Nonsense, horsefeathers, and idle musings from a decade in South Korea (2002-2012).


18 December, 2011

Kim Jong-il is Dead. Dead? Dead. Uh-oh.

By Aaron
18 December, 2011



According to North Korea's ever-reliable Central News Agency, Kim Jong-il - he of the pompadour hairdo, numerous holes-in-one on the links, and despot extraordinaire - has died. Reports of Kim's demise have proven premature in the past, but given that the North's main news organ is confirming the death, I suppose we can take it as given.

Death has seldom come to a more deserving person. In addition to putting North Korea's economy firmly into the crapper, Kim and his father (Kim Il-Sung, founder of the nation) oversaw a network of concentration camps, kidnapped Japanese and South Korean citizens, and regularly engaged in state-sponsored terrorism (bombing civilian airliners, shelling South Korean towns, etc.). Outside of North Korea, few people responded with anything short of "hallelujah" to Kim's death.

But.

The trouble in North Korea may have only just begun. Kim Jong-il's son, Jong-eun, is the heir apparent, but he's young and untested. Moreover, as I wrote last year, a dynastic power transfer in North Korea increases the risk that the ruling coalition breaks down, inciting internal - and perhaps international - strife.

And, in the event that Kim's death has made you optimistic about Korean reunification happening sooner rather than later, I will refer you to this piece from last year. Be careful what you wish for.


07 December, 2011

Economy Watch: "Corporations are Evil Psychopaths"

By Aaron
07 December, 2011


Last summer, Mitt Romney came under fire for his comment that "corporations are people." Romney's remark, made on an Iowa campaign stop, came in response to an audience member who shouted that the U.S. government should raise taxes on corporations as a way to either goose the economy or to solve the United States' debt problems.



In saying that companies are people, Romney was obviously not implying that a corporation could meet you for lunch, console you when you catch your husband with his secretary, or make your mother stop pestering you about your choice of a career. Neither do corporations have hair to cut, noses to blow, or toenails to clip. As I said, obviously.



Romney's point was merely that, when you get right down to it, you can no more tax a corporation than you can tax a sofa or a pencil - you can only tax the individuals who make, buy or sell the sofa and the pencil. Doubt this? Go ahead and try to get that sofa to pay you rent for the privilege of living in your house. A corporation is merely a legal document which spells out the terms of cooperation between a certain group of individuals. Taxes, therefore, can only be paid by individuals, which in the case of a corporation would be its shareholders and employees.



The latest effort to misconstrue Romney's comment comes courtesy of Economy Watch, which a few days back posted this graphical effort in meaningless generalization.



"If corporations are people," asks the headline, "what sort of people are they?"


The authors then proceed to lay out why corporations, as people, are little more than clinical psychopaths, lurking in every dark corner in the hopes of robbing you blind or buggering your cat. Their proof? Why, the DSM-IV and its checklist of antisocial personality traits, of course.



Do corporations repeatedly break the law? Check. Do they con others for personal profit or pleasure? Check. Irritable and aggressive? Check. Reckless disregard for safety of self and others? Consistent irresponsibility? Lack of Remorse? Triple check.



But let's go back to your sofa for a moment. Has it ever behaved irritably or aggressively? If so, did it show remorse for its actions? Probably not (unless your davenport is demon-possessed), because these are human characteristics. Similarly, in what cartoon universe could the BP corporate charter possibly undertake reckless, irresponsible actions? The Deepwater Horizon oil spill in the Gulf of Mexico resulted from human error, and the clean-up and public relations process were handled by humans, some of whom were probably irritable and aggressive and others who were probably just doing their best to contain the disaster. So, while you can say that you'd like to punish BP for this oil spill, the only way to do so is to punish the shareholders, the staff, the executives, and pimply high school kid pumping gas at their station for minimum wage.



