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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
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Razor Sharp 4 February 2014
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Time for a House Un-Australian Activities Committee?
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Make Gina Rinehart work for her dole
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Voice of the Voiceless: Callum Brindley on Development in the Philippines

This essay, by Callum Brindley, explores the development of the Philippines in the context of Brenner’s critique of economic determinism. Callum is an Arts/Economics student at the ANU with a particular interest in social justice and development.

In his seminal piece, The Origins of Capitalist Development: a critique of Neo-Smithian Marxism[ii], Robert Brenner critiqued the economic determinism that he claimed underpinned both Modernisation and Dependency Theory.

Brenner sought to relocate modes of production and social relations to the centre of development, contesting the notion that underdevelopment is due to dependent capitalism.

This essay addresses the Philippines’ economic development between the years 1896 and 1940, a period of indirect American rule when one might expect to observe either significant signs of development or underdevelopment.

It is noted here that the Philippines did not substantially develop and in certain regards the people’s welfare actually declined. Informed by Brenner’s critique, this essay argues that the observed underdevelopment was a consequence of the persistence of pre-capitalist modes of production.

Whereas Brenner’s analysis principally deals with the internal dynamics of class structure and conflict, I maintain that in the case of the Philippines, the economic sub-structure of class, social relations, and modes of production, is notably formed by the interaction of internal and external forces.

I argue that this interaction firstly altered the balance of class powers and secondly reinforced pre-capitalist modes of production.

In order to demonstrate a lack of development, this essay will firstly account for the Philippines’ starting trajectory and secondly illustrate the historical trends during the period.

Thirdly, I will show how the interplay between internal and external factors allowed the upper class to maintain the same privileged position as it possessed under Spanish rule.

Fourthly, this essay will evidence how this consequently reinforced the underdevelopment of the economy’s productive forces and immiserated the Philippines.

Lastly, I conclude this discussion with an overview of the implications for the country’s development

In order to understand the base from which the Philippines’ was developing during the period of analysis and to demonstrate the reinforcement of the existing class structure and modes of production, it is necessary to contextualise the period of Spanish colonialism. This period of extended rule established a highly stratified class structure and feudal land ownership, which in turn chiefly contributed towards the economy’s minimal industrialisation.

There existed in the Philippines at the end of the Spanish period both feudal and pre-capitalist[iii] modes of production but the predominant form was based on the tenancy system which was then decidedly more feudal than capitalist.[iv] [vii] The social relations connected with the encomienda and hacienda labour/production systems did not necessitate the owners of the means of production to invest surpluses productively. Indeed, these surpluses in agriculture were enjoyed by Spanish administrators, clergy, soldiery and the indigenous nobility, rather than reinvested[viii] Agriculture and industry were largely neglected by colonial officials, more interested in mercantile profits from the galleon trade.[ix] As a consequence of Spanish rule, the Philippines had a highly stratified society and a feudally-oriented economy. From this low base, the country began on the path to development.

This system had overturned the existing social relations of production, which were based on clan communalism and a subsistence economy, and functioned as a means of colonial control and exploitation.

The introduction of feudalism also served to stratify Philippine society; communal land holdings became privately owned as collaborating local leaders were co-opted to collect tribute.

Throughout the Spanish period, agriculture and the limited industry utilised relatively backward production techniques due to the predominance of the encomienda and later the hacienda. Here, Brenner accurately locates non-capitalist social relations of production as central to the question of development. Only under conditions of free-wage labour can systematic, capital accumulation and the development of the productive forces occur.

 

 

