Macroeconomic Scaling of Risk: Nuclear Showdown

Macroeconomic Scaling of Risk for a Nuclear Showdown: North Korea vs. America

Following the American Psychological Association’s Guidelines

Jonathan B. Graves, MSA

Norwich University

Abstract

This paper examines the risk strategy of model-based risk analysis (MBRA) with regards to the possibility of nuclear war with North Korea. The MBRA formula, risk (r) = threat (t) * vulnerability (v) * consequence (c), provides a framework to analyze the threat of nuclear war with North Korea. This framework creates consensus within government agencies and key countries like Russia, France, England, China, and South Korea which propagates multilateral cooperation. Kim Jong-un (Jong-un) is an erratic dictator who ruthlessly oppresses North Koreans according to Juche philosophy; the consequence of war and mutually assured destruction (MAD) would exude mass casualties ensuring destruction of the Korean Peninsula. Further complicating the North Korean issue is the leadership style and ideology of American President Donald J. Trump (Trump) who talks tough and is unpredictable in his own hard hitting confrontational style. According to Henry J. Kazianis, “In all my years of watching Asia and North Korea, I have never seen tensions this high” (Kazianis, 2018). Lastly, by highlighting theories such as Song Gun, strategic ambiguity, agreed framework, sea of fire, and auribus teneo lupum, I will analyze flashpoints and solutions which play a key role in ensuring peace on the Korean Peninsula. The North Korean crisis expanded from a critical infrastructure model to an international security model via microeconomic to macroeconomic comparison leaves only one solution, peace through concessions and multilateral diplomacy.

Keywords: MBRA formula, r = t * v * c, juche, MAD, songun, agreed framework, sea of fire threat, macroeconomic scaling

 

Macroeconomic Scaling of Risk for a Nuclear Showdown: North Korea vs. America

North Korean ambitions towards nuclear proliferation are a contentious issue for the U.S. which date back to October 21, 1994 when Bob Gallucci representing the U.S. and Kang Sok-ju representing North Korea, signed the Agreed Framework built on concessions and cooperation to bring North Korea into modernity. American leadership has failed to hold up to its commitments[1] which created severe lack of trust towards American leadership by North Korea. Nuclear war with North Korea is not only a threat, but an existential international relations issue that involves many countries, governmental agencies, and multilateral diplomacy. The threat of nuclear war and war in general cannot be underestimated; North Korea’s army alone is a force to be reckon with albeit poorly equipped. North Korean “special operation forces are currently estimated at 200,000 strong” and “70% of the ground force positioned south of the Pyongyang-Wonsan line” which allows North Korea to maintain aggressive military posturing and the capability of a surprise attack on Seoul (Majumdar, 2018). With North Korea, the fundamentals for a brutal war exist; by understanding the MBRA formula and the psyche of North Korea, all cogent parties can perpetuate diplomatic solutions that focus on peace and prosperity and not war.

North Korea’s realist tendency implements the Juche[2] ideology based on national self-reliance which encompasses three parts including political independence, economic self-sufficiency, and military self-reliance. Further tightening the reigns on everyday North Koreans, the Fuehrer Doctrine was implemented in the 1980’s stipulating that the Suryong[3] (leader) is “an impeccable brain of the living body” and “the masses can be endowed with their life in exchange for their loyalty to him, and the party is the nerve of that living body” (Columbia Law). Not only is self-reliance the most important aspect for North Korean leadership, but Songun states the military comes first, and it elevates the army to great prestige (Country Watch, 2012). In understanding how North Korean political philosophy has developed, the U.S. can more successfully contain, interact with, and affect change within North Korea to achieve world peace and alleviate the suffering of North Koreans. North Korea was only obligated to dismantle their nuclear facilities when light water reactors were delivered by the U.S., which never occurred. Furthermore, political and economic relations were to be relaxed and the U.S. was to provide, under clause III, a guarantee not to use nuclear weapons on North Korea; these assurances were never made. George W. Bush tore up the agreed framework and the U.S. never fulfilled its promises to North Korea. This history lesson shows why North Korea has refused to agree to terms presented by the U.S and why tensions are high. By understanding North Korean vulnerabilities[4] such as fuel, food, and economic investment, the U.S. can invest in North Korea’s infrastructure and increase their resiliency to improve the quality of life.

