Left Outside

"In our age there is no such thing as 'keeping out of politics.' All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia. "

Playing Football in North Korea

I recently finished reading The Aquariums of Pyongyang by Kang Chol-Hwan. It is an account of life in a North Korean gulag. It’s not incredibly current, especially as his time in the gulag finished in 1987, and the book was first published in France a decade ago. But in a country that seems to be plodding along at the pace of an ox drawn cart, and that has suffered a great famine in that time, it offers a relatively insightful glance into a world that very few people have gained access to. Excepting suspicious footage of the Gulag in which the memoirs speak of which surfaced on Japanese TV in the past few years, it is something which very few people have been granted access to.
 

I could put together a several thousand page rant about the Korean Worker’s Party, the ‘Dear’ and ‘Great’ leaders, and the bleak situation which North Korean citizens have had to endure as a result,. It’s something that many people have done before, and with limited fresh information coming out of North Korea, runs the risk of recycling the words of previous commentators. So in an effort to keep this post somewhat topical (whilst avoiding all the election hype) I saw a specific section which I thought I could work with regarding the treatment of a former North Korean national sporting hero.
 
As you may well be aware, the North Korean national football team has qualified for the World Cup finals in South Africa this summer. A feat that they only achieved one time previously when the tournament was held in England (as a Scot I won’t dwell on the final outcome that particular year!). Considering that even less was known about the nation then than now, and that prior to the tournament, no Asian team had ever got past the first round (again, a sensitive issue to a Scot…) very little was expected of the team. Something that was reflected in the 1000/1 odds that were granted to the lowly Koreans prior to the tournament. After a steady, if unremarkable first couple of matches, their final group match against Italy at Ayresome Park in Middlesboro was a decider for qualification to the next phase. Lining up against one of the top seeds and, at the time, joint most successful team in world football with two previous tournament wins, most had resigned them to defeat. They surpassed everyone’s expectations with a victory to take them to the quarter final where they lined up against Portugal with the mighty Eusebio. After 22 minutes, they went 3-0 up, before conceding five and killing off what would have surely been one of the greatest ever success stories in World Cup history.
 
Understandably, following their incredible victory, the team went on a bit of a celebratory binge, which was then used as a reason to blame for their eventual exit from the tournament. After seeing pictures of the team celebrating, the Pyongyang authorities deemed their actions “bourgeois, reactionary, corrupted by imperialism and bad ideas” and the whole team, upon arrival back in North Korea were punished with a stint in the hard labour camps. Kang Chol-Hwan talks of meeting one of the stars of this team, Park Seung-Jin 12 years later, still serving after reacting badly to the punishment which included treatment which stretched as far as a 3 month stint in the utterly barbaric “sweatbox.” This, Kang describes as a Papillon-esque small shack where prisoners are forced onto their hands and knees. Where the prisoner’s heels are pressed so tightly into their body that the buttocks turn solid black with bruising. Barely enough food is provided to survive whilst in this prison, and the tortured are forced to pounce upon cockroaches and centipedes in order to survive. Prisoners are not permitted to talk – the only gestures allowed were to raise your right hand if you wanted to be sick, or left hand if you had to relieve yourself from the other end. If the prisoner made a noise, the guards would relentlessly beat them. If there was any other movement the guard would beat them. That is of course, unless they favoured other punishments such as being forced to crouch over a septic tank with the prisoner’s hands tied behind their back and their face forced downwards.
 
