Why Apple should bomb North Korea with iPhones
Six trillion dollars’ worth of rare earth metals sit untouched in Korea. It’s enough to break China’s stranglehold on the market.
Plunging rare earth metal prices could trigger revolutions in battery technology. And make your consumer electronics vastly cheaper. Battery-powered cars, solar power, and many other technologies could suddenly become far more viable.
The only problem is, the minerals are in North Korea.
But don’t worry, I have a solution. Actually it’s Jocko Willink, a former US Navy SEAL turned author and journalist, who had the idea. He thinks we should bomb North Korea with prepaid iPhones.
The idea is that North Koreans would prefer capitalism, if they only knew it existed. This is a typical American mindset that gets them into trouble in countries around the world. The idea that their own set of priorities are basic human nature is a bit presumptuous. But it’s true to some extent that people prefer to make choices about their lives. And only capitalism offers choice.
Bombing North Korea with iPhones instead of bombs would encourage a revolution. Or defections would surge when Apple releases the newer model.
One North Korean soldier recently ran for it, right across the Demilitarised Zone. Ironically, he got shot for his trouble, proving how demilitarised it really is. But he made it to South Korea alive.
With iPhones in their pockets, North Koreans would discover the world they’re missing out on. Heartfelt YouTube messages from Rowan Atkinson at the end of Korean-subtitled Mr Bean segments could encourage revolution. Or renaming “The Wall” to “The DMZ” in Game of Thrones could make Koreans realise the nature of their captivity. Amazon alone could trigger upheaval by offering drone delivery of its products into North Korea.
And you can pay in bitcoin, so Kim Jong-un won’t know a thing
If the North Koreans managed to boot out their dictator, and opened their economy up, all those rare earths could be mined. Apple, Samsung, car companies and many more would be the prime beneficiaries. The war would pay for itself.
Ivanka Trump could move her Chinese shoe factory to exploit North Korean workers instead. The Chinese know a bit about capitalism these days. They increasingly demand fair working conditions. Whereas the North Koreans are entirely used to working in awful conditions for pay that leaves them starving.
A capitalist war with North Korea could prove consumerism defeats nationalism. Consumer sovereignty trumps national sovereignty. The last bastion of communism could be defeated by companies, nor corps. That’d be a victory to see.
But it’s not just the Koreans causing trouble in geopolitics thanks to a lack of the free market. Just compare and contrast the US oil sector with Saudi Arabia’s mess.
How not to go about an oil boom
If you believe the International Energy Agency, US oil producers are poised for an almighty boom. It’ll be the biggest expansion ever seen by 2025. The US will be responsible for 80% of the increase in output globally. That’s a bigger increase and a bigger share than the Saudis and Russians ever managed.
That’s how to pull off an oil boom. Now, here’s how not to…
Saudi Arabia has gone from oil-producing megalith to the world’s largest family spat, plagued with bungles. The House of Saud is making Theresa May’s leadership struggles look boring.
Figuring out what’s behind the latest mess is proving difficult. Is it about power, money or oil? The answer is all three, because they’re synonymous in Saudi Arabia. And that’s the problem. Mixing political power with corporate power and natural resources makes you look like African nations.
The Saudis have had a terrible few months
First, the plans to list the country’s major oil producer Saudi Aramco on a major stock exchange hit a list of snags. It started well, with global leaders encouraging the Saudis to choose their local stockmarket over competitors.
The British government took the lead with its offer of a $2 billion loan guarantee for the company, as well as meeting officials to consider changing the listing rules for the behemoth company. The resulting controversy caused a PR shemozzle as the UK was accused of favouritism and bending rules.
All this drama, even though only 5% of the Aramco shares will be listed.
There was controversy over the published oil storage data
The satellite image company Orbital Insight claims that the shadows of the Saudi above-ground storage tanks suggest the amount of oil stored has in fact increased while the government published figures of a significant decrease. If the oil storage figures aren’t reliable, what else is hidden?
By far the biggest drama has been the ascension of Crown Prince Mohammad bin Salman. The Saudi king is set to abdicate soon. The crown prince decided to make his bid for power beforehand.
A long list of Saudi family members and prominent businessmen find themselves arrested and thrown into jail. The jail being the Ritz Carlton in Riyadh. They had to throw out a bunch of tourists to make room for all the entourages. A few of them called Australian radio stations to complain.
At first it seemed like the crown prince was reverting back to the old way of settling political disputes.
You arrest your competitors
Or perhaps being stuck in one of the most luxurious hotels in the world is the new version of the ancient practice of fratricide. Under the Ottoman “law of fratricide”, devised by Sultan Mehmed II 600 years ago, succession was decided by a policy of last man standing. Whichever brother killed off their brothers and cousins would be sultan. The idea was to ensure a lack of ongoing infighting. Sultan Mehmed III killed 19 of his siblings to take power, for example.
But, according to him, Prince Mohammed is just on a corruption purge. And he’s probably entirely correct about the corruption part.
But it’s not that simple. In the last few days, Prince Mohammed has shown his cards. His corruption crackdown is actually a ransom gig. The Financial Times reports how it works:
Saudi authorities are negotiating settlements with princes and businessmen held over allegations of corruption, offering deals for the detainees to pay for their freedom, say people briefed on the discussions.
In some cases the government is seeking to appropriate as much as 70 per cent of suspects’ wealth, two of the people said, in a bid to channel hundreds of billions of dollars into depleted state coffers.
The Saudi government is short on money
So it arrested rich people and demanded some of theirs.
Don’t try this with your own family at home.
Believe it or not, the whole drama is actually a popular one in Saudi Arabia. The wider population has watched leading Saudis and businessmen rake in cash from corruption. Prince Mohammed is just demanding they pay back their ill-gotten gains.
But it’s the Saudi government who will get the money. If the hostages pay up. And the Saudi government is Prince Mohammed. So it’s hardly a gain for the man on the street.
The funniest part in all this is that those who didn’t get arrested and detained find themselves at the mercy of those stuck inside the Ritz. They’re scrambling to secure their own wealth in the fear it’ll be signed away as part of the hostage negotiation.
The price of oil has been on the rise as the drama wears on. Could it be the trigger for inflation that we fear? Saudi family relations are one of the few things central bankers don’t control.
Until next time,
Capital & Conflict