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The Summit

Summary:
I have no worthwhile opinion to express publicly about the Trump-Kim summit. Of course, I join everyone in hoping against hope that the final result will be a significantly reduced prospect of a hot war. But such matters are not in my bailiwick, so I don’t share publicly whatever opinions that I might have. But I will say this: if the reduction in the chances of a hot war depend upon North Korean economic development being funded by American largesse or “aid,” then I’m confident that there will be no reduction in the chances of a hot war. Some of the commentary that I’m encountering seems to suggest that North Korea’s rulers will denuclearize – or move significantly in that direction – if the U.S. gives enough financial assistance to North Korea to enable its people to enjoy higher

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I have no worthwhile opinion to express publicly about the Trump-Kim summit. Of course, I join everyone in hoping against hope that the final result will be a significantly reduced prospect of a hot war. But such matters are not in my bailiwick, so I don’t share publicly whatever opinions that I might have.

But I will say this: if the reduction in the chances of a hot war depend upon North Korean economic development being funded by American largesse or “aid,” then I’m confident that there will be no reduction in the chances of a hot war.

Some of the commentary that I’m encountering seems to suggest that North Korea’s rulers will denuclearize – or move significantly in that direction – if the U.S. gives enough financial assistance to North Korea to enable its people to enjoy higher living standards. While I would applaud any improvement in the living standards of North Koreans, any such improvement will occur only if, and only to the extent that, genuine market institutions are introduced into that country and allowed the time necessary to grow and to flourish. No amount of U.S. government aid will improve the living standards of ordinary North Koreans. Only liberalization of markets there will achieve this desirable outcome. Further, if markets are ever liberalized in North Korea, the resulting economic development would occur quite independently of U.S. aid. Such aid would be, at best, superfluous.

Any payments that the U.S. government makes to the Kim regime in the name of improving the welfare of ordinary North Koreans will, in fact, improve only the welfare of Kim and his gang. If such payments secure a less-nuclearized North Korea, that’d likely be a good outcome. But no one should suppose that ordinary North Koreans will gain economically from anything that the U.S. might pay to Kim & Co. in exchange for whatever promises Kim & Co. make.

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Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

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