 Okay, so we now move on to Professor Lankov and Dr Ward. Well, and right well behind time. If you if you want to go to the toilet stroke eat or do anything while I'm talking I don't care so don't worry about that. I'm here primarily to listen to the sound of my own voice not to take your questions only kidding only kidding. So I'm going to talk for 20 minutes because apparently I have no time. So let us begin. Today I'm going to talk to you about as you can maybe hopefully see a transition without reform understanding the political economy of North Korean marketization. I'm writing this book with Andre who's going to be pushing the buttons he's the bait and this is the switch so you're all here to see the celebrity in the field who everyone's heard of and everyone wants to meet you know you want to kiss the ring you want him to autograph you or autograph piece of paper whatever you've never heard of me and I'm going to give you a presentation he's going to push the buttons. Probably I should just be. I hope to see us. Okay, so let me run you. So I'm going to do my best impression of the most boring person you've ever seen on TV. So next slide sir. So North Korea is a remarkably closed and poor country by the standards of the region. So, as you probably all know East Asia is a very dynamic economically successful and industrially powerful and highly important region in the global political economy. And it is full of countries, a full of a small number of countries, a small number of countries that are extraordinarily economically successful. North Korea is the exception I guess that proves the rule. You know, no matter how, how, how, how, how, how would you describe it sir. No matter how well adapted your culture, society and economic institutions, well not economic institutions in North Korea's case, but know how well no matter how well adapt to your culture and society are too. Modernization. If you have bad enough political institutions you can still create hell on earth. Economically speaking, you actually can ruin even an Asian economy. There we are. There we are. Yeah, Andre talks in slogans for journalists. I ramble like an academic, even though he's the academic and I miss training. Anyways, so on the surface we have an unreformed style and state with no private firms beyond the household we have state control of finance state control of factor markets so factor markets and markets for land, labor, capital, raw materials and intermediate goods. And we also have a state control of the most product markets so both goods and services for consumers and or other business. But in practice we have North Korea's undergone significant structural change in practice not legally, but in practice and informal market practices have partially substituted for or compete with Stalinist institutions at both the firm level within state owned enterprises and also within households. So, how do we account for this. What role is that what role does the state play in these processes of change and how do we account for reform, what was called reform from below by Mark Snowland and Steph Haggard about 15 years ago, or what you could describe as what we describe as reform. So we utilize ideas and concepts from the political economy of comparative authoritarianism, and also various ideas from comparative socialist studies, and economics, political science and sociology, generally, and seek to make sense of the North Korean case. This really looks strange. Anyways, I'll keep talking. So there's a, many of you might be familiar with the fact that there is a big debate within political science and economics about how transition from socialism occurs or should occur. You have this sort of shock therapy versus gradualist arguments. Now, this discussion is very interesting. There's a lot of talk about how how transition should or was sequenced, what the appropriate role of the state is in the economy both as a regulator as an owner of assets and as potentially a producer of goods and services. I'm not saying that this isn't an interesting discussion and isn't relevant so far as it goes but most of it doesn't really apply to North Korea. North Korea hasn't really gone through a real process of reform and change. Now, there have been what they call improvement measures, there have been some changes to product markets, for instance, allowing households to engage in more market like, market transactions and allow state firms to engage in more productive activities where they have more say over how goods are priced or what kinds of goods are produced. But nothing that really looks anything like what happened in Eastern Europe in the 19 in the late 80s, nearly 1990s, the former Soviet Union in the late 80s, nearly 1990s, or China in the 1990s. That level of reform has not occurred in North Korea. So if we talk about the gradualism versus shock therapy discussion at the official level, it's kind of irrelevant. Of course, at the unofficial level, Andre loves to say that North Korea went through all of the neoliberal, they had all of the pain of neoliberal shock therapy without any of without any of the official reforms. How would you put it, sir? I would, I would say they had all neoliberal reforms de facto and all problems without a single neoliberal in the government and the route. And still with all of the shortages of toilet paper that you have under socialism as well, right? Well, complete disappearance on that stage. Complete disappearance of toilet paper to very important point now. So, so that's one problem that we would like to stress. Another problem I think it's important to remember is look the literature on North Korea in Korean is much more developed and much more advanced than than it is in English. If you want to study North Korea, you have to speak Korean. Unless you want to study, I don't know, North Korean satellite imagery, which is really important and interesting field, there's some people doing really great work on that. Or, you know, so if you want to study forestry cover in North Korea with its work that we actually use as well, it's really interesting and important. I recommend, I recommend reading it. Even then a lot of the people who study North Korean forestry cover speak Korean and do that research in Korean. But unless you want to study something that does not involve any aspect of interacting with their society, reading any of their sources or talking to North Korean refugees in any way at all, you have to speak Korean. And that's really