Tiny Tips (2026)

The Tiny Tips column from the January 2026 issue of the Socialist Standard

If you make $60,000 a year after taxes, in order to make $700 billion, you’d need to work for nearly 12 million years. ‘The richest 1% own half the stock market (49.9%), while the bottom half of the U.S. owns just 1.1% of the stock market’. ‘The richest 0.0001% control a greater share of wealth than in the Gilded Age, an era of U.S. history defined by extreme inequality’. 

[Consortium News]

The toilet, by Maurizio Cattelan — the provocative Italian artist known for taping a banana to a wall — went up for auction Tuesday evening at Sotheby’s in New York. The starting bid for the 223-pound, 18-karat-gold work was about $10 million. Cattelan has said the piece, titled ‘America’ satirizes superwealth. ‘Whatever you eat, a $200 lunch or a $2 hot dog, the results are the same, toilet-wise’, he once said. 

[Yahoo]

Mother Teresa is still praised around the world for her charity work, but her legacy is deeply controversial. Reports from former volunteers and medical professionals claimed that many of her care homes were unsanitary and neglectful, with patients denied pain relief because she believed suffering brought people closer to God. Despite receiving millions in donations, her organization frequently failed to provide proper medical treatment or transparency regarding the use of the funds. She also accepted money and praise from dictators and was firmly against abortion, contraception, and divorce, even in extreme cases.

[Yahoo]

There are still people who say that Marx is outdated because Russian socialism collapsed … In Russia, capitalism was interpreted as being about private property and private ownership of the means of production, and the Soviets’ proposal was, ‘What if we nationalize everything?’ Then they found that state control ended up being absolute. If you look at the situation of the workers, it didn’t change that much from one system to another. In capitalism, it’s the employers who exploit the workers. During Soviet socialism, the workers were exploited by the Communist Party or by the bureaucrats. 

[ara]

The Russian communist party has awarded North Korean leader Kim Jong Un the “Lenin Prize” for his outstanding contributions to ‘socialist construction’, praising him for standing up against ‘imperialist aggression’ by supporting the invasion of Ukraine. 

[NK News]

The cobbled streets of Newport in Middlesbrough survive from the Victorian era. The staggering levels of child poverty here also feel like they belong in a different time. Six out of every seven children in Newport are classified as living in poverty. 

[Sky News]

It’s time to stop settling. ‘The working class is going to have to look at itself as a whole and say, “Our divisions in race, politics, religion, sectors of the workforce — all that will have to be laid aside,” he says. “It’s a ‘workers of the world, unite’ situation. We’re all in it together against the billionaire class, and it’s going to take that in the fight to win”’. 

[In These Times]

(These links are provided for information and don’t necessarily represent our point of view.)

Proper Gander: The state of North Korea (2023)

The Proper Gander Column from the August 2023 issue of the Socialist Standard 

Little information about how people live in North Korea has leaked out beyond its borders. The only footage we’re likely to see is of tightly managed military parades and appearances by Supreme Leader Kim Jong Un rather than anything more everyday. The lives of the vast majority are kept secret: the country has its own intranet separate to the internet and communication with outsiders is forbidden. Despite the oppressive laws, some North Koreans have been able to share details of their lives, and the extracts of these on the BBC Two documentary North Korea: The Insiders are even more grim than we might expect.

Jean Mackenzie, the BBC’s correspondent in South Korea, worked with Daily NK, a specialist news organisation which has contacts in North Korea. They found three people there who agreed to be covertly interviewed to raise awareness of their situations. Daily NK sent Mackenzie’s questions to them using a ‘special device’, then interviews would be recorded in ‘safe locations that can’t be bugged’ and sent back. This was done at considerable risk, as if the interviewees were caught by the police they could face execution.

