1st. June 2022
1. INTRODUCTION
Capitalism is driven by the determined goal of enterprises for ever-greater accumulation of capital. By accumulation of capital, we mean an increase in assets from profits or investments.
The objective is to increase the value and a return on that profit, whether through appreciation, rent, capital gains or interest.Once we have the growth (capital formation), the accumulation of these assets (capital) can be further obtained or the value extracted.
2. CAPITALISM CRISIS
The Malaysian economy is in a bad shape and rakyat2 are understandably seeking solutions. Many, encouraged by mainstream media and multimedia, believe that ruling regimes’ policies through the last six decades shoulder prime responsibility for the structural decadence in our economy and that any salvation to recovery will require, above all, policy changes that will bring the inter-ethnic equality relationship into balance.
Despite its initial popularity with the introduction of the New Economic Policy – to eradicate poverty and ensuring equity without race identification – this nation-state approach to resolve the dynamics of the poverty poors and to ensure wealth-sharing is seriously flawed. It encourages rakyat2 to see the national problems, falsely, as the outcome of a contest between those who have and those in needs, in which the Malay-dominated government has to boost the well-being of its bumi constituents at the non-bumi expense, through “fairer” practices. As a consequence, it leads to counterproductive policy recommendations.
In this article, we offer an alternative approach to understanding the wealth generation process; one that relies on a class-based analysis of (global) capitalist dynamics impacting upon the (local) compradore capital enclave where they lead, not surprisingly, to a very different economic insights and political challenges. That the threat to bumi share-holding comes not from the non-Malays, but from the operation of a transnational, corporate-shaped, capital-monopoly production system, in which Malaysia serves as the region’s assembly platform to service the financial capitalism in the Global North. In fact, globally, the top 737 multinational corporations controlled 80 percent of total global output,” as cited by (Cheng Enfu and Lu Baolin in Monthly Review May 2021).
While both transnational capital and capital of ruling elites in Malaysia have greatly benefited from the operation of this system, Malaysian workers have paid a high cost; in fact, Malaysian workers experience many of the same negative consequences from its operation as do other indudtrial workers in the Global South., read STORM, Union Bustings in southeast Asia, February 2021.
It also explains why existing governance and preceeding ruling regimes have responded to the current national crisis (higher consumer inflation, high petroleum prices, eminent food insecurity, intermittent floods in township, collapsed houses, congested roads, inefficient mass transit systems and inadequate digital communications accessibility) with tactics designed to retain and maintain the status quo, despite the tremedous negative effects of this capital-led approach on working rakyat2.
In short, it is capitalism – not competition between Malays and the other races – that is the source of our grave political-economic problems.Therefore, Malaysia ambition to become a leading edge in competitiveness is stuck with a stagnated economy, (Sudhdave 2020); that the economy direction needs to be changed, (Kamal Salih, 01/06/2022) because Vision 2020 is blinded (Jomo, 10/12/2020).
Our challenge is to draw on the above insights to develop a strategy capable of both illuminating and contesting capitalism’s destructive logic – a task that puts Malaysisn workers in solidarity, rather than competition, with all workers in the country – and around the world.
3. AN ETHNOCAPITAL NATION-STATE
There are those who argue that Malaysia problems owe much to its growth strategy as follows: the then newly-independeny state neocolonial policies have transformed the nation into an industrial production powerhouse and commodity-led export hub, with the global market as her targeted preference. Initially, our exports were predominately labour intensive, low-technology products, such as electrical and electronic, rubber-based products like gloves and shoes. However, by late 1980s, instead of being a major exporter of higher valued added and high-technology products, the country de-industrialised prematurely from that typical normal developmental trajectory when local compradore capital objecting to the incursion of transnational corporations (TNCs) and low preference given to the emerging bourgeoisie capital base.
The ultimate outcome, to the despaired disadvantages of Malaysian workers, is the role of clientelship capitalism that had inserted into the monopoly-capital supply chain in an age of new economic imperialism, (Suwandi, 2018). Corporate capital in the small manufacturing enterprises (SMEs) collaborates with Global North to tighten the commodity supply chain with monopoly-capital. M&E vendors like AIDA, SKF, Cohu, VAT, Oerlikon Balzers, Favelle Favco, Bromma, Vitrox, etc.; recently, Digi, Nestles and British American Tobacco are, by market capitalisation, leading the list of foreign companies that dominate our local businesses nowadays. A TNC can be a 100% foreign-equity company; and there are over 5000 such sendiran berhad in the country, commanding an overarching external ownership and control of the national economy.
