Left Flank

NK Econ Watch's Curtis Melvin has in the K-Sphere one of those rarest of beasties: low ideology analyses of North Korean issues, in this case, collapse scenarios. After offering a handy diagram of Andrei Lankov's prognostications, Melvin concludes:

Using this framework, we see that Lankov's first scenario falls into quadrant 2 (upper right), and economic reforms lead to a weakening of the central government, pushing the country into quadrants 3 or 4. This transition is based on the notion that the North Korean central government, or whichever coalition holds it together, can't survive an economic transition, mainly due to the visible success of South Korea. I think this is an interesting argument, but I am not entirely convinced by it. Hong Kong is not inspiring revolts in China for the same reasons that North Korea does not need to fall prey to political upheaval—mainly, keep people from organizing and dispersing information, and make sure that some fraction of the productive gains from economic reforms are strategically redistributed as political rents.

I take issue with a number of presuppositions. Firstly, if Pyongyang's authority implodes, the resulting rush of regional foreign power, from Beijing, Seoul, Tokyo, and perhaps, the US and Russia, will not be a polite affair. Secondly, both Melvin and Lankov assume that the lack of information about ROK's economic prowess invites a certain awe. However, as Marcus Noland argues, North Koreans «expectations may be lower. This potentially means less migratory responsiveness and less of a shift away from home goods.» Related to this «imponderable», North Koreans differ from East Germans by their «politics, attitudes, and spirit.» (Noland, Avoiding the Apocalypse, p. 299) Both Melvin and Lankov confuse political culture with government action.

As I have insisted many times, the existence of free and affluent South Korea can profoundly influence North Korean people. Simply put, although Chinese people know that the U.S. and Japan are much wealthier than themselves, they know, at the same time, that China cannot be united with these countries to match their level of consumption with the developed countries' ones.

If North Korean people achieve the freedom to access information and to do at least as much as Chinese people have lately been able to do, the attraction of South Korea will make the Northern regime insecure.

The North Korean people will think that North Korea can easily solve its economic problems and raise their consumption level up to South Korean standards through unification and subsequent co-option into South Korea. Sure enough it is a fantasy, but this fantasy can weaken the North Korean regime.

As the self-proclaimed 'North Korean elite' demonstrated, it is possible for a North Korean, even one not receiving rents from the regime, to be both nationalistic and condescending, even when the economic situation in both states is compared.

Still, I applaud Melvin's efforts to use game theory. It does help to simplify a complicated case. However, complexity is part of the problem.

Ok, I get the point! Nothing changed in DPRK the night the New York Philharmonic Orchestra played (TMH's sly derision, ROK Drop's matter-of-fact outrage, Joshua's total outrage, DPRK Forum's Google-enabled skepticism). But, if not only a way to dupe those foolish American liberals, it was a very entertaining way to upstage ROK President Lee Myung-bak's inauguration. Lorin Maazel owes Lee an apology.

Say you're the beleaguered tyrant of a certain Northeast Asian country.  In a moment of financial duress, you signed an agreement in which you agreed to disclose and eventually give up a nuclear arsenal in which you've invested a great deal of money, pride, and prestige.  You know that in a year, there's an even chance that you might be dealing with the most naive and pliable U.S. President since Jimmy Carter.  You also know that if too many people start getting the idea that you're stalling on that declaration, momentum will shift in favor of turning the economic screws on you again, which you know could be the end of you. You can't survive without money from your enemies, and one of your best sources might soon dry up. Even the foreign diplomat who had been the main proponent of going easy on seems to be turning sour.

Can you last this year without performing on that accursed nuclear deal? Yes, you can!

Fortunately for you, your enemies have an inexhaustible appetite for superficial displays. They desperately want to believe that the gas chambers, nuclear tests, concentration camps, abductions, famines, and global crime syndication are merely a misguided artist's cry for attention. Some of them, though not all, even have the self-important delusion that they can change your nature by playing music for you.

To its credit, The Economist doesn't mention why the gulags are still full and the North Korean people still struggling to survive, but it does dispose of "the self-important delusion":

But will all this bonhomie—both contrived and genuine—really change anything? Donald Gregg, a former American ambassador to South Korea who attended the performance, called it a «16-inch broadside of soft power into the hearts and minds of the [North] Korean people.» But conservative American commentators have attacked it as pandering to a brutal regime. History suggests orchestral diplomacy may be of little real relevance. The Boston Symphony's visit to the Soviet Union was followed soon after by the crushing of the Hungarian uprising. America's relations with China fared better after 1973, but its alignment against the Soviet Union was the critical factor. America has no strategic interests in North Korea beyond stopping it from being a menace.