hard work and most people don't want to do it. So yeah, anyways, unless you're a background speaker, but unfortunately my parents weren't Korean. Anyways, I recommend it. So the literature on North Korean studies in Korean. So the literature of North Korean economy in Korean is very advanced compared to English. There is a lot of discussion. There's a lot of debate that surrounds this sort of marketization from above versus marketization from below. Do we see is it primarily is marketization primarily driven by market actors creating farming or creating goods and making that, you know, offering services in their homes or in the household. Or is it primarily driven say by foreign trade companies and North Korean state owned enterprises. We're utilizing resources that they either acquire steel or get legally acquire through state channels to develop to make products and offer services in a marketized fashion in a legal way or and or is the state, an institution builder does it build market institutions or not. I think this is an interesting debate but it's kind of, we kind of sidestep it because we don't. We don't think that it's actually as meaningful a debate as it once appeared, rather we're more interested in say the topography of markets in North Korea so how the distribution of property rights differs across sectors and within sectors. So you have a value chain in say the fisheries sector, which begins with extracting fish from the sea processing them, distributing them selling them etc. And the state is involved in different levels of value chain in different ways and to differing extents, and we try and offer basically a set of explanations as to why the state would seek to be involved in this part of the value chain or not and then, and or another part of the value chain or not. And our explanations primarily rely on discussion of state capacity, so the state's capacity to penetrate control and coerce social actors. And the political strategies that are pursued by the elite, or rather by the government and the leader himself. And this is where comparative authoritarianism and appreciation of the importance of different kinds of state capacity and the amount of state capacity available, as well as, you know, the close focus on the distribution of property rights really comes into its own. In a lot of ways, like a fair amount of this research in to differing degrees has been done in Korean to some extent but we're trying to offer a new perspective and bring together a set of conceptual tools which we don't think have been fully utilized in either language, when tackling this when discussing marketization in North Korea. Okay, next slide. So what's our unit of analysis, what are we actually focusing on. So we're primarily concerned about transactions and access to factors of production. So I mentioned them earlier, some of you probably quite interested in economics but if you're not factors of production are things that you use to produce goods or services. So goods or services, this would be land, labor, capital, raw materials, intermediate goods. You know, so intermediate difference between raw materials and intermediates is kind of a bit hazy I get kind of hazy about this sometimes but I guess the difference between say colon steel, steel is an intermediate good you don't buy steel in your local shop right but you a lot of steel is going to go into producing these things you see around you this bottle top this, this phone there's probably some steel in this table there's going to be steel in the in the in the chairs you're sitting in. It's a very important intermediate good right. Raw materials I think we think that self explanatory land, labor and capital important to remember with capital there's two kinds of roughly speaking two kinds of capital there's capital in the financial sense. There's capital is in capital goods like that computer or this, maybe this microphone, or, you know, the lights in this room, capital goods are used in the production of other capital goods or in the production of products for markets. So why, why should you care about this in North Korea, well factor markets are absolutely crucial to determine the structure of production, and they are dominated in North Korea almost exclusively by the state. And that's very, very important. So that's where we mainly focus our analysis. We examine property rights, the jury and de facto pertaining to factors of production. So, who in actual fact controls land for instance or who in actual fact is able to mobilize labor. So the rights can be distinguished into into a basket of three distinct kinds. So you have control or management rights. So, for instance, a management manager of an enterprise manager of a capitalist firm so Sasha Nadella first person I think up the CEO of Microsoft. He would have management rights over his staff at Microsoft, but he does not have necessarily residual income rights. So he gets paid a wage by Microsoft by the by the Microsoft the firm, but he doesn't get to decide how all of the firms income is spent he doesn't have to liaise with shareholders yet they may have to liaise with his colleagues. He doesn't literally get to decide. Oh well, you know, we made $3 billion net profit this year. I'm going to spend it all on a nice yacht for myself. He can't do that. If if Microsoft was a sole proprietorship and it didn't have any shareholders maybe he could minus, you know, after paying taxes. So you have your own independent web company you make your own websites and stuff, and you earn a profit, and you don't have any shareholders you can decide how you spend your residual income, you have residual income rights. You also have control rights you get to control you probably get to control how you use your computer. And you know what you do with your time. But if you work for Microsoft, oh sorry if you're the CEO of Microsoft, you will not have probably residual income rights. So we have everything. The third kind of property right so we have income rights we have residual income, we have income rights we have control rights or management rights, and then we also have finally transfer rights. So this is the right to buy and sell the assets of your firm. So for instance Microsoft owns land. Microsoft will own a stock of computers it will have capital stock, it may have inventory of raw materials probably not but you know other firms will have inventory of raw materials and intermediate goods. So maybe they get to decide what they are they allowed