The government’s sentimental weakness for foreign investment over local capital investment is, to be grudgingly acknowledged, seeing Malaysian entrepreneurs taking their businesses offshore. Even new business concepts like Grab car-hailing moved to Singapore, Phison pen-drive to Taiwan, SP Setia real estate group to re-develop the Battersea Power Station, United Kingdom, have transferred activities abroad to more conducive business-friendly environment.
Further, industrialisation had not ensured the mass employment as was expected; the Federal Land Development Authority (FELDA) did not encourage nor retain its owner-tenants to cultivate palm oil produces on their own land, but cater for the Big Farms resulting in settlers migrating to towns in search of better job opportunities which are not easily forthcoming. One has to accept, under kleptocractic capitalism, politically connected cartels have even taken over the poultry industry, resulting in dire shortage supply, rising the price of this common diet that compounded workers continuous class struggle for decent shelters in urban enclaves with a higher cost-of-living environment.
The UNICEF 2020 Report has already shown that low-income female-headed households are exceptionally vulnerable, with higher rates of unemployment at 32% compared to the total heads of households. Female headed households also registered lower rates of access to social protection, with 57% having no access compared to 52% of total heads of households.
Concurrently, with diminishing job outlets, more Malaysians are migrating abroad, (CIPD Asia, The future of talents in Malaysia 2035), thus depleting the talented homeland resources; this skills outflow is further exacerbated by a recent decision that skilled workers shall be employed in a monopoly-capital controlled (The Triad) country – Japan – under a MoC between Malaysia and Japan, thus perpetuating a neo-Imperialism human resource exploitation process, (themalaysianreserves 30th. May 2022).
The way that ethnocapital is capable of siphoning national resources is easily highlighted by existing Government-linked companies (GLC) which, together with the Government-linked Investment Corporations (GLICs), controlled 68% of the Kuala Luimpur Stock Exchange commanding RM$440.4 billion in total assets. The overall control of government agencies connected to the Prime Minister Department and the Ministry of Finance is overwhelming :
4. CAPITALISM AND CLASS
The GLCs like Petronas are a major source of government revenue; Khazanah is often used to bail out other (especially crony) companies. Indeed, the GLCs, respresenting surrogates of ruling elites, are maximising capital accumumulation through a hive of rent-seeking economic activities across various sectors of the economy – from plantations to petroleum, (STORM, Rentier Capitalism in Accumulation, 22/01/2021).
The emergence of this ethnocapital-defined class which ostensibly sought to ‘eradicate poverty’ and ‘restructure society to eliminate the identification of race with economic function’ in order to create the conditions for national unity is less than half truth. That ‘restructuring’ has, inadvertently and unfortunately, come to be associated with ‘positive discrimination’ or ‘affirmative action’ on behalf of the ethno-Malay Bumiputeras whereby state interventions have resulted in significantly greater bumiputera wealth ownership – but restricted to top 1% of constricted beneficiaries – business participation, education opportunities, as well as representation among professionals and managers/administrators. The public sector employment and staff promotions – at Federal and state levels – are extraordinary mono-ethnic-embedded; there are 5.7 million staff (17.6% of labour employment) in the public sector – 23% higher than its minimum in 2016.
The country’s business sector is strangled with APs, approval-import permits, and other licensing, restricting markets and business operations. The layers of administrative controls bear the elements of class division within the Malaysian society.By ethnocapital we mean a (malay) bumiputra owned and controlled an entity performing under a rentier or clientel capitalism approach whether it is a public agency, a government-linked company (GLC) or a privatised and or commercial enterprise.
Between the dominating and the dominated, under capitalism the capitalists are dominant at each level, the proletarians are dominated at each.To comprehend the controlling class, this can be identified from the stronghold of clientelism and the ensuring political clientel relationship where ruling elites in the United Malay National Organisation (UMNO) [place] had aligned with economic oligarchs [positions] in accepting rentier capitalism to sustain their hold on [power]. They adopt this clientelism as solicitations for votes at the grassroots level, allowing ruling elites [place] the party patronage [position] and political [power] to “effectively partisanizing them and ensuring ground-level officials with whom most voters interacted with ……are political party loyalists” (Weiss, 2020), resulting in the skewed distribution of profits by political stakeholders – and the stark inequality of wealth permeating in the country (Khalid 2019):
Bumiputera in the top income groups (the top 1 per cent and the 10 per cent) benefited the most from economic development and its ensuing growth
There is every reason to say that patronage position is never moved from place prescence of ruling elite and the political power that oozes therefrom. Indeed, ruling elites are the biggest “owners” of divisional-level of UMNO constituency places with the office-bearing posts that defined political positioning posts with the ensuing power distributing spoils that emit therefrom. The ownership of the place loci, by situating in a position, the control of vested power elements is explicit.
