Amberley Publishing - Transport, Military, Local and General History

False Economies by S. D. Tucker

The Strangest, Least Successful and Most Audacious Financial Follies, Plans and Crazes of All Time

Pies in the Sky: Defeating Communism with Chocolate Coins - examining the bizarre use of chocolate coins as a real-life currency in North Korea.

Life within the Communist hell-hole of North Korea (or DPRK, as it is officially known) is hard. Its economy is, for the most part, centrally planned, condemning most of its people to have to live in poverty. Ever since the days of Kim Il-sung, the nation’s founding father who still technically rules the place even though he is dead, North Korea has pursued a policy of juche, or ‘self-reliance’, which is just another way of saying ‘self-imposed economic isolation’.

The North has failed to publish any official economic data since 1965, which implies that the only people doing well out of the closed command-economy are the military. Because the ‘Hermit Kingdom’ is about as open to outside penetration as a nun’s chastity belt, it seems that most people there don’t have a particularly good understanding of the notion of capitalism – which is why attempts have been made over recent years to try and undermine the nightmare dictatorship’s economy via the use of chocolate biscuits.

Following a disastrous 1990s famine, the DPRK’s top brass have thankfully allowed some limited economic reforms to take place, the most significant being the creation of the Kaesong Industrial Complex (KIC) in 2002 under the auspices of Kim Jong-il, father of the current chunky little leader, Kim Jong-un. The KIC was a special economic zone in which sealed-off factories operated by 120 South Korean firms employed 50,000 North Korean workers, getting to pay them lower wages than they would back home whilst simultaneously opening up the North to outside influences, or so it was hoped.

The real motive of the DPRK was to increase their foreign currency reserves; workers’ wages were paid direct to the North’s government, and they then passed back the equivalent sum in North Korean notes to the factory staff – minus some ‘necessary deductions’, naturally. The KIC is currently closed down due to deteriorating relations between North and South, but even whilst open it proved a source of severe controversy because of one particular product its factories were producing … Choco Pies.

Choco Pies are the Far Eastern equivalent of Wagon Wheels, being two little circles of cake filled with marshmallow and covered over in chocolate, manufactured by a South Korean company called Orion. Such items may seem unremarkable in the mouth of a capitalist, but confectionaries of this kind were like miracles to the Communists of the North, to whom buttered cardboard is doubtless considered a culinary luxury. To the downtrodden workers of the DPRK, the KIC’s factories contained many hitherto unknown wonders such as toilet-paper (and indeed actual toilets) and the Choco Pies were yet another piece of magic from within Aladdin’s Capitalist Cave.

The South Korean bosses in the KIC factories started paying their workers with free Choco Pies as a non-monetary bonus supplement, hoping to boost morale and increase productivity. The workers seemed pleased with their new bounty, describing them as producing ‘ecstasy’ upon their very tongues, but inspections of the factory workers’ bins revealed something strange – there were no Choco Pie wrappers in them. Why not? Apparently, it was because the workers were taking them home to use as a makeshift currency, deeming them more valuable per unit than many North Korean banknotes were. The chocolate biscuits had become chocolate coins!

At the height of the craze 120,000 Choco Pies were doled out to the biscuit-hungry plebs each day, with even corrupt soldiers guarding the KIC site demanding their customary bribes in Wagon Wheels instead of banknotes. If you believe the highest estimates, some 2.5 million Choco Pies were being used as coins per month, and trading at a value of £6.40 each, compared to their usual price of 16 pence in South Korea. A more realistic estimate of their value was 25 pence, but this was still 1 per cent of the average weekly wage of £25. So valuable did they become that KIC workers started holding sporting contests and placing massive bets in biscuits.

This was all quite disturbing to the DPRK authorities because, as well as helping undermine the economy, the mass distribution of Choco Pies was helping undermine the ideological concept of juche as well. If capitalists were so bad, then why were their biscuits so tasty? The phenomenon was dubbed an ‘invasion of the stomach’, and the regime got nervous, remembering the old argument that the Iron Curtain ended up being torn down because the suppressed proletariat of Eastern Europe, jealous of blue Levis, had wanted to get their hands on more Western consumer goods.

Several measures were adopted by the DPRK Politburo to stem the crisis, with all Choco Pie bonuses being banned in 2014 in favour of wage top-ups of free sausages instead. Another tactic was to spread fake news about the Choco Pies; according to North Korean media, the biscuits had been infected with unspecified ‘weird substances’ by the South, intended to ‘shake our national defence’ or cause illness. In some sense the Choco Pies were really undercover secret agents, which were ‘spying and scheming’ upon behalf of their capitalist masters, hoping to create a situation where ‘the ideology of the people could wither at any moment’. These ‘sweet symbols of capitalism’ were then replaced by the North with cheap forged knock-off versions, a breed of pirated pies which just didn’t taste as nice, thereby undermining the pseudo-currency’s value.

Alternatively, DPRK officials warned that the Oriental Wagon Wheels contained miniature bombs or highly powerful biological agents which would immediately give you cancer ‘and make your body suffer’ if you so much as touched one. Foreign food, it was said, ‘contains material that is harmful to socialism’, so had to be prodded away into a designated safe area with a long stick. According to one South Korean academic, ‘When North Koreans see high quality consumer goods [like Choco Pies] produced overseas, they begin to understand that their economic system doesn’t really deliver.’ If it can so easily be undermined by generic marshmallow treats, then the North Korean economy really must be in trouble; should all the currency within the DPRK’s Treasury come one day to be made entirely from confectionary, there is a severe danger Fat Boy Kim might just eat it.

S. D. Tucker's new book False Economies: The Strangest, Least Successful and Most Audacious Financial Follies, Plans and Crazes of All Time is available for purchase now.