I should note here that, in writing this, I do not wish to endorse (or even shine a positive light on) Mitt Romney, nor is this meant as a discussion of the moral or practical implications of corporations as a legal concept, and I'm certainly not defending BP or your sofa. I simply mean to point out, as I never seem to tire of doing, that political and business entities are not individuals. Only individuals can make decisions and act on them, and the consequences for decisions are ultimately borne by individuals (ideally the ones who made the decision), even if they are part of a larger group.

06 December, 2011

Attack of the Nincompoops, Part CCXXXVII

By Aaron
06 December, 2011


This blog is young – only a few weeks old – but I fear we’ve already given our readers the idea that we hate the government. This is wrong. I think I speak for every writer on this site when I say that I don’t hate the government (an abstract concept), but rather, I dislike nincompoops who use their position within the government to foist their worldview of the world on the rest of us.



I mention this because said governmental nincompoops are at it again. Specifically, the folks over at the Korea Communications Standards Commission (when the word “standards” creeps into state agency’s name, ready yourself for an attack of the Killjoys) have a bee up their backside because Korean citizens have, it seems, been availing themselves of the free speech protections afforded them by their nation’s constitution. And so, knowing that if left alone in this big, immodest world, Koreans would sully their minds with all manner of filth, the KCSC this week leapt into action. From The Wall Street Journal:




…on Wednesday South Korea's government communications standards agency is set to expand a team that monitors Facebook and Twitter posts for violations of rules that cover topics from national security to gambling to privacy.

[snip]

The Korea Communications Standards Commission defined illegal content to include comments or postings that involve pornography, gambling, drug abuse, the spread of false information and anything that incites or promotes crime.


So, in the interest of protecting your privacy, the Korean government will now carefully monitor your online activity. But wait: the government monitoring your activity in the name of “national security?” Oh, well, I’m sure there’s no way that could ever lead to an abuse of power. And, you know, it’s sure nice to see that the Korean government, which protects its citizens from the dangers of gambling by operating the 3 trillion KRW/year (US$3 billion) lottery system, is vowing to go after content which promotes gambling.



Thanks, KCSC, for so generously keeping tabs on us.



Now, why exactly the KCSC needs to stick its nose into our Facebook and Twitter posts is not exactly clear. As Park Kyung-shin, a KCSC commissioner who – bless his heart – voted against the new monitoring, noted in the WSJ piece , issues such as libel can already be taken up in the nation’s courts (in Korea, oddly enough, truth is not considered an adequate defense against such a charge). Mostly, then, this seems like yet another case where a government agency must do something to justify its existence. This monitoring is “something,” therefore, logically, the KCSC must do it.



The KCSC seems to have gotten the idea that constitutional free speech protections only apply to the most mundane utterances, such as “I’m husky” or “Let’s have beans for dinner.” Yet, the reason a constitution contains free speech protections is to protect the most controversial, the most obscene, the most dangerous speech. Too often, however, government agencies like the KCSC operate under a motto of “We’ll protect your right to free speech provided you don’t say anything interesting.”



So rather than having the government cover our ears, eyes and mouths, here’s a suggestion: if you’re offended by what you see on TV, turn it off; if you don’t like reading lewd Tweets, unsubscribe; if someone slanders your name, either shrug it off or take them to court. We’re all big boys and girls. Do we really need – or even want – the nincompoops at the KCSC to babysit us?


05 December, 2011

Korea Herald Debate: "Soak the Rich?"

By Aaron
05 December, 2011

Writing in today's Korea Herald, CFE's own Hyuk-Cheol Kwon debates Dong-youb Shin of Yonsei University on the merits and morality of a special tax for high income individuals in Korea, a proposal which has even gained traction within the ranks of the occasionally conservative Grand National Party. I recommend a full reading of the discussion, but a few notes are in order.



In perhaps the most concise illustration of his camp's position to date, Mr. Shin writes that "increasing taxes for the extremely rich is worth considering to make the workings of the market healthier by compensating for the market failure of unfair wealth distribution."



Too often, those who fret over unequal distributions of wealth and income choose to focus on outcomes rather than processes. In a free market, however, outcomes - such as income and wealth - depend on voluntary exchange, and to the extent that a person's income is earned via voluntary interactions with other individuals there is no market failure whatsoever, as individuals have freely chosen to allocate their time and resources in what they view as the most efficient manner.