to decide on their own whether they can transfer control of their assets sell their assets in other words to another firm or to a household. Now it in most capitalist firms this is the case right you know if you know if Microsoft wanted to sell like large piece of land it might need to talk to its shareholders but it might not need to, it can sell a division. But in North Korea. For many of the factors we're going to I will talk to you about briefly I'm probably using up all my time just talking about this. The firms do not have transfer rights in a strict sense they're not easily able to just go well you know we've got this big piece of land that we want to just sell to the guys down the street that you can't do that in North Korea. Microsoft may be able to sell land so as but you know the state the state the state software company number seven in Nampo just made that up would probably not be able to sell you know a small piece of land next to you know, next to its. To Kim check university to Kim check university without lots of negotiations with lots of regulators and bureaucrats. They may not they probably wouldn't also be able to get a market price for it because that would be illegal because there aren't any legal markets for land. There is kind of a sort of Dejure mark semi market exchange market for the lease of commercial property, but it's very underdeveloped and state state companies don't have pricing rights. Well, in practice they do but in theory they don't. Anyways, so the three groups we look at in our analysis are the central government, which I've already touched on briefly. The local entities so local branches of central government ministries local branches of the party local enterprises of various kinds and local, let's see if I missed any local military units. And then we, and then households themselves so households entrepreneurs who are the drivers a lot of the change we see, or a lot of the change that we're interested in analyzing rather. Now, marketization is a co productive process it's not like North Korean, so this is the problem with the capitalism from so marketization from below school it's this idea that markets are created. Exni hello out of nothing to Novo by you know North Korean market actors and the state is largely there just to get in the way and extract rents and it's more complicated than that and maybe I'm parodying the position a little bit but not really know very much. Anyways, so we're interested in these three groups once again, central government local entities local state entities state party military entities of various kinds, and then households or entrepreneurs. So we look at four sectors four sectors we chose in part because of convenience if I might be so bold, but also we would suggest these four sectors are crucial for the lives of the North Korean people. They may not be particularly crucial for national income because North Korea produces a lot of monuments and it also produces a lot of missiles. And as a percentage of national income statistics there are probably a lot of missiles monuments, which, yeah, which, which may distort the figures. For the North Korean person we would argue that private arable farming, private animal husbandry, private fishing and private household manufacturing and distribution are for crucial sectors for survival. So, let me unpack those quickly. Private farming at home or on local mountains is crucial for people to get the food they need to survive a private animal husbandry similar although obviously a animal protein is a luxury good but nonetheless you can make money from farming pigs and selling them to market. But fishing has been crucial has been a crucial source of expert earnings for their export earnings for the regime but it's also particularly it's a labor intensive industry in which a lot of working class. North Korean men work for instance and a lot of North Korean women workers food process as well of course absolutely. And then finally private manufacturing and distribution which is dominated by women and absolutely crucial for, you know, less wealthy North Korean households producing things at home, and then distributing through the market system to make, you know, make, make ends meet as well. Okay. So, I think I've actually covered a lot of the concepts that we were going to, I was going to talk about it introduced. What I just quickly say is that we're primarily interested in property rights and we distinguish between different kinds or different levels of interaction with the state. So there's this concept in sociology and political science. It's not really used in economics although they do acknowledge it exists political embeddedness and this is distinct from social embeddedness so I'll tell you what political embeddedness is and then I'll briefly describe how it's different from social embeddedness. So political embeddedness is basically relate either interpersonal ties or structural relations in meshed within the state in one way or another or in meshed within political context in one way or another. In the sense that we describe we're talking about market actors involved with the state in various different ways. And when we say the state I'm talking more about local entities. So, if you want to get access to commercial land in North Korea you have to go through a local entity you have to go through a local branch of a government ministry or a local enterprise or a local party committee. And that involves relations of reciprocal dependence, you know, you would have to pay for access, you might work together on a project, etc. You can get access to the land from another individual or another firm and use it for commercial purposes. There are exceptions and we'll talk about those later, but the idea basically is that the, the, it's what you could call political capitalism what it's sometimes called political capitalism in the literature. This idea that you beyond the household, you have to go through the state in one form or another. I mean, there's other terms you could use, but the term it's from sociology and political science and it's quite widely used in the China context and in the context of other many other developing countries. And one of my projects which Andre is not a huge fan of is to try and normalize North Korea as just another developing country, a very poor developing country a very badly run developing country, very well ordered country, you know a country that's not very violent there aren't many ethnic cleavages