North Korean market vendors: The rise of grassroots capitalists in a post-stalinist society

Abstract

The article deals with the social changes that have taken place in North Korea since the mid-1990s, when the collapse of the centrally planned economy led to the growth of private commercial activity. This activity remains technically illegal, but the relevant bans and restrictions have been rarely enforced due to endemic corruption and disorganization of the state bureaucracy. The article is largely based on in-depth interviews with North Korean black market operators. It traces their origins, the type and scale of their businesses, and changes in their mode of operations. The article demonstrates that the "second economy" came to dominate North Korean economic life by the late 1990s, since authorities' attempts to limit its scale were largely ineffective. The growth of the "second economy" produced new grassroots capitalists who sometimes came from under-privileged social groups, but more typically represented people with good official connections. It is also remarkable that foreign connections (usually with China) played a major role: to a large extent, merchandise sold at the North Korean markets either came from overseas or was to be exported overseas eventually, and in many cases the merchants' initial capital was also provided by relatives residing overseas.