North Korea and the Failures of Nationalism (archive 2012)

Human structures, by their very nature, as complex emerges: they involve rules of interactions between people in several spheres of influence, and this systems emerge and fall.  Now, when I am analyzing this in philosophical terms, I do it dialectically and analytically, but I want my readers to remember, this is not only way to tackle a question that has philosophical implications.

Recently I was talking about how “Why Nations Fail: The Origins of Power, Prosperity, and Poverty”  and a friend called it racist apologetics for capitalism. I pointed out that it’s point about meta-structures in economies based on resource extraction seemed true and explained things about events in Africa and Latin America after wars of national liberation that couldn’t be explained on Marxist or Liberal (neo-classical or Keynesian) terms. I, however, did wonder how they came to the conclusion that the American way–inclusive neoliberalism– was ALWAYS better and that China was somehow outdoomed.

That is because within a complex system–within a dialectical emerges in philosophical terms–you are always blinded to its own internal weight.  Tainter’s Collapse of Complex Societies, which a friend had be look over the other day, actually makes it pretty clear.  The problems with North Korea are obvious in hindsight, but the history is actually quite telling.

Let’s look at a chart:

Prior to 1970, it would have appeared that North Korea would out perform either South Korea or China. Daniel W. Drezner  explains this:

My point here is not to defend Kim Il Sung or suggest that the DPRK’s economic institutions are underrated.  Rather, my point is that as data analysts, we’re all prisoners of time.  Had Acemoglu and Robinson written Why Nations Fail in the mid-1970s, it would have either made a different argument or it would have had a much tougher case to make about the merits of inclusive vs. extractive institutions (during the 1970s, commodity extracting states were looking pretty good).

Keep these charts in mind whenever anyone confidently asserts the obvious superiority of a particular model of political economy.  Because, I assure you, there was a point in time when such superiority was far from obvious.  And there might be another such point in the future

Now, Marx could explain that, declining rates of profits are more obvious in economies with natural resource depletion. It’s called the upper-limit to the primitive accumulation of capital.   Furthermore, Drenzer is right to point out that China’s obvious superiority can be seen as highly problematic in this model. But so then can is Acemoglu and Robinson’s assessment of liberal democratic capitalism, isn’t it?

Psychologists have a word this effect: The illusion of asymmetric insight.   Any revolutionary thinker or actor who fails to see this in him or herself will likely end up just confirming the biases of their particular moment in history. History, however, hasn’t looked so kindly on such claims.

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