If you haven’t noticed, North Korea has been a bit of an issue lately, as Kim Jong Un and the knuckle dragger that is our president exchange words. North Korea’s continued militaristic growth stems in part from fledgling proto-capitalism and entrepreneurship, encouraged by American influences.
The West encouraged North Koreans to grow businesses, and the small enterprises and black market that have developed in North Korea have created enough wealth to afford increasingly frequent missile tests. The North Koreans on which this growth has been built are known as the “donju,” small private business owners, operating in a legal gray area, some with guidance from Western business operators. Despite characterizations of Kim Jong Un as a “crazy fat kid,” he has improved his country by enabling some of his people to learn business from capitalists and even pairing foreign businesses with North Korean companies to develop his country.
While Pyongyang may characterize capitalism as “honey-coated poison,” Kim Jong Un has realized that by allowing just a bit of private business in his country, the portion of profit the government takes would be enough to fund his military ambitions.
The Bank of South Korea estimates North Korea’s 2016 GDP at $28.5 billion. Despite U.N. sanctions, the North Korean economy continues to grow, with the same South Korean estimates indicating a 3.9 percent year-over-year GDP growth in 2016. As entrepreneurship continues to grow in North Korea, some profit that would normally go to the individuals running the businesses is funneled back to the state, which means more military spending.
Condemning North Korean missile tests and imposing sanctions will not slow Pyongyang, but cultural change from within could be enough to tip the scales toward a more sensible regime. As the donju gain exposure to capitalist influences, the North Korean people will become more self-reliant and less accepting of their state. Wages and standard of living have shot up during Kim’s reign, thanks to his willingness to relax some rules and his police’s propensity to accept bribes that allow otherwise illegal private enterprises to operate. According to the Korea Development Institute, around two-thirds of North Koreans’ incomes come from unofficial side jobs.
Economic vitality in North Korea is reducing the leverage the western world can exert on North Korea with sanctions and diplomatic language. To eliminate its nuclear proliferation, we must push Pyongyang further into capitalism. A stronger move to a market economy will make North Koreans desire more freedom and exploit untapped economic potential to improve living conditions in the country. The further North Korea moves toward a market economy, the less control the state will have over its people, and the dictatorial power Kim seeks to retain with nuclear weapons will erode.
Allowing a market economy to exist alongside one run by the state has been the source of growth in North Korea. If the market economy is more powerful than the state, the nuclear threats are not necessary for defense. To discourage the state’s nuclear program, we should double down on commerce with North Korea and drive its centers of power more to individuals and businesses than to the government.