Has Capitalist Restoration in North Korea Crossed the Rubicon or Not?


Reply to a Polemic of Władza Rad (Poland)


By Michael Pröbsting, International Secretary of the Revolutionary Communist International Tendency (RCIT), 15 July 2018, www.thecommunists.net




Artur Kowalski, a comrade from the Polish group Władza Rad, has written a critique of the RCIT’s analysis of the process of capitalist restoration in North Korea. (1) This polemic refers to several documents on this issue which the RCIT has published in the past few months. (2) Two of them have been translated in Polish language and published by the comrades. (3)


While we do not agree with the authors’ criticism, we appreciate his polemic as a serious contribution to this debate. Hence we will to reply to his arguments in this article.




A Summary of “Władza Rad’s” Critique of the RCIT’s Analysis




Let us first summarize the main arguments of comrade Kowalski. (4) Basically, the comrade argues that while a process of capitalist restoration is indeed going on in North Korea, this process has not already resulted in the abolition of the deformed workers state. The comrade writes:


The incurably ill one is called a dying person, but he is considered dead only after death. (...) The fact that there exists increasing income stratification in the Democratic People's Republic of Korea, that market mechanisms are introduced, the share of private trade and services increases, licenses for foreign industrial capital are granted, does not automatically mean that capitalism will be restored within a few years. The historical process is the result of social struggles: class struggles and factional struggles within the class or dominant layer, and internationally also between classes in different countries. Sometimes the economic and political situation on the international scale has a decisive influence on events in a single country. All these processes permeate and interact with each other. The global trade war, possible economic and social crisis in the People's Republic of China and / or South Korea, may interrupt the current plans of the DPRK regime. Socio-economic development is not a linear process. It is a dialectical process, the result of a constant struggle between conflicting class interests.


Therefore, the comrade emphasizes that the current process of capitalist restoration is reversible. “In our opinion, the mistake that accompanies RCIT lies in the fact that they do not take seriously the possibility of bureaucratic reversing reforms.”


Comrade Kowalski sees strong similarities of the economic process in North Korea with the limited market reforms which took place in some Eastern European in the 1960s, 1970s and 1980s.


In the 1980s, the bureaucrats' response to the stagnation of the crisis of the economy in Poland and Hungary was the increasingly far-reaching market reforms, all the while claiming that this is just a new NEP (New Economic Policy) and that Lenin was not afraid of going back to the market economy, when it was necessary. Did the bureaucracy consciously seek to restore capitalism at that time? In our opinion, this has not been the case. It rather acted spontaneously seeking a way to improve the economic situation, to prevent further social revolts and to strengthen its privileged position.


After 1956, the Post-Stalin regimes in Eastern Europe did not oppress the emerging bourgeoisie. On the contrary, they were connected with it and the members of the nomenclature benefited from it. In Poland after 1956, compulsory collectivization was abandoned. Most of the cooperatives disintegrated and family farms became the basis of agriculture. The farmer was the owner of the land, and his descendants had the right of inheritance. He could also sell the land, although the state had the right of pre-emption, so the market for trading the land was strictly controlled. (...) There was a private production sector (...). There were small private shops, cafes and restaurants, small private hotels and guest houses. There were private houses and apartments and the possibility of selling them at market prices. (...) At the end of the 1970s, larger, private production companies were allowed - theoretically with foreign capital, in practice belonging to Polish citizens. (...) In practice, they parasitized on a planned economy. In the mid-1980s, as part of the "marketization" of the economy, so-called nomenclature companies emerged, mostly service companies. They were purely parasitic creations, entering as an intermediary between cooperating state enterprises.


If we assume that the DPRK is now capitalist, then the Eastern Bloc has also become capitalistic in the 1960s-70s.


Furthermore, the comrade rejects the RCIT’s characterization of the "Donju" as an emerging capitalist class as wrong. He considers them rather as a middle class.


