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David Miller

The Role of Statism In the Colonial World

A Study of What the Need for Planning Does to Capitalism In Backward Areas

(Fall 1954)

From Fourth International, Vol.15 No.4, Fall 1954, pp.131-138.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).


IT WOULD be a stale truism to say that the events in the colonial world of the past decade have not been integrated by any unified conception into the general framework of Marxist world revolutionary perspectives and theory. Three major problems arising from the past revolutionary decade of colonial wars are:

  1. The nature of the state in China;
  2. the relation between permanent revolution and the emergence of new bourgeois states in Asia;
  3. the significance of the historically unique, developing economic structures of these new states as well as of other industrially backward areas.

It is as a contribution toward the formulation of a comprehensive Marxist conception of the worldwide colonial revolution – various in its forms, but all of them aspects of one socio-economic whole – that this presentation aims. Basic to our conception is the acceptance of an overall picture of the economy which, except as a series of isolated facts, has not been sufficiently appreciated in the movement’s analyses of the colonial world – specifically, the role of the bourgeois state in the economic process. A historical summary of the situation has not yet appeared in the Marxist press, and we must begin with this crucial feature.


The Indian nationalist movement has long recognized the indispensability of some measure of economic planning in their scheme for a new bourgeois India. In accordance with this view the famous Bombay Plan was issued in 1942. It is also known as the Tata Plan, because the main figures in its creation were a group of industrialists headed by Tata, the most important Indian industrial figure. The plan was essentially a detailed outline of a $33 billion investment program spread out over a period of three five-year plans, in which the government was to play an undefined, but central role. [1] This general orientation was confirmed in the government Resolution on Industrial Policy of April 6, 1948, which reserved for government investment the following industries: coal, iron, steel, aircraft, shipbuilding, communications equipment, railroads, oil. Existing properties in these fields were ultimately to be nationalized.

But the vast problems of organizing the new state compelled delay in the projection of a full-scale plan and the first five-year plan did not go into effect until 1952. Involved was a moderate goal of $4 billion new investment. Of this sum, roughly 10% was to take the form of industrial equipment, the remainder for power units, dams, irrigation, training, and agricultural reorganization. [2] (The seeming slight emphasis on factory construction and equipment is due to the immensely pressing and immediate crisis in agriculture.)

Of the new industrial plants, approximately half are expected to be built by private entrepreneurs. However the prospects of realizing these industrial goals cannot be discussed without consideration of the significant course of investment history in the postwar period. In the numerous previous partial efforts at government planning in investment, the share allocated to and expected of private capital has always fallen short of realization. Indeed, in the provisional projection of the most recent plan, on two occasions, revisions were made necessary, increasing the government share of projected investment at the expense of anticipated private. The growing lag in textile and other consumer goods allocated to the private sector supports the likelihood of unfulfillment of private responsibilities, and the consequent further disproportionality between the public and private sectors.

The entire history of investment and of the plan demonstrates incontestably that the Indian bourgeoisie “prefers” increasingly to restrict itself to light industry and commercial ventures. As a consequence, irrespective of formal policy decisions, the actual course of Indian economic development follows more and more that of a government-dominated economy. In attempting to fulfill the urgent needs of the economy, constant encroachments have brought government plans and realized investment into the following areas: fertilizers, chemicals, machine-tools, locomotive factory, instrument, cement, paper and pharmaceuticals. These are irt addition to those industries already preempted by law for the government.

Precisely what proportion of industry will be in government hands at the termination of the plan, is difficult to estimate, but plainly it is a rapidly growing proportion. And its future is equally plain from the knowledge that government investment in India will continue to be of the order of 75% of all capital investment, with the concomitant consequences of planning and state ownership.

As a result of the plan, it is estimated that output will increase as follows: coal 30% (35 million tons), steel 40% (1.5 million tons) and other industrial commodities an average of 100%. Despite this, no serious rise in consumption is to be expected, with the possible exception of food. The inflation of the past 12 years has driven real wages to below their pre-war level. Average per-capita cloth consumption has fallen from 16 yards to 13 yards; food consumption is only 92% of pre-war standards. [3] At the same time industrial production has risen considerably, particularly in producer goods. (Fuel-energy 180, cement 195, steel 170; 1939 equals 100.)

