Radicalising Thailand: New Political Perspectives 9741324332, 9789741324330

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''J!""icalising Tbailaml : nJW politica l perspectives"

edited byJi Giles Ungpakom

I.AS NO. 56

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) r/, National Library of Thailand Cataloging in Publication Data .lt 1/, Radicalising Thailand New Political Perspectives.-· Bangkok : l. OD } Institute of Asian Studies, Chulalongkom University, 2003. 316 p. I.Thailand.·- Politics and Government. I. Title. 0

320.9593 ISBN: 974-13-2433-2 Edited by Ji Giles Ungpakom

E-mail: [email protected]

First Published September 2003 Publisher Institute of Asian Studies Chulalongkom University Bangkok 10330, Thailand www.ias.chula.ac.th Tel: 0-2251-5199, 0-2218·-7464-5 Fax : (662) 255-1124 Copies may be purchased in Thailand at Chulalongkom University Bookshop ([email protected]) and Asia Books (www.asiabooks.com)

Distributed outside Thailand by White Lotus, Co.• Ltd, G.P.O. Box 1141, Bangkok 10501 , Thailand.. E-mail: [email protected] Printing ACTIVE PRINT CO.,LTD. Tel. 0-2216-9122-4 Fax. 0-2214-0721 Cover painting by Louise Ungpakorn

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tdittd by Ji Gilts Ungpalwm CONTENI'S Page numbers About the au1hors Abbr October 1976, journeyed back to the city. Shortly after that the oppressive Stalinist regimes in Eastern Europe thankfully began to unravel, ending in the destruction of the Berlin Wall. The consensus of opinion was that Marxist or socialist politics were finished. In Thailand, the rapid economic growth in the 1980s and early 1990s seemed to confirm the establishment view that free-market capitalism was the answer. For those who still had doubts about the organisation and direction of Thai society, Marxism and a class analysis were certainly not top of the list of alternatives. Marxism fell out of fashion among activists, intellectuals and academics. It came to be replaced by the ideas of Post-modernism, Pluralist Civil Society, Community Politics and Anarchism. Then came the economic crisis of 1997. The Thai baht went into free-fall and major financial institutions buckled under the weight of non-perfonning loans. The economy began to shrink and suddenly free market capitalism was not so great.

In 1998 Workers ' Democracy Book Club, a publishing house set up by a new Thai Marxist organisation, reprinted the Thai version of The

Manifesto of the Communist Party. More importantly, one year later, the first ever Thai edition of Karl Marx's Das Kapital appeared, translated by Meti Iamwara. For twenty years the works of Marx, Engels and Lenin had been banned and then ignored. One important reason why this present book, Radicalising Thailand, has appeared today, is that the Left throughout the world is slowly reorganising and growing as part of the international anti-capitalist movement. This movement started with the social forum in Porto Alegre, followed by the protests in Seattle and then developed further with the international anti-war movement. In Thailand, the growth of the Left and the anti-capitalist movement has been slow, but the important thing is that there now Is a new Marxist Left in Thailand and it has a small but clear presence, both at the level of day to day struggle and in academic circles. This is at a time when neoliberalism and capitalism are becoming discredited once again in the eyes of millions of people throughout the world. This book draws together a number of different strands, which are relevant to Thai radical politics. It is a mixture of writings from experienced radicals and young academics, both from within Thailand and from abroad.

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Some would claim to be Marxists, others would prefer to be regarded as just radical. The fact that non-Thai writers are important in analysing Thai politics from a radical perspective, is partly a reflection of the weakness of the young left here. But it is .also important for those who are interested in Thailand to have an internationalist outlook. Far too often in recent years, Thai scholars have been influenced by a narrow nationalistic outlook, which argued for a "special" or "specifically Thai" social analysis. This was a reaction against the domination of Thai social and political analyses by foreign academics and writers. However, the results of this nationalistic back-lash are far from impressive, being purely descriptive writings, lacking any serious comparative element and devoid of any attempt at a theoretical debate in the Peoples Sector or on the Left. There are a total of four main strands or issues considered. Flrsdy, starting with Chapter 1, I attempt to outline a Marxist analysis of Thai political history, in order to provide a background to the following chapters. This outline, based upon a reinterpretation of primary work by Thai and foreign radical academics, differs from the mechanical analysis previously supplied by the Communist Party of Thailand, where the progress of Thai history was forced into a Western European and Chinese model to fit the Stalinist and Maois.t "stages theory" of revolution. The main proposals contained within this chapter are that Thailand, as a nation and capitalist state, was created in the 1870s due to the influence of colonialism, that it is now a full bourgeois democracy and that class struggle has played a major role in shaping the nature of Thai society.... While most people on the Left would agree with many of the points in Chapter I, one controversial issue is the proposal that King Rama V's absolute monarchy was Thailand's first capitalist state.

