American Statism and North Korea

by Jacob G. Hornberger
Dec. 28, 2010

Yesterday’s New York Times carried an interesting article about North Korea that in some ways reminds one of the United States. The country is suffering severe economic depression but the government is promising that prosperity is just around the corner. Meanwhile, everyone must sacrifice for the sake of the military, which protects the country from the ever-present threat of foreign attack (by the U.S. military).

Sound familiar?

Here in the United States, statist economists love to blame America’s economic woes on “our free-enterprise system.” The notion stretches back to the Great Depression, when the statists of that time blamed the 1929 stock-market crash on the “failure of America’s free enterprise system” rather than on the true culprit — the federal government.

But the real brilliance of the statists came with the advent of President Roosevelt’s New Deal. Although FDR’s program was a combination of European socialism and fascism, the statists sold it to the American people as a “reform” that would “save” America’s free-enterprise system.

The American people bought it. Even though they were shocked when the federal government began handing out “free money,” such as with Social Security or farm subsidies, and with regulating economic activity, such as with the SEC and the NIRA, since it was all part of “reforming” and “saving” our “free-enterprise system,” rather than instituting European socialism and fascism here in the United States, it was all okay in the minds of the American people living at that time.

Of course, over the decades the welfare state — the paternalistic state — the regulatory state — has grown into a monstrosity, one that now infringes on the privacy and liberty of the American people and also threatens to bankrupt the federal government, such as what has happened in Greece and Ireland. Compounding the problem is the U.S. empire-warfare state that came into existence during World War II and has continuously expanded ever since.

The statists argue, however, that America’s economic woes have nothing to do with the welfare state and the warfare state. It’s all due to America’s “free enterprise system.” Sometimes they use other terms, such as speculators, or entrepreneurs, or profiteers, or middlemen, or the rich, but the point is clear: Since everyone knows that America has a free enterprise system, it’s free enterprise that has failed again, just like in 1929. That means, according to the statists, that we need more New Deal type of reforms to save free enterprise and restore prosperity to our land — i.e., more regulations, decrees, taxes, spending, controls, etcetera.

So, what do the statists say is the cause of North Korea’s economic woes? That’s a fascinating question. After all, North Korea, like Cuba, has simply taken Franklin Roosevelt’s statism to its logical conclusion. In North Korea, the state takes care of everyone. Social Security, Medicare. Medicaid. Food. Housing. Clothing. Jobs. Public schools. Yep, it’s all there in North Korea.

Consider this statement by a 59-year-old North Korean: “I heard a rumor that he said we have more bullets than food. So maybe he will be a good leader and feed the people.”

See the mindset? Like so many Americans, North Koreans believe that it is government’s job to take care of them, even while recognizing that sometimes people must sacrifice for the sake of the military.

How is that different from the mindset of the average liberal and conservative in America?

The following statement by a North Korean university student in response to 2,000 new desktop computers installed in the university would easily express the sentiments of American liberals: “This is a very good present from Chairman Kim Jong-il.” And don’t liberals always justify cuts in military spending by showing how the government could use the money to better take care of the American people, with schools, food, housing, and the like?

On the other hand, don’t conservatives constantly remind us that we must continue making sacrifices for the sake of the military, the military-industrial complex, and the CIA, so that they can keep us safe from the terrorists, the communists, the Muslims, the illegal aliens, and the drug dealers? The following statement by a North Korean maid would easily serve as a model for American conservatives: “Even if we don’t eat, we give the military everything we can.”

My hunch is that the American statist economist would blame North Korea’s economic woes on too much economic freedom. The last thing any statist is going to do is raise doubts about the paternalistic welfare state or the national-security warfare state, either here in the United States or anywhere else.

According the Times, “Hundreds [of private markets] have sprung up nationwide, but officials play down their importance because they flout the socialist credo.”

You see, there’s the problem! Too many private markets within the North Korea’s socialist paradise. All that’s needed for prosperity, America’s statist economists would argue, is more control and regulation over those private markets. Isn’t that what they say here at home?
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Jacob Hornberger is founder and president of The Future of Freedom Foundation.