The Jangmadang: North Korean Style Capitalism

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North Korean capitalism may seem like an oxymoron, but this unusual and somewhat hypocritical concept is very much a daily part of life in the DPRK. How has a country founded on strict tenets of collectivism and socialism come to adopt aspects of a market economy? The answer lies in a series of events that transformed, and continue to transform, North Korean society.

Jangmadang is a somewhat outdated term which is rarely heard on the streets of South Korea anymore. It originally meant “market grounds” and was closely associated with farmer’s markets. These were locations were Koreans went to buy and sell produce and other daily necessities, functioning very much the way markets do the world over. The Jangmadang now serves as the backbone of the DPRK’s informal market economy, and has a very different connotation these days; Black market — or Semi-legal “gray” market.

When Kim II Sung came to power in 1948, he revolutionized the country. There was no more need for the Jangmadangs, for a state operated Public Distribution System (PDS) replaced them. The government took crops directly from the farmers, who were given a share of what they grew, and redistributed it amongst the rest of the population. It was not perfect, but it kept most North Koreans adequately feed well into the 1990s. According to Daniel Tudor and James Pearson, “older Chinese living near the border have been known to remark that they envied the living standards of North Koreans in the 1960s and 1970s”(1). This is a bit ironic considering Chinese aid helped support the PDS for decades.

Then came the floods. Between 1994 and 1998, a series of Floods and droughts wreaked havoc on North Korean agriculture and the economy as a whole. This period is often referred to as the “Arduous March”. Over 330,000 North Koreans lost their life and the PDS all but collapsed, never to fully rebound (2). No longer able to rely on the government for food security, North Koreans began to smuggle in supplies from China. Over time, these subsistence markets grew into an informal economy; One heavily regulated, but tolerated, by the North Korean government. Some sources have suggested that American mercantile symbols, such as Disney and Coca-Cola, are available, if not ubiquitous in Jangmadangs.

So how does Kim Jong Un feel about all this? As mentioned before, the Jangmadang informal economy is highly regulated, and even taxed, by the North Korean government. Nonetheless, such marketplaces are commonplace throughout the countryside and cities alike. Both the country’s elite and working class (whose stalls are run predominantly by women) profit from such activities, and the government even investigates higher ups who DON’T partake (3). After all, the informal economy fills in holes left by the largely unsuccessful PDS. The government may not embrace, or even acknowledge such activities openly, but they secretly depend on them for stability.

Perhaps Daniel Tudor and James Pearson summarize this phenomenon best. “As with sex in Victorian Britain, there is a double standard with Capitalism in the Democratic Party of Korea: While everyone does it, few publicly admit to its existence.” (4)

Informal Citations and Further Reading

Citations (1), (3 )and (4) can be found in Daniel Tudor and James Pearson’s book North Korean Confidential: Private Markets, Fashion Trends, Prison Camps, Dissenters and Defectors.

The statistic in Citation (2) was taken from Daniel Goodkind, Loraine West and Peter Johnson’s paper titled A Reassessment Of Morality In North Korea (1993–2008).