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Labour, land, and capital markets in early modern Southeast Asia from the fifteenth to the nineteenth century

Published online by Cambridge University Press:  20 April 2009

PETER BOOMGAARD
PETER BOOMGAARD
Affiliation:
Royal Netherlands Institute of Southeast Asian and Caribbean Studies (KITLV), Leiden.
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Abstract

Factor markets of sorts did exist in the more highly developed areas of early modern Southeast Asia, and they became more efficient in the course of time (although not in a linear process). However, in other more remote areas land was hardly ever sold, labour could not be hired and money was rare. Neither was the institutional framework conducive to economic growth, mainly because the rule of law did not apply where the ruler was concerned. This state of affairs goes a long way to explain why levels of economic growth were lower in Southeast Asia than they were in Western Europe at the same time.

Les marchés du travail, de la terre et des capitaux en asie du sud-est, du 15e au 19e siècle

Dans les régions les plus développées du Sud-Est asiatique de l'époque moderne, il existait ce qu'on pourrait appeler des marchés de facteurs de production, qui acquirent de l'efficience avec le temps (quoique de façon non linéaire). Notons cependant qu'en d'autres zones plus à l'écart il n'y avait pratiquement pas vente de terres, on ne pouvait louer le service de travailleurs et l'argent était rare. Le cadre institutionnel n'incitait pas non plus à la croissance économique, surtout parce que la loi n'avait pas force lorsque le législateur-dirigeant était concerné. Cela en dit long sur les raisons pour lesquelles les niveaux de croissance économique furent plus bas en Asie du Sud-Est qu'en Europe occidentale à la même époque.

Arbeit, boden und kapitalmärkte in südostasien vom 15. bis zum 19. jahrhundert

In den höher entwickelten Gebieten Südostasiens gab es bereits in der Frühen Neuzeit so etwas wie Faktormärkte, die im Laufe der Zeit immer effizienter wurden (wenn auch nicht in einem geradlinigen Prozess). In anderen, mehr entlegenen Gebieten dagegen wurde kaum jemals Boden verkauft, es gab keine frei verfügbaren Arbeitskräfte und kaum Geld. Auch die institutionellen Rahmenbedingungen waren nicht förderlich für das Wirtschaftswachstum, vor allem deshalb nicht, weil die Herrschaft des Rechts kaum etwas galt, wo es um die Belange des Herrschers ging. Diese Zustände liefern ein gutes Stück der Erklärung dafür, warum das Niveau des Wirtschaftswachstums in Südostasien niedriger lag als zur selben Zeit in Westeuropa.

Type
Research Article
Information
Continuity and Change , Volume 24 , Special Issue 1: FACTOR MARKETS IN GLOBAL ECONOMIC HISTORY , May 2009 , pp. 55 - 78
Copyright
Copyright © Cambridge University Press 2009

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References

ENDNOTES

1 Douglass C. North and Robert P. Thomas, The rise of the Western world: a new economic history (Cambridge, 1973).

2 Andre Gunder Frank, ReOrient: global economy in the Asian age (Berkeley and Los Angeles, 1998); Kenneth Pomeranz, The great divergence: China, Europe, and the making of the modern world economy (Princeton and Oxford, 2000).

3 Southeast Asia mainly consists of the countries that are now called Myanmar (Burma), Malaysia, Thailand, Laos, Cambodia, Vietnam, Indonesia and the Philippines.

4 Anthony Reid, Southeast Asia in the age of commerce, vol. I: The lands below the winds (New Haven, 1988); Anthony Reid, Southeast Asia in the age of commerce, vol. II: Expansion and crisis (New Haven, 1993); Victor Lieberman, Strange parallels; Southeast Asia in global context, c. 800–1830 (Cambridge, 2003).

5 As B. Schrieke (Indonesian sociological studies (The Hague and Bandung, 1955–1957), vol. 2, 100) famously said: ‘[T]he Java of around 1700 A.D. was in reality the same as the Java of around 700 A.D.’

6 Detailed statistics have been collected (on an annual basis, and by unit of administration) on population, arable lands and (rice) harvests for nineteenth-century Java (see Peter Boomgaard and Jan Luiten van Zanden, Food crops and arable lands, Java 1815–1942, Changing economy in Indonesia, 10 (Amsterdam, 1990)). The early-nineteenth-century figures are not as good as the data for the early twentieth century, as they are almost invariably too low. This was partly because data-gathering was linked to taxation, which made underreporting attractive, and partly because people, land and crops in out-of-the-way areas escaped notice. However, if one calculates yields per hectare or consumption per capita, the underestimates in numerator and denominator may be expected to cancel each other out. To date, figures for other Southeast Asian areas for the early nineteenth century have not yet been published. However, it may be assumed that production per hectare, for instance in the Red River Delta, northern Vietnam, was of the same order of magnitude as that in Java, while lower rates obtained in much of Southeast Asia.

