A quiet revolution

Kim Byung-yeon
The author is an economics professor and head of the Institute for Peace and Unification Studies at Seoul National University.

Washington was panicky shortly before the first post-Soviet Russian presidential election in June 1996. Communist challenger Gennady Zyuganov appeared to have a better chance of winning the election and defeating incumbent President Boris Yeltsin. Under a Communist reign, Russia could go back to the old Soviet system and bring back the Cold War. All the polls placed Zyuganov in a favorable light. After the dismantling of the Soviet Union, Russia’s national income shriveled by 40 percent by 1995. Due to a steep deterioration in incomes, the Gini coefficient, which was once at the level of Northern European countries, retreated to the levels of Latin America in the mid-1990s. The Communist Party became the overwhelming majority party through a parliamentary election held a year prior. Many American intellectuals projected the inevitability of the return of socialism in Russia.

I did not share the prophesy at the time. I had witnessed a grass-root revolution stemming from market activities. In the early 1990s, I roamed around looking for a gift to take home for my son while completing my research in Moscow. I finally arrived at Detski Mir, or Children’s World, a department store for kids, after a vain search in several stores. The department store was nearly empty except for one floor.

At the center of the floor stood a huge set of glass shelves. It was as if a variety of luxury products were on display, given the crowd before it. When I squeezed myself through the crowd, I was disappointed to find a set of foreign shoes for children. But the Russians’ eyes were glued to the colorful shoes. The display did not just exhibit products, but transmitted the allure of capitalism to Russian people. Parents would stand before the display to promise to themselves that they would one day buy a pair for their children. Socialism was a permanently lost cause with these people, I realized. Yeltsin ended up winning the election by defeating Zyuganov in a run-off.

More than 70 percent of North Korean residents make their living in markets and buy more than 60 percent of food and consumer products sold there. The market can make people wealthier and inspire them to earn more. The bigger the markets become, the stronger the motivation to make money. Eventually, more people will desire a regime enabling more freedom to make and spend money.

The desire for consumption and market activities grow hand-in-hand to dominate the minds of the people, influencing political and social structures. North Koreans claim to be socialist, but in their hearts, the majority aspires to capitalism. According to a 2020 poll by the Seoul National University Institute of Peace and Unification Studies on North Koreans who have defected in less than a year, 68 percent supported capitalism whereas just 16 percent still favored socialism.

Socialist belief tends to shrivel when the believer discovers the power of markets. According to a joint study by myself and Professors Lee Jung-min and Choi Syng-joo of Seoul National University and Lee Suk-bae of Columbia University, North Korean defectors tend to favor equality more than South Koreans. But there have been exceptions with defectors who experienced market activities back in the North. In an economic test, the group like their South Korean counterparts collected their share of earnings. Market activities can overrule collective values and stimulate individualism and desire for personal gains. At the same time, the market allows freedom to exercise individual talents and capacity. One can become rich or poor depending on one’s ability and luck. The market turns a passive human into a proactive being and destabilizes the foundation of socialism.

The markets that arose during the Great Famine period in the mid-1990s have come under another existential challenge under Kim Jong-un. His father Kim Jong-il also suppressed market activities. But markets rebounded upon the catastrophic failure of his currency reform in 2009. The younger Kim tolerated markets — in fact, he encouraged their activities in the beginning. Then from 2019, Kim turned oppressive. The collapse of the second summit with the U.S. in Hanoi may have played a part, or Kim might have become fearful of the market’s power. But a return to socialism cannot succeed. Joseph Stalin killed 20 million people to return to socialism. Kim does not have such power. North Korea is under the rule of markets, not Kim Jong-un.