North Korea’s Rational Analysis

The United States has several thousand operational nuclear missiles. It has a large fleet of strategic bombers, an enormous navy, and hundreds of thousands of soldiers and marines. The US could bomb, blockade, and invade North Korea if it chose to incur the cost.
Yet North Korea is threatening to fire missiles at Guam, a US island territory in the Western Pacific where a substantial portion of the American strategic forces are now stationed. The North Koreans have been unyielding in insisting that they intend to complete a force of nuclear-tipped intercontinental ballistic missiles that could strike the US.
This seems to be irrational behavior. But if these are the deeds of an irrational regime, how has this same regime, founded by the current leader’s grandfather, survived since 1948? It survived a devastating war, managed to stay nimble during the Sino-Soviet confrontation, and endured the fall of the Soviet Union and the transformation of China, starvation in the 1990s, and confrontation with the United States. The regime should have collapsed many times. It didn’t.
If survival is a measure of rationality, and it should be, then the leadership class (and it is of course more than just one person) could not have lasted for almost 70 years if it were irrational. North Korea may have bizarre values, but its leaders have not been stupid. So the question is, what are they seeing now?

This post was published at Mauldin Economics on AUGUST 14, 2017.