Between 1896 and 1940, economic infrastructure and the provision of public services improved, foreign trade relations increased and the Philippines’ export orientation was reinforced, as were levels of tenancy and the prominence of the hacienda. American imperialism was in certain regards significantly different from Spanish colonialism, the state becoming somewhat decentralised with health, education, police and government officials located at the provincial and even town level.[x] Under the Payne-Aldrich and Underwood Simmons Acts of 1909 and 1913, trade relations between the Philippines and the United States increased rapidly. In 1933, 83% of Philippine exports went to America and 64% of imports came thence, compared to only 18% and 9% respectively in 1899.[xi] In absolute terms, the adjusted value of Philippine exports increased eightfold, from P63 779 640 (1895) to P515 995 136 (1940).[xii] It might be expected that this relationship with the world’s leading capitalist nation would have modernised the Philippine economy. On the contrary, this period of trade expansion was accompanied simultaneously by the further entrenchment of the hacienda. “Guaranteed through free trade with a sure profitable market in the United States, hacienderos, particularly of sugar, increased production and expanded the hectareage under cultivation.”[xiii] This enlargement of the haciendas subsequently increased the rate of tenancy, from 19% in 1898 to 40% in 1950.[xiv] In 1939, the economy remained dominated by agriculture, earning 57% of the national income and employing 65% of the workforce. Industry, on the other hand, produced 14% of the national income and employed 11% of labour. In summary;

“the Philippine economy was troubled, social tensions were increasing…overdependence on a few exports, tenancy, indebtedness, low productivity, corruption and inefficiency, undercapitalisation, miserable working conditions (were) all the symptoms of the economic backwardness present at the end of the American period as they had been at the beginning. Some of them had been mildly alleviated, others were much worse”[xv]

 

 

Whilst recognising the complexity of contributing influences, this essay contends that social-productive relations and associated modes of production are central to the question of development. This view is informed firstly by the Marxist concept of the base determining the superstructure and secondly, the observation that important explanations of underdevelopment may derive from the existing modes of production. For example, lower levels of skilled labour and capital in the Philippines have largely been a product of pre-capitalist modes of production rather than the underlying cause of underdevelopment. Thirdly, industrialisation of the kind observed in the developed countries is preconditioned on capitalist social relations of production. Although there are numerous intrinsic difficulties to this development path; the exercise of state autonomy, questions of policy and strains induced by development itself, without capitalist modes of production the ability to travel along it is limited. Indeed development and competitiveness, in a capitalist, world economy, relies on the sustained development of productive forces through relative surplus increases. As Brenner explains;

 

“Only where labour has been separated from possession of the means of production, and where labourers have been emancipated from any direct relation of domination (such as slavery or serfdom), are both capital and labour power ‘free’ to make possible their combination at the highest possible level of technology. Only where they are free, will such a combination appear feasible and desirable. Only where they are free, will such a combination be necessitated.”[xvi] (Brenner’s emphasis)

 

It is argued here that changes in these social relations and modes of production inherently involve conflict as group interests clash. Only through an analysis of the interaction between internal and external factors in this conflict may the process be properly understood. In the case of the Philippines during the first part of the twentieth century, the social relations of production were largely determined by the ability of the upper class to maintain those relations which had existed during the period of Spanish colonialism. The revolution of 1896 and the events preceding the American annexation of the Philippines, highlight this interplay of internal and external factors. Of particular interest is the second stage of the revolution, as it illustrates the influence of the exogenous threat of US intervention and how this assisted the landed elite (ilustrado) to attain direction of the revolutionary movement and hence control the country. It is noteworthy, however, that the momentum and early success of the revolution was due to the peasantry’s militant efforts. None of the charter members of the Katipunan organisation that gave the revolution its impetus were from the middle or aristocratic classes, which likely reflected their divergent class interests.[xvii] During the revolution’s second stage, external factors decisively influenced the internal dynamics of the social conflict. Upon consolidating control over the country in May 1898, the revolutionary militia, under the leadership of General Aguinaldo, found it expedient to accept the landed elite’s involvement in the formation of the republic. This divergence from a revolution of the masses was in large part necessitated by the risk that the elite would invite foreign intervention considering America’s military posturing and its war with Spain. [xviii] Members of the landed elite, such as Beuncamino, Calderon and Paterno, each sought to weaken the military’s control over the chief offices in the new republic through demanding wider legislative powers.[xix] Perhaps the defining discord, however, dealt with the resolution of the Philippine-American War. Those in the Army recognised that a settlement without full independence would likely lead to disbandment of the military. Many of its soldiers would be forced to return to labouring as agriculturalists, a move to which they were disinclined.[xx] For the plutocrats, autonomy under American sovereignty provided more assurance of their current position in the country than the prospect of a Philippine victory and the full realisation of the revolution.[xxi] Apolinario Mabini, Prime Minister of the Republic until forced to resign over his intransigence to continue the war, lamented thus about the country’s direction;

 

“It seems that the present Cabinet is now negotiating with the Americans on the basis of autonomy, and I laugh at all this because those who get tired after months of struggle will be of no service except to carry the yoke of slavery.”

