Home > Finance and Economics > North Korea gives up on totalitarian economics

North Korea gives up on totalitarian economics

If this is true, then there’s good news coming out of North Korea:

Bowing to reality, the North Korean government has lifted all restrictions on private markets — a last-resort option for a leadership desperate to prevent its people from starving.

In recent weeks, according to North Korea observers and defector groups with sources in the country, Kim Jong Il’s government admitted its inability to solve the current food shortage and encouraged its people to rely on private markets for the purchase of goods. Though the policy reversal will not alter daily patterns — North Koreans have depended on such markets for more than 15 years — the latest order from Pyongyang abandons a key pillar of a central, planned economy.

With November’s currency revaluation, Kim wiped out his citizens’ personal savings and struck a blow against the private food distribution system sustaining his country. The latest policy switch, though, stands as an acknowledgment that the currency move was a failure and that only capitalist-style trading can prevent widespread famine.

Over the past year or so, as debates here in the States raged about whether government control over aspects of the economy were favorable or not, I’ve heard people say things to the effect of “maybe [aspects of] socialism aren’t so bad” and “what’s wrong with the government guaranteeing this social benefit or that subsidy”.

Actually, everything’s wrong with command economies, where the motive for economic gain and self-sufficiency are out of the equation.  North Korea may have realized this too late.  Better late than never, I guess.

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Categories: Finance and Economics
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