Syed Hussein Alatas – the _

While reading Syed Hussein Alatas’s Intellectuals in Developing Societies recently, there was one question that kept popping in my head. Is the book still relevant to contemporary Malaysia?

Some rights reserved. By Hafiz Noor Shams.

Published in 1977 but written earlier, Syed Hussein Alatas asserted that developing countries such as Malaysia (and more generally, throughout Asia) did not have an intellectual class. There were a few intellectuals but they were so few and far between that they were powerless and could never function as a class that could exert influence on the elites and the society as a whole.

He attributed the lack of the intellectual class in Malaysia (really, his focus was Malaya/Peninsular Malaysia but the claim is also relevant to the Borneo states) to the massive colonial immigration. In his own words, “the population of Malaya was composed of immigrant groups, devoid of intellectual interest, many of them from the lower economic class in their country of origin.” Meanwhile, the colonial education system was designed by the British purely for vocational reasons and avoided the nurturing of intellectual interest. In short, the whole population was more concerned with economic and other immediate practical factors instead of intellectual pursuits.

The economic focus with limited intellectual development continued beyond the colonial period. Here, Syed Hussein Alatas blamed the Alliance/Barisan Nasional government for failing to create the intellectual class. He reasoned the peaceful nature of the country (relative to the more turbulent revolutionary history such as in Indonesia, the Philippines and Vietnam) had made governing a routine business. Such routines gave way to the rise of the managerial politicians and technocratic class where they functioned to keep the social machine running, instead of manufacturing new machines that intellectuals would do. The lack of need to create new machines meant the lack of need for intellectuals. Only crisis would demand intellectuals and Malaya and Malaysia had little, or so that was the claim.

While that might be true, surely there is an intellectual class in Malaysia today. Syed Hussein Alatas himself had influenced a whole school of thought that is alive and well in Malaysia. And there are other intellectuals of different persuasion who are thriving in the country now. In fact by the 1970s, it does appear to me there was an identifiable intellectual class with Syed Hussein Alatas himself a giant. Furthermore, the events of 1969 were a crisis for Malaysia and to follow his own logic, the times demanded intellectuals, which the society then did provide.

This counterpoint of mine shifted my mental mode. Instead of reading the book as something of contemporary relevance, I began to view it as a material giving insight to the 1950s-1970s society. After all, the author was fully engaged in the 1960s-1970s political debates, with commentaries/examples on less-than-inspiring results from government policy and policy implementation in Malaysia then. He reserved some venom for the Cabinet under the leadership of Tunku Abdul Rahman, which Syed Hussein Alatas described as lacking rationality and filled with unsuitable happy-go-lucky personalities. (There are several chapters on fools and bebalisma but I have a feeling this segment of the book was steam-blowing ranting against the then-government disguised as an model—essentially it is about calling other people stupid without actually doing so. Syed Hussein Alatas had a political career in opposition to Tunku Abdul Rahman and Tun Razak’s leadership.)

Perhaps, something does not change after all.

And perhaps, the existence of an intellectual class does not entirely remove the relevance of Intellectuals in Developing Societies to contemporary Malaysia.

Here, the lack of need for intellectuals during the early days of Malaysia had led to the education system focusing on developing technical expertise without inculcating a ‘philosophic spirit’, an idea borrowed from Egyptian intellectual Muhammad Abduh and a long line of other intellectuals. This gave rise to what Syed Hussein Alatas called the dualistic man where outwardly the person accepts, enjoys and wants the conveniences of science and technology but inwardly, believes in the supernatural in direct contradiction to the sciences. The person wants to be the consumer of science but the science behind the product can be magic for all he or she cares. This can easily describe our post-modern reality that might get worse with the proliferation of mindless artificial intelligence usage within our society.

Capital accumulation as an idea sits close to the center of modern economic growth theory. Any introduction into the field will begin with physical capital accumulation, before population growth, technological progress, human capital and even institutions are progressively thrown into the mix to explain the real world.

