Bulgogi! Kimchi! Galbi! Kamsahamnida!
The competing vendors shouted at the top of their lungs as parents, children, seniors, monks, soldiers and foreigners meandered shoulder to shoulder throughout the packed grocery store.
No aisle is left unattended. On both ends stand young women in mini-skirts and gogo boots gleefully extolling the selling points on the product du jour.
Taste test? Don't mind if I do, as I follow the other patrons in feasting on a buffet of mouth-watering beefs, porks and pastries.
If there is one generalization that is universal about Koreans, it's that they are passionate. And today they are passionate about shopping.
And while the history of 20th century Korea is filled with schisms, stigmas and sorrows, the peninsula offers outsiders a chance to see the outcome of two passionate experiments: pure socialism versus relatively free-markets.
In the North, the political class followed the letter and spirit of communism and Juched (sic) it with steroids creating a netherland whose inhabitants have one collective goal and mission in life: to serve the state.[1]
It is an unfaltering modus operandi that continues to this day. And in terms of economic growth and prosperity, it is an utter failure.
In fact, while collective farms in Russia have broken up and become productive parcels of private property, inhabitants in the North still live below subsistence.
But at least they are all equal in their misery, right?
And because socialism cannot calculate, because central planners have no organic pricing mechanism to determine how to distribute the sickles and scythes, millions of its residents still live at the brink of starvation.[2]
That is, if you are not a connected member of the ruling elite.
Some Animals Are More Equal than Others
It turns out that the multinational chain which socialists love to hate is the same one that socialists turn to when their plans go awry.
The Telegraph recently reported on how some North Koreans are discretely visiting places like Tesco (a big-box chain similar to Wal-Mart) on the Chinese side of the border; purchasing food and incidentals that are surprisingly unavailable in the DPRK.[3] And unsurprisingly these Koreans are politically well-connected. In other words, these are not the residents that need it the most, the ones that suffer due to the central planning elite.[4]
Not that I am endorsing Tesco but as described above, that is where I primarily do my shopping in Seoul. As do thousands of other locals on a daily basis.
And why is the store continuously packed full of food? Who controls what will be sold or how many to sell? What is the quota for spicy ramen production this week? What about chicken flavored ramen?
Despite its own flirtation with dictators and despotism, freer-markets have persisted in the South for the past five decades.[5] And as a consequence, these questions are decided and solved voluntarily through contracts and free-floating prices.[6]
Yet it is a problem that plagues every other industry in the North. [7]
The infamous night time image serves as a good illustration. There is little light pollution in the North, not because Kim Il-Jong orders everyone to turn off the lights or because the infrastructure is efficiently "green." Rather there is simply no infrastructure to support lights. And relatively few, usable light bulbs at all.[8]
The truth of the matter is the North has never survived on its own as it chronically siphoned off resources from the USSR and only stays afloat today due to massive amounts of free foreign aid from entities that coincidentally allow free-enterprise to exist.[9] [10]
Pulling from the Bootstraps
The bumpy path South Korea took to become a relatively wealthy, developed country was not text-book libertarianism and few would argue that it is the picturesque embodiment of unfettered capitalism. Yet the fact that entrepreneurs — both foreign and domestic — can profit in feeding a population twice the size of the North shows that relatively freer trade and commerce will triumph over the purest forms of by-the-book socialism.
Whereas the South opened its markets and liberalized trade barriers, subsequent North Korean regimes have restricted any and all foreign commerce that doesn't benefit the ruling class.[11] [12]
And perhaps the illustration that best highlights the bold dichotomy: the average South Korean is three inches taller than their Northern, malnourished counterpart.
Unfortunately, this is only the seen physical manifestation of a much larger study in planned chaos — a solution that literally is head and shoulders below the fold.
Tim Swanson is a graduate of Texas A&M University and currently lives in Seoul, Korea. Comment on the blog.
Notes
[1] The annual Arirang Mass Games are an example of the coerced collectivism that residents must endure.
[2] In the mid-90s between 200,000 and 3.5 million North Koreans died due to famine. Regarding the centralization of knowledge and prices, see: "Socialism: A Property or Knowledge Problem?" by Hans-Hermann Hoppe and "Why a Socialist Economy is "Impossible"" by Joseph T. Salerno. See also "Knowledge vs. Calculation" from Stephan Kinsella.
[3] Incidentally, Wal-Mart tried to operate in the South, but had a hard time adjusting to market conditions and eventually sold its stores to other players such as E-Mart.
[4] It is the same reason why no one downloaded Firefox in the North, because there is no independent internet access outside of one state-controlled internet cafe. Or even why this video arcade is run down, because there are no incentives to maintain one.
[5] See also: "Why I Probably Won't Visit the DMZ or North Korea This Decade"
[6] I am fully aware of how numerous South Korean administrations have intervened — with a heavy hand — in the economy. In bittersweet fashion it should be noted that in addition to tens of billions in foreign aid from US taxpayers in the 1950s and '60s, the Park regime received hundreds of millions in war reparations from Japan. In turn, a large portion of these monies were used on a slew of pet projects and gifted to the politically connected (e.g., chaebols). At the same time Park and subsequent administrations opened up the Korean markets and affirmed the right of private property ownership and the rule of contracts. See: "Conundrums in Korea" and "Asian Tiger or Asian Kitten?"
[7] There is a never ending list of examples of how planned chaos runs rampant throughout the North. For instance the Ryugyong Hotel is a 105-story concrete boondoggle that dominates the Pyongyang skyline. Not only has it been vacant for two decades, but its unsound architecture prevents it from ever being completed. Thus, what began as a quest by Northern socialists to show how powerful central planning can be, serves as an illustration of how it is ineffective and inferior to market-based solutions.
[8] The lack of incandescent lighting is not proof in and of itself to the failure of socialism or superiority of capitalism, rather it serves as an illustration to how these two economic systems can evolve into. And ironically, as the PRC has become more market-friendly, this incandescent phenomenon exists on the northern side of the Yalu river — as the commercially bustling Chinese cities are glowing with neon lights and the North Korean cities are pitch black: because there is little infrastructure to support the energy requirements of night time electrical usage in the North (i.e., no power plants).
[9] Yes, even China has become more market friendly. See "The Peaceful Rise of China"
[10] One understated reason for why the North has been barely trudging along since 1994 is that it no longer receives subsidies from Russia — and China didn't step in to bail them out, just like the Chinese did not bail out Cuba after the Soviets stopped footing the bill. (See: "Cuba's Post-Soviet Socialism" by Antony Mueller) The dilapidated state of the North infrastructure is also puzzling considering that prior to its independence in 1945, the Northern regions of Korea were heavily industrialized by the Japanese occupation into Manchuria. However, perhaps as the Washington Post reported earlier this year, the North will eventually open up like China did.
[11] For more on Korea, free-trade and Free-Trade Agreements see: "How Long Does a Free-Trade Agreement Need to Be?" Consequently, despite lower FDI and an overall sluggish economy, South Korea was recently added to the "Developed" list by FTSE.
[12] Another ironic twist illustrating the problems of myopic self-isolation, when Kim Jong-Il suffered a stroke last month, he was operated on by an outside team of doctors. From China and not his Eden. Michael Moore should have visited Pyongyang, not Havana.