Has private employment been banned?

The division of labor and specialization was championed by Adam Smith in the 1700s for being one of the great sources of the wealth of nations.  The division of labor was attacked by Karl Mark in the 1800s for “alienating” workers from the value they provide their customers…making them “cogs in the machines”…”bricks in the wall,” etc.  If you see Chalrie Chaplin’s Modern Times you will get the idea.

According to the Daily NK, the government of North Korea has found itself struggling against the natural economic processes of division of labor in its emerging private sector.  If government officials were interested in promoting economic growth, the natural response to this is to establish courts that can enforce contracts between business partners.  This will provide the state with tax revenue and provide a sort of insurance to businessmen who need instruments that will facilitate credible commitment between business partners to the fulfilment of obligations.  The mafia can do this also if the state declines.

According to the story, the governemnt has decided instead to ban private employment in an effort to protect the state owned enterprises.  If this were enforceable, about which I have serious doubts, it will limit business organizations to one person, or will promote the growth of “family businesses”, where members of the organization do not have to worry about their partners cheating them.  “family businesses” can take on many different roles if you get my drift…either way, customers will not be able to take advantage of the lower prices and higher quality of goods produced by specialized labor.


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