploitative feudal lord. Like the rest of North Korea’s cultural output, these films remain niche and morbid curiosities in the outside world. Even with external talent, the socialist state struggled to produce popular films. State-run studios in a state-run entertainment market have to appeal, first and foremost, to those who run the state. By contrast, across the border, studios compete for viewers who are spoilt for choice. The public votes with its wallet, making and breaking billion-dollar franchises at whim. For example, even the combined powers of the Mouse and the Force could not save Squid Game lead Lee Jung-jae’s other show, The Acolyte, from popular ridicule and opprobrium.

Democratic elections and free markets should both be arenas of non-coercive competition. Politicians want our votes and businesses want our money. They compete to convince us that they will best serve our needs and wants. However, politics is zero-sum, since there is only a limited amount of government power and funds to go around. The economy, on the other hand, can keep growing, especially if entrepreneurs are free to take risks, innovate, and profit from their efforts. In the market, you usually get what you pay for—but the same cannot be said about what you vote for. You and I can choose to wear different clothes, eat different foods, and subscribe to different streaming services in the same economy. By contrast, we cannot choose to be governed by different authorities in the same country because the government is a monopoly. Even winning elections won’t guarantee that all or even most campaign promises will be honoured. If you dislike your government, you have only two options: leave the country or wait until the next election in the hope of change. The president is not Netflix. You cannot unsubscribe.