 

 

Having shown how the elite maintained its privileged position within Philippine society, this essay will now demonstrate that this brought about the aforementioned entrenchment of the hacienda and the increase in tenancy rates. Just as the Spanish co-opted local leaders, the Americans also sought to gain an alliance with the governing elites. In order to secure the ilustrados’ cooperation, it was necessary to accept and promote the hacienda system, which although backward, produced most of the desired export crops.[xxii] Assured of profits, due to high demand and privileged access to the US market, the hacienderos increased their production through absolute means. They expanded the hectareage under cultivation, employed more labour and extracted surplus value by non-economic force.[xxiii] Even on those haciendas with wage relations, the workers were paid such minimal amounts and were so heavily in debt that the hacinedero could routinely exploit their surplus-labour through debt-servitude and other forms of unpaid labour.[xxiv] The elites also expanded production through the appropriation of properties. Despite anti-usury laws, rates of interest on loans ranged from 30-100% for half a year.[xxv] Peasants ignorant of their legal rights were often drawn into debt through intimidation and a pacto de retrovendendo, in which farmers were forced of their land if they defaulted on loans.[xxvi]

 

The reinforcement of pre-capitalist social-productive relations and modes of production also occurred by political means. The haciendero-dominated legislature brought leading members of the elite together in the capital, forging them into a ‘self-conscious ruling class’.[xxvii] State-led land reform was only conducted when it advanced the interests of the elites.  Throughout the period of analysis, there was influence on the land system by the US congress, due to pressure from American agriculturalists, concerned about the competitiveness of Philippine operations.[xxviii] Significant impediments prevented the peasantry from registering their small parcels of land and there were also prohibitive stipulations on the amount of land acquirable by individuals or corporations.[xxix] These land size limitations were rationalised as a means to prevent concentrated foreign ownership and fortuitously curtailed any large-scale alternative to the hacienda. The subsequent inability to realise agricultural economies of scale appears to run counter to Dependency Theory’s world division of labour. In 1937, cotton and tobacco were the third and fourth largest Philippine imports from the United States, that is to say, agricultural products transferred from the core to the periphery.[xxx]

 

The Philippine government’s limited autonomy from elite interests restricted the efficacy of any land reform laws that were adopted. For example, laws of land expropriation required ‘just compensation’ and gave priority to idle and abandoned land. In effect, the higher the land value, the higher the redistribution price. Thus, the large majority were disqualified from ownership of arable land.[xxxi] In 1933, the Rice Share Tenancy Law proposed written contracts between landlord and tenant, regulated cost/harvest-sharing and limited interest charges.[xxxii] Due to the decentralised government, the law had to be ratified at a provincial level. The municipal councils were controlled by large landowners, hence the bill failed. In summary, through both economic and political means and the fortuitous intervention of the United States, the Philippine elite reinforced their social and economic position. The maintenance of pre-capitalist social-productive relations and modes of production led to under utilisation of skilled labour and capital, and the subsequent underdevelopment of the country. In 1940, the majority of the population were in the same condition as they had been in 1896.

 

 

 

On the one hand, the Philippines was championed by the United States as a model developing country with “splendid roads, a railroad system, a prosperous export economy, a democratic political system, a high literacy rate and an efficient bureaucracy.”[xxxiii] On the other hand, at the end of the American period social tensions were increasing. The peasantry remained landless and impoverished, the economy exhibited low productivity, undercapitalisation and was heavily reliant on a few exports, the government, meanwhile, was unrepresentative and highly corrupt. In the years following independence, the economy struggled to adjust with the end of preferential US market access. Agrarian unrest led to an openly communist movement. Both of these challenges to the government may be seen as by-products of the country’s underdevelopment and immiseration. It can be argued that the United States had an exploitative, imperialist role and that the Philippines did not notably develop between 1896 and 1940. Should underdevelopment then be blamed on US imperialism? I have attempted to demonstrate throughout this essay that the primary cause of Philippine underdevelopment was in fact the maintenance of pre-capitalist social-productive relations and modes of production. I have indicated that this outcome was the product of an interplay between internal and external factors that allowed the upper class to maintain the same privileged position within Philippine society as it possessed during the era of Spanish colonialism. The ensuing entrenchment and predominance of the hacienda in the market economy led directly to low levels of skilled labour and capital, and the underdevelopment of the country’s productive forces. There are undoubtedly numerous intrinsic difficulties to the development path, none of which are aided by unfavourable foreign relations. The Philippines started from a low base and, as observed, its development path has been fundamentally limited without capitalist modes of production.

