The Arduous March of Socialism: The Private Economy in the DPRK

Introduction

On February 10, 2013, Toilers’ Struggle published an original article, Change in North Korea?, which discussed the problems facing socialism in the Democratic People’s Republic of Korea as presented by none other than their cheerleading proponent, The Economist.  Toilers’ Struggle wrote:

The Economist spoke of petty bourgeois traders and merchants who are increasingly emerging and profiting in the tough times facing the DPRK.  A second economy of corruption, private trading and even production, and smuggling has arisen…The fundamental problem facing the DPRK on the domestic front is resolving the issue of the second economy which, left unchecked, could potentially assume relative proportions of that of the second economy in the USSR, a development which crucially contributed to the Soviet Union’s collapse…The DPRK faces the glaring problem of dealing with the dilemma of the second economy, which is day by day engendering more potential petty bourgeois elements which oppose and undermine the regime’s socialist orientation and workers’ power.  Change may be indeed necessary and, more or less, urgent.”

At the time, Toilers’ Struggle’s knowledge of the extent of the second economy in the DPRK amounted to little more than what was revealed in the article of The Economist, and thus remarks on the matter could not exceed basic acknowledgements and general comments.  Now, however, thanks to the book by Andrei Lankov, The Real North Korea: Life and Politics in the Failed Stalinist Utopia, published in April, 2013, considerably more information is available as to the scale of the private economy which has emerged in the DPRK out of the crisis of the Arduous March in the 1990’s.

The Real North Korea has proved to be a valuable read.  Andrei Lankov’s new book is a refreshing alternative to the abundance of worthless slanderous bourgeois tracts on the DPRK, as instead of peddling the same stock slanders and cliches that relentlessly demonize this small Asian country, The Real North Korea, although still fundamentally bourgeois in its outlook, does intricately explore the dynamics of the Korean Revolution, the inner workings of the regime and society in the DPRK, and the challenges and problems of life in North Korea today.  At the bare least, Lankov’s account provides the facts, statistics, and details which are entirely jettisoned in typical bourgeois literature on North Korea.

The central importance of the book, however, is that, in its detailed study of the origin, development, and dynamics of the second economy in the DPRK, The Real North Korea confirms the conviction of Toilers’ Struggle that “the fundamental problem facing the DPRK on the domestic front is resolving the issue of the second economy” and that “the DPRK faces the glaring problem of dealing with the dilemma of the second economy, which is day by day engendering more potential petty bourgeois elements which oppose and undermine the regime’s socialist orientation and workers’ power.”

Andrei Lankov’s The Real North Korea: Life and Politics in the Failed Stalinist Utopia, offers a sober and realistic picture of the second economy in the DPRK today, and in turn allows for Marxist-Leninists to consider the repercussions of the second economy on socialism and the challenges and problems which confront the survival of one of the few actually existing socialist countries in the world today.

The Second Economy Arises: the Arduous March and the Crisis of the 1990’s

The second, private economy which currently operates at a considerable scale in the DPRK owes its origin to none other than the Arduous March crisis of the 1990’s.  To be clear, there were no inherent problems in the socialist economy of the DPRK which provoked or necessitated a second, private economy such as the current one to emerge.  In the North Korea of the Kim Il Sung era, direct product distribution was the primary norm, something which even the Soviet Union never dared to achieve since the All Union Conference of Workers in Socialist Industry in 1931 and the Seventeenth Party Congress of the CPSU in 1932 which declared the transition to direct product distribution and the abolition of money untenably premature.(1) In the Kim Il Sung era, in contrast, unrestricted purchase and sale of food was almost entirely banned as early as 1957, and the Public Distribution System rationed nearly everything from food to TV sets to watches according to the amount of work one completed and according to application for special goods.  Private markets did exist, but “the average North Korean of Kim Il Sung seldom shopped at the market. Items on sale at the marketplace were overpriced [compared to the PDS] and usually seen as unnecessary luxuries.”(2)  Having food on the table was always a worry-free guarantee, from the standard ration of rice to meat and fruit.  According to Lankov:

