Premonitions of a Disaster

Sino-NK carried a piece today titled “Premonitions of a Disaster: Seeds of the Ecological Collapse and the Germination of Plans for Intensive Industrial Agriculture, 1954-1957” researched and written by your very own DPRK Food Policy Blog editor.

We have summarized here before works by Woo-Cummings and Yu who emphasized anomalous meteorological activities, over-dependence on external inputs, and the collapse of the communist support system as root causes of the famine in the 1990s. They observed that since North Korea did manage to briefly attain food self sufficiency, the socialist system and the national drive for self-sufficiency were not inherently, in of themselves, the causes for the collapse. The implication of this conclusion is that the entitlement failure, emphasized by Amartya Sen, in the form of expropriation and collectivization, is less important than the collapse brought on by an absolute decline in yields. Woo-Cumings noted this difference by highlighting the fact that Sen “conceive[d] famine as an extreme progression along a spectrum of poverty and deprivation, but not as a cataclysmic breakdown of a social system.”

In order to establish a historical narrative, Yu presents the 1964 adoption by Korean Workers’ Party “Theses on the Socialist Rural Question in Our Country” as the beginning of the problem as the nation’s policymakers resolved to intensify mechanization and the application of petrochemical fertilizers. Indeed, starting the narrative here makes the crisis of the 1990s appear to be an entirely agronomical problem. But what had caused the adoption in the first place?

The DPRK Food Policy Blog is resolved that institutional innovation does not occur in a vacuum. The adoption of the Rural Theses too has a catalyst that must be recognized. We believe, based on archival material from the NKIDP and NARA, that Pyongyang’s decision to blindly increase both labor-saving (mechanization) and land-saving (fertilizers) inputs in 1964 occurred because of the collapse of the people’s entitlements which eliminated the means for the public sectors to properly assess the scarcities and inelasticity in the economy. According to Yujiro Hayami and Vernon Ruttan, innovation is driven by endogenous demand and made more socially optimal by public institutions responding to market signals. This expands the role of Sen’s Entitlement Theory from best ensuring the survival of the people to actually contributing to the increased production and efficient distribution of foodstuffs.

Given this theoretical background, we argue that North Korea’s problems began in 1954, right after the war during the reconstruction period, when Pyongyang decided to expand its command over the country by accelerating the formation of cooperatives and abolishing the private grain trade. What followed was the country’s first food crisis in the winter of 1954-55. The state was able to resolve the issue by the summer of 1955 by restoring the free exchange of grain, but could not, for political reasons, bring themselves to permanently relinquish economic powers to the market. Furthermore, policymakers overestimated the consequences of capital scarcity in their agricultural projects and believed that increased inputs would be the solution to filling the shortfalls.

Repeated attempts to rectify the situation without restoring mechanisms of transmitting information on inelastic supply led to the miscalculation that the country needed both land-saving and labor-saving inputs, inviting massive horizontal expansion of farmland, which caused deforestation and soil erosion, and intensive application of fertilizers, which drastically degraded soil fertility. The 1964 Theses merely made this more apparent and proved that the state was unable to grasp the essence of the problem.

We believe this is where North Korea fell off the wagon and continues to be at after the failure to initiate the June 28 Reforms.

The collapse of entitlement and the consequent destruction of signaling devices in the economy are perennial problems in all socialist economies across time and space. Alexander Chayanov advocated for collectivization to be stopped and recommended investment in processing and marketing of grain in the 1930s because he saw that the state had no way of knowing how the peasants were doing without some market mechanisms to transmit signals. There is a basic problem with communism that stands at the root of the Soviet Union’s dissolution and it is important that we recognize this when we begin to evaluate potential reforms in North Korea.

In short, we advocate the restoration of Entitlement Theory in studying famine in North Korea. Aggregate production of grain is certainly critical to food security, but, as we underscored time and time again, without means to properly distribute the grains there is no guarantee that people will consume the food. What our new article suggests is that securing the people’s entitlement (demand) is crucial for not only individual food security but also long-term increase of domestic food production. It’s high time for land and market reforms.


About Yong Kwon

I develop trade advocacy strategies for a DC-based consulting firm. Studied economic history at the London School of Economics, and can be found on twitter at @ykwon88
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5 Responses to Premonitions of a Disaster

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