To put it in another way, the strong growth in high-income Bumiputera occurred at the cost of a decrease in Chinese and Indians in the top income groups where the prime beneficiaries are the top 1% of the Bumiputera elites.
5 POSITIONING THE CLASS DIVISION
The two class processes of capitalism are defined as the extraction and distribution of surplus labour in the form of value. The class positions of the capitalist fundamental class processes are productive workers (performers) and productive capitalists (extractors). Capitalists appropriate surplus value from the consumption of labour power during the production of commodities. The surplus is distributed among occupants of subsumed class positions associated with say the state, merchants, financiers, landlords, managers and monopolies.
Therefore, class position is determined by the relationship of the individual to the appropriation and distribution of surplus value.That positioning presupposes a “place” is already in place or existence.
Thus, when AMMB Holdings Bhd agreed to pay RM2.83 billion to the Malaysian government as settlement on all outstanding claims and actions in relation to the AmBank Group’s involvement in the 1Malaysia Development Bhd (1MDB) corruption scandal – it is a distinctive demarcation of exploitative – and expropriative – capitalist banker’s class from the hardworking dues of the ordinary rakyat2.
Indeed, GLCs have always been used to aid the vested interests of power elites in three ways: first, to channel government-generated concessions to key constituencies to garner electoral support. Second, to allow for the appointment of politicians to the boards of GLCs to sustain party support. Third, to offer lucrative directorships to pre-empt party hopping.
6 TOWARD A SOCIALISM IDEAL
Any change to the capitalism mode shall require an introduction to socialism in the future. There is the consolidation of neoliberalism policies permeating throuhhout the whole country, and the stranglehold of parliamentary democracy with emergency ordanances; and the maintaining of a new stage of ethnocratic hegemonic leading to economic despair even among urban poors and instability in youth employment today.
Toward any sustainable high growth economic development there needs an assurance, and in place, of good governance and that rakyat2‘s money is optimally expended on socioeconomic wellbeing otherwise aiming high with neoliberalism economic policies shall undermine, and underdevelop, Malaysia developmental effort under capitalism.
Long-term – strategically – we need to visionise on building communal organizations and responsive governance to step onto a progressive path beyond capitalism and the capitalist state in economic development and socioeconomic management, and towards a socialist undertaking that shall benefit everyone than the very few, (Fred Magdoff, Ecological Civilisation; Ken Hammond, Beyond the Sprouts of Capitalism; Samir Amin, The Trajectory of Historical Capitalism).
7. Towards Socialism with Malaysian characteristics
Towards this process in striving the Socialism with Malaysia characteristics goal, there shall be a combination of planning and markets forming the basic socialist economic system. Second, we need to keep in mind the dialectical relation between ownership and the liberation of the productive forces that shall entail, then
(1) the system contains a multiplicity of components, but public ownership remains the core economic driver, with corporate capitals supplementing capital formation but without undue surplus value extracted from labour;
(2) while both state owned and private enterprises must be viable, their main objective is not profit at all costs, but social benefit that meets ‘people-centred’ needs from appropriate shelter, education equity to community-base healthcare, harnessing modern technologies towards social needs;
(3) it employs the primary socialist principle of from each according to ability and to each according to work, limiting exploitation and wealth polarisation, and ensuring common prosperity and wealth sharing for every rakyat2 wellbeing;
(4) the primary value should always be ‘socialist collectivism’ – gotong royong than bourgeois individualism and inflicted neoliberalism ethos.The emergence of such socialist democratic political practice shall embrace an organic unity of the components of socialist democracy which entails that the people are masters in the house supervising the servants of society through the socialist rule of law and the Federal institutional guarantees.
EPILOGUE
For socialism to work , one must have the culture of sharing, caring and an indelible sense of fairness .These cultures should be nurtured from young through an education journey that is participative and collaborating, joyful sharing in all challenges together.
Capitalism – by which people are less governed by social or religious ethic and more by politico-bureaucratic norms of efficiency and capital calculability – has, through alienation in labour, that sense of dehumanisation, a decline in enthusiasm for work and, eventually, a drop in productivity. The culture of caring and sharing is anathema to capitalism.
Socialist culture would, and can, universalise the positive values of cooperative sharing in community involvement for the better goods of everyone in a society, gaining a common prosperity to be equally shared by one people one nation in a common wealth.
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