Expectations for the future as a result of the plan are for more of the same. Textile mills, for which a 40% rise over the plan had been projected, are in a slump in response to “necessary” continued low wages, while producer goods output has held up fairly well. The state intervention in capital accumulation seems therefore to be leading to nothing but a repetition of old bourgeois norms, i.e., the development of the means of production at the expense of the proletariat.

China Before the 1948 Revolution

The new phase of modern industrial history in China begins with the approximate unification of China by Chiang Kai-shek in the late 1920s. From the start, “peculiar” economic policies were projected. In 1928, Sun-Fo, the son of the founder of the Chinese Republic, was responsible for the projection of a long- and short-term plan for a $30 billion industrial development by state industry. The plan was quite utopian, but was followed at regular intervals by more modest plans in 1930 and 1932. [4] None of these were more than moderately successful. Several provinces, in the flush of national resurgence, produced their own plans. Kwangtung province had a three-year plan for a $100 million investment in basic industry (more than the total existing industrial capital in the province at the time) which was partially fulfilled. But continued internal instability, gross inexperience and vacillation conspired to reduce the plans to a level of secondary importance in terms of capital growth. Nevertheless, on a small scale, the state investment was never fully interrupted, and remained an indication of a hope and a policy, or, at the very least, a symptom of a struggle of policies. Doubtless one strong factor in this irresolution was the pressure of the comprador wing of the bourgeoisie, agents of western imperialism.

In 1935 the government role of industrial development was reorganized in its final form under the Natural Resources Commission, and was set off on a new three-year plan for a diversified industrial development including an additional steel capacity of 300,000 tons. [5] The outbreak of war with Japan in 1937 forced a reorganization of the Commission’s plans but from this time on it played the decisive role in China’s industrial growth.

The pressing need for industry during the war was met mainly by government funds and management. Between 1939-44, new investment in government industrial enterprises totaled 142 billion Chinese dollars. In the same period, private investment totalled 117 billion Chinese dollars, with much of this capital a government loan. [6]

In a policy statement of 1944, the government preempted for itself (the first halting gesture of its kind) all development in munitions (a vast all-inclusive segment of industry in a backward economy), power, mining, railroads, iron and steel, leaving the remaining sectors of the economy to private enterprise.

However at the close of the war the forces of experience and necessity compelled the government to a de facto violation of its own policy in dealing with the industry of the restored territories of Occupied China and Manchuria. This phase has been amply documented by Germain. [7] In addition to taking over all Japanese and collaborationist industry (the overwhelming part of Chinese modern industry) the government also established a monopoly in the merchant marine, the sugar industry of Formosa, and created a four billion Chinese dollars corporation for the further industrial development of Manchuria. [8] The end result of this process of appropriation was that fully 60% of China’s industrial capacity was nationalized.

One consequence of this lump-sum nationalization must not be ignored. Insofar as heavy industry was concerned, cutting off the source of experience and training for the classical bourgeoisie as well as the source of private capital accumulation, made it inevitable that the future development of industry would also proceed in the channel of state enterprise or not at all. It is this historically unique political economy to which the Chinese Communist Party fell heir upon coming to power.

But before proceeding to the policy of the new regime, it will be of interest to glance at the economic structure which the Kuomintang forces have created and maintained on their last retreat, Formosa. This island of eight million inhabitants has today, under Chiang Kai-shek, proportionately more statified economy than any area of the world outside the Soviet Union. The state has a practicing monopoly in the following industries: aluminum, cement, coal, fertilizer, gold and copper mines, shipbuilding, petroleum, electric power, pulp-paper works, steel works, machine manufacture, sugar mills, chemicals. It also operates nine textile mills with half the output of the island. In addition the state operates 186 sugar plantations covering half the total acreage in sugar and employing 200,000 laborers. [9] No, nationalist policy on planning of nationalization on the mainland of China was not a freak, but an inevitable bourgeois response in an all but impossible situation.

The New China

The participation in a real, not merely window-dressing role, of bourgeois groups in the revolutionary government, the theoretical declarations of the Chinese Communist Party on the relation between state and private capital (and the numerous supporting decrees), the actual protective course pursued by the CP during the agrarian revolution toward all non-land capital, have all been previously and amply documented, particularly in the work of Germain. Apart from the land question, the policy for industrial development of the CP is essentially a continuation of that of the previous regime!

