Who Owns North Korea? Property, Rations and Control

By D. R. Ashworth · November 26, 2024 · Updated October 18, 2026 · 4 min read

• North Korea
• Planned Economies
• Camps and Repression

North Korea’s constitution declares that “there is no limit to the property which the State can own.” All natural resources, railways, ports, banks and major factories belong “solely” to the state; land and small and medium-sized enterprises may be held by cooperatives; and the private property of citizens is defined as what they receive “from socialist distribution according to work done” and from state benefits, along with the produce of kitchen gardens (DPRK Constitution, 2019, arts. 20–24). Behind those articles lies the story of how a communist state took control of nearly everything its people needed to live — and used that control to rule them.

Taking the land and the factories

In March 1946 the Provisional People’s Committee headed by Kim Il-sung issued a Land Reform Law confiscating land belonging to Japanese entities and large landowners and redistributing it to former tenant farmers. In August 1946 it nationalized industry; technically only Japanese owners and Korean “collaborators” were targeted, but this effectively took in all large and most medium-sized industries (UN Commission of Inquiry, para. 98).

The peasants did not keep their land for long. After the Korean War ended in 1953, the regime collectivized agriculture and built a centrally planned economy. Farmers could keep a small part of what they grew; the state took the rest. The government assigned people to compulsory employment (para. 118).

Food as a means of control

In 1957 the regime set up the Public Distribution System to ration food and other goods. An estimated 60 to 70 percent of the population came to depend on it. The system “suppressed private production and monopolized distribution of food and household necessities,” and, the UN Commission of Inquiry found, “became an important means of social, economic and political control” (para. 118).

The same year the Party launched the songbun system, sorting citizens into “core,” “wavering” and “hostile” classes by their family’s perceived loyalty. Where people could live, what work they did and their access to food, health care and education all came to depend on it. A decree barred the “hostile” class from living near the border with the South, the coasts, or within 50 kilometres of Pyongyang or Kaesong, and large numbers were forcibly moved to the mountainous north (paras. 117, 273–274).

Famine

The planned economy never fed the country well. Serious food shortages were reported in 1945–46, 1954–55 and 1970–73; for decades the economy was propped up by Soviet and Chinese largesse, and in the 1970s the state defaulted on billions of dollars of foreign loans. “Survival of the political system and its leadership rather than systemic economic development or concern about feeding its population,” the Commission concluded, “appears to have been the priority” (para. 128).

When Soviet and Chinese support fell away in the early 1990s and floods struck in 1995, the distribution system collapsed. Between 1996 and 1999, an estimated 450,000 to 2 million people starved to death (para. 140). The Commission calls it a “human-made famine” (para. 141).

The markets fight back — and the state strikes back

To survive, North Koreans traded. A decade after the famine, informal economic activity was estimated to make up 78 percent of household income, and as the ration system failed the authorities lost much of their old control (para. 141). The regime has swung between tolerating and crushing the markets. Kim Jong-il’s 2002 reforms formally established general markets, but in 2005 the state tried to revive the distribution system and confiscated grain from farmers (paras. 143–145).

On 30 November 2009 the government announced a currency reform: old notes were exchanged for new at 100 to 1, with one week to do so and strict limits on how much could be exchanged. One aim was to “reduce the role of the market, restoring the centrally planned economic system.” The authorities then banned foreign currencies and shut the general markets. Inflation rendered people’s savings “almost worthless” and appears to have caused further starvation; the Party’s finance chief, Pak Nam-gi, was dismissed and reportedly executed (paras. 531–532).

Housing: owned by the state, sold in secret

Housing in North Korea belongs in principle to the state, which issues permits to live in a house or apartment. Yet homes are bought and sold through brokers, often with bribes to officials. In April 2023 the authorities cracked down on private home sales in Pyongyang, arresting brokers; when a private sale is discovered, the home is confiscated and the money seized (RFA, 2023). In a Seoul National University survey of 133 defectors, 67 percent said they had bought their own homes and only 14 percent had been given accommodation by the state — even though selling, buying or renting a house can be punished with hard labour (Park, Gulf News).

Why it matters

In North Korea, state ownership was never only an economic policy. By owning the land, the jobs and the food supply, and by assigning each family a class, the regime made every citizen dependent on its favour. When that system failed, hundreds of thousands died — and when the survivors built markets of their own, the state confiscated their grain, wiped out their savings and arrested their brokers. Property, for North Koreans, is whatever the state has not yet chosen to take.

Further reading on this site

• North Korea’s political prison camps — the fate of those the state deems enemies.
• North Korea’s information blockade — how the regime controls what its people know.
• The Great Chinese Famine — another communist famine.
• All articles on North Korea and on planned economies.