Chapter 2 by Peter Bell also attempts to outline a broad Marxist history of class struggle in Thailand and its impact on crises. Bell's analysis differs from my chapter in that Bell places heavy emphasis on the role of struggle from below at every stage. He raises a number of important questions about the real strength of working class and other movements from below in shaping recent events in Thailand. He also poses questions concerning the role of women in being at the centre of struggle and in receiving the main impact from the economic crisis. These questions need further exploration in the future. His, is an autonomist interpretation of Marxism, rather th.an my Trotskyist/Leninist one. However, when Bell talks about "Leninism" he is often referring to what I would prefer to call "Stalinism", the main brand of Left-wing ideology common throughout the Cold-War period. Bell's analysis

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provides one further difference from my own in that he is much more supportive and less critical of the N.G.O. movement in Thailand. Chapters 5, 6 and 7 provide more detail about certain periods in Thai history, with Somchai Phatharathnanunth dealing, in Chapter 5, with the socialist tradition in the north-east. This chapter looks at a question which is important to those interested in the problem of vote-buying, since it suggests that poverty and "ignorance" of north-easterners are not the main reasons why vote-buying occurs today. Chapters 6 and 7 deal with the 611> October 1976 bloodbath, and the transference of urban struggle to the jungle, under the leadership of the Communist Party.

The second strand, running through Chapters 1, 6 and 7, is an account and an analysis of the main organised tendency on the Left in Thai politics: the Communist Party of Thailand. Chapter 6 shows how the C.P. T. was initially strengthened by an influx of students after the 6111 October 1976 bloodbath, but that the party failed to utilise the vitality and libertarian nature of the student movement, which ultimately resulted in the demise of the struggle. This chapter, by Wipa Daomanee, is a personal account of one ex-student who entered the jungle. The frame work for criticism of the C .P.T. put forward in Chapters I, 6 and 7 is that of a Trotskyist-State Capitalist analysis, associated. with the organisation called Workers Democracy (Klum Prachatipatai Rang-ngam), a member of the International Socialist Tendency. However, there are other radical critiques which could also be offered, such as autonomist/anarchist critiques (a good example is to be found in Chapter 2) and various localist analyses. In fact the more dominant criticism of the C.P.T. from a radical perspective, found among social movements in Thailand today, is the autonomist/anarchist one. This has had profound influences on the workings of radical N.G.0.s, social movements, such as the Assembly of the Poor and on theoretical alternatives to free-market capitalism, such as localism. The third strand of this book attempts to capture the dynamic of class struggle in two ways. Firstly, by examining the rise and fall of such struggles and their impacts on society and the politics of movements from below. Chapter 7 is an account of the political defeat of the Left in the mid 1970s, together with an explanation of the present day political impact of that defeat. One important result of the defeat of the Left, both in Thailand and throughout the world, was the rise of the N.G.O.s and the politics of "Civil Society" and autonomy. Chapter 10 discusses the rise and fall of

