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Friday, June 24, 2005

NK economy in the 1950s: a reply to Han Kyu-han, part two

Here is the second part of Kim Ha-yông's reply to Han Kyu-han on the North Korean economy in the 1950s.

part one

Contrary to what Han Kyu-han writes, it is difficult to view the August 1956 so-called ‘Factional Incident’ as something that arose as a result of a “severe crisis of capital accumulation.”

The clash over the correct line for economic development that reached its apex at the all-members meeting of the party central committee in August 1956 had already begun in 1953-1954, at the time when the North Korean economy was in its [earliest stages of revival].

The conflict between different economic lines that was revealed in the clash between Kim Il-song and the Soviet/Yenan factions did not [particularly] reflect the situation in North Korea but was actually symptomatic of the limitations of the Stalinist economic model which were revealed in the Soviet Union and Eastern Europe.

When Stalin died in 1953, the Soviet bureaucracy rushed into limited reforms aimed at solving the problems that had accumulated during Stalin’s rule. To borrow Tony Cliff’s expression, the Soviet bureaucracy felt the need to move from “the stage of primitive accumulation to mature state capitalism.”

To raise the productivity of the Soviet economy, “while they were focusing capital investment into industry that was already to a certain extent developed, they could not any longer refuse to use a chunk of the remaining resources to raise the standard of living in the Soviet Union.”

However, the situation in North Korea was different. To prepare a new industrial basis, all resources had to be focused on this. Even if it meant starving the peasants and squeezing the workers, it had to be done. There was no leeway for taking into account the living standards of the people.

The person who advocated this point of view was Kim Il-song himself and those that took the side of the post-Stalin Soviet bureaucracy were the Soviet and Yenan factions.

Kim Il-song first began to talk about Juche [주체] in 1955, reflecting the fact that the economic interests of the Soviet Union and North Korea had diverged from one another.

Once Kim Il-song had emerged victorious from the central committee meeting of August 1956, he completely scrapped the five-year plan, which had partially reflected the call for an expansion of investment in the consumer sector. The heavy-industry-first line became all the more clear.

According the ordinance passed by the Supreme People’s Assembly [최고인민회의] for the first five-year plan, of the total sum to be invested in industry, 83 percent would go to heavy industry!

The North Korean bureaucracy was desperate to keep workers’ wages low while speeding up the rate of work. The bureaucracy organised mass meetings of employees and rallies of ‘zealots’ in every factory and enterprise, where workers resolved that they would complete the five-year plan a year and a half or more early.

In any case, the high production targets (set in the state plan) were gradually inflated by the party’s policy of expansion of production and the resolutions of workers to increase production.

The North Korean bureaucracy made good use of the deeply held desire for economic reconstruction among a people who had experienced colonialism and war and who were afraid of renewed war with American imperialism. The drive for growth also gave a considerable number of people the opportunity to improve their social status. The ‘Heroes of Labour’ [노력영웅] who came to prominence in the drive to increase production became factory managers and members of the Supreme People’s Assembly.

On the other hand, the majority of workers could not climb the ladder of social mobility and had to endure the appalling conditions that were the other side of economic growth.

Although strict labour regulations were enforced, workers did not have the right to organise themselves to defend their conditions. The Labour Federations [직업동맹] were organisations of the state that enforced “the duty of competition” rather than collective contracts.

However, it was difficult to ensure economic development beyond a certain level by forcing workers to accept low living standards and tiring work. To raise the productivity of labour, it was necessary to offer workers better consumer goods and holiday time.

The North Korean bureaucrats could not avoid encountering, somewhat later, the same problems that the Soviet bureaucracy had come up against after the death of Stalin. In 1966-67 Pak Kŭm-ch’ŏl, Yi Hyo-sun and others pointed out the problems of the extensive [?] growth model and argued for the need to find a way of balancing economic growth and controlling the rate of growth.

This was the period when the seven-year plan failed to achieve its target within the allotted time and the three-year extension started to be used as a countermeasure. They [the critics] insisted that defence spending should be reduced so that attention could be paid to the quality of goods produced rather than just economic output.

The year 1966 [1967?] saw another round of purges within the North Korean bureaucracy [the so-called Kapsan Faction Purge, in which KWP deputy chairman Pak Kŭm-ch’ŏl was removed]. Unlike the purges of 1956, this time they did originate in a conflict among the bureaucracy over how to deal with the economic crisis and this reflected the fact that the limitations of Kim Il-song’s ‘more Stalinist than Stalin’ economic model were revealing themselves.


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