or other, you know, sources of international conflict in North Korea, compared to many other developing countries, especially underdeveloped poor developing countries rather than fast developing countries. But I like to look at North Korea through say the lens of another as a developing country as it were. Andre, and I, we agree to disagree, would you say so. Yeah, not exactly. I agree. It's, we should not go too far. Yeah. Yeah. Yeah. All right. Not with exitization but yeah it's still a very unusual place. Um, but you know so political embeddedness is a concept that's used in that context. Now I kind of conceptualize and try to measure it will measure is probably a strong word but at least classify. How did I, how did I put this, um, you know, classifying relative terms if not measured directly because the stuff can't be directly measured not in North Korea anyway. So the level to which households or entrepreneurs are in meshed embedded within state structures in order to access factors of production. So land labor capital raw materials intermediates, etc. And that's what we call embeddedness. So this is, you know, there's a very famous book in development studies called embedded autonomy by Peter Evans. Always thought his name was hilarious. It sounds almost as boring as mine. But no, this idea that bureaucrats are embedded within society but they are autonomous from it and then from it through their autonomy they are able to make decisions about development which allows them to sort of propel a development process which can lead a country to end up like without career. Now, we're not talking about the same process, but, oh, I'm already at 20 minutes. Damn, I'll be quick. But basically North Korean entrepreneurs are to lesser to a lesser or greater extent embedded within or autonomous from the state. And that is what we're really focused on. All right. Now, how's that different from social embeddedness. Now, I know, Professor Gray is very interested in social embeddedness. I'm also very interested in social but it's kind of a distinct thing. I mean, you could say that political embeddedness is a special case of social embeddedness but so there's two schools of thought on embedded social embeddedness you have this sort of Polanyi, and we'll tell me if I get this wrong. Please feel free to cut in if I get this wrong. But the idea that basically markets have gradually evolved to become or gradually become dislodged. Is that the right word? Okay, all right. So it's sort of dislodged from social norms and social values and, you know, we, I mean Mark Carney talks about this in his recent book actually as well. We've increasingly become a market society, and the norms of the market have come to dominate other other normative systems and cultures that exist within So increasingly the value of a person or the value of our labor or the value of who we are is measured by our productivity and are the the the price of the output we can produce. That's not what we're talking about in all correct. Okay, first of all, secondly, social embeddedness in the sense that granite in his very famous paper, the problem of embeddedness, it talks about the idea that economic activities do not occur in a social void, but they are structured around networks and nor and the norms of society and ongoing social ties. And these ongoing social ties can be positive they can be negative they have positive or negative consequences but they're always there. And they can't be avoided and economic models that do not account for them do not account for the social reality and to lack explanatory and predictive power is the argument. That either, but just wanted to flag those exist and when you look up embeddedness on Google, you might come across those. Okay, so what are we talking about. Well, I don't have much time so I'm going to rush along. We use what are we what are methods first we primarily use interview data we also use North Korean satellite imagery we use satellite imagery from North Korea we use North Korean laws we use North Korean written sources of other kinds official sources, including like documents and that kind of stuff as well. We practice a method that's widely called triangulation in a qualitative social analysis. So basically we're doing data source triangulation to you try and bring together as many sources possible to make sense of a social phenomena. And this is absolute crucial in North Korea I mean when you study other countries you might be able to rely on one method. It will improve fantastic results but unfortunately North Korea really just not enough sources so we have to use as many different kinds of sources as possible in order to try and get out what's going on. Okay, argument so actually I think I've already gone through quite a lot of the argument but what I would suggest is what I haven't talked about, which I should definitely talk about now is the central government has largely in North Korea been forced since the collapse of the to tolerate conditionally tolerate or otherwise known as contain in political science. The spread of market forces. What do I mean by that I mean that we don't see blanket repression, we do see occasional we see continued but relatively occasional instances of repression. There have been upswings in repression like in the late 2000s where both product and factor markets were targeted market actors within these spaces both local entities, local, local officials and entrepreneurs were targeted for repression. But what we, what we have seen increasingly actually is that the state went through a period of toleration with sporadic repression, then a concerted attempt to roll back markets in the late 2000s, followed by, followed by some institutionalization some kind of creation of new rules new institutions new structures. What political scientists sometimes called co-optation. But with also continued toleration with conditional toleration. So, what that means is that property rights in in many of the industries that we analyze are not rights. There has been some attempts to build these sort of build institutions of property rights in ways that we'll talk about in a moment, but in most instances what has actually happened is you've seen the spread of these sort of customary arrangements that are politically embedded, you know as in there are certain, there are certain expectations that surround the way people behave when they interact when when entrepreneurs interact with local entities or local officials. But