How Capitalist is North Korea?

The Chosun Ilbo provides an interesting answer: plus or minus 80% capitalist, in the sense of black market. The government-dominated sector has failed so badly that most people look elsewhere.
More than 80 percent of North Koreans are apparently buying and selling goods in the black market or engaging in other commercial activities to make ends meet, learning about free market economics.... One study based on 2009 census data suggests that 83 percent of North Koreans or 14.48 million derive some of their income from commercial activity. In North Hamgyong Province, which suffered heavily from famines, the figure is nearer 93 percent, and even in Pyongyang, which still has a functioning ration system, the proportion is 56 percent.

Another study by Seoul National University finds that 70 percent of North Korean defectors had experience selling goods in open-air markets or other commercial activity. And that applies even to 68 percent of defectors who were privileged members of the Workers Party.

The younger, the more experience they had, with 92.3 percent in their 30s and 88.2 percent in their 40s.

Defectors said their main sources of income were retail sales (37.2 percent), earning foreign currency (11.1 percent), reselling products at higher prices (eight percent) and manual labor (7.1 percent).

Hardly any said their main source of income was payments earned working in state-run factories, and 42.2 percent said they received no handouts from the state.
These are percentages that aren't that different from our own, where about 8 percent work for the government directly, but about 49% receive some form of government income. Of course, our statistics aren't designed to factor in the black market: if you worked in the population of illegal aliens, and those involved in our various black market enterprises (including tax-not-paid cash retail sails at things like flea markets), we'd probably be a little more capitalist than the official statistics suggest.

Still, very interesting. Socialism was one of the big problems in reconstructing Iraq, because farmers lacked the skills to plan their own planting (let alone the skills to estimate what crops were best). They were given orders from a central bureaucracy, along with seeds. If the vast majority of the DPRK's subject population has cut free of all that, the road ahead may not be quite as dark as you'd otherwise suspect for them.

Let's hope it's all true. And up the black market!


Texan99 said...

Looks like a free market outperforms a command economy even when it's forced to operate underground under threat of deadly penalties.

Grim said...

At least black markets do. :)

Gringo said...

I am reminded of Marxists writing about "crisis of capitalism." It appears that when there is a "crisis of socialism," capitalism sprouts up,

E Hines said...

It's a continuum: command economies, black markets, capitalism.

Eric Hines

Grim said...

Evidence suggests that it is not merely a continuum, but an ouroboros.

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douglas said...

How does one gather reliable data for this??

douglas said...

I should have added- I don't think there have been enough defectors to have a reliable basis, and you'd think defectors would be likely to over-represent the black-market connected.