North Korea has been even more insular since the pandemic. Ostensibly to reduce transmission of the virus, the government imposed stricter restrictions on the border with China. An effect of this was to prevent goods being smuggled into North Korea which had previously supplemented the inadequate rations available from within the country. One of the people interviewed sold contraband medicines at a market near the Chinese border, and since the pandemic her income has halved because she can’t get as much stock to sell. The lack of imports also means there is now even less food available than before, and for higher prices. A consequence of this is that two of the three people interviewed personally knew multiple people who had died of starvation. Stories of widespread starvation in the country haven’t been known since its crisis in the mid-late 1990s.

Alongside the threat of malnutrition is the threat from the repressive state. One of the interviewees says ‘If I live according to the rules, I feel like I’ll starve to death but just by trying to survive I could be arrested by the state security, branded as a traitor and killed’. The other interviewees also live in fear of the authorities, such as one who was taken in for questioning under the ‘anti reactionary thought law’. There’s no suggestion in the interviews of any enjoyment at all: no socialising or entertainment. As one of the interviewees says ‘people are stuck here and waiting to die’.

Given the dire conditions in North Korea, it’s understandable that its government doesn’t want the rest of the world to know what’s happening. Nor does it want its own subjects knowing about life outside its boundary, in case they make comparisons. One of the interviewees knew a 22 year old man who was sentenced to over 10 years of hard labour for distributing South Korean songs and films. Before 2020 he would have got a year in prison, but now the official line is that ‘the perverted and animalistic pursuit of South Korean and Western culture must be purged’, and the death penalty is possible. James Heenan, the UN Investigator for Human Rights in North Korea, says that punishments just for watching foreign media are ‘very serious violations of human rights’ and could be crimes against humanity, not that this would concern the regime. When they were sent a video of the documentary, the North Korean government replied that the interviews had been faked, and claimed that it ‘has always prioritised the interests of the people even at difficult times and has an unwavering commitment to the well-being of the people’.

Of the consultants with a view on North Korea featured in the programme, Sue Mi Terry, a previous CIA Senior Analyst on Korea, gets closest to explaining what drives the regime. She says that the government there has always been motivated by preserving its ruling family rather than protecting the people, which is obvious enough. She doesn’t go on to add that all governments work to support the capitalist class, the difference being that in North Korea this class is more compact than in and across most other countries, as its industries and services are all state-owned. The wealth they generate gets channelled into Kim Jong Un and family’s no-doubt lavish lifestyle alongside manufacturing weaponry. In case any North Koreans wonder why investment isn’t being made in food or medicine production, the official justification is that missiles are needed to defend against hostile powers such as the USA and South Korea. Covid has been used as a further pretext for repression and restrictions.

Mackenzie meets Ryu Hyun-woo, who defected from North Korea in 2019 while working as an ambassador. He says that younger people are more likely to ask of the regime ‘what have you done to stop us starving to death?’, adding ‘if anger and discontent keep building up, one day it will explode’. The documentary doesn’t dwell on any action which the people of North Korea could take to improve their conditions: the very real threats of starvation and punishment mean that it’s understandable if many can only concentrate on survival. The situation there makes any kind of worker-based organisation seem unlikely, although this is what’s needed to change it. The programme suggests a little hope, through what Hyun-woo says and how the interviewees have defied the oppressive laws and propaganda to tell their stories.

Mike Foster

Material World: North Korea – Is the Crisis Real? (2013)

The Material World column from the May 2013 issue of the Socialist Standard

It is hard to tell what is real in the ongoing Korean ‘crisis’ and what is contrived. Up to a point – after all, it is in no one’s interest to frighten the markets too badly – it suits both sides to foster a sense of crisis. For Kim Jong-un and his generals a crisis atmosphere is a way to exert pressure for full admission to the nuclear club. For the American rulers and their allies it is also a way to exert pressure – and push North Korea firmly out of the club.

Of course, a good external scare always comes in handy on the domestic front, especially at times when mass misery might otherwise fuel rebellion. It provides an excuse for deteriorating conditions of life, redirects discontent outward and rallies the populace around national leaders.

It seemed for a brief period that the crisis was a real one, but by mid-April the real crisis seemed to be over. Inside North Korea the mobilisation of reserves, air-raid drills and other war preparations were suspended. The focus of mass propaganda switched back to the usual choreographic displays and routine matters like the annual spring drive to collect manure.