these many of these practices and the relationships are not subject to the law, not directly I mean, sometimes there's indirect ways you could you can mobilize the law as a resource in your in your fight with whoever it might be but more often these relations are primarily about, yeah, they are primarily about trust, and they're about ongoing ties. And the central government is well aware of these kinds of arrangements, as in there is a, it's often speculated that the central government might not know, may not know the full extent to which markets have spread through society and into the state, but the documentary sources we have been able to acquire indicate the the state is well aware of what is going on, and continues to practice what could be described as forbearance, very selective repression and of markets given that they the state lacks the capacity to build alternative institutional arrangements and considers alternative institutional arrangements potentially to be more politically destabilizing than tolerating the status quo. And that's very different from adopting a set of top down reforms, either gradually or rapidly through a process of gradual reform like in China or shock therapy like in the former Soviet Union. And it's something very different in fact. Yes. So, how am I doing the time really should rush shouldn't I should. Yeah, right. So, this is a picture of a North Korean marketplace and when you think when people think of North Korean markets is often what they think of. And what's really interesting about this, Professor Gray talked about this in his recent book as well actually, but grassroots capitalism North Korean market actors transacting in a government regulated or partially government regulated but engaging in autonomous transactions has as equals not in in transact, you know, we call this partial autonomy right so they might pay a storage fee. And if they're selling, you know, meth or pornography then they're going to be arrested. But if they're just selling non illicit commodities, they're left to their own devices. And even here, the state is obviously present as a regulator and as an institution builder and maintainer. What's interesting though, can we go to the next one. What's, what's interesting though is the state in grassroots markets has sought to build some institutions so price controls, storage fees taxes, quite negative from the point of view of from market operators institutions, institutions of infiltration so, you know, stalls are policed, people selling outside of the market will be arrested, or, you know, probably just fine to be honest, probably not arrested. But the state is trying to build some institutions. So this is, you know, this is grassroots in the sense that it's most people working in markets are not receiving plans from the North Korean equivalent of cost plan the State Planning Committee. And then they are planning their own production, but and, you know, have their own sales strategies, but this is still not as simple as just, you know, unstructured spontaneous marketization from below as it were. Next slide sir. Beyond, let's rush through all of this actually. Let's go to. Next one. Yeah. Okay, but beyond beyond the household we have a scaling problem. So like I said earlier land all land capital goods intermediates can only be traded between state enterprises land. It's a bit more hazy sometimes we're not really. If you engage in any kind of market activity including distribution that involves anything but using your own bicycle and your own back garden, producing stuff in your own house, you're going to have to interact with local officials in one form or another and I don't mean just bribing them to get them out of your way. I mean if you want to acquire more land or say, for instance, register some trucks. You can't register them in your own name, industrial land you would have to, you would have to use land owned or and controlled by a local entity of some form or another local entity is in look part of the state in some form or another. So this creates a scaling problem. As a result, you have these sharing arrangements that take many different forms between local entities and local entrepreneurs, which the state is very well aware of. So, let's go to the next slide so here's a few examples for you. Larger, the industries in which we largely focus up, you know, so I mentioned earlier so in those industries that there are many outside of those industries as well but in those industries you'd have larger pig farms so people can produce a lot of pigs in their own back garden. I was very surprised at how many pigs you can fit in a North Korean back garden. A lot. You can keep them in the home as well while you're growing while you're waiting for them to reach. Wait, do people keep like like adult pigs in their homes as well? Yes, in the kitchen. And my question was, how does it smell terrible? But it smells of money. Money smells terrible, didn't you know? You can actually buy money cologne. There's a company in America that sells money cologne, but it doesn't smell like pigs. But yeah, so larger pig farms or fishing farms, you would have to acquire some land in which to keep your pigs. You would probably have to work with a local company of some sort or another and you would enter into some kind of profit sharing arrangement and that's going to potentially be quite complex. You might also want to, you may need to enter into some kind of arrangement where when it comes to sharing expenses related to the workers who they might lend you or the workers who they have to put on payroll so you can have these workers do the, you know, help you with pig farming as it were. And these kinds of very complicated, these arrangements can rapidly become very complicated, but because North Korea has no system of private property rights outside of the household, there is no alternative, as Margaret Thatcher would say. But the, it's the same kind of thing you see in fishing as well. And what we're trying to get at within our analysis is why, how these arrangements come into existence, how people are able to pursue private commerce within within their own homes in spite of the fact that they don't have any right to access many of the factors that they need in order to produce what they want to produce, and how when they leave their house when they leave the house and they want to build something bigger, how they do it. Okay. I'll just quickly note the existence of an interesting exception and