“Rationing was not about grain alone. Other foodstuffs were rationed as well: people were issued rations of soy sauce, eggs, cabbage, and other basic ingredients of the traditional Korean diet. Meat was distributed irregularly, a few times a year, usually before major holidays, but fish and other types of seafood were more readily available.  In autumn there might have been occasional distribution of apples, melons, and other fruits.”(3)

Additional food could always be purchased at the marketplace, but as Lankov writes: “In most cases, the North Korean consumers were quite content with what they got through the PDS.”(4)  Further: “For the average North Korean…a twice-monthly trip to the grain distribution center was as normal as a weekend drive to a supermarket for an American family.” (5) The extent to which the DPRK had managed to eliminate and replace commodity exchange with direct product distribution according to labor was and remains impressive.

Problems of food-supply and goods, thus, were not typical of the socialist system in the DPRK prior to the 1990’s.  On the contrary, as Lankov admits, the majority of Koreans were satisfied with the system and the material life which it provided.  Worries of unemployment, hunger, debt, and other crises endemic to life under capitalism were absent in socialist Korea from post-war reconstruction up to the 1990’s.  Rather, the crisis which suddenly engulfed Korea and incited the growth of a second, private economy was not systemic, but was a product of the collapse of much of the socialist bloc from 1989-1991 and the continued siege of socialist Korea by the imperialist West, namely the United States, through both sanctions and military force.

The crisis began to rear its head in the late 1980’s when the consequences of revisionism in the Soviet Union began to manifest themselves in an outright counter-revolution led by M. Gorbachev. The Soviet Union had always been a crucial political and diplomatic ally, and economic aid, to the small, half of a nation that was the DPRK.  The existence and support of the triumphant, powerful socialist Soviet Union, in Fidel Castro’s own words on behalf of the Cuban people, was “as sure as the sun rising in the morning,” and one can hardly doubt that the people of the DPRK thought the same.  Thus, when the Soviet Union did begin to be dismantled in the counter-revolution of 1989-1991, and Korea lost what would be tantamount to the United States losing China overnight, the consequences were tremendously significant.

Lankov cites devastating figures: “Within the first perestroika years bilateral trade between North Korea and the Soviet Union decreased roughly tenfold: from $2.56 billion in 1990 to a mere $.14 billion in 1994.”(6) Over this period, the oil, energy, fertilizer, and spare parts for machinery for which the DPRK had been reliant on the Soviet Union increasingly failed to materialize and then suddenly disappeared altogether. At this point, at only the beginning of the crisis, the Great Leader Kim Il Sung passed away in 1994 and was soon replaced by Kim Jong Il.

The ascendancy of Kim Jong Il to the position of leader of the Party and state took place at a horrifically difficult time. Agriculture suffered the most. Fertilizers were no longer available, oil and spare parts for tractors dried up, and, to make matters worse, heavy rains hit in 1995-1996 and devastated the country. The heavy rains caused massive floods “of biblical proportions” according to some onlookers that not only destroyed agricultural fields across the country, but also caused infrastructural damage which eliminated approximately 85% of the energy capacity of the country by damaging or destroying hydropower plants. (7) Nearly two millions tons of grain reserves were wiped out and the country’s energy system collapsed as floods destroyed hydropower plants and those few power plants which did run on oil were deprived of the normal shipments of Soviet oil.

With the country’s energy system offline, agriculture ravaged, food reserves wiped out, and its long-time aid in the Soviet Union absent, the DPRK was plunged into an agricultural crisis.  Countless fields and livestock were destroyed, those that weren’t lacked functioning tractors, fertilizer, and irrigation from their electricity-powered water-pumping stations, and grain reserves were simply gone, buried in the mud along with the bodies of Korean agricultural workers.  The damage inflicted by these natural disasters cannot be understated.  The disaster has been declared “a once a century calamity” by the DPRK.  The DPRK requires an estimated minimum of 5 million metric tons of grain to healthily feed its population, but the 1996 harvest yielded a mere 2.5 million metric tons. (8)

The ensuing country-wide crisis resulting from the catastrophy of agriculture came to be called the Arduous March by the Workers’ Party of Korea.  The term dates back to a tale of the anti-Japanese guerilla struggle, entitled Arduous March, which famously depicted a scene in which Kim Il Sung and a small group of guerilla fighters, surrounded by thousands of Japanese soldiers, fought in 20 degree below weather in the midst of heavy snowfall and starvation while upholding the red flag as the only truly visible thing on the battlefield. Indeed, the name and the memory it evoked definitely applied to the situation.