7 Broadly similar conclusions can be drawn from Pierre van der Eng, ‘Production technology and comparative advantage in rice agriculture in Southeast Asia since 1870’, paper presented at the Association for Asian Studies Conference, Honolulu, Hawai'i, 1996, 23.

8 Boomgaard and Van Zanden, Food crops, 41.

9 Richard Griffiths, Industrial retardation in the Netherlands 1830–1850 (The Hague, 1979), 5.

10 Jan de Vries, European urbanization, 1500–1800 (London, 1984), 46; Boomgaard, Children, 111. In 1815 and 1850 almost 7 per cent of Java's population lived in towns of 20,000 inhabitants and over. The drop in the urbanization rate between 1850 and 1890 was partly caused by the fact that the so-called ‘cultivation system’ created jobs in the countryside more than in the cities. But even 7 per cent is very low in comparison with the more developed regions of Eurasia.

11 Boomgaard, Peter, ‘Technologies of a trading empire: Dutch introduction of water- and windmills in early modern Asia, 1650s–1800’, History and Technology 24:1 (2008), 43–60.CrossRefGoogle Scholar

12 Details in Peter Boomgaard, Southeast Asia: an environmental history (Santa Barbara, 2007), 145–54.

13 But see for instance Reid, Southeast Asia, vol. I, 90–136, and (for Java) Boomgaard, Peter, ‘Why work for wages? Free labour in Java, 1600–1900’, Economic and Social History in the Netherlands 2 (1990), 37–56Google Scholar. On labour around and after 1850, see Amarjit Kaur, Wage labour in Southeast Asia since 1840: Globalisation, the international division of labour, and labour transformations (Basingstoke, 2004).

14 There are three more or less recent collections on slavery that are partly or entirely dedicated to Southeast Asia: see Anthony Reid ed., Slavery, bondage and dependency in Southeast Asia (St Lucia, 1983); Georges Condominas ed., Formes extrêmes de dépendance: contributions à l'étude de l'esclavage en Asie du Sud-Est (Paris, 1998); and Gwyn Campbell ed., The structure of slavery in Indian Ocean Africa and Asia (London and Portland, 2004).

15 This notion was famously pioneered by H. J. Nieboer, Slavery as an industrial system: ethnological researches (The Hague, 1910); a revised version of his thesis is given by Domar, E. D., ‘The causes of slavery or serfdom: a hypothesis’, Journal of Economic History 30 (1970), 18–32CrossRefGoogle Scholar; see also the article by Gareth Austin in this issue.

16 Lieberman, Strange parallels, 95, 113, 157, 180–3, 300, 303, 359, 410; Volker Grabowsky, Bevölkerung und Staat in Lan Na: ein Beitrag zur bevölkerungsgeschichte Südostasiens (Wiesbaden, 2004).

17 David Feeny, ‘The coevolution of property rights regimes for land, man, and forests in Thailand, 1790–1990’, in John F. Richards ed., Land, property, and the environment (Oakland, 2002), 188–93.

18 Nieboer, Slavery; Domar, ‘The causes of slavery’.

19 Reid, Slavery, 8; Lieberman, Strange parallels; Domar, ‘The causes of slavery’.

20 Leonard Blussé, Strange company: Chinese settlers, mestizo women and the Dutch in VOC Batavia (Dordrecht/Riverton, 1986), 26–7, 52–5; Boomgaard, ‘Why work for wages?’, 41; Robert E. Elson, The end of the peasantry in Southeast Asia: a social and economic history of peasant livelihood, 1800–1990s (Basingstoke and New York, 1997), 41; and Feeny, ‘The coevolution’, particularly pp. 189–93.

21 On this and the next section see Boomgaard, ‘Why work for wages?’.

22 Robert S. Wicks, Money, markets, and trade in early Southeast Asia: the development of indigenous monetary systems to AD 1400 (Ithaca, NY, 1992); Lieberman, Strange parallels, 46–7; Ryuto Shimada, The intra-Asian trade in Japanese copper by the Dutch East India Company during the eighteenth century (Leiden, 2005). More on money and monetization will be found in the section on capital below in this article.

