The Relationship Between the Marketplace and Urban Life in North Korea, Part 1

The DPRK (also known as North Korea) is not a communist country, as according to its regime, it is a socialist country progressing towards communism. Ever since 1948, the categorization that it is a still a socialist country has served as a convenient excuse for many capitalistic reforms. One of these reforms was the allowance of informal markets since the days of Kim Il-sung.1 2 After the land reforms were completed in the 1950s, the selling and purchasing of state materials was forbidden. However, as late as 1958, many were arrested for attempting to sell the land which had been redistributed.3 For the goods which the state could not ration, individuals sold and bought them at the market. Since the founding of the state, the markets went through as dynamic a series of changes as the markets anywhere else in the world. In the 1990s and the 2000s, these markets went through unprecedented changes when the state rationing networks broke down. Studying the daily lives of the DPRK’s citizens is a difficult task; this is not only because sources are limited, but because just like any other place in the world, the DPRK is changing rapidly as well. As this essay will attempt to study the daily lives of urban citizens, through their relationships with the marketplace, it will first challenge the common assumption that the DPRK has a stagnant economy.
According to Yang Munsu, a professor in the University of North Korean Studies, the sudden decline in the DPRK’s economy in the 1990s led to new dimensions in the “collapse and unification scenario.”4 Although scholars have predicted the collapse of the DPRK for decades, from the perspective of South Korean scholars, this scenario became more of a possibility than it had previously; this is not only because Kim Il-sung died, but the markets were expanded due to the economic hardships of the ordinary citizens. According to Yang Munsu, scholars interpreted this expansion to mean the collapse of the DPRK. This was because a class which could challenge the regime could be created by the market.5 However, those scholars were soon proven wrong; as one can see, the DPRK has not collapsed yet. Scholars studying the market are much too focused on dissecting and analyzing specific policies, instead of attempting to study the daily lives of DPRK citizens. With nearly every North Korean expert focusing on government policies, this has led to relatively narrower research on the daily lives of the citizens. In other words, virtually all scholarship about North Korea has taken a top-down approach. Even Jae Jean Suh’s North Korea’s Market Economy Society from Below explores how the government’s policies towards the market changed before and after the July 1st Measures. Through his book, he argues that the measures were a turning point through which the regime adopted more practical policies, rather than ideologically correct ones.6 Disappointingly, he assumed that the government’s new slogan, which encourages citizens to generate the greatest benefits for themselves, is how the government is perusing its reforms.7 Instead of taking the slogan at face value, he should have analyzed if this slogan actually affects the daily lives of citizens. It is therefore necessary to reemploy and reinterpret the data gathered by past scholars to analyze the changes in daily lives of urban citizens.
I will first summarize and criticize the past scholarship about the market leading up to Yang Munsu’s Judgments on the Movements of the North Korean Economy. I will then argue that a study of the daily lives of urban citizens is possible through studying changes in the market, but also that this approach to studying their daily lives is more productive than past methodologies. I therefore attempt to remobilize the data provided by these scholars to demonstrate the reasons why the data should be reinterpreted to studying the daily lives of ordinary urban citizens. Instead of attempting to predict the future, it will take a historical perspective and examine how the market changed from the point of view of the citizens more than from the government.
To demonstrate that studying the daily lives of the citizens is more productive than past methodologies, it would perhaps be productive to first analyze the methodologies of the most prominent scholars working in the field. Joseph Chung’s The North Korean Economy remains as one of the most referenced books for scholars studying North Korea’s economy.8 However, Chung’s book only narrates the history of North Korea’s economy up to 1971; for North Korea’s economy after the market expanded, Yang Munsu remains as one of the most referenced scholars. In his monograph, Changes in the Planned Economy of North Korea and Marketization, he summarizes the past scholarship about the North Korean economy and argues that the market strengthens the regime more than shortening it.9 His argument is now one of the widely acknowledged perspectives in studying the market. Since no publication has yet challenged his argument, I will attempt to do just that.
Other than the monograph, Yang Munsu has written many other influential publications; in his Judgments on the Changes in the Market he analyzes the most recent changes in North Korea, and tries to predict its economic future.10 Eventually, he once again discusses the paradox which the regime struggles with. On one hand, it has no choice but to place harsh regulations on the market, because the expansion of it could create a class within society which will threaten the regime.11 On the other hand, it cannot impose too many regulations because many ordinary citizens rely on it for their daily survival.12 Most importantly, the KLP either taxes or dispossesses materials from the market to overcome the inefficiencies within the rationing network.13 Eventually, Yang Munsu concludes that as food aid continues to flow into the country, there is a chance that more harsh regulations will be placed in the market.14 This is because as aid goes in, parts of the rationing system will be restored; as it is restored, the regime hopes that more people will rely on the government for survival rather than the market.15 Many recent scholarly publications focus on analyzing what the Kim family or other elite members of the KLP are thinking, which is to a degree necessary if one wishes to predict their future economic policies. However, solely focusing on this top-down approach has produced some repetitive analyses.16


Visitors bowing in a show of respect for North Korean leaders Kim Il-sung and Kim Jong-il on Mansudae (Mansu Hill) in Pyongyang, North Korea (2014), by Bjørn Christian Tørrissen via Wikipedia Commons. Licensed under a href=””>CC BY-SA 3.0.