We have considerable doubts as to whether "Donju" (...) are a social class, and especially a class of capitalists in the Marxist understanding of this term. The decisive Marxist criterion of class affiliation - in every socio-economic formation - is the attitude to the means of production. (...) Who are the Korean "Donju"? (...) In Marxist sociology, focusing on the ownership of the means of production, the middle class is defined by the owners of an individual work workshop, family businesses and representatives of liberal professions.




Is the Process in North Korea Today Similar to Poland in the 1960s and 1970s?




Comrade Kowalski puts forward an interesting argument. He compares the capitalist restoration process in North Korea with the market reforms in Poland and Hungary in the 1960s and 1970s. He rightly states that these Eastern European countries remained degenerated workers states at that time despite these reforms. Hence, on his opinion, it would be wrong to state that the process of capitalist restoration in North Korea has already crossed the Rubicon.


However, we think that the comrades’ comparison is not accurate for several reasons. First, it is true that, for historical reasons, land in Poland was in private ownership of small peasants throughout the whole period of Stalinism. According to studies, the private share of farmland ownership remained stable at 77.3% (1955), 85.0% (1965), 79.0% (1975) and 76.3% (1989). (5)


However, while this represented a “historical compromise” of the Stalinist bureaucracy with the Polish rural petty bourgeoisie, private property of means of production was mostly limited to agriculture. In 1980, only 3.5% of the Polish workers were employed in the non-agricultural private sector. This number rose in the last years before capitalist restoration triumphed. But by December 1989, there were still only 10.1% of the workers employed in the non-agricultural private sector. As a result, 66.7% of all labor force was concentrated in the so-called socialized sector by time of collapse of Stalinist rule 30 years ago. (6)


Hence we see that while the Stalinist bureaucracy accepted the existence of a rural petty-bourgeoisie there was hardly any petty-bourgeoisie or even bourgeoisie in the main sectors of the economy. Only in the last years before capitalist restoration did such a class arise but it remained pretty small until the collapse of the degenerated workers state.


Compare this with North Korea today: as we have demonstrated in our documents, the process of capitalist restoration is much more advanced. While private ownership is spreading in agriculture, (7) this process is by far not restricted to this sector. As a result, a much higher share of labor is employed in North Korea’s private market sector (about 40%) than this was the case in Poland.


In fact, it took several years of a full-blown capitalist rule in Poland that the share of labor employed in the private sector surpassed the current level in North Korea (46% of total employment in 1993). (8)


We think that these figures demonstrate that the process of capitalist restoration is far more advanced in North Korea today than it was the case in Poland at any time before 1989. Furthermore, the fact that the Polish bureaucracy did not allow any meaningful private sector outside of agriculture is an undisputable proof that they never intended at that time to restore capitalism. As we have shown, the situation is very different in North Korea where the regime actively supports the expansion of the capitalist market and is also involved in it.




A Different International Situation




There is also another important factor which comrade Kowalski does not take into account: the international situation has changed dramatically in the past decades. In the 1960s, 1970s and 1980s, a strong Stalinist bloc with two major powers at the centre (USSR and China) existed. They could give the Polish (or any other) bureaucracy sufficient material and political support to retain the Stalinist project of a non-capitalist economy.


This is very different to the world situation today. The USSR has collapsed and both Russia as well as China have become capitalist Great Powers. In other words, there exist no longer any degenerated workers states. Quite the opposite, capitalist Russia and China are North Koreas neighbors and most important allies. These Great Powers are pressurizing the regime in Pyongyang to advance the market reforms. Under such conditions, it is only logical that the North Korean bureaucracy turned towards capitalist restoration instead of defending the planned property relations (as they would be the only non-capitalist country on earth)!




Two Different Roads of Capitalist Restoration




Comrade Kowalski argues that we underestimate the possibility of a reversal of the process of capitalist restoration. No, we don’t exclude such a possibility. But, in opposite to the comrade, we do not believe that such an anti-capitalist turn could be implemented by the Stalinist-Capitalist bureaucracy which is thoroughly interlinked with the Donju capitalist class.


