THE BLOG

Punishing Policymakers For Economic Disasters, North Korea Style

05/25/2010 05:12 am ET | Updated May 25, 2011

In our enlightened Western, capitalist, free enterprise democratic world, we have a most liberal and benign way of punishing those responsible for massive systemic financial and economic malfeasance. We bail them out, at taxpayers expense, and allow the captains of failed institutions to reward themselves for their miscalculations and greed with massive bonuses, while the public at large is "rewarded" with massive sovereign indebtedness and unemployment.

On the other hand, the Stalinist anachronism that is North Korea has a somewhat different approach to those held accountable for economic disasters: the firing squad. So it was that Pak Nam-ki, chief for planned economy for the DPRK's ruling party, met his end amid a hail of bullets. Supposedly, he was shot for being a stooge of an imperialist dog of a bourgeois counterrevolutionary. The truth, however, is much more interesting.

The ruling communist monarch of North Korea, Kim Jong-il , son of the nation's founder and officially infallible, decided on a major currency reform. The reform was a disaster, leading to a steep rise in price inflation and the wiping out of the meagre savings of most North Korean families. Someone had to pay for this outcome, however the nation's ruler, Kim Jong-il , being the "great leader" and therefore incapable of mistakes, could not be blamed. According to press reports, the unfortunate Pak Nam-ki was selected as the sacrificial scapegoat, and was shot.

While North Korea is clearly an extreme case, should the global economy deteriorate in the manner I expect, it is highly probable that ruling elites in the Western world will also look for scapegoats to satisfy public anger, as opposed to bailing out Wall Street in perpetuity.