Forget Gunboat Diplomacy Meet Missile Diplomacy

Test-firing missiles is about as close as North Korea gets to capitalism, and the old-school communist state appears to have started a new business cycle. U.S. Defense Secretary Cohen and South Korea’s President Kim Dae Jung warned Thursday of harsh economic consequences if Pyongyang proceeds with alleged plans to test a 3,700 mile-range missile in the near future, but North Korea believes it can't lose with missile tests: They either advertise the hard-line communist country’s wares among rogue states, or else serve as a means of extorting aid from the West. "Making themselves a security problem is North Korea’s primary leverage in dealing with the world," says TIME Tokyo correspondent Tim Larimer. "It’s crippled by famine and the decline of its industrial base, so its military might and reputation for irrationality are its strongest cards in any negotiations."

The incentive of economic aid from South Korea, Japan and the U.S. has played a crucial role in curbing North Korea’s nuclear program and its missile exports, but strong warnings from those countries against a missile test could actually goad Pyongyang into pressing the button – it may be counterintuitive to publicly call the bluff of a regime whose bread-and-butter is acting crazy. "By making so much of this we may have turned firing this missile a test of North Korean manhood," says TIME Pentagon correspondent Mark Thompson. "Being more discreet would have given Pyongyang more of a way out." On the other hand, North Korea hasn’t actually said it plans to test the missile, and with famine and starvation threatening, they may still be open for their own peculiar brand of business with the West.