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struggle in a Thai context, while never forgetting the global back-drop. The chapter is a critique of N.G.O. politics in the light of the revival of the Left as part of the new anti-capitalist movement. Chapters 8 and 9 complement this analysis by firstly presenting (in Kanokrat Lertchoosakul's Chapter) a detailed study of one N.G.0.-linked social movement (the Anti-Pak Mun Dam Movement). Her analysis shows the weaknesses of N.G.0. politics in practice and offers some explanations. Chapter 9, by Dulcey Simpkins, outlines the contradictions between radical and conforming N.G.0.s and shows that continued political liberalisation in Thailand poses sharp questions of tactics and strategy for N.G.0.s. Another aspect of the dynamic of class struggle is concerned with looking at the nature of the 1997 economic crisis. Chapters 2 and 3 by Peter Bell and Jim Glassman show that class struggle and a Marxist analysis are central to understanding the Thai economic crisis of 1997 and that alternative mainstream explanations are extremely problematic. In Chapter 3, Jim Glassman argues that the lessons from the crisis, as presented by mainstream conunentators, not surprisingly, conform to the assumptions and valuejudgments of neo-classical economics and neo-liberal policy approaches. Glassman challenges these lessons offered up by the neo-liberals, by presenting a neoMarxist interpretation of the crisis in Thailand, backed up by economic figures. For him, Thailand's economy is crisis prone, not because of policy mistakes, but because it is a capitalist economy on the periphery of a global capitalist system that is itself crisis prone. Chapter 4 by Kevin Hewison puts forward the idea that Taksin 's Thai Rak Thai government is attempting to craft a new social contract from above, with social policies for alleviating poverty, which will allow restructuring of the economy in aneoliberal fashion. For the Thai capitalist class, this restructuring is a necessary response to the crisis. It is a clear analysis of the thinking behind the populist policies of this business dominated government and it shows that class struggle is very much an issue for those seeking to build a level ofsocial peace for the benefit of capital accumulation. The forth and final strand found in this book deals with how the Thai ruling class and its allies see the future, both in terms of political and social reform. Chapter 11, by Michael Connors, is an account of how the more advanced sections of the Thai ruling class have continually developed and modernised their ideology. In the present period, following me economic crisis and the introduction of the new Constitution, Connors argues that state promoted notions of participatory democracy are an invitation to take part in the remaking of Thai capitalism's place in the world. Would be radical

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activists who harness the language of a national civil society, localism, community and participation have been trumped by the state. The state repeats back at them their own manifestos for change. More than that, it has the material force of organization and ideological apparatuses of the state to make them meaningful to relevant actors. This last chapter also complements my own and Simpkin's critiques of N.G.O. ideology in earlier chapters and the chapter by Kevin Hewison on the new social contract. Taken together with our analysis of the economic crisis, these are some of the reasons why this book can claim, with some weight, to be a new radical political perspective on Thai politics. Naturally, this book cannot and does not claim to cover every aspect of Thai radical politics. Major blind spots not covered by this book are an analysis of religion, an analysis of the labour movement, a deeper analysis of gender issues, including abortion, gay and lesbian issues and a history of the Thai socialists . For those interested in further study of such issues there are a number of very good books by Chris Baker, Pasuk Phongpaichit, Peter Jackson and Kasian Tejapira already in print. Finally, I would like to thank Dr Chaiyan Rajchagool from Chiang

Mai University for spending much time reading our manuscripts and suggesting useful changes which have improved this book.

Note on references Thai authors whose work appears in thai are referred to by their first names, but by their last names when their work is in Engligh.

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Chapter 1: A Marxist history of political change in Thailand. Ji Giles Ungpakorn [email protected]

Abstract The predominant relations of production and the state in Thailand have been capitalist for over a century. This chapter outlines the process of this capitalist transfonnation from the demise of the Sakdina system, through the rise of the absolute monarchy, the 1932 revolution, and the various struggles again st military dictatorship. The chapter also discusses the class structure of Thailand, which has a working class and peasantry each making up approximately 40% of the working population. From this, there follows a short discussion of the state of the labour movement. Politically, Thailand has a bourgeois democratic system comparable with the West, and just like in the West, rights and freedoms have been won by continuous class struggle from below. Because capitalism is the first truly world system in human history, Marxism, which is the working class theoretical explanation of how to struggle against capitalism, is valid as a universal theory throughout the world. This chapter argues that Marxism allows the political developments in modem Thailand to be understood as the result of class struggle in all its fonns. Marxism can also explain

the causes of the Thai economic crisis which were no different from those of any other capitalist crisis; a declining rate of profit and over-production in an unplanned global market system. The chapter discusses the various political responses to the crisis and ends with an analysis of the rise to power of the populist TMi Rak TMi party.

