Why does the dictatorship in North Korea still exist in this anachronistic stone-age like style?
What an exciting topic to discuss you suggested! You are correct in assuming that this will be a long post
But before I start, please keep in mind that I'm not an expert on this subject. So what I'm going to write is but my personal opinion and conjectures which may or may not accurate.
The first thing that occurred in my mind when I read your question is the difference between the social and political development between the two countries - namely, former Eastern Germany and North Korea leading up to the time of their division.
As you must know better than what little I know of Germany, the country had been the epicentre of diverse philosophical and political ideas until the beginning of the Second World War, notably socialism. As such, a relatively large number of the population were more or less aware of such abstract ideas like civil liberties or natural rights.
Also, European society, in general, has a long tradition of struggles between various social classes in which we witnessed the constant weakening of the power and authority of hereditary rulers and the emergence of the citizenry who would eventually form the backbone of modern democratic countries.
The situation had been quite different from that of Korea, however, which had enjoyed half a millennium years of relative stability (at least in terms of socio-political ideas) until everything turned upside down when Japan took over the country.
I think the medieval Korean kingdom, which was called "Josun", had very peculiar and interesting characteristics which may call for an explanation if they are to be understood by those who are unfamiliar with the subject.
Even the term 'medieval' itself may be inappropriate here since feudalism never took place in Josun. Instead, every aspect of society in Josun ran according to a set of Confucian principles or ideals.
While yielding such absolute authority which most of the medieval European monarchs would have only dreamed of, the Kings of Josun dynastic were not above the order that such principles had created.
It was a rule that a King must participate in a study at least three times a day, starting from 7 a.m. to 8 p.m. Also, he could not freely give a position in his court to powerful nobilities or local warlords (which didn't even exist) because one must pass five consecutive nationwide exams to become a government official.
A King could not even freely have sex with his concubines because he must follow strict protocols even in this act, which involve having a proper candidate and the date chosen for him and being attended by nine people surrounding his bed.
Every action and every word he does or says was also painstakingly recorded by a dedicated scribe. The records only dealing the latter half of the dynasty contain 242 million characters which are still in the process of translation.
In a word, it was a country of scholars ruled by rigid principles and protocols, which was supported by the toils of uneducated serfs and a small number of merchants and engineers whom they regarded as inferior to the gentry class whose sole job was to study.
What was unfortunate was that the study in question was mostly philosophical and had little relevance to improving the quality of life for the people or advancing science or industry. (They even tried to suppress the enocomy and trade to a marginal level in a fear that luxury may make people less inclined to study and live according to the Confucian ideals.)
But what it had left when the whole system crumbled down almost overnight when the country fell prey to imperial powers, was a general notion that there is an unchanging world order to which everyone must conform.
The traditional orders and principles got progressively challenged and overthrown as the country, now occupied by Japan, was forcibly brought to the modern era. However, there was not sufficient time nor a proper environment for new political ideas to develop so that they can nourish the ground for a citizen body suitable for a democratic government to emerge.
As such, only a handful of fortunate intellectuals could have a chance to access the liberal ideas which were prevalent in contemporary Europe. On the other hand, the vast majority of the population were kept servile under a colonial and militaristic education system which imperial Japan enforced for its recent requisition.
About half of those intellectuals became communists and returned to the Soviet-occupied part of Korea when the Allies liberated the country from Japan. They formed the elite group and became a part of the system which emerged as the Democratic People's Republic of Korea or 'North Korea' as we are more familiar with today.
But the new country was neither democratic nor a republic as the Soviet-backed leader Kim Il Sung could successfully establish a dictatorship despite his failure in the Korean War.
It was not much unlike how Stalin came to power after the death of Lenin. However, we should remember that Korea had only a tiny number of educated intellectuals at that time while the vast majority of the ordinary people still retained remnants of their beliefs in the old system; a system which had ruled the country over half a millennium.
In the old system, for example, they taught that one should respect the King, one's teacher, and one's father with the same respect and must submit to their authority no matter what.
The principle held such importance in Josun dynasty, that when one's parent passes away, it was expected for the child to abandon every social activity and live a life of a hermit for three years.
During that period, one was supposed to live in a hut wearing the most humble garment (because he was supposed to have committed a crime of neglecting one's parent) and offer the meals at the dead parent's grave twice a day, while shunning any alcohol or meat.
As you can imagine, it can be quite a convenient ideology for a dictator who wants to establish himself as a fatherly figure with absolute authority over the whole nation.
Just like how they taught one should treat the trinity - that of the King, one's teacher, and one's parent - with the same absolute respect, the North Korean regime started teaching its population how Kim Il Sung fits such a figure.
After purging what small number of dissenters in the government who were the only people educated enough to put any serious resistance, he could successfully build an absolute monarchy which is now known ironically as the Democratic People's Republic of Korea.
It doesn't explain why the regime also failed in the economy so that it became the "black hole" as you said in your post, however. In fact, North Korea did pretty well in that regard, even better than their Southern brethren until the 1970s. But it went downhill from that point to become one of the poorest countries in the world.
I have even less knowledge of the economic matters than I have of those regarding history or politics. And it has become such a wall of texts already. So, I'll just say that I believe it could be the inherent inefficiencies in a closed, planned economy that eventually proved to be the demise of that regime, combined with a few significant strategical failures like the commitment to the Vinylon technology.
I hope this could be a sufficient answer to your question.