The first thing one learns from economics is what figured at the beginning of Paul Samuelson’s famous college textbook: society must choose between guns and butter. This allegory represents the primordial fact that resources are scarce compared with infinite human desires. It’s true even for trade union activists and social justice warriors, who are always chasing money. Although the idea of scarcity looks quite obvious once formulated to anybody who can read and count and perhaps a bit more, its understanding has momentous consequences.
A literal illustration of the old Samuelson allegory is provided by North Korean dictator Kim Jong Un, even if he is certainly not the most economically literate person on earth (Dasl Yoon, “While Kim Jong Un Shows World ‘Fire and Fury,’ He Projects Different Message at Home,” Wall Street Journal, October 18, 2022):
Even the munitions industry has been mobilized to aid farming efforts. In late September, North Korea’s munitions industry displayed some 5,500 new farm machines, parking the green-and-red rice threshers in neat rows at a town in South Hwanghae province. … The equipment was reportedly gifted to local farms by Mr. Kim himself.
Only later will a careful student of human affairs learn from economics another crucial idea, which seems so difficult to understand that even some brilliant economists don’t get to that point: it is not “society” that chooses between guns and butter, but either the government or every individual for himself. The theory that individual choices are capable of solving the fundamental economic problem of scarcity more efficiently than social choices, meaning rulers’ choices, did not develop before the 18th century.
The fact that international sanctions against “North Korea” have compounded the country’s problems helps understand that society and the state are two different entities between which the distance increases as a direct function of the state’s power. The more powerful the state, the more different it is from society. In a classical-liberal regime, there exists an interface between individual demands and state activities, a reality vividly modeled by James Buchanan and Gordon Tullock, although all liberal theorists have been involved in this inquiry. In a tyrannical regime, of which Kim Jong Un is a real-world caricature, there is little interface, and international sanctions are likely to hit the despot’s subjects much harder than the despot himself and his collaborators. In such a situation, the ruler’s choice of guns over butter means starvation for many:
Nearly 70% of North Korea’s people will face food shortages this year, according to estimates released by the U.S. Department of Agriculture in September. … “Fewer houses in rural areas are seeing smoke coming from their chimneys, suggesting there is nothing to cook at home,” [Lee Sang-yong of Daily NK, a news website focused on North Korea] said. … Meanwhile, the regime is dedicating much of its budget to military advances. … North Korea has conducted 27 missile launches his year, more than any other previous year.
Everybody in the classical liberal tradition must feel sympathy for the poor, exploited people. In a free society, these people would have more butter and also some guns to defend their liberty. Liberty pushes up the production possibility frontier (PPF), as Samuelson’s introductory economics textbook explained. Trade-offs are still required, but their locus is mainly in each individual’s choices.