1. Capitalist transformation 1.1 Pre-capitalism Before the major transfonnation of the state into a centralised capitalist model in the 1870s, ''Thailand" as a nation-state did not exist (Winichakul 1994). The back-projection of ''Thailand's history" from the modem era to Sukotai ( 1270) and Ayuttaya ( 1350-1782) must therefore be seen as rewritings of history by people such as Luang Wichitwatakarn and Prince Darnrong, to serve modem nationalistic ideology. Digitized by

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Before the 1870s the dominant economic and political system in the central and northern region can best be described as a "Mandala" (Wolters 1968), "Galactic Polity" (Tambiah 1977) or the "Sakdina" form of rule (as it is called in Thai). This was a loose political entity based on clusters of powerful cities, such as Sukotai, Ayuttaya, Chaing Mai, and Bangkok, whose political power changed over time and also decreased proportionately to the distance from each city. Not only was there no such thing as a centralised nation-state under an all-powerful king, but political power to control surplus production was also decentralised. In this Sakdina system, control of surplus production, over and above self-sufficiency levels, was based on forced labour, the extraction of tribute and the control of trade. This was a system of direct control over humans, rather than the use of land ownership to control labour, and its importance was due to the low population level. One estimate puts the average population density in 1904 as II persons per square kilometre, compared to 73 in India (Chatthip 1985: 28). The majority of common people (Prm} living near urban centres were forced to perform corvoo forced labour for monthly periods. There were also debt slaves (Taht) and war slaves ( Chaleay Seuk). This direct control of labour was decentralised under various Moon Nai, nobles and local rulers (Jao Hua Muang) who had powers to mobilise labour. The result was that under the Sakdina system both economic and political power was decentralised (Cruikshank 1975: 315, Panananon 1988:1). Trade played an important part in the economy. Control of river mouths as export centres became more important as long distance trade increased. Local rulers sought a monopoly on this trade in cooperation with Chinese merchants who ran sailing junks as far as China and the Arab world.

Since the Sakdina system was decentralised, it was not the only system of social organisation that existed in what is now Thailand. In areas far away from large _towns and cities people of varying ethnic composition also lived in semi-autonomous villages or small clusters of human habitation in various different ways. Apart from this, before the rise of

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Ayuttaya, there also existed a multitude of different states such the Khmer or Tawarawadi empires.

1.2 Imperialism and capitalist transformation Although the increasing penetration of capitalism and the world market into the region had already increased the importance of money and trade, especially in the early Bangkok period (Nidhi 1984), it was direct pressure from Western imperialism and class struggle that finally pushed and dragged the Bangkok rulers towards a capitalist political transformation. Evidence for this comes with looking at the effect of the British imposed Bowring Treaty of 1855. This treaty established free trade and the freedom for Western capital penetration into the area without the need for direct colonisation. While the monopoly over trade, enjoyed by the Sakdina rulers of Bangkok, was abolished, vast opportunities were created for the capitalist production and trade of rice, sugar, tin, rubber and teak. An opportunity also arose to centralise the state under a powerful ruler.

Thailand's Capitalist Revolution was not carried out by the bourgeoisie in the same style as the English or French revolutions. In Thailand's case, the ruler of Bangkok, King Rama V or "King Chulalongkom" brought about a revolutionary transformation of the political and economic system in response to both pressure from an outside world which was already dominated by capitalism, and the result of class struggle within. Rama V's revolution was to create a centralised and unified nation-state under the rule of Thailand's first absolute monarchy (Rajchagool 1994, Ungpakornl997: 42). This involved destroying the power of his Sakdina rivals, the Moon Nai, nobles and local Jao Hua Muang. Politically this was done by appointing a civil service bureaucracy to rule outer regions and economically, by abolishing their power to control forced labour and hence surplus value. Forced labour was also abolished in response to class struggle from below, since Prai had a habit of trying to escape corvce labour and both Prai and That would often deliberately work inefficiently. Forced labour was replaced by wage labour and private property in land ownership was introduced for the first time. Furthennore, investment in production of agricultural goods for the world market Digitized by

