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Hundred-to-won
February 3, 2010 3:03 PM   Subscribe

Last December, the government of North Korea unexpectedly revalued its internal currency, the North Korean won, at a rate of 100-to-1 and capped the amounts that residents could exchange old currency at 300,000 won (approx. $90 U.S. on the black market). This effectively wiped out many peoples' savings and killed the nascent market economy that had begun to emerge after a series of economic reforms starting in July, 2002. Professor Rüdiger Frank of the University of Vienna argues that while it represents a temporary victory for the North Korean government, this move may ultimately lead to the end of North Korean socialism. [Recently here]
posted by albrecht (23 comments total) 3 users marked this as a favorite

 
I'm not sure you can call it Socialism as such, it's more of a highly abusive cult that happens to own a country.
posted by Artw at 3:06 PM on February 3, 2010 [13 favorites]


At least when we do this in the US we'll spread it out over a decade or so.
posted by mullingitover at 3:10 PM on February 3, 2010 [1 favorite]


I think the teabaggers would actually take rather well to the Juche concept.

(Especially the bit where it basically means being so crazy looking and fucked up that people will step in and prop you up just to stop the crazy from spreading)
posted by Artw at 3:14 PM on February 3, 2010


Dictatorship of Conletariat.
posted by blue_beetle at 3:19 PM on February 3, 2010


Dictatorship of Conletariat, amirite?
posted by davejay at 3:23 PM on February 3, 2010


North Korean socialism devalues currencies like this, and Western societies devalue currency like this
posted by davejay at 3:24 PM on February 3, 2010 [1 favorite]


But wait, I thought that in the last thread we had already established that no-one thinks of North Korea as socialist and so "The Cleanest Race" is lame and superfluous and Hitchens is a bonehead for being surprised at anything in it? I really wish researchers would do their best to keep up with MetaFilter threads instead of futzing around with primary sources and scholarshop all the time.
posted by No-sword at 3:24 PM on February 3, 2010 [1 favorite]


I missed a Hitchens thread? Probably for the best really. But seriously, screw that guy.
posted by Artw at 3:26 PM on February 3, 2010


Artw: Prev (it was actually included in the last link)

Basically someone read through years of N.K. propaganda and discovered that they the "Juche concept" was basically B.S. and their main propaganda angle was racist nationalism. They (the North Koreans) were too "pure" and needed a strong paternal leader, or something.

The excerpt of the book was pretty interesting, and nicely Hitchens free.
posted by delmoi at 3:56 PM on February 3, 2010


But wait, I thought that in the last thread we had already established that no-one thinks of North Korea as socialist

I actually think you're confusing communist and socialist.
posted by delmoi at 3:57 PM on February 3, 2010


So, like I said, ideal for teabaggers!
posted by Artw at 3:59 PM on February 3, 2010


Same thing amirite? (Yeah, I guess I oversnarked. My bad.)
posted by No-sword at 4:02 PM on February 3, 2010


"Rather, it seems that we have to interpret this measure as part of the ongoing neoconservative trend in North Korea that has started around 2004/2005."

They are Republicans! I knew it!
posted by Xoebe at 4:06 PM on February 3, 2010


What a big 'fuck you' to the people. They'd have a revolution if the people had any mobility or weapons at all.
posted by uni verse at 4:07 PM on February 3, 2010


What a big 'fuck you' to the people. They'd have a revolution if the people had any mobility or weapons at all.

Actually there's no reason why merchants couldn't keep using the old bills if they wanted, just like Iraqi's kept using Iraqi notes after the fall of Saddam.
posted by delmoi at 4:41 PM on February 3, 2010


delmoi: Except for being arrested and thrown in a concentration camp.

That's a pretty big reason.
posted by Grimgrin at 4:47 PM on February 3, 2010


They'd have a revolution if the people had any mobility or weapons at all.

Or food.
posted by armage at 5:21 PM on February 3, 2010 [1 favorite]


Actually there's no reason why merchants couldn't keep using the old bills if they wanted, just like Iraqi's kept using Iraqi notes after the fall of Saddam.

Like Grimgrin said, that wasn't really an option for anyone, given the massive authoritarian crackdown. Even holding assets in a foreign currency is frowned upon and only available to the (relative) rich, leaving the lower-middle class merchants holding the bag, as usual. What was interesting to me about the way the government chose to implement this revaluation is that they basically shut down all commerce for a period of a week. Really, this reads to me more like a reaction to the inroads of capitalism and a big middle finger to anyone who thought they were building for their financial future, rather than trusting in the state.

For those comparing this to U.S. monetary policy--there's a difference between using inflation to devalue the money in circulation vs. changing out the currency wholesale for one with different units. Technically, there's no reason that redenominating currency like this should be inflationary--it's most often seen in response to periods of hyperinflation, but that can often be just for the practical/perceptual issue of not wanting prices to be in the trillions of units, or whatever (see Yugoslavia in the 90s or Zimbabwe more recently). In a fixed exchange rate regime, this would actually be massively deflationary, but since the won isn't tied down to the dollar (or anything) all it did was reboot the exchange rates. Meanwhile inflation in North Korea is still a huge problem which is compounding the fucked-upedness of their whole economy and exacerbating the problems of poverty and starvation, among others.
posted by albrecht at 5:23 PM on February 3, 2010 [1 favorite]


Perhaps at the same time, they should've renamed it the North Korean lost.
posted by UbuRoivas at 6:12 PM on February 3, 2010 [1 favorite]


This was done in South Vietnam at US direction. Exactly the same way. Notified of change to take place on short notice, weird and short hours of notification and exchange. Very low amount of currency allowed.
posted by shnarg at 10:20 AM on February 4, 2010


This was done in the Soviet Union and soviet-controlled Poland as a way to destroy personal fortunes and control all the currency in the country.
posted by jedrek at 3:59 PM on February 4, 2010


This was done in South Vietnam at US direction. Exactly the same way. Notified of change to take place on short notice, weird and short hours of notification and exchange. Very low amount of currency allowed.

Very interesting. Can anyone point me to a book or website that discusses this further?
posted by telstar at 3:08 AM on February 25, 2010


The Burmese Junta did a similar thing, arbitrarily ruling - I think on at least two separate occasions - that certain high-denomination notes were no longer legal tender, so overnight people lost fortunes from banknotes in shoeboxes under their beds which were suddenly worth about as much as toilet paper.
posted by UbuRoivas at 4:16 AM on February 25, 2010


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