Catapulted to power, the new government proceeded to nationalize the property of bureaucratic capital, i.e., those elements intimately tied to the Chiang regime who fled to Formosa. By 1952, 80% of all heavy industry was in government hands, and 30% of light industry. [10] But apart from these political expropriations, the situation was not changed qualitatively in comparison with the condition of state economy under Chiang. The state retains dominance in heavy industry (and must extend this); light industry and commercial capital remain largely in private hands. [11]

It is not, however, the strength of the classical bourgeoisie which is responsible for this reservation about private enterprise. The real limiting factors to fuller nationalization lie in the technical and administrative backwardness of the bureaucratic apparatus, and in the poverty of the economy, resulting in the enormous difficulty of integrating the public and private sectors of the economy, and in government control and planning in general. The recent five-anti’s and three-anti’s movements were a reflection of this problem, as is also the fact that these campaigns have not been followed by any tendency toward further expropriations among the numerous investigated private firms.

As in the other Asiatic states, the policy of the Mao regime toward foreign capital is not a hostile one. Not only is domestic capital protected, but foreign as well. [12] An exception to this policy may have been made in regard to American properties, as a response to the refusal of the US government to release Chinese funds in American banks to the new regime. There is no reason to believe that the government would not welcome and encourage foreign investment, on policy considerations. The $50 million annual capital loan from Russia is an insignificant amount for China’s immediate needs and capacity to absorb capital, and even runs a poor second to US loans and grants to India, which are approximately double this amount.

As to current and future capital accumulation in China, its distribution between the public and private sectors, no significant data is yet available; consequently it has been impossible to determine the actual source of the capital or to compare the rate of development with that of India. However, if one is to be at all guided by government policy statements, it seems likely that it is the area of government heavy industry and development which will continue to absorb the predominant share of new capital in China.


The Dutch government of pre-war days pursued a policy in Indonesia somewhat distinct from that of the other imperialists in Asia in several significant aspects. An outstanding example was the fact that no non-Indonesian could own agricultural land. The large estates for industrial agriculture could only be on leased land, and for the most part, land not previously cultivated (hence the concentration of estates in thinly populated Sumatra). To this policy was due the unusual degree of survival in Indonesia of ancient communal land distribution and the relatively low concentration of land ownership.

But paralleling this attempt to preserve some aspects of the pre-Dutch economy, was the failure of Indonesia, perhaps more than any other Asiatic colony, to develop its own bourgeois class. The role of this class – to supplement the western bourgeoisie in the exploitation and development of the country – tell to the Chinese immigrant (commercial investment) and to the state. Consequently, even in the pre-war period the government owned two-thirds of the railroads, all telephone and telegraph, 60% of electric power, 75% of coal output, 60% of the tin mines (and five-eighths interest in the rest).

At the conclusion of the struggle for independence a policy of industrial development was accepted universally, and all major parties claimed to aim at a socialist commonwealth. The constitution (Article 38) states, “The national economy shall be organized on a cooperative basis.” But in the short run, the ruling groups agreed that this would preclude expropriation of foreign properties due to the great capital shortage and the need for foreign help.

In 1950, the first industrialization plan was proposed, the Sumitro plan, oriented about the construction of relatively small plants, complementary to the basic agricultural products of the islands (wood-pulp and paper, rubber milling, tiles, plywood, spinning and knitting mills, jute bag plants, cement, saw mills, chemicals, aluminum plants, fertilizer, glass, scrap reduction plants. Unlike India, however, there was almost no counterpart private investment to supplement development. Private capitalism restricts itself to commerce despite generous government offers of loans, so that in industrialization the field is yielded almost entirely to the state. The only other source of growth has lain in the field of industrial cooperatives, which, facilitated by strong communal tradition and government policy, now number 1,500, employing 218,000 workers. [13] These exist mainly in handicrafts.

But it is not only native capital that is not forthcoming. The huge foreign-owned investments, while guaranteed by the state, are no longer the viable economic units they once were. (The very obviously unfinished state of the revolution in Indonesia in the city as well as on the land has resulted in paralysis and even some exodus of private foreign investment.)