Yet only a few days previously, US and South Korean officials were warning that medium-range missiles had been deployed along North Korea’s eastern coast, with ‘a very high probability’ of their imminent launch against US forces in Japan (or, just conceivably, Guam). A North Korean official announced that missiles had been placed on standby and target coordinates set for their warheads. 

A torrent of threats?

The sense of crisis, however, is fuelled mainly by what Fox News called ‘a torrent of warlike threats’ from North Korean officials. True, the most alarming of these ‘threats’ are pure make-believe, given that North Korea has no delivery vehicle capable of reaching the US mainland. Moreover, media reports hardly ever reveal that the ‘threats’ are in fact warnings of what North Korea will do ‘in the event of US aggression.’ ‘Patriotic Americans’ are expected to regard the term ‘US aggression’ as a piece of gibberish and pooh-pooh the very idea that any country might genuinely fear an American assault. As if the peace-loving United States has ever attacked anyone!

Whatever ulterior motives the young emperor may have for inculcating fear in his subjects, it does not follow that he is not afraid or that his fear is unreasonable. Anxiety would be an understandable reaction to the movements of US air and sea forces near North Korean borders, especially the flights of nuclear-capable bombers and stealth jets. He and his advisers know how the US used the issue of nuclear non-proliferation to justify its invasion of Iraq and a contemplated invasion of Iran.

Use them or lose them

Even in purely military terms, North Korea is by far the weaker party in the confrontation. Despite a large army, its forces are no match for an opposing coalition made up of South Korea, the United States and Japan (it can no longer count on support from China). This in itself makes the deliberate initiation of large-scale hostilities by North Korea extremely unlikely. On the contrary, the vulnerability of its few strategic weapons exposes it to the danger of a successful counterforce first strike.

Here lies the real danger. Facing the perceived dilemma of ‘use them or lose them’, North Korea’s leaders switched to a strategy of pre-emption. This means that they resolved to launch their missiles as soon as they determined that the adversary had begun preparations for an attack. But such a determination might be mistaken, especially when made by people already keyed up in anticipation – because, for example, they suspect (as North Korean strategists say they do) that South Korea and the US will use the joint military exercises they conduct each spring as cover for a real attack.

Economic and political vulnerability

The sense of vulnerability that makes a North Korean pre-emptive strike possible has economic and political as well as military roots. 

In recent years the leaders have partly lost control of the economy and been forced to tolerate a vast expansion of formally illegal internal trade and the emergence of a new group of wealthy black-market operators who potentially pose a political challenge. It is now widely assumed that collapse of the regime and unification of Korea are only a matter of time.     

Another economic blow is the new sanctions imposed by United Nations Security Council Resolution 2094, designed to block ‘financial transactions and bulk cash transfers in support of illicit activities.’ This does not refer solely to trade in uranium and nuclear components. Other ‘illicit activities’, organised by a special bureau of the party Central Committee, include uranium sales, the counterfeiting of US dollars and the manufacture of methamphetamine and heroin for export (an estimated third of collective farm land is sown with poppies). Besides funding military programmes, the proceeds fill the personal bank accounts held by top officials abroad.            

However, the wealth of the North Korean leaders cannot be measured in money. They also enjoy enormous non-monetary privileges. The dynastic family possesses palatial villas in a series of scenic locations, staffed by numerous guards, servants and entertainers. At the same time, hundreds of thousands rot in the labour camps and millions struggle on the verge of starvation. And yet, to our great regret, this system –  marked by inequality perhaps even more extreme than that of the US – masquerades under the name of socialism! 

Stefan

Death of a Dictator (2012)

From the February 2012 issue of the Socialist Standard

In the Second World War Russia (or the U.S.S.R. as it was then), which had been fighting Germany since the Nazi invasion of 1941, only got round to declaring war on Japan on 8 August 1945. That was three days after the first atomic bomb landed on Hiroshima and one day before the second landed on Nagasaki. The Japanese empire was now squeezed between the vast armed forces of Russia and America, and it disintegrated. Japan had forcibly annexed Korea in 1910, but the Japanese were now driven out. The U.S.S.R occupied the northern half of Korea with its capital at Pyongyang, and the U.S.A. occupied the southern half with its capital at Seoul.