As far as modern macroeconomics is concerned, I think I can trace the idea of accumulation as the key to growth right up to Harrod-Domar as formulated in the 1940s. The model has a naive mechanics. William Easterly lays out the world of Harrod-Domar within the context of international aid and points out the model’s weaknesses in his 2001 book The Elusive Quest for Growth. Those same criticisms led to the articulation of the famed Solow-Swan growth model in the 1950s, which in turn was improved in the 1960s through the Ramsey-Cass-Koopmans model. About twenty years later, the so-called new growth theory with its endogenous models dominated mainstream macroeconomics.

Harrod-Domar is the earliest modern growth theory with capital accumulation at its heart that I can think of. If I try really hard, I think I could cite Karl Marx in the 1850s-1860s and even Adam Smith in 1770s although both of them did not produce a model while I do not think Marx’s idea of accumulation is directly related to growth as we understand it today. I struggle to trace the evolution of the idea beyond Marx and Smith, although a quick search on the internet points towards St. Aquinas and Ibn Khaldun, and possibly right up to Greek philosophers.

But the tracing of these models and works only describes the evolution of the idea. It is not the history of accumulation per se.

Jurgen Kocka recounts the history of physical capital accumulation in Capitalism, a nifty book on the history of capitalism. First published in German in 2014, the English translation came out this year. It is only available in hardcover currently with a price tag of MYR142. I bought a copy from Kinokuniya in Kuala Lumpur. Kocka is a German historian focusing on German and eastern European labor history.

Kocka writes consumption pattern gradually switched from a period of instant gratification when personal accumulation was hard if not impossible for the majority to a time when where they began to care for the next generation and were able to gather private wealth and transfer it to their children as inheritance. Although Kocka does not use the term, this is the intergenerational capital accumulation.

The intergenerational accumulation happened in a limited fashion in the middle age be it in Europe, Arabia or Asia. Even among the merchant class, the accumulation and transfers were limited among a few families before the Industrial Revolution. Wealth produced by a person was generally consumed within his or her lifetime, with limited opportunity for intergenerational transfer. This happened as feudalism worked in the background, the great institution that prevented the majority who were serfs from accumulating capital. The personal wealth of the serfs generally belonged to or easily extracted by to feudal lords. What is the incentive for work when the fruits could be appropriated freely by the local lords?^[1]

Private wealth accumulation in Europe began only during the Industrial Revolution in the 1800s. Rapid economic pace in the cities suddenly made accumulation faster than ever in history for most. That attracted serfs from the rural areas to the town and cities which led to the crumbling of feudalism as there were fewer and fewer pairs of serf hands to work for the feudal lord. Now freed from serfdom, common workers were able to accumulate private wealth and participate in intergenerational accumulation. It was a slow process and never a straightforward one judging from the various labor unrests and even revolutions during the industrial age but it did start the process of capital accumulation among the masses nonetheless.

But even before the Industrial Revolution, early companies in the 1100s in Venice played a role in intergenerational capital accumulation. A company, a product of various traders and merchants coming together to pool resources and diversify risk extended the accumulation horizon beyond the lifetime of a person. The application of the new social technology — along with the creation of double-entry accounting to keep track of the company’s resources — means the endowment got bigger and bigger, which encouraged bigger accumulation that was possible if wealth was restricted within one’s lifetime.

Some of these traders and merchants went on to form their own banks (as company) to finance their and others’ various business requirements. Jurgen in his book points to the 1300s as the turning point, when rich trading families first established banks in northern Italy. This made the financial market more efficient, which in turn aided them and other banking consumers to manage and amass their wealth better.

The evolution of companies continued in London and Amsterdam, capitals of the trading nations England and the Netherlands. The joint-stock companies were developed and more and more individuals and entities got together to pool their resources to finance, among others, the British East India Company and the Dutch East India Company, the first true multinationals in the world.

But the greatest enabler of capital accumulation was, of course, technological progress, as stressed in the Solow-Swan model. Indeed, wealth per capita soared during the 1800s Industrial Revolution after thousands of years of largely stagnation that began in northwestern Europe.