The major capital holdings, those in industrial agriculture, are hard hit by a dual problem, the general hostility to foreign capital and the growing food crisis. During the war, the Japanese, unable to use all the products of Indonesia’s vast industrial agriculture, acquiesced in the return of land to food production to meet the growing shortages. As a result many estates (particularly in Sumatra) were divided by the peasants into small holdings. Thus far it has proved impossible to reconstruct these estates, and the attempts to do so are partly responsible for the Darul Islam movement. Naturally this does not serve to encourage further private investment, though the capital shortage is very severe. One consequence is that even in estate agriculture the state has been largely responsible for the necessary reconstruction. But to this day, the real and incipient war in the countryside is such that even at the peak prices and demand of 1951 (Korean war stockpiling), the production of raw material for export was only 60-80% of 1938. [14]


In Burma we find a territory in much the same position as Indonesia, yet meriting distinct treatment for the unusual political features of the regime. Here too we find an insignificant native bourgeoisie, whose role is usurped by British and even Indian capital. Burmese industrial capital is almost confined to the smaller rice mills.

After independence was attained under the leadership of the Socialist Party, a Constitution and policy were promulgated much more specifically “socialist” than in any other state in Asia. Under the Land Nationalization Act (Nov. 4, 1948), land was nationalized, and individual holdings limited to a maximum of 50 acres, except for producers cooperatives. Also nationalized were all rice mills (an industry employing half the industrial labor force of the country), as well as the distribution and sale of rice. Under Articles 44 and 219 of the Constitution, state enterprises were to have a monopoly in arms, railroads, power, communication, chemicals, iron-steel, extractive industries.

As usual in these cases, the state in practice was forced beyond even these industries into almost every field. Thus river transportation has been nationalized, and government plants were constructed in textile, glass, salt mines, cement, paper, fertilizer, jute bags.

In 1950, a development plan was introduced covering 1951-59, and involving $1.5 billion. It is difficult to determine to what degree this is being realized. But it is quite plain that private domestic capital is playing practically no role, remaining restricted in practice to commerce.

The predominant role of the state in investment and production is not altered qualitatively by the fact that foreign capital still retains some hold in the country. The vast capital requirement for reconstruction of the oil industry has discouraged the government from nationalizing it to date on the premise that only foreign capitalists could supply the needed resources. The policy is, in fact, one of encouraging more private foreign capitalism, but so far very little has been forthcoming, due no doubt to the overall industrial policy of the regime and the persisting revolutionary situation.


It is, and indeed should be, a genuine source of theoretical concern, to find this formation of similar economic structures developing within a group of countries encompassing the widest range of seemingly divergent political superstructures – the Formosa and China of Chiang Kai-shek and of Mao Tse-tung, so-called socialist Burma and overtly bourgeois India. It is possible, however, to demonstrate that these superficially diverse states are really but different manifestations of a common social necessity in much the same sense that it was possible to understand Hitler Germany, Social Democratic Sweden, and pre-war Japan all as expressions of bourgeois society, despite their certainly non-classical character. The full concrete reality, the diversity in appearance, can, of course, be understood only by an analysis of the general socio-economic problems facing this group of countries, the manner of attempted resolution of these problems, and the specific historical circumstances in which the attempt was made.

The Economics of Statification

There is an extensive Marxist literature on the subject of the role of imperialism in impeding the industrial development of the colonial areas. Three major factors seem to be responsible for this, and they need only be mentioned here.

  1. Certain industries were not permitted for competitive reasons.
  2. The most profitable industries (extractive) were reserved for European capital, depriving the home economy of a great source of ready capital accumulation.
  3. The political necessity of preserving power imposed a policy of encouraging “feudal” social relations and repressing the dynamic potentialities of urban-industrial development.

Valid as this analysis is, it is certainly inadequate, being incapable of explaining the failure of independent semi-colonial countries to mature industrially (pre-war Eastern Europe,

South America). The significance of the analysis rests essentially upon the relationship it bears to that central organizing principle, the problem of capital accumulation and investment. Within this framework we can recognize that there are other equally important problems on the road to capital accumulation, and that the traditional analysis is therefore incomplete.

The forced involvement of the Asiatic countries in the world market imposed upon them for the first time the revolutionizing tasks of capital creation. We are accustomed to speak summarily of the backwardness of pre-revolutionary Russia, and of the overriding significance of this condition. How much more so this is true of Asia is rendered graphically clear by one simple index. In 1913, Russia had a steel capacity which, in per capita terms, was more than ten times that of India or China in 1950 – 4.2 million tons vs. approximately one million tons.

