Why Capitalism Won’t Change North Korea’s Regime

To an outside observer, the behavior of the North Korean leadership often appears short-sighted and irrational. There seems to be a tested and easy way out of their predicament -- the path of Chinese-style economic reforms. While such gradual capitalist reforms might be good for the country, however, they would be far too dangerous for the current North Korean elite. As a consequence, they’re unlikely to be implemented anytime soon.

The history of East Asia after World War II has been, above all, one of spectacular economic growth. From 1960 to 2000, average per-capita gross-domestic-product growth in East Asia reached 4.6 percent, while the same indicator for the world was 2.8 percent. In 1960, in terms of per-capita GDP, South Korea ranked slightly below Somalia, while Taiwan lagged behind Senegal.