The Hidden People of North Korea (19 page)

It is a great irony that socialists criticize the market economies for being chaotic and claim that socialism is superior because it follows a plan, but it is the plan that defeats socialism. There is nothing wrong with planning, if it can be done well, but poor plans are worse than no plans at all because they lead people in the wrong direction. And once a plan has been put in place and people have become committed to it, it is difficult to change just one part of the economic system because doing so tends to destabilize the whole. This is one important reason why the Kim regime has tried to stick with the economic system already in place.

Fortunately for the leadership, most people in failing communist economies do not demand a change. The economist Janos Kornai lumps economic actors into three groups.
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The elites generally profit from the system and thus support it. The masses are generally ignorant of how much better conditions are in other economies; in any case they have few ideas about how to make fundamental changes in their own economic system because that system is linked to the political system over which they have no control. And then there are a few intellectuals who have some understanding of the system and a desire to change it, but they are easily silenced. The result is that the masses are stuck in an unworkable system in which they participate as little as possible, instead of putting their efforts into an alternative economy.

Foreign analysts have identified a long list of problems plaguing the North Korean economy, and we can be sure that some North Korean economists are aware of these problems as well but know that it is unwise to criticize the Kim regime’s economic system. In the United States, Marcus Noland and Nicholas Eberstadt have separately discussed most of the problems the North Korean economy faces.
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Eberstadt’s list includes the following: breakdown of central planning, too many resources devoted to the military, too few resources devoted to the consumer sector (to improve quality of life and give people something to work for), overreliance on barter, lack of a banking and loan system, refusal to service external debt, restrictions on trade with developed economies, and a generally inhospitable domestic economic environment.
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For Kim and his elite supporters, the economy is secondary in importance to the politics of control that keeps them in power. As a rule of thumb, it could even be argued that the more reforms Kim introduces to the command economy, the weaker his political position becomes. One might think that a strong economy would please the people and confer legitimacy on the regime, but Kim can look at what has happened in other countries that adopted reforms. All those formerly communist economies that have “reformed” are under new management. Even China, where the Communist Party is still firmly in power, has had several leaders. Only North Korea and Cuba, the two unreformed economies, are still ruled by the same family.

One thing that hasn’t changed over the years is the regime’s eternal and unwarranted optimism. Every year the North Korean media promise that an economic takeoff is at hand, and every year is the same as the previous year, with new campaigns to achieve the same old economic goals. As far as outsiders can see, the socialist economy has not made any progress at all. It is the emerging people’s economy, which forsakes socialism and embraces small-scale capitalism, that is keeping the people alive and giving them a measure of hope. This is the economy that we turn to in the next chapter.

CHAPTER FOUR

The Economy of Everyday Life

The North Korean people must struggle to make a living, but at least they are not as sick and hungry as they were during the famine of the mid-1990s, now that many of them have learned to go into business for themselves. Yet their lives are marked by uncertainty as the economy and society change within the confines of an unchanged political system, and like millions of Americans who lived through the Great Depression, they have an underlying fear that another famine may be just around the corner.

Before the economic changes that were ratified—but not initiated—by the July 1, 2002, Economic Management Improvement Measures, the task of describing the life and work of the average North Korean was comparatively simple, thanks to the party’s efforts to impose uniformity on society. After graduating from secondary school at the age of sixteen, most males went into the military for ten years or more. Women were assigned to clerical or blue-collar work. After marriage in their twenties, women worked part-time until their children were older. Upon completion of military service, men could marry and were assigned lifetime jobs according to the needs of the local economy. Since daily necessities were obtained from the Public Distribution System (PDS) with ration coupons distributed at work sites, people of the same political class ate the same foods in approximately the same amounts, wore the same clothes, and had the same household articles. The government assigned housing, and physicians assigned to each workplace or locality provided a minimum standard of health care.

This stable, low-grade life began to change in the 1980s. The tens of thousands of visitors to the World Festival of Youth and Students in Pyongyang in 1989 introduced new styles and ideas to the city’s residents, who communicated them to people around the country. Word of the collapse of European communist regimes in the late 1980s and early 1990s seeped into the country, leading people to wonder how long their own socialist system would survive. That collapse also resulted in a drastic reduction in foreign aid, quickly triggering shortages of oil, electricity, and manufacturing materials. By the early 1990s, the PDS was beginning to run short of goods, and by 1995 it had ceased to function, except in Pyongyang. The nominal wages paid to workers became almost worthless because there was nothing to buy. Factories stopped operating. The most immediate impact of this economic collapse was the shortage of food. Those who showed up at their assigned workplaces and waited for public rations starved. Those who looked for work on their own survived.

More than ten years later, the socialist employment and distribution systems still have not recovered, but most people no longer starve because they have found a thousand ways to eke out a meager existence. There are few rules to guide them and few laws that absolutely must be obeyed. Describing this rapidly changing, chaotic environment is challenging. It is easier to say what it is not than what it is or where it is going. The recent history of former socialist economies in Eastern Europe or the current socialist economies in transition in such places as Vietnam and China may provide some clue about what is happening today in North Korea, but it is not certain that North Korea will follow the same economic path as these other countries, and for that matter the Kim regime has vigorously insisted that it will not.

