"Rent-seekers" or real capitalists? : the riddle of Malaysian capitalism
Date
1994
Authors
Searle, Peter Whitford
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Abstract
This study argues that the nexus of business, politics and the state which has been central
to the capitalist upsurge in Southeast Asia (McVey, 1992:9) has also been central to the
rise of Malay capitalism and the transformation of Chinese business in Malaysia. That
nexus is intimate in Malaysia where the government through the New Economic Policy
(NEP) has sought to create a Malay commercial and industrial community, in short Malay
capitalists. In the process of creating Malay entrepreneurs the study shows how just as
the boundaries between business, politics and the state became blurred in the Malaysian
context there, as indeed elswhere in Southeast Asia, it is no longer easy in many cases to
distinguish between “rent-seeking” and true “productive” capitalism, between pariahs and
entrepreneurs or between patrons and clients. But from this amalgam what sort of
capitalism and capitalists have emerged in Malaysia? To throw light on the character and
strength of Malaysian capitalism answers are sought to two questions. First:
Has government manipulation created new sources of entrepreneurship or
only fostered rentiers?
The study identifies the complex interaction between the state, party [UMNO] and
business as the source of dynamism or defeat in the development of Malay capitalists. It
argues that significant changes are taking place in those relationships, while at the same
time more Malay groups are developing a greater independence of patronage - changes
that suggest it is imperative we keep our view of the nature of Malay capitalism open to
revision. But, just as the growth of Malay capitalism is more variegated than generally
supposed, so this survey of Malaysian capitalism also seeks to illuminate the change and
transformation occurring among Chinese business groups. So the second question
addressed is:
Have Malaysia's political circumstances trapped Chinese businessmen in
dependency relationships similar in kind if not degree to Riggs' pariah
entrepreneurs?
After a survey of Chinese business groups the study finds that analyses in the 1980s
which have described the relationship between the state and Chinese [as well as foreign]
capital as discrete entities and in antipathetical terms, no longer seem appropriate to the
more complex and complementary character of those categories in the 1990s. At a general
level this survey also challenges a common view that Chinese capital is completely
different to Malay capital. There are differences, but increasingly there are important
points of similarity in the manner of their growth, their relations with the state and the
UMNO leadership, and their credentials as capitalists.
Overall the study argues against drawing sharp contrasts between dependency and
self-reliance, between state and capital, and between rent-seekers and true productive
capitalists. For it is from that amalgam of categories and groups that this study shows a
form of capitalism emerging in Malaysia which is nonetheless remarkably dynamic,
vibrant and resilient despite its ‘unorthodox’ origins, and already well integrated into the
increasingly complex product cycles and investment patterns of the rapidly growing
Asian region.
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