When economist approach to North Korea issue goes off the mark

[note note_color=”#f3f3ef”]More refined version (with a proper edit) appeared on the Dissolve[/note]

Economics seems to shed a light of reason when sight is murky by the shade that is politics.

Politics is chaotic, illogical or plain dumb (maybe both) while economics guide us, with its calm voice of science, through this raucous bazaar of human selfishness. Who wouldn’t love that, huh?

But the power of its rhetoric and logic (sometimes it’s hard to distinguish each other) more often than not comes from the crispness of abstraction. As soon as it comes down to the noises of bazaar, it loses its power in no time.

Professor of economics and frequent commentator on North Korea issue Byung-yeon Kim likens the current denuclearization stalemate to incomplete contract:

“Even if the US manages to inspect the North, it would be too much to expect to discover all the stashed weapons and it would take too much time,” Kim writes. “Without economic aid and easing sanctions, North Korea couldn’t carry on.

“Otherwise, when offered phased compensations, the North may try to grip both its economy and its nuclear weapons by stashing the weapons.”

An appropriate incentive system would unravel the Gordian knot, Kim is so sure of.

“The simplest and most transparent method is to set out how much to pay out for its nuclear material per tonne in the beginning,” Kim writes.

“Since the more the North gets rid of the bigger the compensation gets, it is also good for the North to give up all its weapons.”

Sounds about right. Until you get to read the history of US-DPRK negotiation including the six-party talks.

“The US thoroughly abhorred the terms North Korea argued like compensation and give and take,” Lee Soo-hyuk, the chief representative of South Korea for the first three rounds of the six-party talks wrote in his 2011 book.

“There should be no compensation for an illegal activity in defiance of international norm, it says.”

At the moment of the six-party talks, it was more about the rhetoric—the US preferred corresponding measures and coordinated measures, Lee recounts.

But would the politicians, who has the final say at the end of the day, support the idea when it comes to paying out monies to Pyongyang for its nuclear weapons?

Or we can push the logic of the economist approach to the edge.

Years ago one scholar who then resided in the peninsula had a brilliant idea to reunite the divided nation peacefully and prosperously:

By paying out the entire North Korean population in return to accept reunification led by the South and the rest of the world. Including Kim Jong Un and co.

The lion’s share, including personal security, of the reward would be reserved for Kim actually. But even a simple peasant in North Korea, according to Shepherd Iverson’s scheme, would be paid.

This plan is nuts, you may say but when you read the books (Iverson has written two books on the basically identical idea) yourself, it sounds quite plausible.

Actually it makes perfect sense when we reduce people’s mind to a set of simple concepts like selfishness and benefit.

North Korea wants prosperity and so does the rest of the world. The North Korean elite want their security guaranteed and the neighboring nations want the world free of another conflict.

Buying out peace is simply a win-win for everyone. They get prosperity and security and we get more prosperity and security in larger scale.

The thing is, however, no sane political leader in the free, democratic world would dare to champion the scheme in front of voters.

The system of people’s desire and hope is very complex if not totally contradictory. People want security and prosperity but won’t let a evil dictator get away with what he has done so far. Even if it means more volatility and eventually a unavoidable crisis.

When it comes to a very political, controversial issue, one has to perform a very smart manipulation to incentivate people into one direction. When it comes to democratic society, a policy process of which has to be transparent, a manipulation gets further away from being viable by definition.

What makes it a nonstarter would apply to Professor Kim’s idea as well.

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