Existential Risk

Risk[5] is a fundamental tool used to frame U.S. national security concerns because understanding risk not only allows the preparation of disaster response planning, but it ensures allies in the international sphere understand the same protocols for sowing the seeds of multilateral diplomacy and resolution building. The risk of war with North Korea is not only existential in nature, but it deals with economics and human rights abuses. The totality of consequence frames the risk of war with North Korea as an unacceptable option where the loss of millions of lives, billions of dollars in economic destruction, and mass human rights abuses of innocent people would occur. War breaking out between North Korea and the U.S. and her allies would see “millions of people dead in South Korea, tens of thousands of Americans dead” and “Japan doesn’t come out of this without some catastrophe” (Haltiwanger, 2018). War would ensure mass casualties, but the economic devastation would set the Korean Peninsula back a half century unleashing chaos in global markets. Contradictorily, if North Korea is left unchecked, millions of innocent North Koreas will suffer slave labor at internment camps as well as disease and famine. Peace is vital to U.S. global leadership and national security objectives and Trump would be considered immensely successful if he negotiated terms with North Korea which alluded his predecessors. While the risk of war with North Korea is high, the risk of failing diplomacy weighs far more on the moral conscience of America’s democratic idealism. Macroeconomic scaling[6] of risk cements the thought that nuclear war with North Korea is an existential threat greater than any threat ever seen before.

Sea of Fire Threat

Not only are 24 million South Koreans, the sum of North Koreas entire population, within range of North Korean artillery fire in metropolitan Seoul, but a sea of fire from the North made up of “thousands of field artillery pieces, rocket launchers and missiles” would wreak havoc and cause immense losses for South Korea, American military personnel, Guam and Japan. (Kourdi, 2012).  History shows that “it was only after the US refused to negotiate and continued with its hostile policy that in July 2003 the DPRK publicly said it was developing a nuclear deterrent” (Beal, 2005). While rhetoric from Pyongyang has been harsh with threats of annihilation and Armageddon, “evidence suggests that Pyongyang has been more than willing to renounce nuclear weapons in exchange for quite modest ‘concessions’ from the United States” (Beal, 2005). In fact, the Bush administration relied on unsubstantiated data that “presented a worst-case scenario as an incontrovertible truth and distorted its intelligence on North Korea (much as it did on Iraq), seriously exaggerating the danger that Pyongyang is secretly making uranium-based nuclear weapons” (Associated Press, 2004). The sea of fire[7] threat is more complicated by the fact that North Korea cannot trust U.S. leadership to follow through on their commitments and détente becomes unlikely.

Vulnerability

Vulnerability, according to Lewis, “is a probability indicating the likelihood of a successful attack on a node or link” (Lewis, 2012). If we extrapolate a node or link to an international structure as opposed to critical infrastructure, we can then define the capabilities of states like Hawaii or Alaska, as well as regional allies such as South Korea and Japan, as their own macroeconomic version of a link[8], node[9], hub, and network with similar vulnerabilities. In appendix, figure 1, it is easy to gauge the vulnerability of military bases, civilian populations, and infrastructures like transportation, oil and gas, and hard assets by using the estimated ranges of North Korean missiles and calculating the risk formula (Appendix, Figure 1). Not only is it apparent that Jong-un could strike allies and start a war, but North Korea is capable of responding to U.S. aggression by projecting their military power or using it as a bargaining chip in negotiations. Furthermore, if North Korea struck a nuclear warhead in any of the areas on the map in appendix, figure 1, the consequences would be death, destruction, and the undoing of social cohesion in Asia. If hard assets such as a bridge can be considered on the macroeconomic level, then considering their implications for international macroeconomic levels could prove useful when solving an international nuclear crises. Simply put, infrastructure topography can be scaled up to small networks like the transportation grid of Detroit or scaled up even further to include the transportation grid of Michigan, South Korea, or Japan. By examining the destruction of scaled up networks in a nuclear war crisis such as the complete destruction of Seoul, we can see the risk of war with North Korea is not a risk world powers should gamble with and one with dire consequences.

Consequence

Consequence, according to Lewis, “is a measure of damage due to an attack and can be measured in a number of ways; as loss of life, loss of capital asset, economic value or loss of utility” (Lewis, 2012). With a nuclear war on the Korean Peninsula, extreme loss of life is all but guaranteed, loss of capital assets would be in the billions of dollars, and the economic engine of Seoul would grind to a halt affecting global markets. Simply put, the “sea of fire” scenario would upend the social structure of an entire region causing the largest international crisis since the end of World War II. With nodes and links, as discussed previously, scaled up from microeconomics to macroeconomics, the totality of consequence regarding threats posed by North Korea are immense and something to fear. While a hurricane may wipe out the power grid of Puerto Rico, imagine if nuclear strikes on Japan, South Korea, and Guam wiped out entire cities or regions including power grids, water pipelines, economic markets, and entire populations. Scaling up the consequences of nuclear war would kill millions, destroy wealth on an unseen scale, and create immense chaos due to a lack of assets prepared to respond to such a devastating multipronged attack certain to cause cascading faults and reaching criticality thresholds. While militaries would be somewhat prepared, the real threat comes from the destruction of social cohesion whereby disease, famine, and more nuclear war would become the norm of the day while peace is all but a forgotten past time that wiped out millions of people in a flash of blinding light.