Russia’s ruling clique then favoured state capitalism, while America’s rulers favoured private capitalism. In the south, under American occupation, Syngman Rhee (a Korean who had studied at American universities, had spent the previous twenty years in the U.S.A., and had westernised his name) became the ruler, and private capitalism took over the economy. In the north, Kim Il-sung (a Korean brought up in Manchuria, who had been an officer in the Chinese armies and then in the Russian armies) was hastily tutored in the Korean language, which he had largely forgotten, and was installed in power; the economy was state capitalist. In the south Syngman Rhee instituted a repressive and corrupt regime, jailing and killing any who protested until he was forced to resign by a popular uprising in 1960. In the north Kim Il-sung instituted a repressive and corrupt regime, jailing and killing any who protested, but he was able to rule till his death in 1994.

The two Koreas were very much simply proxies for the great countries that had set them up and supported them. From the first there were many raids and skirmishes between the north and the south, and from 1950 to 1953 there was open warfare, with the Americans (and British) supporting the south and the Chinese supporting the north. The battles swept over the whole country: the front line was at first pushed to the extreme south, then back to the extreme north, and then south again. Korea experienced all the delights of modern war: air raids, great battles, trench warfare, death and destruction, all ranged over the whole peninsula. As in many wars since, no one actually counted the corpses, but one estimate is that there were two million or more Korean civilian deaths, plus of course many Korean, and American, and Chinese, and British soldiers. (One of the writer’s classmates at school, an enthusiastic member of the “cadet corps”, joined the army when he left school and was killed in Korea.)

Kim Il-sung was set up by the state propaganda machine as being virtually divine, a being that, it was pretty strongly hinted, had created the world. A new calendar was inaugurated, in which 1912, when Kim Il-sung was born, was year one. When Kim Il-sung died in year eighty-three – or 1994 – his son Kim Jong-il was put into his place and ruled in the same way as his father had done

North Korea saw itself as part of the state-capitalist bloc, which included Russia and China. It was and is harshly authoritarian. Dissent is met by torture, and North Korea is third in the list of the world’s countries carrying out executions – those condemned are killed publicly by firing squads. In 2004 a Human Rights Watch report said that North Korea was “among the world’s most repressive governments”: there were up to 200,000 political prisoners. It was dubbed the world’s most corrupt country in a “Corruption Index”. North Korea is the thirty-ninth largest country by population, but it has the world’s fourth largest army: in a population of twenty-four million, 1.1 million are military personnel, and 8.2 million active reservists. It has been called “the most militarized country in the world today”; it has the world’s third-largest chemical weapons stockpile, and it possesses its own nuclear warheads.

At the end of last century the state-capitalist bloc had begun to fall apart. In the 1990s Russia dismantled state capitalism in favour of private capitalism, and China took steps along the same road. More and more, North Korea found itself isolated. This was bad news, since capitalism (of whichever variety) operates most profitably by disregarding state boundaries. On top of that, 1995 and 1996 saw disastrous floods in North Korea, and there was a calamitous drought in 1997. The ordinary people suffered grievously. Although detailed figures are hard to obtain in the kind of xenophobic dictatorship that North Korea had become, some reports say that a million North Koreans, or perhaps two million, died of famine. North Koreans have an official salary of £1 or £2 per week, but lucky ones can make more by trading in tolerated private markets.

The twenty-first century saw some steps towards the modification of the system, with private capitalism being allowed a larger share of the economy. 2002 saw the introduction of what North Korea’s rulers called “landmark socialist-type market economic practices”. It is hardly necessary to say that this change had nothing to do with socialism; it was a dilution of the previously prevailing state capitalism with some admixture of the private variety. (And it may be significant that when the North Korean constitution was re-written in 2009, any reference to “communism” was dropped; perhaps a very belated concession to honesty.) The changes of the early twenty-first century allowed foreign firms into the country to operate “manufacturing facilities”. For example, the “Kaesong Industrial Park” was created just north of the demilitarised zone which separates the two Koreas; here South Korean companies were allowed to operate, and by 2010 they employed over 40,000 North Korean workers.

