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Thanks to Adam Cathcart, we were alerted to a story in Rodong Shinmun about new posters being unveiled in North Korea. The posters encourage the army and people to implement the historic tasks set forth in Marshal Kim Jong Un’s New Year’s Speech. As we predicted, the satellite launch is being used as the overarching metaphor for the regime’s big push approach: one poster has the slogan “Let Us Bring About a Radical Turn in the Building of an Economic Giant with the Same Spirit and Mettle as Were Displayed in Conquering Space!" Another, reproduced above, shows a scientist in suit and tie calling for citizens to “"thoroughly carry out the important tasks set forth in the New Year’s address."Max Fischer at the Washington Post picked up on another Rodong Shinmun story that even goes farther, referring to North Koreans five times as “space conquerors.”
The New Year’s Speech has apparently been bound into a Little Green Book, visible in the poster above. This choice is more than a little curious; the author of the last Green Book did not fare so well. But with the missile/satellite launch, Kim III is clearly feeling lucky.
We scoured the New Year's Speech for anything that looked promising, but were hard-pressed. Nonetheless, new reports suggest the speech is being considered a policy lodestone. Yet another Rodong Shinmun editorial—significantly longer in Korean than English—is titled “Let Us Create a New Turnabout in Building an Economically Powerful State While Highly Displaying the Dignity of a Space Power.” And like the speech itself, it provides dreary evidence of everything that is wrong with North Korea's economic management.
We see three things in the speech, editorials and posters that are discouraging. The first is the ongoing confusion between ends (being a strong and prosperous nation) and the strategy of getting there (heavy industry first, technological leap-frogging, vague injunctions to focus on people’s livelihoods). Second, the emphasis on technology as a form of economic deliverance is everywhere (“Today's era is an era of science and technology, and we should open up an epoch-making phase in building an economically powerful state with the power of science and technology. The key to crushing the sanctions and blockades by the imperialists and leaping forward into an economically powerful state lies in science and technology.”) A single-minded focus on technology can put a missile in space, and the launch has to be seen as an achievement. But a single-minded focus on technology can’t produce economic growth in the absence of policies that promote ongoing innovation and provide incentives to using technology in an efficient way.In our humble opinion, it is a greater--if more mundane--achievement to grow at 3-4 percent a year than to waste hundreds of millions of dollars on a non-functioning satellite and military posturing.
Which brings us to the final problem: what we call the exhortatory approach to economic growth. The endless exhortation in important speeches is not coincidental. In the absence of meaningful incentives, the only way to squeeze more juice out of the workforce is hope that they respond to nationalist appeals by increasing effort. But a country's workforce can work very hard and remain poor if what it is doing destroys value, as forced-march economic campaigns typically do. As we know from past socialist collapses, a surprising share of the capital stock in the former Soviet Union and Eastern Europe was essentially worthless when the final reckoning came. Effort cannot substitute for fundamentals, if anyone is even paying attention to these campaigns any more.
The best we can hope for is that the emphasis given to economic questions—however orthodox—will be accompanied with greater forbearance toward the de facto market economy and more substantial managerial and farmer discretion. If this is happening, it has to be one of the more extreme versions of gradualism we have ever seen.