23 Lieberman, Strange parallels, 181–2.

24 For details see Feeny, ‘The coevolution’, 191, and Lieberman, Strange parallels, 186, 298–9, 417.

25 Reid, Slavery, 17; Boomgaard, ‘Why work for wages?’, 37–40.

26 Georges Condominas, We have eaten the forest: the story of a montagnard village in the central highlands of Vietnam (New York, 1994); Feeny, ‘The coevolution’, 193.

27 May, Glenn Anthony, ‘The making of a myth: John Leddy Phelan and the “hispanization” of land tenure in the Philippines’, Philippine Studies 52:3 (2004), 275–307.Google Scholar

28 Richards ed., Land, property, and the environment, 2.

29 At a much earlier date (in the sixteenth century), the king of Spain had declared himself owner of all the lands in the Philippines by right of conquest (O. D. Corpuz, An economic history of the Philippines (Quezon City, 1997), 27). Based on the same right the VOC regarded itself as the owner of Batavia and its environs (Java) after 1619.

30 This view was pioneered by the Dutch scholar Cornelis van Vollenhoven, founder of what is often called the Adat Law School. The term he used for such village rights was beschikkingsrecht (C. van Vollenhoven, De Indonesiër en zijn grond (Leiden, 1919), 8). This has been translated variously as ‘rights of avail’ and ‘rights of disposal’, but nowadays the term ‘residual rights’ appears to be used by most scholars.

31 Mark Cleary and Peter Eaton, Tradition and reform: land tenure and rural development in South-East Asia (Kuala Lumpur, 1996), 29–45; Richards, Land, property and the environment, 14; Peter Eaton, Land tenure, conservation and development in Southeast Asia (London and New York, 2005), 9.

32 For details see Kenneth R. Hall, ‘Economic history of early Southeast Asia’, in Nicholas Tarling ed., The Cambridge history of Southeast Asia, vol. 1: From early times to circa 1500 (Cambridge, 1999), 268; Feeny, ‘The coevolution’, 182–5; Lieberman, Strange parallels, 148; Jan Wisseman Christie, ‘The agricultural economies of early Java and Bali’, in Peter Boomgaard and David Henley eds., Smallholders and stockbreeders: histories of foodcrop and livestock farming in Southeast Asia (Leiden, 2004), 55; and May, ‘The making’. See also Peter Boomgaard, ‘Rights to land and the environment in the Indonesian Archipelago, 900–1950’, John Kleinen, ‘The tragedy of the margins: land rights and marginality in (pre-)colonial Vietnam (c. 1800–1950)’, and Barend Jan Terwiel, ‘Land rights and the environment in early modern Thailand’, all papers presented at the Third International Conference of the European Society for Environmental History, Florence, 2005.

33 van Schendel, Willem, ‘Origins of the Burma rice boom, 1850–1880’, Journal of Comtemporary Asia 17:4 (1987), 461Google Scholar; Terwiel, ‘Land rights’, 5.

34 In the Philippines, conversion of the local population to Catholicism had been one of the most important aims of the Spanish conquest, and the large friar estates should be seen in that light.

35 Michael Adas, The Burma delta: economic development and social change on an Asian rice frontier, 1852–1941 (Madison, 1974); Johnston, David B., ‘Rice cultivation in Thailand: The development of an export economy by indigenous capital and labor’, Modern Asian Studies 15:1 (1981)CrossRefGoogle Scholar; Van Schendel, ‘Origins’; Lieberman, Strange parallels, 410, 432, 442.

36 In the literature on landed tenure in Europe, ‘customary tenure’ usually has a different meaning.

37 An example of this line of reasoning can be found in Toon van Meijl and Franz von Benda-Beckmann eds., Property rights and economic development: land and natural resources in Southeast Asia and Oceania (London and New York, 1999).

38 W. R. Geddes, The Land Dayak of Sarawak (London, 1954); J. D. Freeman, Iban agriculture: a report on the shifting cultivation of hill rice by the Iban of Sarawak (London, 1955).

39 In some areas of Borneo the longhouse was the basic community type, rather than any village. In the regions discussed here, land was still easily available and the sale of land was practically unknown until far into the twentieth century.

40 On this type of communal tenure in Vietnam see Pierre Gourou, Les paysans du delta Tonkinois: étude de géographie humaine (Paris and The Hague, 1965), and Kleinen, ‘The tragedy’; on Java, see Peter Boomgaard, Between sovereign domain and servile tenure: the development of rights to land in Java, 1780–1870 (Amsterdam, 1989).

