The North Korean Model....

The Hermit Kingdom is an excellent teaching tool, and makes my job easy. Just look at the economic decisions made by deranged despots, and argue for the opposite. Google a few recent news articles on whatever is making headlines in those countries, and you even have some relevent, interesting, real-world illustrations to keep your students awake during lectures.

Consider two recent news stories carried by Bloomberg. Here we learn that North Korea's : "Arirang mass games," ostensibly put on to showcase the worker's paradise to the world, involves twice as many performers as spectators. That's a great example of a profitable business model.... NOT!

Here's another, discussing the lavish palace built to hold all the gifts given to the "President for Eternity" and his son, North Korea's current leader. At the same time as wealth is being allocated to such high priority tasks,

A high percentage of [soldiers] are five feet tall or shorter. In the 1990s, North Korea reduced the minimum height for military service to 148 centimeters (4 foot 9 inches) from 150 centimeters and the minimum weight to 43 kilograms (95 pounds) from 48 kilograms....

in order to be able to recruit soldiers, despite a shrinking population. And why were people shrikning? As a direct result of their "Great Leader's" misguided policies leading to severe malnutrition. Surely you know you've done something wrong when your people are getting shorter from one generation to the next!

Remember the concave production possibility frontier used to teach opportunity cost and diminishing returns? "Guns" lie on one axis (representing military spending) and "Butter" on the other (representing food). Korea demonstrates what happens when you choose a corner solution, and it's the wrong one! (DPRK even looks dark at night from space).

Even if North Korea miraculously find a way to improve, there are other deranged leaders willing and able to fill it's large shoes. Zimbabwe is an excellent example of how NOT to generate economic growth, run monetary policy, support property rights, and so on. I don't expect to run out of teaching material anytime soon....