It will not surprise anyone to hear that Kim Jong-il (the “Dear Leader” and “Our Father”) who had succeeded his father Kim Il-sung (the “Great Leader” and “Eternal President”) in 1994 was able to protect his own living standards during these tragic times. He had seventeen different palatial residences scattered across North Korea. He was fond of burgundy and bordeaux, and in some years he was the world’s biggest buyer of Hennessy cognac – up to half a million pounds worth of it. His chef went round the world to secure foreign delicacies. When he visited China and Russia (in a special train – he was afraid of flying) fresh lobster was flown to his train every day. Several of his staff were employed to check that the grains of rice served to him were absolutely identical in size and colour. He liked watching films and had a collection of 20,000 videotapes and DVDs. A song glorifying him – “No motherland without you” – was regularly piped from public loudspeakers in Pyongyang. No dictator exists without the support of an upper class, and in North Korea there is a small group at the top who are apparently doing very well, and defying the world’s embargoes and sanctions by importing luxury items through China.

It is very difficult to be sure what was happening in North Korea and what was being said in North Korea because the whole power of the North Korean state was brought to bear to create insuperable barriers between the North Koreans and the rest of the world. But so far as one can work it out the state media of North Korea – and there was no other kind – was endlessly asserting that Kim Jong-il was a most remarkable person. Apparently you might have known that someone special had appeared when he was born because according to the official sources of information his birth (which was foretold by a swallow – I’m not sure how) was marked by the appearance of a double rainbow and a new star in the sky. He began walking at three weeks, and he began talking at eight weeks. (Why did he take so long?)

When he went to university (at Kim Il-sung University, Pyongyang), he wrote 1,500 books over the three years – that’s ten books a week, or about a book and a half every day. Book-writing was not his only achievement. He was also able to compose no fewer than six operas, which, said his official biography, turned out to be “better than any in the history of music”. He also staged a number of elaborate musicals. Sport was no problem. Some reports had him winning gold at every event in the Seoul Olympics of 1988, which was quite an achievement, but it was the more remarkable since – having been born in 1941 – he was then forty-seven years old. So there’s hope for us all. Hostile press reports from foreign countries alleging that North Korea had actually boycotted the Games because they were still officially at war with South Korea can safely be ignored.

Never having played golf before, he strolled on to a golf course one day, picking up some clubs for the first time, and on his first eighteen holes he returned a score of thirty-eight under par – a world record by some considerable distance – having been expert enough to shoot eleven of the holes in one. This cannot be doubted since he had seventeen bodyguards with him, all of whom verified the feat. Perhaps they all stood round each hole that Kim aimed at, willing the golf ball to follow the correct political line. (As politicians and journalists vied with each other to eulogize their leader, the stories improved: some earlier versions of the golfing triumph gave him only a measly five holes-in-one.)

In his spare time he invented the hamburger; and his distinctive style of clothing “led world-wide fashion trends”. Some state media gave the strong impression that he could control the weather. One doesn’t know how he found time for all these activities in addition to supervising the whole government of North Korea, but then one finds that he never had to go to the lavatory, so that must have given him a bit more time. When Kim Jong-il died last December, the reader will not be surprised to hear that “a fierce snowstorm paused” and the sky glowed red above the sacred North Korean Mount Paektu, while the ice on a lake nearby cracked so loud that “it seemed to shake the heavens and the earth”. At the moment of his death a crane was observed to circle a statue of his father Kim Il-sung, before landing on a nearby tree, “its head bowed in sorrow”.