Consider, for instance, the fortunes of an actor like George Clooney or a sports star like Ji-Sung Park (of Manchester United). Their incomes greatly distort the inequality statistics in their respective countries, but who would characterize their high pay as a "market failure?" The processes by which Clooney and Park became wealthy involved the voluntary decisions of millions of individuals and, as such, the outcome can hardly be considered unjust. For Mr. Shin, however, any outcome that does not conform to his notions of how the world should look is considered a failure of the market.



Of course, being concerned by processes, we should worry about individuals who become wealthy by colluding with or capturing state power, such as when companies or interest groups lobby the government for subsidies, bail-outs, or protections against competition. In this sense, Koreans are right to be suspicious of the fortunes of corporate chieftans who enjoy a cozy relationship with Korean politicians, and who tend to conveniently skirt justice despite years of political and corporate corruption. This, however, is not an argument for punitively taxing the wealthy, but rather for giving the government less power to arbitrarily hand out favors.



Finally, before allowing indignation and envy to shape our public policy, we would do well to examine our intended goals. The economist Thomas Sowell has written that the first question a young policy analyst must learn to ask is "And then what?" Let's say the Korean government institutes a special tax just for the most wealthy members of society. And then what? Well, you've had enough of me for now, so I'll just close by handing it off to Milton:






See also: The "Buffett Tax:" Now Leaving the City Limits of Virtue

Over Yonder...

By Aaron

Over at CFE Korea, I've got a handful of new posts to occupy your time:

  • In this post, I add a few thoughts to the Korea Herald's debate topic of the week ("Should There Be a New Tax for the Rich?"). And as it happens, I had just last Saturday written this post about the so-called "Buffett Tax."

  • Local protests against the KORUS FTA are dwindling, but they haven't completely run out of steam. My latest comments on the protests are here.
  • Finally, I found this Bloggingheads.TV conversation on the Italian debt crisis (between Robert Wright and Franco Pavoncello) to be informative and entertaining.

03 December, 2011

Consumption: The Sole End & Purpose of All Production

By Aaron
03 December, 2011

Once the current wave caterwauling against the KORUS FTA subsides, most Koreans will likely find themselves benefiting greatly from the trade agreement. Of course, particular companies will face new competition and, having grown up behind the protective skirts of state protection, will find themselves unable to withstand the forces of economic dynamism.



In this CNBC video, Sean King (a VP of Park Strategies) discusses the KORUS FTA on CNBC. King believes, and I agree, that in purely zero-sum terms Korean companies likely gained a bigger prize in this trade agreement, as it gives Korean firms access to the world's largest single market, while American firms gained access to a much smaller Korean market. That said, the world economy is a complex ecosystem and only time will tell which firms are able to take advantage of the new angles created by these bilateral trade agreements. Some companies will succeed, some will fold, others will emerge to take their place.



Yet, while we need not celebrate the demise of uncompetitive firms, we must not lose sight of the most important benefits of increased trade and specialization, even when such forces change the composition of market participants. As Adam Smith wrote, "Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer." For years, Korean consumers have been held hostage by various local interest groups (automobile manufacturers, farmers, consumer goods makers, etc.) who charged higher prices for lower quality, generally pitching their self-interested behavior as noble patriotism. Fortunately, Korean consumers will soon be met with a wider array of choices and a lower prices as American goods and services enter the Korean market. Likewise for American consumers, who will benefit from the competition provided by Korean goods and services.



Regardless of which companies may benefit from the KORUS FTA, then, we can be sure that consumers will be the ultimate beneficiaries of any increase in trade.



h/t: Don Southerton at Korealegal.org


The “Buffett Tax:” Now Leaving the City Limits of Virtue

By Aaron



"There is no virtue in compulsory government charity, and there is no virtue in advocating it. A politician who portrays himself as 'caring' and 'sensitive' because he wants to expand the government's charitable programs is merely saying that he's willing to try to do good with other people's money. Well, who isn't? And a voter who takes pride in supporting such programs is telling us that he'll do good with his own money -- if a gun is held to his head."