The PDS completely collapsed. Rations were increasingly scaled back ond delayed until, for many people, they failed to materialize at all. According to Lankov: “Even the privileged population of Pyongyang was issued partial rations, and there were periods (for example, in 1998) when distribution completely failed. Outside of Pyongyang only party cadres, police personnel, military officials, and the workers at military factories continued to receive their rations.”(9)

Many historians have confirmed that the famine came to affect all sections of the population, and the death toll of the famine of the Arduous March has been the subject of much controversy and research.  The bourgeoisie and its loyal historians and media are quick to throw out ridiculous numbers like 2.5, 3, and 3.5 million deaths, while substantiated research and information, the most recent study of which was done in 2011 by Daniel Goodkind and Loraine West, has estimated approximately 490,000 excess deaths.(10) According to Lankov, the government of the DPRK, in confidential communications with foreign guests, has supposedly released the number of approximately 250,000 deaths from starvation.(11)

Standard grain ration in the DPRK prior to Arduous March:

Categories

Amount Allocated

Privileged Industrial Workers

900 grams/day

Ordinary Workers

700 grams/day

Retired Citizens

300 grams/day

2-4 years old

200 grams/day

Grain rations during the Arduous March and preceding period:

Year

Changes

1987

Reduced 10%

1992

Reduced another 10%

1994

450 down to 400 grams/day

1997

128 grams/day

(Source: Wikipedia, North Korean Famine)

Apart from agricultural crisis and famine, industrial slowdown and stoppage resulted as well. Lankov writes: “Being deprived of free spare parts and subsidized oil, many industries stopped functioning…it seems that by the year 2000, industrial output in the state economy was approximately half of what it was in 1990.” (12) Workers were responsible for continuing to show up to work and either sit idle, participate in ideological-educational courses, or play games and engage in other leisure activities. Some managers of state enterprises even took to selling nonoperating equipment to China as scrap metal, further exacerbating the situation.(13)

As no trading partner existed to replace the Soviet Union’s long-standing support of the DPRK’s endeavor to construct an independent, self-reliant economy, and as the United States and the imperialist camp relentlessly continued to occupy half of the Korean nation, and enforce cruel sanctions, the DPRK was faced with little choice for salvation in its time of need.

It was in this context of deep and extensive economic crisis, precipitated by natural disaster and the collapse of the Soviet bloc, that the second, private economy arose.  With agriculture and agricultural management in chaos, farmers moved to cope by developing so’to’ji, or “small fields,” in pockets of land situated between and on mountains. These small, scattered fields on fresh, new lands around the countryside were cultivated by private farmers to yield food following the floods and during the famine.  After feeding their owners, these fields provided the meager food which was exchanged for goods in the cities. In 1995, urban families began to barter household items for food, and this quickly developed into household handicraft production. In the same year, huge bartering markets appeared in cities across the country. Commodity production sprang back to life as a a predominant mode of production parallel to the crippled, damaged socialized sector.

Thus, in the wake of the disasters and crisis of the Arduous March, a “black market”, or really just a market, developed as a means of survival and basic economic life as the primary socialist economy was nearly destroyed and suffered devastating blows. Civilization suffered a step backwards. In the words of Lankov: “In essence, the North Korean people rediscovered capitalism while the North Korean state had little choice…”(14). Such was the origin of the second economy that, as we shall now proceed to outline, holds such a significant position in North Korean society today and which poses equally significant problems to the fate of socialism in the DPRK.