People who have listened to this kind of garbage all their lives (and have never even heard, as it were, any counter-garbage) might well feel desperately sad when such an outstanding figure dies, and that may help to account for the pictures of mass wailing and weeping which emerged from North Korea recently. Even those who have retained enough common sense (which is, of course, very uncommon) to disbelieve the unbelievable might well realize that if they were not sobbing loudly enough, the omnipresent military and security forces might well be tempted to give them something to make them lament in real earnest.

Nonsense knows no national or temporal boundaries, and when Kim Jong-il died on 17 December, the Western world was all geared up for its annual celebrations of another great man whose birth was also marked by the appearance of an extra star in the sky and at whose death a great darkness overwhelmed the earth (Matthew 2-2 and 27-45).

Strangely, when Kim Jong-il died, the man who immediately stepped into his shoes as North Korea’s dictator was his son, Kim Jong-un. He does not appear to have done anything in particular up to now except choose his parents carefully, although his appearance suggests that so far he has successfully fended off famine. However, no doubt the Pyongyang publicity boys will soon come up with something wonderful, so we wait with bated breath.

Before we all split our sides laughing, perhaps we should remember that we ourselves (like the Koreans) live in a system where a small group of people own everything worth owning and live luxuriously on the proceeds, while the great majority (who own very little) spend their lives desperately working so that great amounts of rent, interest and profit can be paid to this small group. Furthermore, the media continually tell us that this system is the best that ever has been, or ever could be, devised. Now, no one would ever believe that, would they?

Alwyn Edgar

North Korea: Capitalism in a Mao Suit (2017)

Book Review from the November 2017 issue of the Socialist Standard

Unveiling the North Korean Economy by Byung-Yeon  Kim (Cambridge University Press, 2017)

The global system of capitalism takes various national forms, including the ‘state capitalism’ in North Korea that has been passed off as ‘socialism’.

North Korea presents an image to the world as a society existing in a sort of Stalinist time warp, embodied in the very appearance of its latest ‘supreme leader’, Kim Jong-un, who fills out his Mao suit with the same corpulence as his grandfather, Kim Il-sung, and even tops off the look by paying him a hairstyle homage.

The main development within the country that has gained the attention of the outside world is its nuclear weapons programme. But people’s everyday lives within the country are still shrouded in considerable mystery. A general lack of information about economic and social life in the DPRK (Democratic People’s Republic of Korea) makes it hard to know what is going on. And the government, which has not published a statistical yearbook since the early 1960s, is content with this situation.

Two important sources of information about the DPRK have been the approximately 30,000 North Korean refugees living in South Korea and the companies (mostly Chinese) doing business with North Korean firms. A book published this year, Unveiling the North Korean Economy by Kim Byung-yeon, draws on surveys from those two sources to uncover the state of the North Korean economy and ponder where it may be headed. The subtitle of the book, ‘Collapse and Transition’, refers to the period of extreme crisis the DPRK underwent after the end of the Soviet Union and to its current transition that the author views as a gradual shift from ‘socialism’ to capitalism. 

Capitalism by another name

Before looking at some of the findings of the book, it’s necessary to say a word about the author’s belief that the DPRK is a ‘socialist’ country. For Kim, the state ownership of the key means of production, combined with the existence of central planning, is sufficient for an economic system to merit the label ‘socialism’.

However, as numerous Socialist Standard articles have pointed out, the nationalisation of certain means of production is simply a change in the form of ownership, not the negation of property rights to bring social wealth under the common control of all members of society. Ownership remains under restricted control, in the hands of state bureaucrats and the heads of firms. And since the aim is ‘economic growth’ (capital accumulation), not the direct satisfaction of human needs, as democratically determined by the members of society themselves, any ‘planning’ carried out under this system is geared toward that end.

The history of the twentieth century should make clear that nationalisation of industry and the existence of planning do not threaten capitalism in the least. What capitalism could not exist without, rather, are such economic forms as money, profit, wage labour, and commodities—all of which are present in the DPRK. So we cannot help but conclude that the DPRK is capitalist, not ‘socialist’ as Kim claims, although we refer to it more specifically as ‘state capitalist’ because of the predominance of state ownership.