P.J. O'Rourke



A few days back, my colleague, Casey, took the Korea Times to task for an editorial which demanded that the wealth of Korea's richest citizens be seized. The money quote:




Rich people in America and Europe have volunteered to pay more taxes, either out of noblesse oblige or ‘enlightened selfishness.’ None of their Korean counterparts have done so, which means someone else should force them.



While I share Casey's distaste for the Times' politics, I would like to give the paper credit for accurately describing its own proposal. All taxes are, when we get right down to it, taken under the threat of force, and I commend the Times for pointing this out.



Still, the current discussion of the wealthy upper crust and the taxes they pay has entered a peculiar realm wherein a person is greedy for wanting to hold on to his own money (or to direct it to charity as he sees fit) but is noble and kindhearted for wanting to take someone else's money. Thus is Warren Buffett feted for saying, in effect, "I'll give the government a bit of my money as long as it snatches more of that guy's money, too." Meanwhile, wealthy folks who doubt the state's ability to competently address the needs of society - and who therefore channel their money to charity as they see fit - are portrayed as miserly grumps.



It's worth noting, as Casey did in his post and as the Daily Caller shows in the following video, that even those richest Americans who call for higher taxes on their own ilk aren't exactly lining up to dump bags of money into the government coffers. They're more interested in a round of moral grandstanding:





As the opening P.J. O'Rourke quote points out, as James Otteson says in the video just above it, virtue can only exist when an activity is freely chosen. Thus, for Warren Buffett to voluntarily give his own money to charity - or even to the U.S. government - would be an act of virtue. When Buffett, or the Korea Times, starts lobbying for the government to take other people's money by force, however, they've clearly exited the Virtue city limits and ought not be patting themselves on the back for such proposals.



The Castle & the Abuse of Eminent Domain

By Aaron


Go find your dictionary and look up the phrase "pleasant surprise." If your dictionary is worth its space on the shelf, the definition will read: "A fifteen year-old, low-budget Australian film which turns out to be the most insightful, hilarious commentary on eminent domain abuse in recent cinematic history." Next to the entry will be a screenshot from The Castle.

Released in 1997, The Castle is the story of the Kerrigans, a family of rustic boobs (to use the most charitable description) who live right next door to the Melbourne Airport in a house which, as son Dale proudly boasts, is worth almost as much as the day they bought it. The family, while short on class and sophistication, nevertheless exudes a close-knit warmth and a pride in their humble home. Indeed, they exemplify the old adage that a man's home is his castle, hence the film's title.

Everything in the Kerrigan household is going along swimmingly until a real estate assessor shows up one day to do a valuation on their property. Soon thereafter, father Darryl receives a notice that his land has been "compulsorily acquired" to make way for extensions to the neighboring airport. What follows is one man's battle to keep his home in the face of a legal system which frustrates common sense at every turn. His initial confrontation with a government employee is but a taste of things to come:

Bureaucrat: "There is an ironclad agreement between federal, state, and local governments and the airport commission [which states that you must vacate the property]."

Darryl: "Yeah, well where's the agreement with Darryl Kerrigan, 3 High View Crescent, Coolaroo?"

And then there's this scene, wherein Darryl is astonished to discover that it's up to him to prove why he should be allowed to keep his home:



Libertarians (and other free market types) who start talking about the rule of law and the importance of private property rights are often derided as being tools of the wealthy, interested only in maintaining ill-gotten privileges - which only shows how little these critics have considered such matters. These institutions are not mere conveniences of the plutocratic class. Rather, the protection of private property - as part of a consistent rule of law - is a chiefly a protection of "the common man" against attempts by the state, often captured by privileged special interests, to seize by force what it cannot get via persuasion. Thus, in The Castle, it is Airlink, a sorta-private, kinda-public Big Corporation (read: private money combined with state force), that is out to take the Kerrigan's land.