This imperative necessity to accumulate is buttressed by the fact, which history so amply demonstrates, that failure to do so yields not stagnation, but relative and absolute decline! The overwhelming necessity and the method by which it is attacked, determine the character of all policy; and it is this common situation and method that impose their stamp upon seemingly diverse regimes. Above all stands the tremendous contrast between the indispensable minimum capital requirements (determined by political as well as economic pressures) and the quantities realizable under given social relations.

In advanced countries, the problem of capital accumulation is comparatively simple. Our whole economy, way of life, is geared above all else to this one demand. So much so that we forget that to a feudal or agrarian society, capital accumulation is almost incomprehensible. Such societies are geared about wealth production, not capital formation. The transformation in Europe from the feudal to the bourgeois conception of wealth took centuries.

Asia, an agrarian society, is to this very day still essentially wealth and not capital oriented. Surpluses are not invested, but rather kept in hoards of bullion, luxury goods, or sent abroad. In the more “dynamic” sectors, wealth can be invested in trade, speculation, but only rarely in genuine capital construction. Due to the late arrival of capital accumulation, the incipient bourgeoisie is faced simultaneously with the historically most mature impediment – revolutionary class struggle.

Capital scarcity is, of course, a relative conception. Asia has been sufficiently shaken by the impact of industrialism to make it likely that if these nations could be isolated from the world market, capitalism would slowly but surely grow, much as it did in Europe in the late middle ages. But the concretely overwhelming links to the world market pose a problem which Europe (outside Russia) never had to face regarding the rate of capital accumulation. The nature of capitalism, and of the market, demands that as each country enters the sphere of capitalist production it must do so at the highest level reached by industrial civilization up to that point. Nothing short of this level will do if the economy entertains serious perspectives; any lower level can lead only to stagnation. This is, of course, “old hat.” But to say that Asia enters industrial society in the period of the emergence of atomic energy is to dramatize, without departing one iota from reality, the enormous leap that must be taken. The law of combined development takes the stage with a vengeance.

Perhaps some explication of the meaning of catching up today may not be superfluous. Industrialization involves more than the use of the latest technical apparatus. The scale of operations of modern industry is such that the unit of capital expenditure in under-developed areas is not the plant, but a coordinated group of industries. Thus setting up one modern steel mill in India would mean a minimum increase of 25-50% in her steel capacity. A change in output of such scope could not be met by a mere internal expansion of all the industries and services related to steel. Instead one would simultaneously have to open up new coal and iron mines, quite possibly new railroads, electric power units, schools for training labor, perhaps new cities and certainly additional steel fabricating plants to absorb the qualitatively new steel capacity. [15]

To all this, one must add the revolution in culture involved in the overnight creation of a labor force for modern industry. Students of the history of the creation of the contemporary Soviet labor force will not be prone to underestimate the magnitude of this aspect of industrial revolution. Under these circumstances, the development of Asia by capitalist means can only be achieved under conditions socially tumultuous and unbelievably costly in human terms.

Under such conditions it becomes equally clear that the demands of accumulation involve the utter inadequacy of classical techniques of accumulation: i.e., that only the state can now perform that historic function of the capitalist on the requisite scale. This new function of the state and the new demands upon the scope of investment predicate a leap from the most primitive forms of capitalist organization to that of the most advanced (in principle), namely, state planned economy.

Planning per se is of course not always a substitute for the rigors of capital accumulation; it can, and does, as easily provide the weapon for the most absolute, most thorough exploitation known to man. For, indeed, it is only via the state that the most concentrated techniques of accumulation (in its two-fold aspect) can be introduced in contemporary society – -the repression of the proletariat, and the most efficient tapping of the incomes of every segment of the population, by taxation or other methods of “forced saving.”

Where this development proved impossible, or delayed, as in pre-war colonial areas under direct imperialist domination, it is hardly surprising to find that, historically, the emergence of a bourgeoisie in the classical form was of necessity art abortive one. The best that these economies were able to manage up to now was a bastard development, the comprador capitalist, so prominent throughout the colonial world, the marginal entrepreneur who lives in and through the limited industrialization carried out by the imperialists.

The logic of the condition in which they find themselves has not been lost upon the more dynamic, non-feudal elements in colonial societies, and is now almost universally accepted. This appreciation has been greatly facilitated in Asia by several historical factors whose impact is quite well-known.

