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North Korea – Waiting for the endgame

By Chris Clancy
web posted January 31, 2011

When socialist revolutionaries come to power, they have to set about putting their grandiose talk of creating some kind of worker's "utopia", into practice. This is the beginning of a descent into ad hoc madness and, at times, high farce.

"Castro asked which of us was an economist. I thought he'd said 'communist', so I immediately said 'I am'. 'Okay,' Castro said, 'you handle the economy". Che Guevara.

Attempts to centrally plan entire economies inevitably degenerate into poverty and misery. In the end, it is only fear and terror which keeps them going. The only country left on the planet which is still trying to do this is North Korea.

Its behaviour in recent years has come to resemble a tiresome "cat and mouse" game. It has been likened to dealing with a naughty recalcitrant child.

The BBC provides a very useful timeline: it starts as follows:

"1945 - After World War II, Japanese occupation of Korea ends with Soviet troops occupying the north, and US troops the south.
1946 - North Korea's Communist Party (Korean Workers' Party - KWP) inaugurated. Soviet-backed leadership installed, including Red Army-trained Kim Il-sung.
1948 - Democratic People's Republic of Korea proclaimed. Soviet troops withdraw.
1950 - South declares independence, sparking North Korean invasion.
1953 - Armistice ends Korean War, which has cost two million lives."

With the ending of the war North and South Korea went in opposite directions. The North went for central planning, the South went for a market economy.

The result, nearly 60 years later:

"[The World Food Programme] has been providing food assistance to the most vulnerable in DPRK since 1995, saving lives and helping achieve significant reductions in malnutrition rates … If funding allows, WFP also seeks to distribute commodities such a pulses and oil to promote a balanced diet. The operation intends to provide assistance to a total of 2.5 million people up to mid-2011, over 80 percent of them women and children." 17 November 2010.

But it's not as if the North started out at a disadvantage:

"In the 1950s, North Korea was richer than South Korea. It had a decent industrial base and a lot of raw materials. South Korea today is an industrial powerhouse, and North Korea is languishing in poverty. It is one of the world's greatest tragedies. For two individual Koreans separated by a completely arbitrary line called the 38th parallel, they have had totally different lives." – Professor Yasheng Huang.

How different are their lives?

Last year, BBC journalist Sue Lloyd-Roberts was allowed into North Korea with a film crew. It quickly became evident that the whole thing was a sham – a put-up job. She was only allowed to see and film what they wanted her to see and film. She describes her visit here. There is also a video of the visit which can be found here.

The video finishes with her saying:

"For more than a week in North Korea they invited us to indulge in [a] fantasy. I think what surprised me most here was that they could believe that we could believe that what they showed us was for real."

Her and her crew then travelled to South Korea. The difference couldn't be more stark.

But North Korea shows no sign of any change.

China's visionary leader, Deng Xiaoping, signaled a halt to things after assuming power in 1976. In 1978 he began his "opening up" policy. The system in the USSR (along with its satellite states), under Mikhail Gorbachev, finally fell apart in 1991.

The transition in China was relatively peaceful. The only major threat came with Tiananmen Square in 1989. (A revisionist treatment of what was really going on back then is given here by Justin Raimondo). The transition in Europe was similar with the exception of Romania and the conflict that followed in what was then Yugoslavia.

The transition in North Korea, when the system finally collapses, remains to be seen.

What both Deng and Gorbachev came to accept was that trying to effectively plan an entire economy was an impossibility. The result would always be failure.(The very same result applies to so-called "mixed" economies - as predicted by Ludwig von Mises).

On a broader theme in this essay Art Carden writes, "Those who plan grand schemes are wrong when they assume that, in the absence of such plans, chaos, disorder, and misery must set in."

History tells us that if the thing is left alone the opposite comes about – order:

"This order is not, however, a machine to be tinkered with or fine tuned. It is an array of social relationships, which are of a literally incomprehensible complexity. And yet, when free people are left to their own devices, order emerges".
Whether Deng and Gorbachev still held on to their ideological beliefs after they abandoned their previous economic systems I don't know. But they were pragmatists.

One can only wonder about the ideological beliefs of the North Korean leadership?

The country was high on the agenda during the recent China-US summit in Washington DC.

Will it make any difference to the lives of ordinary people in North Korea?

I can't see how. The "game" will just continue.

Political one-upmanship and stand-offs, diplomatic posturing, pointless meetings, walk-outs, missile testing, the threat of having nuclear arms – not to mention their many and varied attempts to get their hands on hard currency - something which their moribund economy simply cannot do – e.g. illicit arms trading, drugs trafficking, money laundering, counteifiting and any other means which justifies their "ends".

And what are their "ends"?

There's only one left - self-preservation. The well-being of the people dropped out of the equation a long time ago.

They'll hang on grimly because they have no other choice. They dare not relax their iron grip on their people – for a very good reason – they know what's waiting for them when the end does come. ESR

Chris Clancy, has been living and working in China for the last 7 years. He is currently employed as associate professor of financial accounting at Zhongnan University of Economics and Law, Wuhan City, Hubei Province, PRC.

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