So other than to give you an unpleasant account of torture methods used in North Korea, what has this post told you? North Korea is isolated from the outside world. Even the route of escape which Kang eventually took – past relatively lax border guards in China has been limited with the construction of concrete walls and barbed wire lining the border to stop escapees. The lack of information regular citizens have of the outside world is startling. The internet is but a fantasy to all but an elite few. Tuning in to South Korean radio is punishable with a spell in the gulags. The country has the lowest rated free media in the world. The very few tourists allowed in the country are scowled at by the North Koreans, who believe them to be a threat to their great nation. The population of North Korea genuinely believes that their “Great Leader” saved them from the American Imperialists who invaded their country. They also believe that they are the most successful and most fortunate nation in the world. The thought of them losing in the World Cup (which, lets face it, looking at their group is incredibly likely!) is inconceivable to the 180,000 odd who can pack into their Rŭngrado May First Stadium in Pyongyang, which I recently learned is the largest stadium in the world.
 
The World Cup for me and many other people worldwide is a hugely anticipated sporting spectacle. It’s a chance to watch the best in the world compete in the world’s most popular sport. But naturally it brings political implications. I just hope that people pay a bit more attention to this North Korean team. I fear for these players who will almost certainly never live up to their nations impossible expectations. Whilst many casual observers may expect the team to return home to a heroes welcome regardless of the results, the reality may be far starker. So let’s hope, that in 43 days (and counting) when the tournament commences, that the team won’t be ‘corrupted’ in the free, western world and be accused of actions that are “bourgeois, reactionary and corrupted by imperialism and bad ideas.” Let’s hope that the media steer clear of arousing unwanted political controversy which would have extremely far reaching implications, and let’s hope that the logic and lunacy of Kim Jong-Il doesn’t stop these players enjoying their well-earned spot in the limelight amongst some of the world’s sporting elite.

Filed under: Foreign Affairs, History, Society

That new IMF report…

I’m liking it.

Matthew Yglesias points me towards the IMF blog [1] which has some more explanation on their Financial Activities Tax.

A FAT is just a tax on the sum of the profits and remuneration paid by financial institutions. That sounds simple, and, in essence, it is. But why an extra tax on financial institutions? Here, I’m afraid, things get a bit nerdy. So brace up for what is coming.

Profits plus all remuneration is value added. So a tax of this kind would be a kind of Value-Added Tax or VAT. And that could make sense because current VATs don’t work well for financial services, which are largely VAT-exempt. This means that a FAT of this kind could make the tax treatment of the financial sector more like that other sectors and so help offset a tendency for the financial sector, purely for tax reasons, to be too large—or too fat.

Now suppose that the base included only remuneration above some high level, and only profits above a ‘normal’ rate of return. Then the base of the FAT may not be a bad proxy for taxes on ‘rents’—return in excess of competitive levels—earned in the sector. Some might find taxing that excess fair.

Or one might include only profits above some level well above normal. Taxing away some of these high returns in good times may help correct for any tendency to excessive risk-taking implied by financial institutions not attaching enough weight to outcomes in bad times (whether because of limited liability, or because they think themselves too big to fail).

A tax on rents? Sounds good to me. It sounds like it would reduce the size of the financial sector too which would be good in a number of ways.

  1. Smaller financial firms would mean a smaller systemic risk of crises.
  2. A less powerful financial lobby twisting the state’s arm.
  3. Finance would stop attracting intelligent people to extract rents who could instead do something productive.
  4. Many crises spring from the financial sector so shrinking it should help diminish the frequency and severity of these.

What happened to the IMF in the last 10 years? It seems like they may have actually learned from some of their mistakes.

[1] Yes, they’re using the theme I used to use for this blog. The IMF, apparently quite frugal.

Filed under: Economics

Happy Birthday: Left Outside is 1

This day in 2009 I wrote my first blog post.

http://leftoutside.files.wordpress.com/2010/01/newleftoutside.jpg?w=341&h=330

297 posts, 1,150 comments and over 50,000 hits later and I am still going.

I wasn’t sure if I’d last this long when I’ve started but I am happy I am still going, I’ve got no plans to stop any time soon.

Thank you to everyone who has stopped by, commented, linked to me, argued with me or encouraged me over the last year. I hope our next year together is even better than the last.

Filed under: Blogging

When NGDP is Depressed, Employment is Depressed

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