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Burma’s Economy in the Twentieth Century

Author(s):Brown, Ian
Reviewer(s):Tarling, Nicholas

Published by EH.Net (August 2015)

Ian Brown, Burma’s Economy in the Twentieth Century. New York: Cambridge University Press, 2013. xii +229 pp. $30 (paperback), ISBN: 978-1-107-68005-0.

Reviewed for EH.Net by Nicholas Tarling, New Zealand Asia Institute, University of Auckland.

In his latest book, Ian Brown, research professor in the economic history of Southeast Asia at the School of Oriental and African Studies, University of London, complains that too often the regime in Burma/Myanmar is viewed from an unduly short perspective, one taking its starting point from the defeat of the democracy movement of 1988 and what he calls, for no clear reason, the “apparent” disregard of the results of the subsequent election by the military junta. Nor is he happy to accept the viewpoint of those who go back as far as the gaining of independence in 1948 and declare that the prospects, then fair, were destroyed by decades of mainly military rule.

His well-written book argues that, if we want to understand “Myanmar” now, we should go further back, at least as far as the nineteenth-century imposition of the British regime, particularly after the second and third Anglo-Burma wars. Brown points to the creation of a rice-exporting economy through the opening-up of the delta regions by hard-working Burman peasants backed by Chettiar moneylenders from India in what was at least in that respect a market economy. Indeed the British authorities did little to intervene when, as Brown points out, the system displayed its flaws: good land ran out, productivity fell, and during the Depression land was taken over by Chettiars who had no wish for it and no means of working it.

In the twentieth century most of the rice exports went to India. Brown also points to the other connections with India, strongly urging some arguments already familiar to historians. Making “British Burma” a province of India meant that British administrators tended to ignore the special character of the country and neglect or by-pass its traditional institutions. It also meant that Indians took up many of the new opportunities that the occupation opened up, in administration, in policing, in wharf and mill labor. Rangoon was an Indian town, as Brown puts it.

Even so Burman nationalists advanced their cause in the interwar period by cruising on the back of Indian reformers, and then through the Japanese conquest. But they were deeply resentful of the hold the Indians had secured pre-war, and deeply opposed, too, to the major British firms that had secured overall control over large sections of the economy. Brown argues that the perception of that control — as well as its actuality — was a strong motive with Burma’s leaders when they secured independence. Under Nu in the 1950s, the government pursued policies designed to destroy the colonial framework that seemed so alien, though they involved replacing it by other policies deeply influenced by the West, nationalization, industrialization, and Burmanization of the labor force, the Indian component of which had already been depleted by the war.

To what extent the elite’s choice of policies was accepted by the masses is not discussed. But, as Brown says, Ne Win’s military regime went on to pursue these aims with greater “ferocity” after it definitively installed itself in 1962. The result, he argues, was disastrous. Burmans did not have the training to administer the elaborate all-level command economy they envisaged, and the military — unlike Suharto’s in Indonesia — were not prepared to make use of those who were expert. The state itself was weak, though the regime might be strong. It crucially lacked the revenue essential to a modern state. It also opposed foreign direct investment, while there was no equivalent in Burma of the Chinese capitalists of Malaysia or Indonesia. Autarchy could not succeed.

The post-1988 regimes turned to the free market, but not, Brown suggests, with any conviction. The government still intervenes when it sees fit; the army itself is in the market as well as the government. In accounting for the slow advance of the economy, Brown believes, foreign economic sanctions were less significant than government policies.

In offering these conclusions, he comes rather close to undermining his initial argument, and we seem to need an explanation of the army’s additional “ferocity” and of the SLORC/SPDC governments’ tendency to retain the habits of the Ne Win regime they succeeded. Remarks Brown makes in the concluding paragraphs could perhaps have been incorporated and elaborated earlier in the book. The priorities for all the regimes since 1948 have surely been to hold the state together and to avoid internal disorder. The military believed their answer was better than Nu’s. But the object was the same.

Not much is said of the links with China, so restrained under Ne Win, so greatly expanded after 1988-89. But in the concern to preserve the regime — and the state itself — the governments of the two countries seem to have a common challenge, and in meeting it the ideology of the market has if necessary to give way.