 

 


Bibliography

 

 

Texts:

 

 

Agoncillo, Teodoro A. The revolt of the masses, University of the Philippines, Quezon City, 1956

 

Agoncillo, Teodoro A. Malolos. The crisis of the republic, University of the Philippines, Quezon City, 1960

 

Corpuz, O. D. An economic history of the Philippines, University of the Philippines, Quezon City, 1997

 

Guerrero, Amado. Philippine society and revolution, Ta Kung Pao, Hong Kong, 1970

 

Kurihara, Kenneth K. Labour in the Philippine economy, Standford University, California, 1945

 

Lichauco, Alejandro A. The struggle against underdevelopment in the Philippines, The Nationalist Resource Centre, Manila, 1981.

 

Majul, Cesar A. Mabini and the Philippine Revolution, University of the Philippines, Quezon City, 1960

 

Marx Karl. Capital, tr. from the third German ed. by S.Moore and E.Aveling and ed. by F.Engels, Foreign Languages Pub. House, Moscow, 1957-61.

 

Marx Karl. Grundrisse: foundations of the critique of political economy, N.Y. Vintage, New York, 1973

 

Muhi, Panopio and Salcedo. Dynamics of Development. The Philippine Perspective. National Book Store Inc, Quezon City, 1993

 

Owen, Norman G. “Philippine Economic Development and American Policy: A Reappraisal”, in Compradre Colonialism, Solidaridad Publishing House, Quezon City

 

Peet Richard (Ed.) An Introduction to Marxist Theories of Development, Publication HG/14, Department of Human Geography, Research School of Pacific Studies, Australian National University, 1980

 

Rivera, Magallona, Tiglao et al. Feudalism and Capitalism in the Philippines. Trends and implications. Foundation for Nationalist Studies, Quezon City, 1982

 

Salgado, Pedro V. The Philippine Economy. History and Analysis. R. P Garcia Publishing Co. Inc, Quezon City, 1985

 

 

 

 

Articles:

 

 

Anderson, B. “Cacique Democracy and the Philippines: Origins and Dreams”, New Left Review, No169, 1988

 

Brenner, Robert. “The origins of capitalist development: a critique of Neo-Smitian Marxism”, New Left Review, No 104, 1977.

 

Laclau, Ernesto. “Feudalism and Capitalism in Latin America”, New Left Review, No 67, 1971

 

Minns, John. “Colonial Latin America and the World-System”, Anals, School of Spanish and Latin American Studies, University of New South Wales, Vol II, No 1, 1993 

[i]

[ii] Brenner, Robert. “The origins of capitalist development: a critique of Neo-Smitian Marxism”, New Left Review, No 104, 1977.

[iii] Defined here by conditions where wage-labour exists without a complete separation of the means of production from the means of reproduction.

[iv] Rivera, Temario C. “Rethinking the Philippine social formation: some problematic concepts and issues” in Feudalism and Capitalism in the Philippines. Trends and implications. Rivera, Magallona, Tiglao, Valencia and Magno. (Foundation for Nationalist Studies: Quezon City 1982) P 3

[v] Magallona, Merlin M. “A contribution to the study of feudalism and capitalism in the Philippines” in Feudalism and Capitalism in the Philippines. Trends and implications. P 16

[vi] Ibid. P 21

[vii] Brenner, Robert. “The origins of capitalist development: a critique of Neo-Smitian Marxism”, New Left Review, No 104, 1977.P32

[viii] Guerrero, Amado. Philippine society and revolution, Ta Kung Pao, Hong Kong, 1970P 162

[ix] Kurihara, Kenneth K. Labour in the Philippine economy, Standford University, California, 1945. P 6

[x] Corpuz, O. D. An economic history of the Philippines, University of the Philippines, Quezon City, 1997. P219.