Disclaimer: Any views or opinions expressed in articles are solely those of the authors and do not necessarily represent the views of the NATO Association of Canada.

  1. What I mean by the market exclusively refers to the public places where goods are exchanged. This should not be conflated to mean the general economic climate of the country
  2. Kwon Oen and Chŏng Sŏngch’un Pukhan ui “Sijanghwa wa chasaengryŏk [The Marketization and Self-Sustainability in North Korea] Kyungsung University Sahoe Kwahak Yŏn’gu 28 no.1 (2013 Spring), 165.
  3. Chung Joseph The North Korean Economy ( Stanford: Stanford University, 1974), 27.
  4. The “Collapse and unification scenario” is an idealistic prediction of future which states that after a major event, such as a defense of a chairman, North Korea would collapse and would be absorbed by the South Korean state. Such an idea began to capture the imagination of South Korean scholars after the death of Kim Il-sung, thinking that his death would disable his army and government. See also Yang Munsu and Yi Suk Pukhan Kyehoek kyehoeng ŭi pyŏnhwa wa Sijang hwa [Changes in the Planned Economy of North Korea and Marketization] (Seoul: T’ongil Yŏn’guwon, 2009), 50.
  5. Ibid, 11.
  6. Jae Jun Suh North Korea’s Market Economy Society from Below (Seoul : Korea Institute for National Unification, 2005), 31.
  7. Ibid, 2.
  8. Park, Phillip H. Self Reliance or Self Destruction (New York ; London : Routledge, 2002), 7.
  9. Yang Munsu and Yi Suk Pukhan Kyehoek kyehoeng ŭi pyŏnhwa wa Sijang hwa [Changes in the Planned Economy of North Korea and Marketization] (Seoul: T’ongil Yŏn’guwon, 2009), 122
  10. Yang Munsu “Pukhan Kyŏngje Tonghyang mit P’yon’gka” [Judgments on the Movements of the North Korean Market] Pukhan Kwaje Review 49 (2012): 40.
  11. Ibid, 56.
  12. Ibid, 56.
  13. Yang“Pukhan ŭi Hwapye kaehyŏk silt’ae P’yon’gka”, 70.
  14. Yang “Pukhan Kyŏngje Tonghyang mit P’yon’gka” , 57.
  15. Ibid, 56.
  16. One of these repetitive analyses may be that the expansion of the market actually strengthens the regime; however, because scholars who argue such only analyze the short term trends of the market and make such conclusions, weather their arguments will turn out to be affirmative is still to be seen.
Daniel Jung

About Daniel Jung

Daniel completed his Bachelor of Arts and Master’s Degrees from the University of Toronto. Since then, he has been employed at Legal Aid Ontario and The Refugee Law Office in Toronto as a professional interpreter and translator. His undergraduate thesis, Reconstruction and Reimaginations of Goguryeo in the PRC and the ROK, was about the diplomatic history between China and South Korea since 1949. He took a particular focus on how the politicians and scholars of each country dealt with the problem of incorporating the history of Goguryeo (37BCE- 668 CE) into their national historical narratives. Because Goguryeo had occupied parts of Korea and China for 700 years, each country claimed exclusive ownership to it, while trying to deny the other any ownership or ties to this kingdom at the same time. Instead of taking a side at this conflict, Daniel explains the history behind this conflict. During his graduate studies career, he had an opportunity to present this paper at The East Asian Graduate Conference: In Between. The feedback he received at his conference, allowed him to complete his Master’s thesis titled: Tracing the Origins of the Goryeo and Goguryeo Waves in Korean Historical Dramas. While preparing his PhD application, Daniel took a particular focus on the diaries written by anti-Japanese guerrillas in the first half of the 20th century. During this process, Daniel was the first student to translate the diaries of Hong Beomdo, Kim Gyeongcheon, and Kim Daerak to incorporate them into his work. Daniel is interested in the security issues in the Asia-Pacific Region. His academic training has allowed him to nurture his interests in Korean and Chinese history as well as the diplomatic relations between them. Daniel also has been educating North Korean refugees for the past five years. As a Korean historian, Daniel plans to provide context for the problems surrounding the Peninsula by informing the public about the different historical narratives which has influenced the perceptions of Korea for the past 50 years. With his coworkers at the NATO Association, he hopes to think about the possible solutions to these problems.