I'm going to leave it there. Hopefully, my ramblings will have whetted your appetite for more discussion. So, one really interesting exception is sloping field agriculture. Now, there aren't that many mountains in England. Well, Ben Nevis hasn't been turned into a cabbage patch. But in North Korea, if you, North Korea is a very mountainous country, 70% mountains? Yep. 70% mountains? Roughly. It's a very mountainous country. The food supply is obviously, shall we say fragile at best. And a lot of North Koreans live near mountains. And what do they do? What did they start doing in the 1990s? Well, started earlier than that. Increasingly in large numbers starts in the 1990s. Go up into the mountains, cut down the trees and farm. This is all illegal. And it's not really very embedded either. So local forestry officials are not really involved in this. Occasionally have to be bribed to go away. But you know, if you have to bribe a policeman, it doesn't mean that you're using the policeman's back garden to produce cabbages. So this stuff is basically what we describe as disembedded. And there are other examples of this, which are really interesting, but I don't have any time to talk to you about it. But we have these sort of disembedded factor markets. So there are some workers who are for whatever reason, are legally supposed to be working inside a factory but are not, and are participating in a disembedded labor market. So they have disembedded hand markets like sloping fields where the sloping field operator could potentially sell. They can transfer rights, de facto rights, obviously not real, not de jure rights, but transfer rights to the field that they're farming. They have the right to residual income over what they produce in that field. And they also control the field, even though they are not embedded within any state entity. One really interesting thing about sloping agriculture is it's really, really important for the food supply in the country, but the government seems to have been unable, and largely most of the time unwilling to seriously police it. There have been multiple eradication campaigns, but largely the government has continued to practice what could be described as toleration, or benign neglect if you want to use a less technical expression. One of the major reasons seems to be a lack of state capacity. And this is something that we keep coming back to in our work actually, and just I suppose I can wrap up with this point. The North Korean state is very, very notionally powerful. The leader has very few checks, very few constraints on his power. State officials in big government ministries and in state security in the police service, etc. They are very unconstrained by the niceties of, you know, regulatory compliance, and all of those incredibly complicated annoying aspects of running a modern government in the developed country. And yet, they lack the capacity and the ability to control many things, which we would imagine they would want to get rid of. And as a result, we see these complex patterns of shared de facto property rights between the household and local entities, and a state that is largely a spectator with some important exceptions and at certain times but largely we would suggest it's largely a spectator to what is going on. Anyways, I'm going to leave it there. And yeah, let's, let's continue. So we have discussed it now, Professor, you're am bullets ski from University of Manchester. Okay, well, let me begin by thanking Andre and Peter for inviting me to discuss their work and opening up the fascinating case of North Korea, a country whose history I had hitherto known relatively little about. I want to start by restating the main points of their argument, as I see it, and then go on to set out three themes which from a comparative perspective maybe further developed. So, on the surface, North Korea appears to have a classic centrally managed economy without any private enterprise beyond the household. And here more closely we see that although the state does not recognize markets or private enterprise nor has it built market supporting institutions, such as commercial court system, financial markets or corporate registry. The system has become heavily reliant on de facto markets and private enterprise. The point is that it is not the state's policymakers but entrepreneurs who are making strategic policy decisions, including those related to the firm creation. So, Peter and Andre asked, how and why can a market economy emerge in a country with a strong state that is implacably opposed to capitalism and markets. The transition happened without the conscious policy design or blessing of the state. While other scholars have provided a partial picture of this phenomenon with some pointing to the role of grassroots initiatives of market trainers, spontaneously creating markets and others have highlighted top down institution building. And Peter provide a comparative analysis of four sectors to provide a broader and more comprehensive account of the overall process. They do this by developing into the property rights literature and disaggregating forms of control into three areas, the rights of transfer or alienation or sale. The property rights, sometimes referred to as use rights and the right to derive an income from property. So there, these are three different sets of property rights which are a general right across the property rights literature which is highly developed in the, in the literature. And we show that whereas management rights are still mediated through the state income and transfer rights are now often held by market actors, and using these tools they aim to provide a more nuanced understanding of what has in effect been a de facto transition to a market economy in North Korea. So we have a careful and intuitively attractive analysis that throws up a number of fruitful insights which I, which can help place the North Korean case in comparative perspective at the same time I think if viewed from a comparative perspective there are there are three areas that that Andre and Peter might want to consider developing. The first is to do with the role of the state and a political leadership. What is it that is really unusual about the North Korean case. What is de facto private enterprise and de facto markets that are not formally recognized by the state or is it the state has so doggedly persisted in maintaining its classic Leninist form and ideology, avoiding even the so called market Leninism of