Gregory Clark in his 2008 book A Farewell to Alms claims it happened in England and the Netherlands because they had the institutions that enabled the Industrial Revolution to take place in exactly those countries first. He goes on to suggest, controversially, that these institutions which were absent in other places led to a deep cultural change that made the industrial age possible.

Kocka does not challenge that in his book. While explaining the connection between industrialization and capitalism, he writes:

One the one hand, when industrialization began, capitalism already had a long history to look on. Not even in its proto-industrially expanded form did merchant capitalism, which was widespread throughout the world, lead inescapably to full-fledged industrialization. There are many cases illustrating this point. Conversely, the case of the Soviet Union substantiates how it is also possible for industrialization to exist in a noncapitalist form. The concepts of capitalism and industrialization are defined by different features, and it is advisable to make a sharp distinction between the two of them.

On the other hand, preindustrial-commercial traditions of capitalism, whenever they persisted, significantly promoted the breakthrough to industrialization, whenever that happened in the nineteenth and twentieth century. In the nineteenth century, industrialization took place within capitalist structures everywhere. Alternative models of a centrally administered economy were tried out under Communist auspices between 1917 and 1991. They proved to be inferior. China’s rapid industrialization also began to take off only when the country’s party leadership decided to loosen political controls step by step and make room for capitalist principles. There obviously was (and is) a pronounced affinity between capitalism and industrialization: for both, investments are of decisive importance. An inherent part of industrialization is the permanent search for new projects, as is constant engagement in new configurations; to this end, pointers and feedback from markets were and are irreplaceable. A decentralized structure that disperses decision-making among many different enterprises has proven indispensable. So far, any effort at industrialization expecting to be successful over the long run has presupposed capitalism. [Page 99-100. Capitalism: A Short History. Jurgen Kocka. 2016]

But accumulation did not always happen peacefully through hard work, production or technological progress. In the middle age, pillages, plunders and wars were a common way to accumulate wealth. There were a lot of cases in Europe and elsewhere as well. This continued into the 1800s during the colonial age where European mercantilism helped European powers accumulate more wealth.

Such mercantilism meant accumulation for European was the dis-accumulation for the rest of the world.

Kocka does not go into the dis-accumulation as he is focusing on European capitalism mostly. But he does mention the slave trades between Europe, Africa and America, where African slaves were used to man the plantations and fulfil European demand. It does appear to me the slave trade and European colonial policy decimated Africa.

In Asia, especially Malaya, colonialism seems to have the opposite effect. Although European powers, the British in Malaya especially, were still accumulating wealth, the colonialism did have an accelerating effect on domestic growth in the 1800s and the early 1900s. Perhaps the reason for that was that the colonial administrators in Malaya was importing European advancement along with various institutions from the Industrial Revolution, hence boosting technological growth in this part of the world.

So, was colonialism good or bad for Malaya in terms of capital accumulation? I guess the only way to answer it is to address the counterfactual: how would capital accumulation have progressed if Malacca was not defeated by the Portuguese war fleet? How would the area now called Malaysia have fared if it had never been colonized by the British and the Dutch?

Mohd Hafiz Noor Shams. Some rights reserved

^[1] — Let me digress slightly. Anthony Milner in The Malays believes the feudalist structure explains the lack of the Malay merchant class during the 1700s-1800s. The sultan as the feudal lord owned everything and the idea of private wealth among the masses did not exist. Everything within the realm ruled by the sultan belonged to him. Milner, if I recall correctly, cited Munshi Abdullah who lamented in his writing about the lack of security to self and property of the masses due to tyranny of the sultans in the 19^th century Pahang, Terengganu and Kelantan.

While this sounds like a rival explanation to Syed Hussein Alatas’ as outlined in The Myth of the Lazy Native where he postulated that European colonialists killed the Malay merchant class by regulating trade in a way that granted monopoly to European traders, I feel both arguments can be true. Milner is describing the effect of the sultans’ influence on the masses while Syed Hussein focusing specifically on the merchant class. Indeed, Milner’s point is more general and hence, the effect of European monopoly could well happen within Milner’s explanation. So, it was a double-whammy for Malay traders.