The state property and property of social and cooperative organizations of the means of production are the economic foundation of the Republic. The state property belongs to the entire people. The state increases the role of the property of the entire people in leading the cooperative property so as to combine the two forms of property in an organic way, consolidates and develops the socialist cooperative economic system by improving the guidance and management of the cooperative economy and gradually transforms the property of cooperative organizations into the property of the entire people on the voluntary will of all their members.
Private property is derived from socialist distribution according to work done and from fringe benefits granted by the state and society. The products of individual sideline activities including those from the kitchen gardens, as well as the income from other legal economic activities are also private property. The state protects private property and guarantees the right to inherit it by law.
In Korea where taxes have been abolished,
the steadily increasing material wealth of society is geared entirely
to promoting the well-being of the working people.
Under the socialist system where the people are the masters of power and the means of production, it is the supreme principle of state activities to steadily improve their material and cultural standards. The Republic provides all working people with every opportunity to obtain food, clothing and housing.
The Republic firmly adheres to the principle
of properly combining political guidance with economic and technological
guidance, the unified guidance of the state with the creativeness of each
unit, the unified direction with democracy, and political and moral incentives
with material incentive in the guidance and management of the socialist
The national economy of the DPRK is a planned economy. The state ensures a high rate of growth in production and a balanced development of the national economy by implementing unified and detailed planning.
The Republic directs and manages the economy through the Taean work system, a socialist form of economic management whereby the economy is operated and managed scientifically and rationally on the basis of a collective effort of the producer masses, and through the system of agricultural guidance whereby agricultural management is conducted by industrial methods.
The Republic enforces the self-balancing system in economic management to meet the requirements of the Taean work system and strives to make proper use of economic levers such as cost. price and profit.