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became more important than the simple use of surplus production for consumption and trade. lbis can clearly be seen in the various investments in irrigation canals. for rice production in the Rungsit area of the central plains. These investments opened up the land for settlement and work by the peasantry, which had been freed from corvee labour. Thus a temporary class alliance was built between the monarchy and the peasantry against the old Sakdina rulers and bosses, which served to support ruling class interests in the global rice trade. The shortage of labour for capitalist accumulation was initially solved by recruiting labour from overseas Chinese in the early part of the twentieth century. Much later, beginning in the early 1960s, a large surge in "indigenous" wage labour occurred as a result of poor peasants being pulled off the land, often from the north-east, into more productive workshops and factories in urban areas, especially around Bangkok. The capitalist transformation and the construction of the first Thai nation state, a product of continuous change, occurred at a time when similar transformations were taking place throughout colonised South-east Asia. In the neighbouring colonies of Britain, France and The Netherlands, state centralisation and the development of a capitalist economy, based upon wage labour was also taking place.In fact, it has been suggested by people like Ajam Suluk that we should view the process of Thai state fonnation as the "colonisation of the north, south and north-east by the Chakri rulers of Bangkok". Certainly the various north and north-eastern revolts against Bangkok indicate this to .be true. The main point to bear in mind here, is that the changes taking place in "un-colonised" Thailand were not very different from the rest of colonised South-east Asia.

1.3 Problems with the Stallnist/Maoist analysis of state formation The Left in Thailand has shown considerable confusion about Thailand's capitalist transformation. This results from applying a Marxist model in an extremely mechanical and a-historical manner, typical of

the Stalinist tradition. This is not surprising given that the only Leftwing organisation of any significance, in terms of ideas and numbers of supporters, was the Communist Party of Thailand (C.P.T.). A prime example

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of this mechanical analysis is Jit Pumisak's (1995) argument that land ownership was central to the extraction of surplus value in Thai "feudalism" (the Sakdina system). This is one of many attempts at trying to fit Thai history into a Western model. Marx never claimed that Asian history followed the same exact path as European historical processes. As an example of a different production system in Asia, he suggested (Marx 1992) that in certain areas there existed a society based on irrigation canals called the "Asiatic Mode of Production" (A.M.P.) . There is no archeological evidence that Marx's model of the A.M.P., with its complex irrigation system and centralised state, ever existed in Thailand, although it might have existed in the Khmer empire, centred around Ankor. Yet, the

mechanical Mmists have also tried to prove that pre-capitalist production in Thailand was a mixture of the Sakdina system and the Asiatic Mode of Production (Pakpat 1997). In doing so, they have been forced to transform the meaning of the A.M.P. to mean only a system of village production. The mechanical approach by the Thai Left also betrays a total lack of understanding about the fundamental nature of capitalism. Capitalism, for them, c.an only exist with private capitalists. They are unable to understand the concept of an absolute monarchy or military dictator being part of the capitalist class in much the same way that they are unable to understand the theory of State Capitalism in Russia (Cliff 1974). Maoist doctrine, which dominated the Communist Party of Thailand, insisted that Thailand in the 1970s and 1980s was "semi-feudal, semi colonial"; a model copied directly from Mao's analysis of China. Even today it is still possible to meet those who believe that Thailand has yet to achieve its capitalist revolution. Capitalism is a system whereby capital is invested in the production process with the aim of realising further capital accumulation. This process requires two things: firstly a significant population of waged workers who are separated from the means of production, in order that the small minority capitalist class can accumulate capital by the extraction of surplus value. Secondly, capitalism needs the existence, in one form or another of market forces which lead to competition between different groups of capital. The important point about the capitalist class is not its

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outward form or title or·the issue of personal ownership. The important point is the fact that the capitalist class controls the means of accumulation. Therefore it follows that the capitalist class, especially in under-developed countries can be made up of absolute monarchs, government officials, communist party bureaucrats (Cliff 1974) or private capitalists. The first Thai capitalist state was controlled by the absolute monarchy, which was a key part of the indigenous capitalist class (Ungpakorn 1997: 42). Under this state, there were three main capitalist groupings; the royal capitalists, the Chinese capitalist merchants and the "foreign" (Western and later Japanese) capitalists (Suehiro 1989: 52).