Kim describes socialism as a ‘grand-scale experiment of an economic alternative to capitalism’ based on ‘human design’, unlike capitalism’s basis in the ‘natural evolution of society’. More specifically, he fingers Karl Marx as the culprit, who apparently ‘designed and initiated implementation of the ideal of socialism’, although Kim doesn’t specify where Marx presented his plan or in what country he began to implement it.

The editors at Cambridge University Press also let Kim get away with stating, without any reference, that Marx (who was anything but a moralist) ‘believed that capitalism was the “root of all evil”’ and ‘wrote’ that ‘central planning as the coordination mechanism can be designed to maximise both economic growth and social fairness’.

If Kim had read enough Marx to at least get his quotes right he might have gained the basic understanding of capitalism needed to recognise its existence in the DPRK. Nevertheless, the facts on North Korea provided by the author confirm that fact.

A ‘plan-less’ planned economy

Even though the existence of ‘central planning’ is one of the reasons cited by Kim for defining the DPRK as ‘socialist,’ his book demonstrates that such planning has been limited and full of contradictions from the outset. 

Kim argues that even after the DPRK, under Soviet tutelage, nationalised large enterprises and collectivised agriculture in the early 1950s, the leaders ‘lacked the necessary requirements’ to establish a ‘fully working, centrally planned economy’ since they did not have reliable data on nationalised forms or the institutions and technocrats needed to direct the system. This situation grew even worse after the Soviet Union reduced its technical help and subsidies later in the 1950s due to worsening bilateral relations after Khrushchev’s criticism of Stalin (denounced by the DPRK and China as ‘revisionism’).

Kim notes that the weaknesses in the DPRK’s planning capacity forced its government to rely on the mass mobilisation of the population to meet certain production goals. One example was the ‘Chullima Movement’ from 1958 to 1961 that sought to speed up production, much like China’s ‘Great Leap Forward’. Such mass mobilisations have been more common in the DPRK than China, and the author views them as evidence that ‘the country is unable or unwilling to devise and implement coherent central planning’.

Adding to the confusion of planning is the existence alongside the central plans of the Juseok Fund and ‘on-the-spot guidance’. In the early 1970s, Kim Il-sung introduced the Juseok Fund to ‘ensure a sufficient supply of inputs for high-priority sectors’. The fund is administered by the top DPRK leadership and is used to ‘circumvent the bureaucracy associated with central planning’ and lessen its power. The fund is also related to the practice of ‘on-the-spot’ guidance, where the ‘supreme leader’ tours a production site and issues specific directives.

Kim points out how the arbitrary intervention by the supreme leader in the planning mechanism ‘actually disrupts the allocation of resources and production in accordance with the plans’ and is thus ‘incompatible with the centrally planned economy’. Firms prioritise the imperatives of the Juseok Fund and on-the-spot guidance over the central plans.

The author uses the odd expression of a ‘plan-less planned economy’ to describe this situation, which suggests that the anarchy of capitalist production also reigns in North Korea.

State-owned, profit-driven

Just as ‘central planning’, upon closer scrutiny, turns out to have been chaotic, so do we find that the DPRK’s state-owned firms are by no means monolithic or exempt from the profit motive.

The author notes the many distinctions among the nationalised firms, which are ‘classified into several categories (i.e. Special, 1st, 2nd, 3rd, etc.) in terms of their size and their importance in the national economy’. There is also a distinction between ‘national’ firms that are ‘directly controlled and supported by the central planning body, and the lower priority ‘regional’ firms that belong to regional governments.

In addition to the various categories of firms, there are other distinctions regarding the state institutions to which firms are connected. As the DPRK gradually decentralised its enterprise sector, firms became connected to one of four state institutions: the army, the Workers’ Party, the cabinet, and the regional governments. The largest share of the resources produced in North Korea’ are controlled by either the Party or the army, which have their own affiliated trading companies. This disintegration of the economy into those four institutional sectors, the author argues, means that ‘central planning has been virtually destroyed in North Korea’—confined only to a few areas.