If such a turn would take place, it would be the result of an uprising of the working class, i.e. a social revolution against the Stalinist-Capitalist ruling class. Indeed, such a proletarian uprising is the goal for which revolutionaries in North Korea have to fight for today!


Finally, a word on comrade Kowalski’s critique of our definition of the Donju as a capitalist class. Certainly, the North Korean entrepreneurs are not already big capitalists comparable with other countries which have a much longer history of capitalism. But this is hardly surprising as the process of capital accumulation has begun only a few years ago.


We think comrade Kowalski should not look so much to the Polish experience in the 1960s, 1970s and 1980s in order to find an explanation of the capitalist restoration process in North Korea. It would be far more appropriate to look to the restoration process which took place in China, Vietnam and Cuba. The experience in these countries is much more similar to North Korea than Eastern Europe. Capitalist restoration in Eastern Europe and in the USSR was accompanied with a collapse of the political superstructure of Stalinism. In China as well as in Vietnam, Laos and Cuba, capitalist restoration proceeded differently. Here this process was accompanied with a continuation of the political superstructure of Stalinism and its transformation into a Stalinist-Capitalist regime. (9) In short, historically there have been two different roads of capitalist restoration. Unfortunately, the Władza Rad comrade largely ignores this experience




A Question of Methodology




This brings us to the last point. It seems to us that the comrades of Władza Rad are not clear about the criterion when they define a state as already capitalist or as still being a deformed workers state. When, in their opinion, has the Rubicon been crossed?


Is it the case if the Stalinist political superstructure collapses? Obviously that would be wrong because in this case they would have to characterize one of the biggest imperialist powers, China, as a non-capitalist, deformed workers state.


Is it the case if 50% of the economy is in private hands? That would be wrong too. As we have explained in our documents this has not been the method of Marxists. Russia became a workers state when the proletariat, led by the Bolshevik Party, conquered political power and destroyed the capitalist state machinery in October 1917. The economic expropriation of the bourgeoisie was a process which started later.


In our book on the capitalist restoration in Cuba, as well as in other works, we have discussed in detail the complex nature of the process of social transformation from a workers state towards capitalism. We summarized the RCIT’s analysis: “When can we state that such a capitalist restoration has taken place? The answer is: when a Stalinist bureaucratic workers’ government is replaced by or transforms itself into a bourgeois restorationist government. Such a bourgeois restorationist government is one which is firmly resolved, both in words and deeds, to reestablish a capitalist mode of production, i.e., to move decisively against planned property relations in favor of creating a capitalist economy based on the law of value.” (10)


Such an approach is in accordance with Trotsky’s method when he discussed the possibility of capitalist restoration in the USSR in the later 1930s. He also insisted that the decisive criterion is not the exact degree of privatization of the economy: “Should a bourgeois counterrevolution succeed in the USSR, the new government for a lengthy period would have to base itself upon the nationalized economy.” (11) It is rather the class character of property relations which the regime is defending: “The class nature of the state is, consequently, determined not only by its political forms but by its social content; i.e., by the character of the forms of property and productive relations which the given state guards and defends.” (12)








Concluding our reply, we want to emphasize that it is decisive to understand the specific nature of the capitalist restoration process in North Korea. Since several years, the North Korean regime has made a decisive turn towards capitalist restoration. This is obvious from the rapid expansion of the private market sector, from the emergence of Donju capitalist class and from the linkage of the bureaucracy with these entrepreneurs.


What has been taking place in North Korea is a process of transformation of the old Stalinist regimes into Stalinist-Capitalist regimes similar to the developments in China, Vietnam and Laos in the early 1990s (or in Cuba in the later 2000s). We therefore characterize the Kim Jong Un regime as bourgeois-restorationist. It defends and promotes the restoration of capitalism. This is the decisive criteria to characterize North Korea as a capitalist state.