2. Subsequent changes in the nature of the capitalist state 2.1 From the 1932 revolution to the end of military rule in 1973 Most non-Marxists see economic crises as sudden and unexpected accidents. They try to deny a pattern of crises and booms within the capitalist system. Yet, the 1997 crisis was not Thailand's first. Thailand was well integrated into the world market in the 1930s and as a result of this, suffered the effects of the 1930s economic depression. The political fallout from this was that a group of civilian and military state officials, under Pridi Banomyong's Peoples' Party, staged a revolution which overthrew the absolute monarchy of Rama VII in 1932. The first declaration of the revolutionaries clearly identified the economic crisis as bringing things to a head, with mass unemployment, cuts in wages and increased taxation experienced by the mass of the population. The Royal Family was notably exempted from these increases! (Sutachai 1993) The 1932 revolution was carried out on the back of widespread social discontent. Farmers in rural areas were becoming increasingly bold and strident in their written criticism of the monarchy (Nakarin 1990). Working class activists were involved in the revolution itself, although they were not the main actors, and cheering crowds spontaneously lined Rachadamnem Avenue as the Peoples' Party declaration was read out by various representatives stationed along the road. The landmark work of Thammasart historian Nakarin Mektrairat (1990) details this wide Digitized by

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transfer of tabor out of agriculture into manufacturing (Krugman 1994, Crafts 1999, Warr 1999). In this context, a large number of firms in Thailand have remained focused on the advantages to be gained from relatively competitive wages, rather than on investment in increased productivity of capital. Indeed, as several studies have illustrated, even larger foreign firms in Thailand have made only limited efforts to train personnel and upgrade technology used in their Thai manufacturing operations (Lirnqueco et al. 1989, Deyo 1995), a problem that has been exacerbated over the post-World War II period by the policies of the Thai state (cf., Hewison 1989, Doner & Ramsay 1994, Pongpaichit & Baker 1995, Unger 1998). 10 The Thai state's relatively poor performance in spurring scientific and technological research and development (R & D) is reflected in the fact that as of the mid- I 990s Thailand had only 0.2 R & D scientists and technicians per 1,000 members of the general population-a level not only much lower than that of competitor states such as South Korea (2.9) and Singapore (2.6), or even China (0.6) and Vietnam (0.3), but also lower than the average for all countries categorized by the United Nations Development Program as exhibiting medium human development (0.7) (U.N.D.P. 1999: 176-7). To be sure, there have recently been modest increases in the proportion of government spending on education and science and technology development. But in spite of this, productivity of capital declined between 1982 and 1996 (Figure 5)-a continuation of the relatively low-productivity pattern which has marked Thai accumulation throughout most of its recent history. The ability of the Thai state to pursue this comparatively low human capital development path, it should be noted, has deep roots in the country's abundant land and natural resource base, which has allowed several decades of robust export growth on the basis of primary commodities-primarily rice (Pongpaichit and Baker 1995, Jomo 1997). Thailand's development path also has deep roots in the effects of the Cold War on the evolution of the Thai state and its fonns and functions. Thailand's development under US umbrage gave it various forms of wherewithal to discipline labor while promoting rapid growth that was underpinned originally by substantial aid flows, and later by F.D.l. and favorable terms of access to the US market.

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This meant that high profit rates and opportunities for economic growth could be maintained for many years without disciplining capital or developing the capacity to force capital into the tertiary circuit-e.g., through higher effective rates of corporate taxation to support greater expenditure on education, training, and technology development. Thailand in fact has one of the lowest rates of effective corporate taxation in the World (Warr & Bhanupong 1996: 75-6), but until the 1990s it countered the problems this poses for the state's capacity to inv·e st in skills upgrading and technology development by maintaining a labor force so disciplined that it had one of the lowest wage shares of any labor force in the developing world (UNIDO 1992: 45, Jansen 1997: 34-5). When this changed in the 1990s, under the impact of tighter labor markets and more militant labor struggle, neither the Thai state nor most of the private sector had developed substantial capacity to respond to rising wages with labor-displacing technological innovation. Instead, even though some larger firms invested in "catching up" technological change, a great number of firms simply ratcheted up investment and production on the basis of existing, labor-intensive technology, attempting