  1. The powerful strain of communalism that persists throughout Asia in the form of clan and family rights and obligations taking precedence over individuals. The ideology of cooperation and group priority remains a powerful barrier against bourgeois-individualism. (Communal property is still quite common in Java, India, and China.)
  2. The ready consistency of communalism and state organization of economy with the objective needs of the time.
  3. The hostility toward colonial imperialism is easily and naturally extended to include a hostility to its ideology and social organization.
  4. The crisis of capitalist economy and ideology since 1914, which is especially obvious to outsiders.

The Politics of Statification

“The nationalization of railroads and oil fields in Mexico has of course nothing in common with socialism. It is a measure of state capitalism in a backward country which in this way seeks to defend itself on the one hand against foreign imperialism and on the other hand against its own proletariat.” [16] (My emphasis. – D.M.)

With this penetrating analysis of a concrete instance of nationalization (and under trade union management!) Trotsky presents us with the political necessity for the new role of the state. So perpetual, so all-embracing is the crisis of the colonial areas of the world, that the preservation of bourgeois society demands that the state take direct charge, in one final decisive effort at disciplining the revolution and the new additional revolutionary impulses which efforts at industrialization must unleash.

The major source of the vast revolutionary mass movement which has swept the entire colonial world is the unchecked decay of Asiatic economy during the past hundred years, and particularly during the recent period of western decline. The destruction of a vast class of artisans and small-scale industry by the intrusion of the world market compelled a mass retreat to the soil, involving the destruction of a tenuous balance between city and farm, between production and population, that had been preserved for centuries in the stagnant but not declining economies of the pre-capitalist states. As a consequence, per capita output in agriculture began an uninterrupted decline; because of surplus labor, farms were broken into even smaller less economic units, and the entire economy” took a nosedive. Within the past 15 years alone, India has suffered a 10% decline in per capita food consumption. In Java (an area of few estates) 96% of all arable soil was under cultivation in 1936, yet population Was increasing at the rate of 1½% per annum. Throughout the area, urban life on the whole was in relative decline. Every stratum of the population writhed under this impossible restriction of life!

But if to this improverishment and decay we add the prospect, the daily image, of a better way posed by the very existence of imperialists, their technology, the slight industrialization and the dribble of their goods into the economy – i.e., the vision of abundance – then every degree of decline necessarily propels the revolution forward. A seemingly exaggerated, yet an important pure case of this phenomenon, the contradiction between declining reality and rising expectations and demands, was given us by a movement among New Guinea laborers upon the final withdrawal of American troops in 1946. The return of the Australians, and their lower wage policy for natives, caused a strike among these sons of headhunters for a 4,800% increase in wages and an American diet!

The attempt to resolve these vital problems of the economy by intensified industrialization requires statification of production for reasons beyond the economic indispensability of planned integrated development. The unbelievable capital poverty of these states imposes upon them a program of capital accumulation which, under bourgeois conditions, can only be realized by the most barbarous direct exploitation of the proletariat precisely at a time when its expectations and demands for improved circumstances are at a new peak.

Thus pressed by economic and political necessity – the attempt to meet the revolution, to master it, to develop the economy and thus meet the urgent revolutionary demand for production – the situation is approachable for a bourgeois resolution only through some variant of state-dominated economy. And now, in the fullest sense of the word, the state in all its functions and fullest potentialities is revealed beyond disguise as the executive committee of the capitalist class – the state as the “personification of capital.”

The Historical Circumstances

The abstract realization that a social system is at an impasse, and the availability of a “solution” (in this case statification of production), does not guarantee that the society will be able to muster the resources for the requisite effort. For example, the urgent necessity of economic and political unity of Europe is quite clear to everyone in Europe, even to most sections of the bourgeoisie. Despite this, to all appearances the decay is so deep that bourgeois Europe seems quite unable to consummate even this secondary effort. So in the colonial countries, understanding is not invariably followed by action. Here politics, history play their role.

The traditional response of the colonial bourgeoisie to revolutionary anti-imperialism was governed by fear of the permanent revolution, the fear that once the masses entered the scene and expelled imperialism, they would move on to the destruction of bourgeois society itself. The need of the native bourgeoisie for national independence and the elimination of the feudal elements in society was therefore met by only half-hearted, com-promisist attempts, with which the history of the inter-war period is replete.

