Asia in Europe, Europe in Asia

6. Rethinking Assumptions on Asia and Europe: The Study of Entrepreneurship

102 Mario Rutten 6 Rethinking Assumptions on Asia and Europe: The Study of Entrepreneurship Mario Rutten Characterizing Asian capitalists For a long time, developments in South and Southeast Asia have inspired scholars to invent a terminology specific to the region because they believed that the processes studied did not seem to fit into the existing type of classification. Marx’s ‘Asiatic mode of production’, Furnivall’s ‘plural society’ and Boeke’s ‘dual economy’ are perhaps the most wellknown concepts that were conceived in colonial times to analyse South and Southeast Asian societies.1 In the last few decades, several new concepts have been employed to analyse the present-day developments in South and Southeast Asia. The South Asian economy in general and that of India in particular has been characterized in terms of a ‘semifeudal mode of production’ (Bhaduri 1973; Chandra 1974; Sau 1975), a ‘semi-colonial semi-feudal mode of production’ (Sen Gupta 1977), a ‘dual mode of production’ (Lin 1980), a ‘constrained type of merchant capitalism’ (Harriss 1981), an ‘intermediate form of capitalist Rethinking Assumptions on Asia and Europe 103 development’ (Harriss 1982) and a socio-economic structure dominated by ‘commercialism’ (Van der Veen 1976; Streefkerk 1985).2 The terms ‘rent capitalism’ (Fegan 1981), ‘bureaucratic capitalism’ (Robison 1986), ‘statist capitalism’ (Jomo 1988), ‘dependent capitalism’ and ‘ersatz capitalism’ (Yoshihara 1988) have been employed to analyse Southeast Asian economies, such as those of Indonesia, Malaysia and the Philippines. What all these concepts have in common is the insistence that the characteristics of South and Southeast Asian developments are so specific that they merit a terminology specific to the region. The relations of production in these societies are held to be of a mixed nature. Capitalist and pre-capitalist relations of production are intertwined without any tendency of capitalist relations becoming more dominant. Merchant or financial capital is powerfully developed at the expense of productive capital; capital circulation instead of capital accumulation is the dominant tendency in South and Southeast Asia. Development of South and Southeast Asian capitalism has been largely confined to the tertiary sector: commerce, trade and services. The manufacturing sectors of the economy—agriculture and industry—have not been the driving force of economic growth in these countries. Development in South and Southeast Asia has not been the result of self-generating and self-sustaining autonomous economic growth, based on an open-market economy and fuelled by indigenous technology and serviced by indigenous skills. More than anything else, economic growth in South and Southeast Asia is considered to be a dependent type of development: dependent on foreign capital, foreign technology, distorted market mechanisms and a high level of government protection and state assistance. One factor which is considered to be crucial in determining the nature of capitalist development in South and Southeast Asia has been the process by which the capitalist class emerges. Characterizations of the developments in South and Southeast Asia as a specific type of capitalism have therefore often been based on references to the characteristics of the capitalists operating in these countries. South and Southeast Asian capitalists are considered to be a specific type of capitalist because of the fact that they display a commercial orientation, follow a business strategy of economic diversification and do not directly apply capital to the production process in agriculture or industry itself but gain control of the claims on the product of others through the outlay of merchant or 104 Mario Rutten financial capital (Harriss 1981; Harriss 1982; Van der Veen 1976; Streefkerk 1985). Closely linked with these characteristics, South and Southeast Asian capitalists are termed a specific type of capitalists because of the fact that they are dependent on government finance and protection, and on foreign capital and technology. Their profits are not based on production but are in essence rent incomes that are the result of distorted market mechanisms following a high level of state intervention and regulations (Jomo 1988; Fegan 1981; Robison 1986; Yoshihara 1988). At the core of these characterizations of the capitalist class in South and Southeast Asia often seems to lie a specific notion about the culture that underlies the economic behaviour of the Asian capitalists. The deformed nature of the capitalist class in Asia is sometimes thought to be the direct or indirect result of the existence of a specific Asian mentality. Beneath the terms used to characterize the specific nature of the Asian capitalists lies the implication of a...