For the record, that same feature article includes some interesting vignettes of foreigners experiencing Pyongyang.

Choosing what to play in Pyongyang proved the easy part. Finding a suitable venue and getting the orchestra and instruments there were more difficult. The seat of the State Symphony Orchestra, the Moranbong Theatre (recently refurbished under Kim Jong Il's guidance—«no details escaped him,» gushed the state news agency), was rejected as too small. The East Pyongyang Grand Theatre, though bigger, needed modifications to bring its acoustic qualities up to the Philharmonic's standards (the North Koreans obligingly made the alterations, including building an «acoustic shell», at their own expense).

Pyongyang's harsh winter and shattered economy were obstacles too. Organisers worried that the instruments would be damaged by temperature variations as they were transported into and around the city. The chandelier-decked foyer of the venue itself was freezing. Mr Mehta held talks at the foreign ministry with an official wearing a thick overcoat in his office. Pyongyang's heating has been so bad this winter that residents complain they cannot remember the last time they were able to have a shower, says a diplomat.

Unable to find any heated trucks in North Korea to carry the instruments, the orchestra arranged for some to drive up from South Korea (South Korea's Asiana Airlines provided a Boeing 747 jet to fly the orchestra itself in and out of Pyongyang). The North Koreans promised good heating at the hotel and venue—and they delivered it. Mr Mehta had to ask for a window in his room to be unsealed so that he could get a bit of cool air.

The authorities spared no effort to isolate the Americans from the reality of life in Pyongyang. Some attempting a morning jog were turned back by guards at the perimeter of their hotel. Officials like to put foreigners there. It is on an island in Pyongyang's Taedong River from which it is difficult to get into the city proper, and there are no taxis available. When they were not rehearsing or performing during their 48-hour stay, the Americans were taken on bus tours of the city's monuments, including a giant bronze statue of the late President Kim—the country's leader during the Korean war.

It's only been a couple years since I've had heat and air conditioning in a college classroom in Busan, and still not the rest of the building. It must be a Korean virtue to sacrifice when others have much more.

The only way to be optimistic about DPRK's willingness to negotiate away its only nuclear bargaining chip this year will be to pray for the Kim regime's collapse. It's cold solace. Victor Cha is a bit more positive.

Cha, a scholar at Georgetown University, said optimism has never been the driving force in U.S. diplomacy with Pyongyang.

"People who support the policy now don't support it because they're optimistic. They're as pessimistic as the strongest hawk on North Korea, but we still have to fashion some sort of diplomatic process that gets (the North Koreans) in a position where they're forced to make decisions they don't want to make," he said.

I could hope for massive pundit battles and body slams, like Marcus Noland's.

«This is about as close to a Nazi regime in terms of its internal practices as exists in the world today,» he said. «It's outrageous that the director of the New York Philharmonic would [make such a statement] before this trip. I think you have to at least admit that there are troubling aspects to this regime and [consider] how your activity fits into these. To just dismiss it is outrageous.»

Waiting long for such sane arguments, however, could be futile.

Fortunately, saving me from killing myself, there's a more useful endeavor at hand: understanding the Gratuitous Game Theory of Official Support. Now, the only aspect I deplore is math. Except for counting money, I generally fall asleep after viewing too many numbers. It's a grave handicap, but I fight it to master economics.

The South Korean Ministry of Unification has a dominant strategy to lend/give/invest in North Korea for ostensibly two reasons: 1. If the MoU does not, their raison d'etre goes away.  2. South Korea will ultimately see a payoff if a development strategy works in the DPRK.

Contracting with North Korea, however, is essentially a prisoner's dilemma (see chart above), and North Korea has the ability to cooperate or defect.  However, the North Koreans have rational expectations, so they know the Ministry of Unification has a dominant strategy to cooperate.

Therefore the Nash equilibrium is for the South to keep cooperating and for the North to keep defecting.  In a repeated game, cooperation evolves over time as trust develops and defection decreases.  Because of South Korea's dominant strategy,however, the North never has an incentive to cooperate–so we end up with an «anti-folk theorem» where defection is the only incentive compatible outcome over time.

if Joshua at OFK is a canary, then this might be the rational discipline that sees us through to the better end.