41 This rule did not apply to the so-called ‘private estates’ (Particuliere Landerijen), mainly to be found around Batavia, where land had been given out to foreigners in full allodial property before about 1820, and to the ‘principalities’ (Vorstenlanden) of Central Java, where European entrepreneurs could lease land from the Javanese princes and the nobility.

42 Marshall S. McLennan, The central Luzon plain: land and society of the inland frontier (Quezon City, 1980), 86–102; Boomgaard, Between sovereign domain; Elson, The end of the peasantry, 127; Willem G. Wolters, ‘The development of property rights to land in the Philippines, 1850–1930’, in Van Meijl and Von Benda-Beckmann, Property rights, 122; May, ‘The making’, 299.

43 Boomgaard, Southeast Asia, 249–61.

44 On tenancy see McLennan, The central Luzon plain, 98–102; Elson, The end of the peasantry, 140–8; Molle, François, ‘Social and economic patterns of landlord–tenant relationships in the Chao Phraya delta, Thailand: an historical perspective’, Journal of Southeast Asian Studies 33:3 (2002), 517–43.CrossRefGoogle Scholar

45 Elson, The end of the peasantry, 125–30; Wolters, ‘The development’, 116–27.

46 A similar point, regarding urban land rights, is made by Hernando de Soto in The mystery of capital: why capitalism triumphs in the West and fails everywhere else (New York, 2000).

47 This section is largely based on Boomgaard, Peter, ‘Buitenzorg in 1805: the role of money and credit in a colonial frontier society’, Modern Asian Studies 20:1 (1986), 33–58CrossRefGoogle Scholar, and ‘Geld, krediet, rente en Europeanen in Zuid- en Zuidoost-Azië in de zeventiende eeuw’, in C. A. Davids, W. Fritschy and L. A. van der Valk eds., Kapitaal, ondernemerschap en beleid: studies over economie en politiek in Nederland, Europa en Azië van 1500 tot heden (Amsterdam, 1996), 483–510; Elson, The end of the peasantry, 185–212; and Peter Boomgaard, ‘“Following the debt”: credit and debt in Southeast Asian legal theory and practice, 1400–1800’, in David Henley and Peter Boomgaard eds., Credit and debt in Indonesia, 860–1930: from peonage to pawnshop, from kongsi to cooperative (Singapore, 2008), 62–80.

48 Gourou, Les paysans, 379; see also Jan Luiten van Zanden, ‘Credit and the colonial state: the reform of capital markets on Java, 1900–1930’, in Henley and Boomgaard, Credit and debt, 163–80, on pawnshop rates in the Netherlands Indies around 1900.

49 This analysis is partly inspired by David Henley, ‘Credit and debt in Indonesian history: An introduction,’ in Henley and Boomgaard, Credit and debt, 1–41.

50 Reid, Southeast Asia, vol. II, 109. This feature seems to be at odds with the above-mentioned display of wealth, but while the latter was practised mainly by royalty and nobles, the former applied to merchants and the peasantry. However, in case of war – a situation in which Southeast Asians often found themselves – even the ruling classes would resort to hoarding.

51 Anthony Reid, ‘Low population growth and its causes in pre-colonial Southeast Asia’, in Norman G. Owen ed., Death and disease in Southeast Asia: explorations in social, medical and demographic history (Singapore, 1987), 42.

52 Boomgaard, Southeast Asia, 91–108.

53 Gourou, Les paysans, 379. Regarding trust in Indonesia, see Alice G. Dewey, Peasant marketing in Java (New York, 1962); David Henley, Jealousy and justice: the indigenous roots of colonial rule in Northern Sulawesi (Amsterdam, 2002); Henley, ‘Credit and debt’.

54 See for instance Jeyamalar Kathirithamby-Wells, ‘Restraints on the development of merchant ‘capitalism’ in Southeast Asia before c. 1800’, in Anthony Reid ed., Southeast Asia in the early modern era: trade, power, and belief (Ithaca and London, 1993), 123–48.

55 M. B. Hooker, A concise legal history of South-East Asia (Oxford, 1978); M. B. Hooker ed., Laws of Southeast Asia, vol. I: The pre-modern texts (Singapore, 1986).

56 As there were no prisons, there were no jail sentences.

57 Reid, Southeast Asia, vol. I, 137–46; Boomgaard, ‘“Following the debt”’, 57–8.

58 In the bridewealth areas the son-in-law had often to work for his father-in-law if his family was not sufficiently rich to pay the going brideprice.