The decentralisation of state-owned firms was accelerated in the early 1990s as a response to the severe economic crisis that followed the collapse of the Soviet Union. The author lists four key changes that emerged out of the crisis: (1) ‘Implicitly’ allowing trading in markets, (2) Opening the DPRK economy to the outside world and creating Special Economic Zones, (3) Decentralising the planning process to the level of firms and districts, (4) Allowing firms to have more autonomy for decision making.

Another aspect of decentralisation has been the liberalisation of foreign trade. Already in the late 1970s the DPRK began to permit certain large firms to engage in trade with foreign companies. A second wave of foreign trade decentralisation in the early 1990s allowed trading firms to ‘plan and execute foreign trade for themselves on the basis of their output capacity and economic conditions’. And the third wave of decentralisation, starting in 2002, made it possible for trading companies to directly sell imported good to consumers.

According to the author, ‘the decentralisation of foreign trade meant the de facto destruction of the central planning system’ because the autonomy to engage in foreign trade ‘implied that central planning could no longer control all the activities of these bodies’. Apart from the firms in the Special category, which ‘are given inputs in accordance with central planning’, all the other firms ‘must seek their own means of survival’.

Existing alongside that ‘official economy’, wherein nationalised firms are scrambling for profits, is an enormous ‘informal economy’. The author claims that North Koreans earn 62.7 percent of their ‘individual total income in the informal economy’ and obtain 59.7 percent of their food and 67.4 percent of their consumer goods through markets rather than the rationing system and official channels. Another remarkable characteristic of life in the DPRK is widespread bribery and corruption. The author writes that the ‘average spending on bribes in total household expenditures from 1996 to 2007 was 8.95 per cent, which translates into 6–7 per cent of GDP’.

In short, the closer one looks at the reality of state-owned firms, not to mention the huge informal economy, the clearer it becomes that profit is the driving force of production, as in every other capitalist country.

What was state capitalism?

The findings of Unveiling the North Korean Economy make it perfectly clear that the DPRK today is not ‘socialist’, probably even according to the author’s narrow view of that concept as centring on state ownership and central planning. But one still might wonder why industry was nationalised and agriculture collectivised in the first place. Why, in other words, was state capitalism (or what the author calls ‘socialism’) adopted as an economic model in many countries?

It’s no accident that most of those countries were only at the outset of capitalist development, with huge peasant populations and little heavy industry. In other words, they were in a position not unlike that of Japan or Germany in the mid-nineteenth century. And just as the state in those two countries drove industrialisation, so was it a driving force of capital accumulation in China and North Korea in the mid-twentieth century. 

The methods of the state-capitalist system were crude but effective in forging the material conditions and ‘human resources’ required by capitalism. But once state capitalism had swept aside the fetters to capitalist development and achieved rapid industrialisation, the system itself began to impede the ‘efficient’ (profitable) operation of individual capitalist firms.

In the Soviet Union, state capitalism was already reaching that impasse by the 1950s, as reflected in the economic reforms of Khrushchev. But the DPRK and China, still in the midst of their industrialisation, viewed the profitability of individual firms as less important than the pace of overall capital accumulation. Kim Jong-il and Mao Tse-tung denounced the Soviet leaders as ‘revisionists’ or ‘capitalist-roaders’ not merely to save their own skins as dictators but also because the contradictions of state capitalism had not yet become apparent in their countries.

Later, of course, the DPRK and China followed the same path as the Soviet Union, introducing similar economic reforms to give state-owned firms greater autonomy to pursue profit. Marx once wrote, in looking at the development of capitalism in his time, that ‘the country that is more developed industrially only shows, to the less developed, the image of its own future’. And this was the pattern in the twentieth century as well, with every state-capitalist country obliged to eventually implement Soviet-style reforms.

The DPRK leadership is walking the same tightrope, with even less room to manoeuvre because of its rigid political dictatorship. The ‘supreme leader’ and his cohorts recognise that providing too much autonomy to firms could undermine their own political legitimacy. And yet, in the end, even the dictator must follow the dictates of capital.

Michael Schauerte