Nicholas Tarling, formerly Professor of History at the University of Auckland, is now Fellow of its New Zealand Asia Institute. His book, The Fourth Anglo-Burmese War: Britain and the Independence of Burma, was published in 1987. Subsequently he edited the Cambridge History of Southeast Asia and published other books on Britain’s policies in Southeast Asia after the Pacific War. His latest book is Orientalism and the Operatic World (Rowman and Littlefield, 2015). Email: n.tarling@auckland.ac.nz

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Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII

David Ricardo

David R. Stead, University of York

David Ricardo (1772-1823) was one of the greatest theoretical economists of all time. The third child of Abigail and Abraham (a prosperous Jewish stockbroker who had emigrated to London from Holland), Ricardo attended school in London and Amsterdam and at the age of fourteen entered his father’s business. In 1793 he married a Quaker, Priscilla Wilkinson, with whom he was to have eight children. The couple’s different religious backgrounds meant that the marriage created a rift with both their families, and Ricardo was forced to set up independently as a broker on the London Stock Exchange. Ricardo, though, prospered in the financial business to a far greater extent than his father, amassing a fortune of about £700,000 (equivalent to approximately £40 million today).

Ricardo became interested in economics in 1799 after, apparently by chance, reading the work of Adam Smith. He subsequently published pamphlets and articles analyzing various economic problems of the day, including the stability of the currency and the national debt. After some struggle (“I fear the undertaking exceeds my powers,” he wrote), his classic work, The Principles of Political Economy, appeared in 1817. Two of Ricardo’s most important contributions were the theory of rent and the concept of comparative advantage. The former, which drew on the writings of (among others) his close friend and critic Robert Malthus, defined rent as “that portion of the produce of the earth which is paid to the landlord [by the tenant farmer] for the use of the original and indestructible powers of the soil.” Rent, Ricardo argued, is what remains from gross farm revenue after all the farmer’s production costs have been paid, including remuneration for the capital and labor he had expended on the land. It is an unearned surplus (now referred to as an economic rent) in that its payment is not necessary to ensure a supply of farmland. For Ricardo, rent arises from the advantages that one site has over another due to differing degrees of soil fertility: rent per acre is highest on the most fertile land, and declines to zero on the worst quality soil.

Comparative advantage, Ricardo believed, ensured that international trade would bring benefits for all countries; his theory remains the foundation of the economic case for free trade today. He argued that each country should specialize in making the products in which it possessed a comparative advantage, that is could produce relatively efficiently. Portuguese sunshine, for example, gave Portuguese entrepreneurs a comparative advantage in producing wine, whereas England’s wet climate meant that her comparative advantage was in making cloth. Ricardo showed that, by specializing in production and then trading, Portugal and England would each achieve greater consumption of both wine and cloth than in the absence of international trade.

Not surprisingly, then, Ricardo opposed the protectionist Corn Laws in place during his lifetime, and upon retiring from the Stock Exchange in 1819, made his case directly to the House of Commons as the member for Portarlington, a pocket borough in Ireland. Ricardo’s Parliamentary career was influential but brief: four years later he died suddenly after contracting an ear infection.

Bibliography

Henderson, John P. with John B. Davis [Warren J. Samuels and Gilbert B. Davis, editors]. The Life and Economics of David Ricardo. Boston: Kluwer Academic, 1997.Hollander, Samuel. The Economics of David Ricardo. London: Heinemann Educational, 1979.

Ricardo, David. On the Principles of Political Economy, and Taxation. 1st edition, 1817. Harmondsworth: Penguin reprint [R. M. Hartwell, editor], 1971.

Sraffa, Piero with M. H. Dobb, editors. The Works and Correspondence of David Ricardo (11 volumes). Cambridge: Cambridge University Press, 1951-73.

Turner, M. E., Beckett, J. V. and B. Afton. Agricultural Rent in England, 1690-1914. Cambridge: Cambridge University Press, 1997.

Weatherall, David. David Ricardo: A Biography. The Hague: Nijhoff, 1976.

Citation: Stead, David. “David Ricardo”. EH.Net Encyclopedia, edited by Robert Whaples. November 18, 2003. URL http://eh.net/encyclopedia/david-ricardo/