This thesis sheds light on the characteristics of the North Korean socialist economic system through the concept of the Jaryeokgaengsaeng (自力更生) economy. The Jaryeokgaengsaeng economy is an economic structure with two levels: a self-reliant economy at the national level and a self-sufficient economy at the local level. In the 1960s, North Korea pursued not only the economic independence of the nation but also the self-sufficiency of the local economy under the slogan of Jaryeokgaengsaeng. In order to understand the characteristics of this economic structure, the thesis reviews the socialist transition process from the Korean War Armistice to the early 1960s. Focusing on the Soviet Union’s role in the process, this research shows that the Soviet Union’s continuous restraints on the radical socialist transition line of the Korean Workers’ Party (KWP) resulted in the de-Sovietization of North Korea. As a result, North Korea’s socialist system became strongly oriented toward a self-reliant economy, and the Jaryeokgaengsaeng economy was formed based on the historicalgeopolitical conditions of its realization at that time.
After the liberation of Korea from Japan, North Korean communists pursued a balanced economic development and long-term socialist transition based on the theory of people’s democracy and national self-reliance. However, this idea began to be doubted because of the influence of post-people’s democracy theory, introduced in North Korea around 1949. The Korean War also provided momentum for the radical socialist transition line. As the US military stayed in South Korea after the Armistice, North Korea’s self-knowledge of being at the forefront of the Cold War led to ideological radicalization. This was based on the interpretation of subjectivist materialism in the leadership of the KWP and Hwang Jang Yeop, who theorized the idea of Juche, supported the logic of the radical socialist transition line.
The greatest unease in the KWP’s radical socialist transition line was that it conflicted with the Soviet Union. The KWP line, based on the subjectivist interpretation of historical materialism, had a fundamental difference from the Communist Party of the Soviet Union (CPSU) line, which emphasized the correspondence of productivity and production relations. Furthermore, the CPSU collective leadership that emerged after Stalin’s death sought to overwhelm the capitalist world through a political and economic means in the principle of peaceful coexistence that was fundamentally different from the former foreign policy. For this reason, the CPSU directly pushed Malenkov’s “new course” of North Korea’s Three-Year Plan(1954~56) for the post-war reconstruction of in September 1953. In April 1955, it engaged in making North Korea’s First Five-Year Plan(1957~61) and agricultural policy.
The continued intervention of the CPSU in economic policy and political lines provided Kim Il Sung with the direct motivation to implement de-Sovietization in North Korea. Since 1955, Kim Il Sung had attempted to deviate from the influence of the Soviet Union, including the massive campaign against the Soviet fraction of North Korea. Kim’s radical socialist transition line had led to the de-Sovietization of North Korea in antagonizing Khrushchev’s new foreign policy. Simultaneously, it meant that Kim had to stand alone at the forefront of the East Asian Cold War without outside help.
However, the situational assessment of the KWP leadership was far from pessimistic. As Khrushchev and Mao Zedong did in the late 1950s, North Korean leaders believed that socialism was inherently superior to capitalism. They were caught up in a modernist dream that the Soviet Union and North Korea would overtake the United States and South Korea, respectively, and transform to communism. Accordingly, the KWP adopted the First Five-Year Plan, which further emphasized a drive for rapid growth and a development strategy that put heavy industry ahead of everything.
Such a modernist dream for the KWP carried over into attempts to build communist communities, or communes, at the local level. Like the “Great Leap” and the people’s commune movement in China, the unification of agricultural cooperatives was attempted and building of a local self-sufficiency system was sought through the development of local industries in North Korea. Like little furnaces built in North Korea imitating the Chinese “backyard furnaces (土法高爐),” ideas such as “the use of its own resources” and “Jaryeokgaengsaeng” were shared by China and North Korea.
Another such ideal, the self-sufficiency policy at the local level, had a realistic purpose of securing investment in the heavy industry by saving national investment in the light industry and improving people’s standard of living. North Korea’s local economic system, formed in the late 1950s and early 1960s, was a structure that sought an expanded reproduction with little national investment through its own resources and work forces while consuming products at the local level. In order to maintain the policy of prioritizing high-speed growth and heavy industry at the national level, Jaryeokgaengsaeng was also driven at the local level.
During the era of the Division of Korea and the Cold War, underdeveloped socialism and the historical–geographical conditions of North Korea converted from the ideals of a communist community where there was no exploitation of the rural areas by the city to the exploitation of the local economy by the state. Communism, which aims for the ideal of prosperity and cooperation, was developed as an ideological method for the survival of state and economic growth. In reality, the economy of Jaryeokgaengsaeng had a structure of self-reliance at the national level and self-escape (各自圖生) at the local level. In this context, it can be regarded as the origin of the “dual economy,” which is one of the main characteristics of today’s North Korean economy.
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