Working for the State

Until the 1990s, private enterprise was forbidden and hardly existed. Instead, North Koreans worked for state or collective enterprises. The North Korean urban workplace paid low wages, but more importantly, it issued ration coupons for food and other daily necessities, which could then be purchased for just pennies. Farmers were provided for by the management of their agricultural collectives. The workplace was also the center of social and political life. Political education sessions were a part of every workday, and workers were occasionally mobilized for special work assignments such as construction and harvesting. To reinforce the workplace connection, urban workers in the same unit were often assigned to the same housing complex.

Since the early 1990s, it appears, only about a quarter of North Korea’s factories have been operating at near normal capacity. The operating rate of mines may be even lower due to extensive flooding during the mid-1990s and in 2007. Party officials have called on factory managers to “grasp the labor forces of all individual plants and enterprises which have temporarily become idle due to the material and resources problems” and to send them out to find substitute jobs that can contribute to the cash flow of the crippled workplaces.
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The labor market is supposedly run in a rational and egalitarian manner. In principle, workers’ education, skills, interests, and physical condition are used to match employees to the needs of local employers. People are rarely given permission to move far from their hometown—the better to keep track of them. As they go through the motions of job hunting, job candidates submit to the labor department of the local party committee a resume, career statement, list of desired occupations, and certificate of graduation. The applicant’s secondary school or military unit also submits relevant documents. In practice, if there is a large factory, farm, or mine in the area, workers will be sent there regardless of their job preferences. And if there is a shortage of workers at a major construction site somewhere in the country, the party committee may dispatch a contingent of workers to the site to fill the local labor levy. Job preferences are only honored when a person has good political connections or can afford to pay hefty bribes.

There are two exceptions to this peremptory method of assigning workers to jobs. First, much care is taken when recruiting someone for a sensitive political or security position such as in the Bodyguard Bureau or special forces. In these cases, extensive interviews are conducted, along with an investigation of the political history of the candidate’s extended family, including nephews and nieces. The slightest hint of political unreliability, such as having relatives in South Korea, will disqualify the candidate. The other exception involves highly talented students, especially in the sciences, who are identified at an early age and sent to “number one” schools in each locality—the North Korean equivalent of magnet schools.

Women with young children are not automatically assigned to the workforce, although at an early age the children are sent to state nursery schools, thereby allowing the mothers to enter the state labor force. A woman’s life is doubly difficult because North Korea remains a male-dominated society in which women are expected to take primary responsibility for raising the children and taking care of the home, in addition to holding down a state-assigned job. On the other hand, women today have one great economic advantage in that because they are under less pressure than men to hold a full-time job, they have more freedom to work in the private sector, where there is money to be made. As a consequence, the wife is often the main breadwinner in the family, a situation that threatens the self-esteem of North Korean husbands and leads to dissension in the family.

Workers are required to join one of the national party-controlled labor unions, such as the umbrella General Federation of Trade Unions or the Union of Agricultural Workers, which function as indoctrinating and controlling organizations rather than as representatives of the workers. According to the 1996 version of the [
North
]
Korea Encyclopedia
, a labor organization is “an auxiliary organization of the party that advocates, protects, and supports the party and is an important link between the party and the public.”
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It is the role of such an organization “to educate the working public from all walks of life, keep them closely under the control of the party and the great leader, and mobilize them in implementing party policies.”
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Women who do not work outside the home are expected to join the Korea Democratic Women’s Union, and men between the ages of fourteen and twenty-six join the Kim Il-sung Socialist Youth League. Children from the ages of nine to thirteen join the Korea Children’s Union. Identified by the red neckties they proudly wear, these organized youngsters patrol neighborhoods and report suspicious activities to the police. Their slogan, “Always ready,” is reminiscent of the American Boy Scouts’ “Be prepared.” Under Kim Jong-il’s military-first politics, these youths have adopted the slogan “Let’s become three million bombs [to protect our great leader].”

The government has designed an elaborate schedule of wages that takes into account type of work, training and education, and seniority. Until the early 2000s, the socialist work model stipulated that all workers doing the same job should receive the same pay, regardless of how productive they were. On collective farms, when the workers brought in a bumper crop, they collectively shared a larger food distribution, with the diligent workers getting as much as the lazy ones, although the collective’s managers, who were party hacks, benefited disproportionately.

As part of the July 2002 economic measures, wages were raised across the board, but since prices were also raised by about the same amount, the pay raise did nothing to motivate workers. Within a few months, many work organizations stopped paying wages altogether, and in the years since, inflation has destroyed the value of the North Korean won. In 2008, the average worker was receiving only enough money to buy about a week’s supply of food for one person at market prices, and prices for household goods and appliances put them out of reach of those who relied on government wages.