The Second Economy Today

The second economy in the DPRK, according to research and statistics released throughout the last decade, has assumed considerably extensive proportions. Of course, it deserves recognition that estimating the exact size and extent of the second economy is nearly impossible, as it truly is a shadow, or grey economy whose existence is meant to be secretive and subversive. Although, as we shall see, the North Korean government has come to tacitly tolerate the growth of the private economy, statistics and figures are merely speculative from an outside perspective and are not officially recorded or recognized by the DPRK. Nonetheless, the fundamental reality that a second economy has emerged and expanded in the DPRK is indisputable.

A starting point for analysis is the estimation that in the span of ten years from 1998-2008, “informal” economic activities have come to make up 78% of a North Korean household’s income.(15) In the period of 1995-2010, the monthly salary of a North Korean worker fluctuated around the $2-3 mark, whereas the actual monthly income of a North Korean is between $15-20.(16) These figures, however more or less accurate, serve to illustrate the approximate size and significance of the second economy to the livelihood of average citizens of the DPRK.

A crucial reality to keep in mind, however, is that this percentage of income that has its source in the second economy is primarily reaped by the women of the DPRK’s households. Lankov reminds the reader:

“Women make up the majority of North Korea’s market operators. Market vendors in North Korea are by no means the kind of street toughs one might encounter in the black markets of other countries. Instead, they are largely housewives who make and sell to keep the family alive…today some three quarters of North Korean market vendors are women.”(17)

The reason for this, Lankov explains, is that women in the DPRK “were allowed to stay at home as full-time housewives” and still receive benefits if they chose not to take up another occupation. Many women do work and pursue higher education, but still, according to Lankov, a considerable number apparently remain at home, and this has increased since the Arduous March. Those women who do work outside of the home may very well still participate in the second economy on the side and, by stealing materials from work, in direct relation to their occupation. The profound words of Mao Tsetung, “women hold up half the sky,” emphasize the crucial significance of the problem that those who are holding up half the sky in the DPRK are huge players in the private economy.

During and following the Arduous March, the chief aspect of the second economy was handicraft production out of the home. In 1995, handicraft bartering for food began to skyrocket until, in the late 1990’s, the more successful businesswomen moved from small retail to wholesale trade in commodity production. Some women either made large quantities of goods or arranged for goods to be delivered from China and began to base their entire livelihoods on basic commodity economy. As for men, the primary form of engagement in the second economy was stealing unnoticeable things here and there from their workplaces and selling them on the black market. Lankov describes the climax of these growing activities:

“By the early 2000’s some wholesalers had large sums at their disposal; they sometimes invested in new types of enterprise – eateries, storage facilities, semi-legal transportation companies. Indeed, the growth of the market that was initially centered around small-scale retail activities soon produced many kinds of associated private-ventures.”(18)

Now, in 2013, the main activities of the second economy are transporation, FCEE ventures, retail, restaurant business, and private trade with China.

The latter is the most obvious and simple. Chinese products, services, and citizens play a large role in the second economy of the DPRK. According to Lankov, “nearly all trade links either begin or end in China.”(19) Cheap Chinese clothes, shoes, TV sets, DVD players, and personal computers are imported by traders and bartered or sold. During the famine years, an estimated 150,000 to 195,000 North Koreans were hiding China, but since 2005 only 20-40,000 are, and the massive influx of Koreans back into the DPRK has brought back all sorts of goods, connections, and Yuan.(20)

Transportation is a major occupation of the second economy, as “a large number of trucks and buses that traverse…North Korea are owned privately.”(21) Investors buy used trucks and buses from China, register them as state property, but then bribe managers to allow them to use them for private transportation business. Lankov recounts someone involved in this that he met:

“Large transportation companies have developed: I met a person who owned seven trucks…He used these trucks to move salt from salt farms to the coast to wholesale markets…This man also augmented his income by moving large sacks of cement that were stolen by workers from the few cement plants continuing to function in post-1994 North Korea.”(22)

FCEEs, or Foreign Currency Earning Enterprises, play “a special role in the new economy” as “a particular form of entrepreneurial activity that is neither private nor state.”(23) FCEEs have always existed in the DPRK as large companies or agencies which sell goods on the international market for the purpose of raking in foreign currency to buy things which aren’t produced domestically. FCEEs operated throughout the Kim Il Sung era, but Lankov accounts for how they’ve skyrocketed in size, operations, and corruption since the growth of the second economy. FCEEs simply “hire adventurous and entrepreneurial people whose job is to use the company’s official clout and connections to earn as much money as possible.”(24) Profiteering by these hired individuals is rendered possible by “knowing their limit” and bribes.