China and it may be that what is really interesting here is not so much that economy has market eyes but the state has despite major major changes in the world around it retained its basic shape. From the perspective of 30 years after the collapse of the Soviet Union we see that there are other states, such as Russia itself which have experienced stabilization and liberalization. Where the state has through a process of incremental de facto renationalization reasserted control of energy utilities the media and large scale industry. States such as Russia have fully renounced the Leninist model, while the market Leninist states have arrived at a strange fusion of Leninist nationalist and market ideologies. Yet despite major upheaval such as the famine of the 1990s, the North Korean state has has retained the same structure. Now on page 13 Andre and Peter right at the basic aim of all dictators is survival but I really do wonder whether that is true. In the late 1940s Stalin invested heavily in what would in plans that would only come to fruition, long after he had died. This is nothing to do with his survival, but had everything to do with his ideology. This year, vertically integrated hierarchies began to break down the 1990s and marketized operations emerged within them. The difference with other transition economies with this was not the consequence of specific policy decisions made by the country's leaders, but as Peter and Andre right of the leaders refusal to act in the face of dramatically changed external circumstances. But this surely is the key question. Why did they refuse to act. Why was it the North Korean government tolerated markets of a certain scale and size in the 1990s, only for Kim Il Young to change his mind in the 2000s, and to view markets as a threat to the party states again me. It is difficult to make sense of all this without taking into account of the state's ideology but that plays only a marginal role in their account. And it's important that we don't forget that there were markets of a sort in traditional state socialist regimes. The most notable were the farmers markets which were tolerated in the heyday of Stalinism and whose prices were widely used by economic historians such as RW Davis and Alec Nove as proxies for the availability of food, and even as very rough measures for levels of welfare. In Julie Hessler's work that in a post war period in the Soviet Union. There were powerful moves to recognize certain forms of private enterprise. There was a big debate about this in 1946 1947 1948 in the Soviet Union. From our legs left nukes very recent book on Ivan Pavlenka we also know that there were even self made millionaires who created and invested in their own firms with very high turnovers, which transacted with other large firms and ministries in Moscow. In the classic Soviet system we also had entrepreneurs the telkachi who scoured the Soviet Union sourcing raw materials and shortage goods for their factories. Their activities have traditionally been framed as trust based network transactions, but if different entrepreneurs are competing for the same goods. They may have had to pay a higher rate, thereby introducing a price mechanism of sorts. This is of course not to say that the system in North Korea resembles the classic centrally managed economy, but we need to be mindful of what is substantially different here. This is really the existence of factor markets land in particular, and this I think came out in in Peter's very last slide when he talked about the the arable market. It could not be bought and sold in classic loneliness regimes and the right and to create and invest in firms. I think it would be useful. If we have a framework that can make sense of various forms of slippage and evolution, as well as transformation in all centrally managed economies. There is a border framework that doesn't just look at North Korea now but looks at the evolution of centrally managed economies over the over the whole period of their, their existence. Third and finally the four examples that Peter and Andre have chosen are one such as horrible farming animal husbandry histories and household manufacturers, which are central to the survival of the North Korean household, and where their barriers are relatively low. In order to press home their point about how a transition can happen without the conscious policy design or blessing of the state. It might be beneficial to widen the variance of case studies to include capital goods where given their strategic importance to the state, entrepreneurship and active markets might be more surprising. So I'd like to conclude by saying that I found this a fascinating paper and I look forward to reading the book. Which of you would like to. Yeah, so you start with ideology if you want. Yes, I thought about it. Now this is a this is a live discussion between us actually. Because of the ideology. Yes, I think that, first of all, I'm increasingly beginning for well personally until recently I used to think for quite a long time that ideology is one important exception sees to be relevant for the North Korean decision making. That it's a kind of smoke screen for the public. And as the real decision makers, they have one ideology which is I would say North Korean it's important North Korean nationalism. These people are really committed to the long term survival of the North Korean state, not Korean state North Korean state unification if it ever happens is seen as a nice kind of bonus. But now I'm beginning to have some doubts about it because we have more access to the internal documents, and I'm beginning to suspect that it is the older generation. Actually, I say I have to say plural because it's what we were talking with Peter billy first time yesterday morning, but that we are beginning to suspect that probably at least people for older generation which still dominates the government I get that Kim Jong-un is young and he is basically even showing off his daughter is probably not necessary next successor. But most of the people are in the 70s in the government. So this people still have some commitment to the traditional. So learning a state social system they really believe that it's superior politically morally whichever. And they see all these problems, all this compromises they have to do as a kind of way to make through to survive difficult times as a kind of emergency measure. Again, again, I would say let's not overestimate it, because these people care about