The Castle has taken on new relevance in the last decade as American cities have used - and abused - eminent domain to force people out of their homes not in order to build roads or schools, but rather in the interest of increasing local tax revenues. Indeed, in 2005, the United States Supreme Court put its own stamp of approval on such thuggery when it ruled in Kelo v. City of New London that a Connecticut town government had every right to forcibly take someone's home and hand it over to the pharmaceutical company Pfizer. In addition, the NBA's New Jersey Nets will soon relocate to Brooklyn, where their new arena was built using much the same methods. Yet, as this video from Reason.TV shows, none of this is new:




Throughout The Castle, Darryl Kerrigan repeatedly argues that "you can't just steal my home," to which judges and lawyers reply in confusion that he's being compensated. So why the all the fuss? Of course, if I walk into the Apple Store and offer them $50 for a new iPad, the store employees will understandably refuse to sell. If I force them to take the money and then walk out with the iPad, I'll be arrested for theft. No judge would accept, as my defense, the argument that Apple had been compensated for the iPad. For an exchange to be voluntary, both sides must agree to the terms, otherwise we're dealing with a form of theft (i.e. the difference between $50 and the actual retail price of the iPad). The same is true of eminent domain when land-owners object to moving at the prices offered by the government. That this may inconvenience certain parties (the government, private construction companies, etc.) does not change the fact that, at root, this is theft pure and simple.

As further credit to the writers of The Castle, the film manages to be a biting commentary on the importance of private property rights without ever forgetting that its first order of business is to be a comedy rather than a preachy docudrama. Whether you've never seen it before, or whether you were enraged by decisions like Kelo (or maybe you just want a solid comedy for next Saturday night), track this film down and give it a look. You won't be disappointed.

New Posting Climes

By Aaron


As I mentioned a few weeks back, I recently began working with the Center for Free Enterprise here in Seoul. Part of that collaboration has involved working with Hana Lee - CFE's Queen of All Things Technological - to get a CFE blog up and running.

And here it is: CFE Korea, the English-language blog of the Center for Free Enterprise, while still young and prone to stumbles, is open for reading. I encourage you to add it to your bookmarks, subscribe to the RSS feed or to our email updates, and to leave your comments. In addition to me and Hana, CFE's Director of International Relations, Casey Lartigue, will also be contributing to this newest outpost of classical liberalism. And as it happens, I just this evening did up a post over there, so you'd best amble on over and give it a read.

I'll still be posting 'round these parts, so don't delete me from your bookmarks just yet. My plan is to use CFE Korea as a platform for my thoughts on Korean politics and economics, while maintaining Idiots' Collective as my personal site, with a smattering of non-Korea related policy matters tossed in. Or maybe I'll just use this site to post pics of Korean bikini models.



02 December, 2011

Give Me Less Control Over Your Affairs!

By Aaron
02 December, 2011

Since the ruling Grand National Party rammed through ratified a free trade agreement between Korea and the United States late last month, a series of candlelight vigils protesting the FTA have attracted large crowds across Seoul. The largest of these, held on 30 November, reportedly drew a crowd of 50,000 to Yeouido Park for a live performance of the television show “I am a Singer.”

The organizer behind these protest vigils is the Korean Alliance Against KORUS FTA (한미 FTA 저지 범국민운동본부), a member of which I recently debated in the pages of the Korea Herald. In response to police plans to block protests in Central Seoul, the Alliance issued the following statement: “…we have to make sure that something as important to the nation as the the KORUS FTA is considered by the entire nation…”

I’ve said it before, but I suppose the points bears repetition: Why should Person C be allowed to approve or reject a voluntary trade between Person A and Person B? Why do "we" have to debate who I can trade with?

In fact, I’m half-tempted to take to the streets of Seoul in protest because I believe the KORUS FTA does not go far enough in liberalizing the Korean market. In the event, I’d be the one carrying the sign which reads “Give Me Less Control Over Your Affairs!”

As it is, though, the people protesting the KORUS FTA are in effect demanding that the private, voluntary activities of others be subject to their approval.