(1) Artur Kowalski: KRLD i restauracja kapitalizmu [polemika z RCIT], 04/07/2018, http://1917.net.pl/node/23206 resp. https://www.thecommunists.net/forum/krld-i-restauracja-kapitalizmu-polemika-z-rcit/


(2) Michael Pröbsting: In What Sense Can One Speak of Capitalist Restoration in North Korea? Reply to Several Objections Raised by the Polish Comrades of “Władza Rad”, 21 June 2018, https://www.thecommunists.net/theory/north-korea-and-the-marxist-theory-of-capitalist-restoration/; Michael Pröbsting: Again on Capitalist Restoration in North Korea, 12 June 2018, https://www.thecommunists.net/worldwide/asia/again-on-capitalist-restoration-in-north-korea/; Michael Pröbsting: World Perspectives 2018: A World Pregnant with Wars and Popular Uprisings. Theses on the World Situation, the Perspectives for Class Struggle and the Tasks of Revolutionaries, RCIT Books, Vienna 2018, Chapter VI. The Korean Peninsula: Imperialist Aggression, Capitalist Restoration and Revolutionary Defensism, pp. 95-105, https://www.thecommunists.net/theory/world-perspectives-2018/


(3) Michael Pröbsting: Jeszcze raz o restauracji kapitalizmu w Korei Północnej, http://www.1917.net.pl/node/23163 resp. https://www.thecommunists.net/home/polski/jeszcze-raz-o-restauracji-kapitalizmu-w-korei-polnocnej/; Michael Pröbsting: W jakim sensie można mówić o przywracaniu kapitalizmu w Korei Północnej? Odpowiedz na kilku zarzutów podniesionych przez polskich towarzyszy z „Władzy Rad”, 21 czerwca 2018 r., http://www.1917.net.pl/node/23194 resp. https://www.thecommunists.net/home/polski/w-jakim-sensie-mozna-mowic-o-przywracaniu-kapitalizmu-w-korei-polnocnej/


(4) The following chapter has been verified by the comrades of Władza Rad as an accurate summary of their views.


(5) Majda Bne Saad: Can Small Farmers Survive Poland’s Accession to the EU? (2002), European Association of Development Research and Training Institutes, p. 3


(6) Mieczyslaw Waclaw Socha and Yaacov Weisberg: Poland in transition: labor market data collection, in: Monthly Labor Review September 1999, p. 10


(7) Christian Oliver: In North Korea, private agriculture quietly flourishes, Washington Post, October 14, 2011 https://www.washingtonpost.com/world/asia_pacific/in-north-korea-private-agriculture-quietly-flourishes/2011/10/14/gIQAGbZPkL_story.html?utm_term=.b212ce2fbd56


(8) European Bank for Reconstruction and Development: Transition Report 1994, London 1994, p. 32


(9) On the RCIT’s analysis of China as an imperialist power see the literature mentioned in the special sub-section on our website: https://www.thecommunists.net/theory/china-russia-as-imperialist-powers/. In particular we refer readers to Michael Pröbsting: The China Question and the Marxist Theory of Imperialism, December 2014, https://www.thecommunists.net/theory/reply-to-csr-pco-on-china/; Michael Pröbsting: The Great Robbery of the South. Continuity and Changes in the Super-Exploitation of the Semi-Colonial World by Monopoly Capital. Consequences for the Marxist Theory of Imperialism, RCIT Books, Vienna 2013, chapter 10, https://www.thecommunists.net/theory/great-robbery-of-the-south/


Concerning the capitalist restoration process in Cuba we refer to: Michael Pröbsting: Cuba’s Revolution Sold Out? The Road from Revolution to the Restoration of Capitalism, RCIT Books, Vienna 2013, https://www.thecommunists.net/theory/cuba-s-revolution-sold-out/


(10) Michael Pröbsting: Cuba’s Revolution Sold Out? The Road from Revolution to the Restoration of Capitalism, p. 54


(11) Leon Trotsky: Not a Workers‘ and not a Bourgeois State? (1937); in: Trotsky Writings, 1937-38, p. 63


(12) Leon Trotsky: Not a Workers‘ and not a Bourgeois State? (1937); in: Trotsky Writings, 1937-38, p. 61