[xi] Salgado, Pedro V. The Philippine Economy. History and Analysis. R. P Garcia Publishing Co. Inc, Quezon City, 1985. P 20

[xii] Corpuz, O. D. An economic history of the Philippines, University of the Philippines, Quezon City, 1997. P219

[xiii] Salgado, Pedro V. The Philippine Economy. History and Analysis. R. P Garcia Publishing Co. Inc, Quezon City, 1985. P20

[xiv] From study by Rivera, Generoso F. and Macmillan, Robert T. The Rural Philippines (Manila. Office of Information, Mutual Security Agency, 1952)

[xv] Owen, Norman G. “Philippine Economic Development and American Policy: A Reappraisal” in Compadre Colonialism, Solidaridad Publishing House, Quezon City (no pub date available), P 55

[xvi] Brenner, Robert. “The origins of capitalist development: a critique of Neo-Smitian Marxism”, New Left Review, No 104, 1977. P 32.

[xvii] Agoncillo, Teodoro A. The revolt of the masses, University of the Philippines, Quezon City, 1956. P45

[xviii] Majul, Cesar A. Mabini and the Philippine Revolution, University of the Philippines, Quezon City, 1960. P226

[xix] Agoncillo, Teodoro A. Malolos. The crisis of the republic, University of the Philippines, Quezon City, 1960. P 307

[xx] Majul, Cesar A. Mabini and the Philippine Revolution, University of the Philippines, Quezon City, 1960. P269

[xxi] Ibid. P 269

[xxii] Salgado, Pedro V. The Philippine Economy. History and Analysis. R. P Garcia Publishing Co. Inc, Quezon City, 1985. P 25

[xxiii] Ibid. P 25

[xxiv] Rivera, Temario C. “Rethinking the Philippine social formation: some problematic concepts and issues” in Feudalism and Capitalism in the Philippines. Trends and implications. Rivera, Magallona, Tiglao, Valencia and Magno. (Foundation for Nationalist Studies: Quezon City 1982) P 3

[xxv] Kurihara, Kenneth K. Labour in the Philippine economy, Standford University, California, 1945. P 8

[xxvi] Salgado, Pedro V. The Philippine Economy. History and Analysis. R. P Garcia Publishing Co. Inc, Quezon City, 1985. P 17

[xxvii] Anderson, B. “Cacique Democracy and the Philippines: Origins and Dreams”, New Left Review, No169, 1988. P 11

[xxviii] Corpuz, O. D. An economic history of the Philippines, University of the Philippines, Quezon City, 1997. P 273

[xxix] These conditions were that: only lands unoccupied and unappropriated by other persons could be registered, applicants would need to make a written application and swear under oath that the land was unoccupied, unappropriated etc as well as provide a description of the parcel, the applicant was then to live on the land for five years after which there was an opportunity for adverse parties to declare their opposition to the title being issued. The primary barrier to land titling was that even after meeting all these requirement, land could not be registered unless it had been surveyed. In 1928, twenty four years after the public land law had been enacted, idle public land suitable for cultivation amounted to 14 000 000ha. It was estimated that at the then rate of surveys and title issuances, it would take 400 years before the land was conveyed into public ownership. Source: Corpuz, O. D. An economic history of the Philippines, University of the Philippines, Quezon City, 1997. P 279

[xxx] Salgado, Pedro V. The Philippine Economy. History and Analysis. R. P Garcia Publishing Co. Inc, Quezon City, 1985. P 27

[xxxi] Guerrero, Amado. Philippine society and revolution, Ta Kung Pao, Hong Kong, 1970. P 179

[xxxii] Corpuz, O. D. An economic history of the Philippines, University of the Philippines, Quezon City, 1997. P 291

[xxxiii] Lichauco, Alejandro A. The struggle against underdevelopment in the Philippines, The Nationalist Resource Centre, Manila, 1981. P 22-23

 

 

 

 

 

 


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