The retail and reastaurant business spheres, however, are probably the most prominent sectors in which the second economy holds sway. Lankov’s words speak for the facts themselves:

“Between 1996 and 1997 the state-run restaurant industry collapsed everywhere except for a few major cities. Private capital, however, almost immediately revived it, and most North Korean restaurants are now run by private entrepreneurs. Officially, they are not supposed to exist, and such eateries are technically state-owned. According to offical papers, an eatery is owned by the state and managed by the relevant department of the municipal government. However, this is a legal fiction. A private investor makes an informal deal with municipal officials, promising them a kickback, and he/she then hires workers and buys equipment. It is assumed that a certain amount of the earnings will be transferred to the state budget. In return the private owner runs a business at his/her discretion, investing or pocketing profits. A 2009 study came to the conclusion that some 58.8 percent of all restaurants in North Korea are de facto privately owned.

“Similar trends exist in the retail industry. While the fiction of state ownership is maintained, many shops are, essentially, private. The manager-cum-owner buys merchandise from wholesalers as well as (technically) state-owned suppliers, and then sells it at a profit. The earnings are partially transferred to the state, but largely pocketed by the owner himself (or rather, herself). The above-mentioned study estimated in 2009 that some 51.3 percent of shops were actually private retail operations.”(25)

As of 2013, these are the most common forms of activity in the realm of the second economy, but apparently real estate ventures are also beginning to surface.(26) The natural product of these private economic activities has been the emergence of a definite class of capitalists, called in the DPRK by whispering voices tonju, or “masters of money.” Lankov accounts for how these tonju are noticeable by their considerably high level of consumption. Tonju eat at private restaurants where a meal costs what an average North Korean worker makes in several weeks, and they buy such things on the market as flat screen TVs, motorbikes, cars (the North Korean equivalent of a private jet in both expense and unnecessary luxury), multiple fridges, and designer clothing.(27) Lankov writes: “The growth of ‘grassroots capitalism’ predictably brought in a remarkable income inequality.”(28)

These tonju derive their relatively luxurious lifestyles from their complete dependence on private economic activities. Some have accumulated enough money, connections, and experience to expropriate gold mines from the state, while others merely import and sell Chinese clothing. These people, violating North Korean law, exploiting others to increase their personal wealth, and eagerly showing off their newfound luxury, however, don’t necessarily live a life of security. Lankov says:

“The North Korean new rich might occasionally feel insecure. They might be afraid of the state, because pretty much everything they do is in breach of some article of the North Korean criminial code. It is a serious breach indeed – technically any of the above-described persons can be sent to face an execution squad the moment the authorities change their mind. They provide officials with generous kickbacks, and in recent years massive crackdowns have been infrequent. Yet the fear lingers nonetheless.”(29)

From the handicraft wife to the gold mine owner to the transportation entrepreneur, the second economy has not only expanded and deepened its headway in North Korean society, but has obviously also began to produce an uneven, but nonetheless developing class of petty-bourgeois and big-bourgeois capitalists whose level of social cohesion is unknown. What’s more, Party and state corruption have reportedly grown near exponentially. Lankov’s account is a vivid and importantly honest portrayal of the extent of the front on which socialism in the DPRK is confronted with these anti-socialist elements. Obviously, the socialist and capitalist sectors of the economy cannot co-exist together forever without the triumph of one over the other. The question now at hand is what the socialist state has done and attempted in regards to the second economy, what the state can do, and what some possibilities are for the victory of the socialist sector over the capitalist sectory and the preservation of the dictatorship of the proletariat and socialism in the northern half of Korea.

