Stephen Kotkin

So they've been through a couple of famines here.

I mean, really big famines.

They don't have the state capacity to reimpose the system immediately in the economic sphere.

So they grudgingly make concessions, very few but some in the market sphere.

Gradually, that expands over time as more and more

People push against the system's restrictions.

And so it's a policy-driven story in part, but not as the lead.

It's a policy-driven story as the following of the entrepreneurialism and the hard work of the society.

North Korea doesn't have the cultural revolution where it annihilates its state capacity in a Maoist frenzy in order for Mao to,

to, in his mind, undo his rivals, unbalance and destabilize them.

Yes, they do, but they still have the mechanisms of economic control and they have a massive black market.

You got to remember that the communism doesn't have legal markets for the most part.

It has restricted legal markets, again, grudgingly, household plots.

But for the most part,

It has a lot of illegal market activity, including in the state sector.

So the state sector gets an order to produce certain numbers of large quantitative output for the military industrial sector, but it only gets allocated 25% of its ball barracks.

So it has to assign its supply department on the black market to go out and find the other ball bearings that it's not assigned from central planning.

So you get a massive black market in the system, not just at the level of little people in the village, but at the top level of the military industrial complex to make the system work.

So when market behavior is grudgingly accepted...

What that does is it brings market behavior out of the shadows into a legal or quasi-legal realm.