to outcompete one another through "perspiration rather than inspiration" (Crafts 1999, Warr 1999). Here, it is also worth noting the pace at which the realization and overcapacity crisis has evolved-unfolding largely since the second half of the 1980s-which has meant that countries attempting to maintain themselves as export bases have to respond quickly and harshly to rising production costs. The simple means of doing this is to constantly devalue the currency; the more difficult means is to move rapidly from lower value added products suffering from increased competition into higher value added lines that are (somewhat) less competitive. The speed required of the transformation process in the era of "globalization"- a reflection of what David Harvey calls "space-time compression" (Harvey 1989)-is important to emphasize because, again, it is not the case that firms in Thailand have totally neglected effons to increase productivity or move into higher value added lines, nor is it the case that the Thai state has totally neglected efforts to spur industrial deepening (Deyo 1995, Pongpaichit & Baker 1998: 43-5). However, in a context of historically satisfactory profits insured by repression of labor and minimal disciplining of capital, investors and state planners

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have simply been unable to respond with the timeliness or seriousness required by contemporary global capital flows (Doner & Ramsay 1994: 189-94, Bello et al. 1998: 55-70).

2.S The crisis as a financial crisis Realization failure, rising wages, and stagnant productivity in the early 1990s provide a crucial context for understanding the Thai economic meltdown of 1996-97, but they do not by themselves explain the crisis or its onset. Indeed, the very fact that pre-boom profit rates may have been similar to post-boom rates without the economy going into the sort of decline seen in 1996-97 suggests that something additional must have occurred in the 1990s to trigger collapse. Here the issue of capital switching is important. As Figure 8 shows, one of the most noteworthy features of F.D.I. inflows during the early 1990s is the decline of new investment in manufacturing industries and the explosion of investment in real estate that began in 1994 and continued through 1996. It is also worth noting that this investment in real estate-which quickly led to a glutted market-is not matched by comparable investment in construction, indicating that much of the real estate investment may have involved speculative land deals (cf., Bello et al. 1998: 161). Indeed, the national accounts indicate that compared to the period 1987-1991, growth rates of value added in the manufacturing and construction sectors declined much more during 1991-1995 than did rates in banking, insurance, and real estate (Figure 9). Moreover, during the early 1990s portfolio investment overtook F.D.l., and total stock market capitalization boomed until it reached a level equal to one-tenth of GDP by 1993 (Figure 10). All of these indicators point to the development of a much higher level of speculative, non·-productive investment by 1993-94. This movement of capital into speculative activities is not entirely surprising, given low or declining profit rates in all sectors except banking, insurance, and real estate (BIR, Figure 1), and booming profit rates in BIR themselves reflect the increase in speculative activity in real estate. 11 The phenomenon of increasing speculative investment is described in mainstream analyses of the economic crisis as the development of the "bubble economy." It is widely ackno·wledged by analysts that the shift of capital into more speculative ventures not only set up the subsequent crash

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in real estate values -particularly since such investment was swelling at a rate much faster than the growth of the overall economy, which was slowing during the early l 990s-but also represented a diversion of capital from employment in productive sectors lilce manufacturing (Pongpaichit & Baker 1998: 316-7). What needs to be further emphasized, however, is that the timing and weight of the movement of capital into more speculative investments seems quite plausibly to imply a response by investors to declining profit rates in manufacturing by the early 1990s. Finns in the manufacturing sector were finding the prospects Jess attractive than in the late 1980s, precipitating slower growth in investment, while extraordinary rates of overall economic growth up until 1990-and respectable rates after that- had attracted the attention of institutional investors looking for emerging markets within which to park new short-term investments (Bernard 1999: 191 ). Had manufacruring profitability not been declining by the early 1990s, is it is conceivable that various investors would have put more money directly into manufacturing activities and that rates of manufacturing growth would have continued at levels that could more effectively sustain the boom in the stock market and the property sector.12 Thus, the crisis that broke out in the financial sector during 1996-97 when real estate values collapsed was not a narrowly financial phenomenon but rather was directly linked to the behavior of capitalists in response to declining profitability of manufacturing investment. The capital switching described here indicates the international dimensions of the issue. It was the switching of East Asian capital from manufacturing F.D.I. into real estate and stock markets-along with the inflow of financial capital from Western banks and emerging market funds (itself a form of switching from reinvestment in the slower-growing O.E.C.D. countries)-that triggered the development of Thailand's bubble. To point out these international dimensions of the bubble economy, however, is not to say that international capital simply ran roughshod over the Thai state. Rather, the Thai state was very much an actor in the process, and in order to encourage rapid inflows of foreign capital and bridge a projected savingsinvestment gap, it had undertaken a number of financial liberalization measures during the early 1990s (Bello I998, Bello et al. 1998: 18-20, Pongpaichit & Baker 1998: 98, 116-7, 318-9, Unger 1998: 95-7, Bernard 1999: 191). First,