The Struggle Against the Second Economy and the Fate of Korean Socialism  

As long as any country has a relatively low level of development of the productive forces, petty commodity trade and corruption are, to a certain extent, inevitable and unsurprising. This especially applies to socialist countries which, faced with the momentous tasks of industrializing mainly on their own resources and building a formidable national defense capacity in order to survive in a world dominated by bloodthirsty imperialism, have naturally been compelled to limit investment on consumer goods. In this case, demand exceeds supply and petty circumventions of the law regarding private bartering and manufacture are expectable, and have even been legally tolerated in socialist countries for this reason. Further, since the socialized sector cannot immediately handle responsibility for literally every service and exchange, private economic activity has a legally allowed corner. Historical experience has shown, moreover, that with further growth in the productive capacity of socialist countries, the availability of a wider range of consumer goods steadily and positively increases in line with the socialist state’s orientation towards providing the greatest good for the greatest number. Historically existing socialist countries have proven Stalin to be correct in positing that the essential trajectory of development of the socialist mode of production is “securing the maximum satisfaction of the constantly rising material and cultural requirements of the whole of society through the continuous expansion and perfection of socialist production on the basis of higher techniques.”(30)

The words of Roger Keeran and Thomas Kenny in their studies of the Soviet second economy ring true for the second economy in the DPRK: “What was important, however, was not petty pilfering or the purchase of black market goods, but the emergence of a layer of people who depended upon private activity for all or a substantial portion of their income…Such people could rightly be considered a nascent class of bourgeoisie.”(31)

In the context of the horrific crisis of the 1990’s, the historical underdevelopment of the colonial economy of Korea, and the relentless impediment of economic growth by US imperialism’s sanctions, sabotage, and national partition, a second economy of petty, private handicraft and commodity exchange, and even pilferage, is entirely understandable and, moreover, tacitly tolerable. Although serving a naturally necessary and crucial emergency purpose during the Arduous March and after, however, the private economy has since corrupted and hindered the process of restoring and developing the full integrity of the socialist economy, has contributed to the formation of a primitive, emerging capitalist class, and has resulted in a significant increase in petty corruption among lower officials of the Party and state. These are the really significant problems with which the socialist state, the Workers’ Party, and the masses of conscious Korean working people must tackle.

So far, the measures and policies implemented towards cracking down on the second economy have been largely unsuccessful. On July 1, 2002, the so called “7.1 Measures” or “2002 reforms” were announced. Consumer prices were raised to align with more but still undercut the market, official wages were increased, managers were authorized to use the private markets to the advantage of acquiring resources for and selling the products of an enterprise, and chonghap sichang, or “general markets,” with explicit regulations and legal perameters were established. Lankov, although in glaringly bourgeois terms, describes the significance of the 7.1 Measures: “Nonetheless, the 7.1 measures and associated policies inidicated that the Pyongyang leadership acknowledged and, to an extent, accepted spontaneous “de-Stalinization from below.”(32) Within several years, however, the government’s attitude towards the market transitioned from toleration and coping to offensive and suppression.

The first year of the “socialist offensive” was 2005, when the PDS restarted rationing and remonopolized rice purchases. Lankov writes:

“By that time, the famine was over…the partial recovery was helped by the emergence of the private economy (private fields in particular) and the adjustment of what remained of the state sector. Improved harvests played a role, too. The North Korean government saw this mild but palpable improvement as a sign that it could do what it wanted to do – revive the pre-crisis system.”(33)

Subsequently, in 2006, able-bodied males were officially prohibited from engaging in market trade.“The government’s decision a year later, in December 2007, to extend the ban on market trade to women below 50 years of age was much more important.”(34)

