Tale of Two Koreas: Communism vs. Capitalism.

The comparison between North and South Korea is incredible. It hit me earlier today just how perfect a case study the two nations really are.

South Korea could certainly be called “Capitalist”. It has it’s share of obtrusive government and violent regulation, but South Korea is on the “more free” side of the fence. The past half-century in South Korea has been one of the most wild economic explosions in world history. In 1950, just after the Korean War ended, South Korea had a GDP per capita similar to the GDP many African nations have today; that is, practically zero. The Korean Peninsula was one of the poorest and most backward areas in the entire world at the time.

Zoom ahead to the present day: South Korea is one of the economic superpowers of Asia, maybe even the world. Where wooden shacks and meager farms once sat, towering skyscrapers and gleaming city streets now reign supreme. South Koreans boast a highly-developed and competitive economy based on technology and production. Many South Korean companies such as LG and Hyundai boast wildly successful and innovative products. South Korea is no libertarian paradise, but the impact of largely Free Market policy and the permitted investment of foreign capital has transformed South Korea from an agrarian peasantry to an advanced economy with high standards of living. This all happened within approximately 50 years. It is incredible.

Contrast this with it’s neighbor, North Korea. Officially, North Korea is not communist. According to their constitution, the Kim family rules by the ideology of “Juche”, not Marxism. However, in practice, North Korea is Stalinist, comparable to the political and economic atmosphere of early Soviet Russia. All industry and production is controlled by the State in North Korea. All stores and services are controlled by State mandates on some level. Only the most minor of market reforms have been made since the founding of the nation. North Korea, alongside Cuba, is one of the last bastions of true communism left in the world.

True to communist form, North Korea is not a nice place. I should not even need to go into detail. We’ve all read the stories. We’ve all seen the photos. We know about the prison camps and summary executions. North Koreans have low living standards; a privileged few live in Pyongyang, while everyone else toils in abject poverty elsewhere. North Korea produces next to nothing of value. It is possible that their most profitable enterprises are in the production of various illicit drugs and in counterfeiting the currency of other nations. North Koreans have basically no freedom in any regard. They are controlled by the State every step of the way. It is a terrible place.

I read a humorous article a few months ago in which UK journalist Simon Winchester quipped that South Korea had been culturally trashed by Capitalism, while “North Korea, for all its faults, is undeniably still Korea”. If he’s referring to the destitute and miserable pre-war Korea, then I guess he’s right. South Korea has certainly become something different.

This is a case study: Freedom vs. Statism. It is almost too perfect.

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