Conclusion

Congressional skepticism and partisan politics sunk the agreement framework deal, and this led to “the minimum interpretation of sanctions lifting” which created a trust issue whereby “the North Koreans have always been disappointed that more has not been done by the US[10]” (Ryan, 2017).  Robert Gallucci warned the agreed framework “could fail unless the US did what it said it would do, which is to take responsibility for the delivery of the heavy fuel oil” (Ryan, 2017). With careful considerations and concessions by both North Korea and the U.S. utilizing MBRA risk strategy, a philosophical victory that reshapes nuclear proliferation in Asia and ushers in an era of peace is not only achievable but an absolute value for Trump’s administration to engage in. Former New Zealand Prime Minister David Lange stated that there is “a quality of irrationality about nuclear weapons which does not sit well with good intentions” and that “a system of defense serves its purpose if it guarantees the security of those it protects” (Publishers Weekly, 2005). Now more than ever, understanding the risk strategy MBRA through macroeconomic scaling could offer perspective by showing how serous a threat nuclear war is with emphasis on the definite loss of life, cost of rebuilding, economic impact on global markets, human rights epidemics like immigration, disease, and famine that would devastate entire regions.

Auribus Teneo Lupum

South Koreans sympathize with North Koreans and peace over the last 50 years has not been without tragedy as millions of North Koreans starve, work slave labor, and die for minor offenses the Jong-un regime finds unsavory. Quite simply, the innocence of children is being squandered on military provocation through missile launches and nuclear technological progression.  While innocence suffers the darkest human tragedies imaginable in an allegory of the cave lifestyle, the world has stood idle but not without reason or empathetic concern. If the U.S. was to strike North Korea, millions of lives would be lost both in the North and in the South. If the U.S. stands idle while humans rights abuses occur, millions suffer, and many die. Jong-un’s regime is as much a threat to its own people as it is to the annihilation of Seoul; this disturbing negative paradox I call the North Korean Situation, is unique in that doing nothing is equally as dangerous as doing something because either way, people will die. Auribus teneo lupum is a Latin expression that means holding the wolf by the ears. In this expression, letting go of the wolf means the holder will get bitten while holding onto the wolf means the wolf will get wounded; doing nothing is equally as dangerous as doing something and this predicament perfectly sums up the North Korean nuclear crisis where innocent people are harmed in any scenario but peace through diplomacy. Analyzing risk through threats, vulnerabilities, and consequences along with macroeconomic scaling allows the U.S. to bring resolution to the Korean Peninsula whereby both the North, the South, and the U.S. make concessions to ensure peace and prosperity as the de facto social norm.

 

References

A Journey to North Korea, 2012. Films Media Group, 2012, fod.infobase.com/PortalPlaylists.aspx?wID=151869&xtid=53301. Accessed 3 Feb. 2018.

Associated Press. (December 10, 2004). Expert: U.S. distorted North Korean evidence. Retrieved from http://www.nbcnews.com/id/6695917/ns/world_news/t/expert-us-distorted-n-korea-evidence/#.Wnc5EkxFz9Q

BBC News. (September 15, 2015). How potent are North Korea’s threats? Retrieved from http://www.bbc.com/news/world-asia-21710644

Beal, Tim. North Korea: The Struggle Against American Power, Pluto Press, 2005. ProQuest eBook Central, https://ebookcentral.proquest.com/lib/norwich/detail.action?docID=3386474.

Columbia Law. (n.d.). Juche Ideology. Retrieved from http://www2.law.columbia.edu/course_00S_L9436_001/North%20Korea%20materials/3.html

Department of Homeland Security. (2015). Transportation systems sector-specific plan. {PDF} Retrieved from https://www.dhs.gov/sites/default/files/publications/nipp-ssp-transportation-systems-2015-508.pdf

Haltiwanger, J. (January 31, 2018). Trump attacking north korea would result in millions dead, former defense secretary Chuck Hagel warns. Retrieved from http://www.google.com/amp/www.newsweek/com/trump-attacking-north-korea-millions-dead-796319%famp=1

Homeland Security. (2013). NIPP 2013: Partnering for critical infrastructure security and resilience. Retrieved from https://www.dhs.gov/sites/default/files/publications/national-infrastructure-protection-plan-2013-508.pdf