2009, however, was the year of the climactic offensive against market activity. Private markets were legally restricted to three days a month, no industrial goods were to be sold on the market, and in late 2009, “North Korean leaders decided to inflict a major blow to the market system, wiping out capitalistic activities and punishing independent entrepreneurs (also known as “shameless anti-Socialist profiteers”), while also rewarding those few who remained loyal to the Party and Leader in the midst of the turmoil.”(35). This “major blow” was none other than currency reform which “wiped out illegal savings of black market operators,” instituted a new currency at a ratio of 100 new won to 10,000 old own, and increased salaries and wages by nearly 10,000 percent to ensure that “virtually all those legally employed in the economy…would receive the same amount in the new currency in wages as they did in the old currency.”(36)

Soon afterwards, however, all the 2005-2009 anti-market measures were recalled (except the currency reform which gradually became superfluous) as having been assessed as unsuccessful and rash. In May 2010, Party and state officials “were explicitly ordered…not to intervene with the daily working of markets – as long as politically dangerous items…were not for sale.”(37)

The problem is therefore serious, and, as Toilers’ Struggle formerly remarked, “coercion will not wholly do the trick.” On the one hand, the conditions do exist which allow for a restoration of the pre-crisis socialist system, and a continued development of the DPRK along socialist lines. On the other hand, the measures and policies implemented towards eliminating and scaling down market activity have been considerably irresponsible and unsuccessful. The question is thus begged: what is to be done?

Obviously, pessimism and defeatism are incorrect and untenable attitudes. Lankov provides evidence that there is hope in the consciousness of the masses of Korean working people. For one, Lankov concludes: “From regular interaction with North Koreans, I have come to suspect that the average North Korean would much prefer a regimented life under Kim Il sung to the uncertainties of the subsequent era.”(38) The mindset of the majority of North Koreans remains: “The underlying assumption is clear: ideally, the economy should be based on administrative distribution and rationing, whereas markets and retail trade should be tolerated only as a means of coping with emergencies.”(39) Lankov identifies such in the response of a North Korean to a visiting South Korean scholar: “Now, when we have a good harvest and plentiful reserves of rice, are the private sales of rice at the market necessary?”(40) Although coated in Lankov’s bourgeois perception of the planned economy, these words of worthy insight into the attitude of most North Koreans are genuinely encouraging to the Marxist-Leninist, who recognizes in such allegiances and conceptions the existence of a consciousness conditioned by the influence of socialist relations and mode of production and ideological education.

Above all, it is important to keep in mind that we are no longer in the specific period of the Arduous March – GDP increase, new construction projects, and the opening of new public property establishments, from factories to retail stores, have returned. Anyone who keeps up with Korean Central News Agency is aware of this.

Nonetheless, the struggle for socialism in the DPRK is still undoubtedly facing an arduous march, even if not the Arduous March of the 1990’s. There remain those elements which are entirely dependent, as a capitalist class, on the private economy who must be decisively dealt with. These elements constitute a nascent bourgeoisie which acts as the vehicle and promoter of revisionism and bourgeois ideology within the DPRK. There remains the crucial task, as a responsibility of the vanguard Workers’ Party of Korea, of rallying the masses of working people in a conscious struggle against the private economy and for a conscious realization of the problems and dangers of the second economy. The second economy will not be eradicated or coopted through the implementation of measures of currency reform, bureaucratic decrees, or the utilization of bourgeois market methods. Moreover, there remains the struggle against corruption.

The publishing of an editorial entitled Call for Intensified Class Education in Rodong Sinmun on July 3, 2013 is an encouraging sign of the realization of the need for conscious confrontation of the ideological effects of the second economy, the possibility of capitalist restoration if revolutionary vigilance and regeneration is not maintained, and the continued significance of US imperialism’s role. The article reads:

“Today, our revolutionary ranks are built up with the new generation that has not experienced exploitation and oppression, and not gone through rigors of war trials. Therefore, the main point in the class struggle today must be to make the Party members and working people fully aware of the aggressive and predatory nature of the U.S. imperialism and hold on to their class and revolutionary principles…Another important thing in the class education is to make the people assured that our cause is just and we are sure to win…Class-consciousness is not something hereditary.”(41)

Still, this article represents just a tiny first step towards ensuring the revolutionary education of the vanguard and the masses of working people towards tackling the real task of mobilizing the Korean people in a revolutionary way to expose the nature and dangers of the second economy, and towards discovering a suitable path of advance, or retreat, in dealing with the second economy and maintaining the sacred institutions of socialism and people’s power. The worst possible route would be for the Korean workers’ vanguard to resign to a Brezhnevite position of complacency, condoning tolerance, and abandonment of revolutionary prinicple and resolve – the very same attitude and failure of the vanguard which allowed the great Soviet Union to continue to downslide towards the restoration of capitalism.

