Korean unification issues

I recently had an unusual experience while reading the Wall Street Journal. After deciding to read a certain op/ed piece because its subtitle looked extremely interesting, I found the piece to be a profound disappointment.

The article, written by a Stanford research fellow named Peter M. Beck, was titled “Contemplating Korean Reunification,” and its gripping subtitle read, “The North could collapse more quickly than we think.”

The piece was primarily disappointing on two fronts.

First, the author barely spends one sentence on the subject of the apparently impending collapse of the North’s Communist regime, a subject that is of particular importance given recent events. (De facto leader Kim Jong Il’s alleged health problems and sticky succession issues, among other things, come to mind.) However, perhaps the author should be forgiven for this error, as the subtitle’s wording was probably someone else’s call.

Responsibility for the second giant flaw, however, rests entirely with Mr. Beck. His mistake? Focusing on the completely ludicrous issue of “equalizing North Koreans’ incomes with their richer cousins in the South” and proceeding to ignore the most obvious solution to this “problem.”

While Mr. Beck is entirely correct in his statistical characterization of the income disparity between South and North Korea (which stands at a staggering 20:1 ratio), he ignores the solution that has been the primary driver of almost every economic rise in the history of the world: economic liberalization, including the lowering or elimination of barriers to trade and regulations on commerce and the institution and protection of private property rights.

He summarizes recent estimates of the “cost of Korean reunification,” which ranged from $50 billion to $5 trillion over 30 years and posits that South Korea, China, Japan, the United States and the World Bank might all chip in to help foot the bill and bring the North up to speed.

Why he assumes that the North’s prosperity will have to be brought about with massive assistance from outside is beyond me. If the country were entirely populated by people incapable of learning new skills and producing goods and services of value, this approach might make slightly more sense. (Even then, however, the question of why their becoming prosperous should be other countries’ responsibility would remain.)

Fortunately, however, North Korea’s population is not unable to be trained and educated but merely poorly trained and educated as a result of the country’s repressive economic system, which allows almost no opportunity or incentive for people to improve their own lives. If their natural right to property were protected and their leaders and other leaders around the world would make international trade more free, these people would be able to do what billions before them have done: improve their own lot through trading by mutual agreement to mutual benefit with each other and their fellow humans around the globe.

Unfortunately, Mr. Beck’s survey of the issues surrounding unification missed the mark. Let us hope future discussions of this important issue will address real problems and sensible solutions.


E-mail: jarlower@indiana.edu