survival of their state their own legacy. They believe that they're fighting a just war against the evil outside world, which is as bad as they are or was. But I think that some of them still have the indeed some additional kind of more traditional Marxist Leninist left wing of eight artists state center name it how you like some kind of such inclination. Yeah. I'm on on markets, more generally, especially this idea of a framework for slippage it's something we've. We struggled with because we can identify, I would say, relatively coarse grained tendencies in government policy but we don't have the kinds of documentary sources we would like to make more sense of day to day decision making about, you know, as if you want to know what the government is doing here then just open the papers right but you know North Korea like higher high level discussions, frank discussions about actual policy rather than very vague discussions, vague slogans are very difficult to obtain information about. So, with respect to the 1990s, especially like we tried we experimented with using this sort of framework on historical institutionalist framework for sort of identifying different change processes and the extent to which say government policy relative to institution coming from below through like what's sometimes called drift were present in these in these different markets. What we found is it was very difficult to. We couldn't obviously do probability samples and surveys in North Korea and we didn't have access to the kinds of reports and documents that would be necessary to really reconstruct a chronology at that level of detail that would allow us to really account for institutional change, micro level institutional change in, you know, relatively in real time. So it's an approach I'd really like to do. I really have a great deal of appreciation for what historical institutionalists do, but North Korea would probably be one of the least ideal cases in which. You know, I think it would be much easier to do in the Soviet Union the late 80s or China 1990s. I don't want to kind of hog the conversation at all but just one brief response to Andre's comment I think when you're looking at ideology. I think it's important to recognize that in particular when you apply the concept to state socialist regimes that ideologies doesn't have to be, it doesn't have to be a cognitive understanding that you don't have to believe in the ideology. So, there is a lot of work on ideology is a is a kind of discourse discursive formation that consists of various conventions that people adhere to so in the Soviet Union in the 1970s, very few leaders actually believed in the in the ideology but they adhered to the to the discourse and the framework of the ideology and I think that if you if you adopted that framework and I think that could actually be very very interesting in the in the North Korean case, but it's quite quite a specific understanding of ideology and it's one that I think has probably been used. Most helpfully in the comparative analysis of this regimes. I usually think about idiocratic regimes. Is that that common approach you're talking about as well or. Well that that might be a little bit different but there is a there is a general framework for the understanding of ideology that has been applied to state socialist regimes it could be applied to other authoritarian regimes, possibly idiocratic regimes but there's been much less work on on that. With respect to your final point and I really like I really like this idea actually widening the variants of sectors we analyze to include capital goods. What do you think so want to write another chapter. No. One of the major problem we are likely to encounter with the exception of some leaked documents and official. Basically, works of Kim Kim journal and Kim journal and will help a bit was some leaked documents but information it's basically it's what is doing with North Korea always have some ideas which are relatively well known and areas which are well known and sometimes you have not just temptation but no choice but to search behind just well where it's not dark because in darkness you will be unable to find. I also see the reason why you would propose this at least maybe maybe I'm wrong here but my understanding would be that capital goods manufacturer is it requires a level of complexity in the supply chain that you're not going to see with you know say for instance production corn on the side of a mountain. The issue with North Korea obviously is they don't produce many capital goods and for most of the period we're talking about they were probably not producing many machine tools they were primarily importing them. So it would be an analysis of trade relations largely I mean obviously you've got this whole move towards CNC that computer America control that they've been heralding since the late 2000s and they do assemble some things now they assemble smartphones and tablets but they don't actually produce the circuit boards. So, like in theory would be a brilliant idea in practice I think it would end up just talking about external relations, which is very interesting but it's not. And another part of the problem the capital goods they produce, they are very often related to the military or they do it in violation of the sanctions. So getting this stuff probably should go to Tyson corner, also known as lambley maybe they know something but I would not always. I can't imagine they're interested in property rights within the munitions sectors. I hope they are. I look forward to reading those reports in 30 years time but I've probably no seriously it's the first of all is relatively small scale because, well, they're basically all most of their equipment is imported from overwhelmingly China. But in second what little they produce it's seen by them as highly sensitive stuff. We managed to get acquired some classified stuff on non kind of non military industries but he is sensitive I don't think we will be able to get much. I'm afraid I'm going to take a rather probably unpopular decision that we should actually conclude here, because we really really are running out of time and we've had actually very interesting discussion I think I would like to start the next bit at mid day so that we do actually finish and be able to have some lunch, and we have a couple of minutes breather I hope I don't have terrible objections for being so tyrannical. But thank you very much for the for the panelists and for our discussion.