In facing the daunting problem of the second economy, the DPRK must have the solidarity and support of the communists of the world. As an actually existing socialist country, Toilers’ Struggle approaches the Democratic People’s Republic of Korea with the utmost sincerity of proletarian internationalism, and it is for this reason that Toilers’ Struggle hopes to educate communists the world over in the problems and challenges which confront one of the few remaining remnants of the revolutionary tide of the 20th century. The DPRK has survived, against all odds, the counter-revolution of the 1989-1991 period and subsequent crisis, and as long as it remains committed to anti-imperialism, proletarian internationalism, the struggle for communism, and the theory and practice of Juche, the DPRK will surely survive as a beacon of socialism which has stood up to, and resisted, the yankee imperialist beast and built an alternative to the exploitation and oppression of capitalism. The working and oppressed people of the world must draw lessons and inspiration presented by the heroic and just struggle of the Korean working people in the past, present, and ensuing period. The struggle against the second, private economy in the DPRK is an experience which will certainly hold lessons of immeasurable magnitude.

Notes:

1. Asad Ali, What is the Role of Private Production in Getting to Socialism?, Marxism-Leninism Today.

2. Andrei Lankov, The Real North Korea: Life and Politics in the Failed Stalinist Utopia, Oxford University Press: New York, 2013, pg. 36

3. Ibid, pg. 35

4. Ibid, pg. 36

5. Ibid, pg. 79

6. Ibid, pg. 76

7.  David F. Von Hippel and Peter Hayes, North Korean Energy Sector: Current Status and Scenarios for 2000 and 2005, Economic Integration of the Korean Peninsula, 1998, pg. 89.

8. Andrei Lankov, The Real North Korea: Life and Politics in the Failed Stalinist Utopia, pg. 78.

9. Ibid, pg. 79

10. Ibid.

11. Ibid.

12. Ibid, pg. 77

13. Ibid.

14. Ibid, pg. 80

15. Ibid, pg. 82

16. Ibid, pg. 89-90

17. Ibid, pg. 83

18. Ibid, pg. 85

19. Ibid, pg. 87

20. Ibid, pg. 94

21. Ibid, pg. 85

22. Ibid, pg. 86

23. Ibid, pg. 87

24. Ibid, pg. 88

25. Ibid, pg. 85

26. Ibid, pg. 93

27. Ibid.

28. Ibid, pg. 92

29. Ibid, pg. 93

30. J.V. Stalin, Economic Problems of Socialism in the USSR, Foreign Languages Press: Peking, 1972, pg. 39-40.

31. Roger Keeran and Thomas Kenny, Socialism Betrayed: Behind the Collapse of the Soviet Union, International Publishers: New York, 2004, pg. 53.

32.  Andrei Lankov, The Real North Korea: Life and Politics in the Failed Stalinist Utopia, pg. 120.

33. Ibid, pg. 121

34. Ibid, pg. 123

35. Ibid, pg. 126

36. Ibid, pg. 127

37. Ibid, pg. 130

38. Ibid, pg. 106

39. Ibid, pg. 121

40. Ibid.

41. Call For Intensified Class Education, Rodong Sinmun, July 3, 2013.

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One thought on “The Arduous March of Socialism: The Private Economy in the DPRK

  1. Your article is very impressive. You obviously are putting your enforced spare time to good use. More and more I am going to Stephan Gowans site called “what,s left” He is very good on N. Korea and everything else I’ve read by him. John

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