The Promise Of North Korea

Interesting things are happening on the Korean peninsula, with the thawing of relations between the United States government and that of North Korea, and recent actions indicate significant positive outcomes. This is, however, not the first time that dictators have made commitments in discussions and negotiations, and those commitments are sometimes acts of deceit to buy time or get concessions. Nobody really knows what the outcome will ultimately be, but it is interesting to ponder the possibilities.

We, as in observant people of the world, have some evidence about what can happen, both in the positive and negative directions, since we have seen both in relatively recent times. Things could get worse in Korea, but, at least through the lens with which we have been allowed to see the nation, they are in bad shape already. We have seen, with cases such as Venezuela, what can happen as a nation becomes less free, and the markets fall apart. Ignoring economic effects of political actions does not make those effects go away, but rather tends to amplify them.

There is also, however, the possibility of getting better, in fact, much better. The extent of better or worse results for the people of Korea is, in large part, dependent on how far the government embraces economic freedom, a market-based economy, and that ten-letter word that everyone loves to hate, capitalism. The several measures of economic freedom in the world, though not perfect and have their own weaknesses, demonstrate a significant relationship between such economic freedom and the prosperity of the people of a country. Generally, the more freedom, the more prosperous. The poor in the most economically free countries, those that impede markets the least, have a higher standard of living than most middle class people in the rest of the world.

The world itself has witnessed a significant decline in poverty around the world over the last thirty years. That has coincided with an increase in the global average of the freedom indexes of the countries. In spite of exceptions, the world has actually been getting more free, particularly in countries that have been historically poor. In many cases, the poverty of the people is not due to lack of resources, lack of land, lack of access to sea ports, or other such factors. Often the greatest factor is a government that abuses its citizens, that creates rules that keep people down, or that confiscates property and destroys incentives to investment and production.

Capitalism is not equal to cronyism, though outwardly capitalist countries are often victims of the crony disease. It is also the disease every other political system, including the most fervent communist societies. It is the granting of political favors and special rights by politicians in return for something of value, for prestige, or for power. If Korea is to embrace economic freedom, another name for capitalism, or private ownership of property and one’s own labor, the possibilities for it’s people and for the country are boundless.

Botswana was one of the poorest countries in the world, but is now considered a middle income country. It has experienced sustained economic growth, with projected 2019 growth of 4.8 percent, according to the World Bank. It is also one of the most economically free countries in Africa. The 2017 Index of Economic Freedom ranks it as number 30 in the world. Its freedom and its growing prosperity are intertwined.

The choice for Korea is whether they want a future like Venezuela or one like Botswana. No, Botswana is not an economic engine of the world, but it has grown by leaps and bound from where it started. Let’s hope they choose the Botswana model, for their sake and ours.

Dan McLaughlin is the author of “Compassion and Truth-Why Good Intentions Don’t Equal Good Results.” Follow him at daniel-mclaughlin.com.

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