Chapter 1 Project: North Korea

Bobby Shi

Part 1

1. Vocabulary

Scarcity: the situation where available resources, or factors of production, are finite, whereas wants are infinite

Every country has to find some way to allocate its scarce resources, whether through the free market or through government control. With North Korea and its extremely limited resources, the problem is exacerbated. The country in general, due to its climate and geology, has a hard time growing food, but the government still chooses to engage in a command economy and throw most of its resources into the military and into nuclear weapons.

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Labor: physical and mental effort that people contribute to the production of goods and services

Most of the people in North Korea work in agriculture or industry, with an equal amount of money put into agriculture and the military. The conditions are usually extremely bad, and there exist forced labor camps in the country where citizens often engage in activities laboring for the government.

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2. PPC

  • Spending on military and on its people (particularly food)

    • Has spent about a third of its GDP on military, and about the same on food

      • In comparison, the United States spends less than 5% on its military

    • Military spending slowly has risen since the late 1990s, which was the time of the famine

      • Despite 5-10% of its population dying in the famine, North Korea still continues to spend more and more money on military each year

      • Total GDP has only risen 0.8% since that time, so clearly, less money is being spent on food
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  • $12.38 billion was the GDP for Korea in 2014
  • They have only grown 0.8% since 1999, so shifts in the PPCs are negligible
  • They have continued to spend more and more money each year on the military, hence the three dots

Part 2

  1. The allocation of resources, especially money, into the military seems to portray a very militarized mindset, especially benefiting those in power. Former leader Kim Jong Il once said, “We can live without sugar; we can’t live without bullets.” Therefore, the leaders are actively neglecting the people in order to benefit their own power fetish. It is projected that about a quarter of the North Korean people don’t have enough food; North Korea once launched a rocket costing $850 million that failed, and the money would have been enough to feed the people for a year. While food would benefit all, the leaders are still eating lavishly, and the common people starve. However, the weapons only benefit the power structure.

  2. Income is incredibly disparate between the upper and lower classes. There does not seem to be any existence of a middle class, the presence of which is usually an indicator for a strong economy. Additionally, the fact that a quarter of the population is unable to afford food while money could be used to stimulate the economy indicates that the haves have an incredible amount while the have-nots have nothing.

  3. Resources used to produce both weapons and food are publicly owned, as North Korea is communist in name and an autocratic dictatorship in practice. The government, and particularly a few in the government, own everything.

  4. The public sector makes decisions in the economy, and the private sector has very little say.

  5. The state rations resources. Additionally, with the leaders’ policy of “songun,” meaning military first, most of the resources are actively being pushed into the military sector. WIth less resources for food, North Korea has to ask for billions of dollars of humanitarian aid each year in order to feed its people.

  6. The World Bank has published reports saying that North Korea has achieved a very low level of economic growth, particularly since the famines of 1999. They can now produce more weapons and have more food to feed their people (albeit how little). However, North Korea continues to rely heavily on aid, and they may be on the verge of another famine.

  7. North Korea is absolutely not achieving economic development. They continue to spend more and more on weapons, clearly not benefiting the wider populace, and they continue to ignore their people, maintaining an extremely low standard of living and leaving their people destitute.

  8. Based on this PPC, it is difficult to ascertain as to whether North Korea is practicing sustainable development on the environment side. However, they are not providing future generations the ability to live healthily and are sacrificing their country’s future opportunities by continuing to invest in weapons and not in other merit goods, especially food.