North Korea's 'Mad Men': Signs of capitalism in the Hermit Kingdom?

It's a strange thing when a toothpaste ad makes international news, but in North Korea, the subtle but growing presence of the occasional advertisement could signal a slow shift.

Ads and posters are still taboo in public – except for the large, colorful portraits and slogans that reinforce the ideology of North Korea's political regime – but lately North Korea-style 'Mad Men' have been tacking up single, laminated sheets inside stores or stacking them on the counters near check-out, Reuters reported. They promise pills to make children taller, illustrated with a picture of a giraffe, or promise superior automotive services. In a socialist society, they seem distinctly counter-cultural.

"The main thing North Korean businesses compete on is quality, but now they're starting to compete in terms of how their products make people feel," Andray Abrahamian, part of an NGO from Singapore that teaches business skills to North Koreans, told Reuters. 

As workers are allowed to innovate in small ways, one successful experiment could lead to another, just as it has in China, wrote Rüdiger Frank, chair of East Asian Economy and Society at the University of Vienna and a regular visitor to North Korea, in an article for the Asia-Pacific Journal:

In China and Vietnam, too, initially nobody wanted to change the whole economic system in the first place. Even in the 1990s, Chinese economists were talking about a secondary and supplementary role of the non-state sector. But successful experiments prompted new ones, leading to the stop-and-go piecemeal approach that we now, in hindsight, recognize to have been the beginnings of gradual transformation.... So there is room for optimism concerning North Korea.

Such experimentation is showing some success among the political elite. Under Kim Jong-un, children of a small, developing upper class are creating a "Pyonghattan" where they can buy many of the trappings of Western teenage life, Anna Fifield reported for The Washington Post. Children of North Korea's political elite have the disposable income to see and be seen, and a tiny networks of shops are developing to serve this desire. These range from fancy wedding venues that advertise services for $500 an hour, to iced coffees and a ski resort built on Mr. Kim's orders. 

“Kim Jong Un is very ­pro-market. His policy has essentially been benign neglect,” Andrei Lankov, a Russian historian who specializes in Korea, told The Washington Post. “A number of North Korean capitalists I’ve talked to say that they’ve never had it so good.”

Many of the ads so far have been joint ventures between a local North Korean company and foreign firm. Much of the new supply of consumer goods comes through China, but the demand starts from within.

"After years of economic reforms and exchanges with the outside world, the government is no longer able to control its citizens’ minds in the old rigid fashion,” Zhang Yushan, North Korea expert at China’s Jilin Academy of Social Sciences, told The Christian Science Monitor.

Although advertising is plainly at odds with a socialized economy, where workers have no incentive to lure customers toward a certain product, North Korea's government has begun to embrace the role of advertising in its economy.

"By actively introducing new products and guaranteeing a high quality of life and material culture, advertising in a socialist society helps the love and care of our Party efficiently reach out the people," wrote Kim Kwang Gil in a journal of North Korean economics in 2015, according to Reuters.

As demand grows, so may the tiny sector of the country's economy that falls outside the party line – and looks almost capitalistic. North Korea's 2016 budget report showed sources from "local areas" constituted 23.2 percent of the economy, up from 16.1 percent in 2011, according to a post by Dr. Frank for the US-Korea Institute at SAIS. As it grows, Frank writes, this freewheeling economic driver will likely become a more indispensable part of the hermit kingdom's economic makeup.