And this remained the perspective of the native bourgeoisie until devious history demonstrated that in conditions of great revolutionary upsurge and weakened imperialism, the revolutionary masses could no longer be suppressed, contained, and that the only slight remaining chance for both domestic and foreign capital lay in the surrender of political power by imperialism and its assumption by the native bourgeois classes, or in most cases, by its “socialist” representatives.

The revolutionary history of Asia over the past decade is actually not too well known. It is very sparsely documented. Our analysis is therefore of necessity sketchy. But the main outlines of some of the processes are reasonably distinct.


Even before World War II broke out, sections of the nationalist movement, including the Socialist Thakin movement, had established close ties with the Japanese government, which promised to supply funds, arms and military training to the anti-British movement. These promises were only partially fulfilled, but one of the Burmese who received military training in Japan was Aung San, the future leader of Burma. [17] Under such circumstances it is hardly surprising that the outbreak of war in 1941 was greeted as the first step toward Burmese independence (an illusion widely shared throughout Asia) and led to the immediate formation of the Burmese Independence Army (BIA) which helped in the defeat of the British in Burma.

Though hardly an independent regime, the Japanese did institute a government in Burma with far more power and participation for the Burmese than the British had ever granted. Burmese were appointed to all government positions, internal authority was extensive, and the BIA was maintained as a sizable armed force. Plainly, these were the minimal concessions consistent with maintaining order; i.e., preventing revolution. The vast territory to be administered, the awakened, confident, militant nationalist movement made a deal with the native ruling class absolutely necessary – risky though it was.

But these concessions were not sufficient to counterbalance the demand for full independence, or to compensate for the enormous demands which the Japanese began to make upon the conquered areas. Interrupted communications, general industrial shortages, the need for defense works, compelled the Japanese to forced requisitioning of labor and supplies which were far beyond the capacity of the economy. The net result was that a raging inflation set in by 1943.

When indications arose that the war was turning against the Japanese, the desperate occupying power could only attempt to halt the rising tide of hostility by declaring Burma independent in August, 1943. In what must have been an astonishing response, the declaration was the signal for the outbreak of a vast peasant war against the Indian land-owning class. Fleeing to Rangoon, the landlords received asylum, but neither the Japanese nor the Burmese regime dared to intervene to protect their property rights. [18]

The growing economic crisis, the growing certainty of Japan’s defeat, caused a split in the nationalist movement, and, led by a cabinet minister of the government, Aung San, the anti-Japanese movement was organized as the Anti-Fascist Peoples’ Freedom League (AFPFL). Like the Chinese revolution, the mass base of this movement, and of its largest component party, the Socialist Party, lay in the peasant associations which had arisen during the land seizure of 1943, and which were apparently led by socialists. For the AFPFL, the road to independence lay not in opposition to both imperialist camps. This would have been much too “impractical.” Above all, the first maxim of opportunist and bourgeois politics is “Alone with the masses? Never!” Instead it proposed to achieve Burmese independence by aiding the British in their reconquest of Burma in 1945.

It must be confessed that the documented role of the proletariat in the period under consideration is obscure. The primitive, tiny Burmese working class (only 100,000 in modern-type industry) did not have its first experience as a class until 1938-39, which marked the real beginning of the Burmese Union movement and its first significant strikes. But these strikes were already semi-political. The year 1941 witnessed a second, broader wave of strikes and efforts at the organization of an All-Burma Federation just six months before the war. Here information of independent class action ceases until September 1946, when the first general strike in Burmese history took place, with a dual aim – wage increases from the predominantly foreign capital, and a demonstration for immediate independence. The unions were led largely by elements in the AFPFL, but to the left of the dominant Aung San Socialist Party.

Marxist surmisal would be that this perilous general strike played no small role in convincing the British of the necessity to grant the Burmese demand for independence (negotiations were then in progress) and thus hand over the power to a native class of urban petty-bourgeois elements linked with the new small-peasant landholders.


To a startling degree, events in Indonesia followed closely the pattern of Burmese developments. Here too the nationalist movement accepted the Japanese, and held considerable power under it, including a military force. Under influences and pressures similar to those in Burma, but more intense (1,000,000 laborers deported from Java alone, food consumption down by 25%), a pro-Allied wing soon split off, entering into moderate opposition to the Japanese-dominated regime, but without reaching the success of the AFPFL. As in India and Burma, the two wings of the nationalist movement were not hostile to one another – neither Soekarno nor Bose was considered a Quisling – but rather considered one another hedges against the victory of either imperialist group.