Kourdi, Jeremy. Answers: North Korea: How do you solve a problem like North Korea? Marshall Cavendish International (Asia) Ptd Ltd, 2012. ProQuest eBook Central, https://ebookcentral.proquest.com/lib/norwich/detail.action?docID=979871

Lewis, Ted G., Darken, R. P., Mackin, T., Dudenhoeffer, D. (2012). Model-based risk analysis for critical infrastructures. {PDF} Retrieved from http://www.witpress.com/secure/elibrary/papers/9781845645625/9781845645625001FU1.pdf

Lewis, Ted G. Critical infrastructure protection in homeland security: Defending a Networked Nation, John Wiley & Sons, Incorporated, 2014. ProQuest eBook Central

Majumdar, D. (February 1, 2018). North Korea’s army by the numbers: 4,300 tanks and 200,000 lethal special forces. Retrieved from http://nationalinterest.org/blog/the-buzz/north-koreas-army-by-the-numbers-4300-tanks-200000-lethal-24301

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Ryan, M. (August 4, 2017). Why america’s 1994 deal with north korea failed- and what Trump can learn from it. Retrieved from http://www.independent.co.uk/voices/north-korea-missile-test-us-1994-agreed-framework-pyongyang-programme-kim-jong-un-donald-trump-a7876446.html

Sherman, W. (2013). Why we’ve fallen short and why that’s no longer an option. Retrieved from http://time.com/north-korea-opinion/

Speaking of Earth: Environmental Speeches That Moved the World. Publishers Weekly, vol. 252, no. 45, 14 Nov. 2005, pp. 55-56. EBSCOhost, library.norwich.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=18853358&scope=site

[1] America agreed to “the full normalization of political and economic relations” with North Korea included building light water reactors by 2003, supplying 500,000 tons of heavy fuel, lift sanctions and remove them from the state terrorism list, and provide formal assurances against the use of nuclear weapons (Ryan, 2017).

[2] Juche is a North Korean idea that was created in the 1950’s to vanquish Soviet Union influence and purge opposition to Kim Il Sung. In modern day, Juche is a justification for the Jong-un regime to maintain its grasp on power as authorized by the North Korean Constitution that guides the Worker’s Party’s motto of self-reliance.

[3] Suryong is a part of Juche ideology whereby “only the masses guided by the party” are considered masters of history and therefore, “Juche ideology is none other than a sophistry to theorize the idea of personality cult of the Suryong” which has been Kim Il-sung, Kim Jong-Il, and Kim Jong-un (Columbia Law, n.d.).

[4] North Korea wants security “guarantees, economic and food aid, and confidence-building steps” which is something the U.S. has failed to provide but could easily do to cement a legacy of peace on the Korean Peninsula (Sherman, 2013).

[5] Lewis combined the Achilles Heel theory with the traditional MBRA formula to define risk as “the degree weighted sum of individual asset risks” (Lewis, 2012). While we examine the risk of nuclear attack, it is important to understand the risk of failing to engage North Korea albeit this is often ignored.

[6] Macroeconomic scaling of risk is the idea that the basic parts of the risk equation, nodes, links, hubs, and networks can be used to define larger nodes, links, hubs, and networks such as the infrastructure of Japan or the loss of life in the entire city of Seoul. If Seoul and Tokyo are destroyed, the cascading fault would ripple through the global economy as well as having social, political, and disaster response consequences.

[7] North Korean aggression is exemplified by the torpedoing of a South Korean ship in March of 2010, exchanging fire heightened tensions in November of 2010, and North Korea launching a rocket in April of 2012 at the Sophae Space Center; these examples show power projection in line with Thucydides in that the strong do what they can, and North Korea is pushing the envelope on South Korean tolerance.

[8] Links in critical infrastructure typically relate to the connectivity of nodes and when extrapolating MBRA to a macroeconomic view as opposed to a microeconomic view, we see that international airports, shipping lanes, and communication can be considered links vital to the stability of world governance and peace (Lewis, 2012).

[9] Nodes in critical infrastructure typically relate to substations, depots, warehouses, internet providers, and bridges. With extrapolating MBRA to a macroeconomic view, nodes can become military warehouses and assets, or infrastructure. With this view, we take MBRA from a micro view of single networks to labeling an entire state, country, or region as a network, node, link, or hub (Lewis, 2012).

[10] Clinton targeted North Korea as a rogue state and planned for a two-front war with both North Korea and Iraq. Bush listed North Korea as a country whom the U.S. would likely use nuclear weapons against. “As abhorrent as the North Korean regime is, it’s not hard to see why the ruling clique might have concluded that Pyongyang remains in Washington’s crosshairs and that the US was never truly committed to the agreed framework” (Ryan, 2017).

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