Imminent defeat, the desperate search for allies, the rising wall of hostility, prompted the Japanese to offer the Indonesians independence, and on August 17, 1945, the Japanese-sponsored “Committee for the Preparation of Independence” proclaimed the Indonesian Republic. It was to be three years before the Dutch could bring themselves to realise that the revolution was irreversible.

As in Burma, the role of the proletariat as a class in these events is still obscure in terms of available information. If one includes the proletariat on the plantations, i.e., industrial agriculture, then the industrial proletariat numbers no less than 1½ million workers in modern industry. But the pre-war repressions of the Dutch were if anything even more severe than those of the British; trade union membership in the Indies never reached above 90,000, of which many were European white-collar workers. During the 1930s, the peak strike year recorded 42 strikes involving a total of 2,115 workers. The precise form in which the working class participated in the booming revolutionary movement which followed the Japanese invasion, is difficult to determine in view of the complete absence of any detailed history of this period. Undoubtedly, the economic and political crisis, the reflected revolutionary movement, assumed some independent working class forms such as unions. Very possibly on the plantations the revolutionary organizations and the class organizations were often synonymous; but, either during or immediately after the declaration of independence, the movement reorganized itself on distinct class lines, and a period of intense class struggle ensued – a struggle which is today, and has been since the very birth of the republic, the primary immediate problem facing the new regime. Today, probably 80% of the proletariat is in the union movement.

We have already referred to the division of many large European estates during the war and the refusal of peasants to relinquish the land which is so desperately needed for food production. The war against the Dutch extended this incipient peasant war, directed it now against the relatively powerful feudal landlords in Sumatra (the remaining stronghold of feudal property). Considerable land redistribution was effected in this manner.

* * *

In these two developments it is abundantly clear that:

  1. faced with a movement which had already experienced a considerable measure of independence, and had already organized a state and an armed force, to have refused recognition of independence would only have resulted in pushing the revolution to the left;
  2. the experiences during the war precluded any possibility of profitable exploitation in the old way by imperialism; and
  3. any effort to do so could only result in the situation we saw in Indochina, i.e., one that drained the life-blood of both contending parties. (It is notable that after eight years of war, the French cannot attain more than a toe-hold even in the ruling native class! Even the Assembly, hand-picked from the most reactionary wing of the Indo-Chinese bourgeois-feudal class, demanded an end to the French union, and recognized that without independence, all is lost for themselves and the French.)

It is in this matrix of economic, political and historic events and conditions, that the colonal revolutions of the past decade, and the economic statism which characterized them, become a comprehensive unity and reality.


1. Far East Survey, 1945, p.137.

2. Eastern Economist, Mar. 6, 1953.

3. Report on the Indian Economy, Pacific Affairs, 1949.

4. H.D. Fong, Toward Economic Control in China.

5. C.Y.W. Meng, Survey of China’s Industrial Development, China Monthly, June-July, 1946.

6. Ibid.

7. Fourth International, Nov.-Dec., 1950

8. Far East Survey, 1946, p. 296.

9. Report of the National Resources Commission, Taiwan, 1951.

10. China Reconstructs, Jan-Feb. 1953.

11. In terms of employment and resources used, the specific weight of light industry is much greater in backward areas than in developed economies. Thus, for example, in one industry which remains in a semi-handicraft stage, paper manufacture, in Chekiang province alone in 1929, in 24,000 mills employing 125,000 workers, capital investment in each mill ranged from $1,415 to $14 and the number of workers varied from 17 to 2. Outside of textile goods, most mass consumption goods are produced under such conditions (pottery, bricks, flour, oil, wine, lanterns, etc.).

12. Open Letter of Peng Shu-tze, The Militant, Nov. 2, 1953.

13. US Information Office, Republic of Indonesia, Report on Indonesia, Oct. 1, 1952.

14. Ibid.

15. This disproportion arises occasionally even in the economy of advanced countries, and is to some extent the case with some recent gigantic investments in Canada.

16. Leon Trotsky, Trade Unions in the Epoch of Imperialist Decay.

17. Thein Pe, What Happened in Burma.

18. V. Thompson, Labor Problems in South East Asia.

Steve Zeluck   |   ETOL Main Page

Last updated: 31 March 2009