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Figure 9 Jncnase In valae added, by industry 140

120

J1:

I: 20

0 a.Ming. lnsurtnct , Real Estate

Commerce

• 1987-1 991 • 1991-1995 SMircc: NESDB. Ho.ionat A«OMIW

Figure 10 Foreign direct investm~nt and portfolio Investment, 1989-1995 8,000 7,000 8.000 "' S.000

~

.§

4,000

~

3,000

• Po In this chapter I refer to 'the World Bank' when discussing reports

published by the World Bank. This is not meant to imply that there were no conflicts over policy within the institution. 6

Based on a number of meetings and interviews with Bank staff and

consultants in Bangkok, February 1999. , The World Bank's co-ordinating role was made clear to all Thai government agencies and to foreign donors, where even existing activities were considered to come under the purview of the World Banlc (Interviews, Department of Technical and Economic Co-operation, Bank of Thailand, World Bank, and Australian Embassy, :February 1999). Digitized by

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RADICALISING THAILAND : Chapter '

' The official Thai poverty line was set at 878 baht per person per month in 1998 and 886 baht in 1999. The latter is the equivalent of75 U.S. cents a day. In 1999, this amount represented Jess then 15 percent of G.D.P. per capita and less than a quarter of the official minimum wage (W.B. 200lc: 2-3). Actually living on this small amount of money would be extremely difficult. • Tiie World Bank (200tc: v) noted that, on average, small and medium farmers were poorer in 1999 than they had been in 1992. 10 The World Bank observes that even Thailand's peak unemployment rates might appear" ... modest by European standards, [but, in contrast,] its welfare impact can be severe, given that Thailand does not have unemployment insurance..." (W.B. 2000b: 18). 11 A recent paper suggests real wages did not fall (Behrman, Deolalikar & Pranee 2001: 3). This is a conclusion drawn for the "inunediate post-crisis period",

and appears based on a calculation of hourly wages, while noting that employment and hours of work had declined and that there had been shifts to "nonwage employment". 1bis represents an attempt to manipulate the statistics to show the rate of pay per hour of those who remained in employment did not decline, even though the total wage packet of the same workers was almost certainly smaller. 12

Glassman ( 1999: Ch. 10), who adopts a Marxist position, has also suggested that increased wages in manufacturing bad a role in the onset of the crisis. However, it is not clear to what extent short-term rising wages contributed to the crisis. It is also necessary to examine over-capacity and over-production in Thailand, East Asia and world-wide (see Hewison 2000, Brenner 1999). " In an attempt to keep wages down, employers hired illegal immigrant workers and pressured the government to legalise immigrant workers who would receive lower wages than Thai workers. While the figures are not accurate, it is estimated that more than a million foreignworkers were employed. When the crisis began the government moved to repatriate some of these, although protests from employers slowed this. 1 • The World Bank also noted gendered outcomes, arguing that the impact of the crisis was greater for men than women. This was for both wages and unemployment, although men's wages before the crisis had been higher than those

for women (W.B. 2000c: 23-4). This was in the context of women "opting out" or paid work in large numbers, as noted above. Tiie World Bank's conclusion is not supported by other reports, with some arguing that the impact fell disproportionately on women (see Brown, Bundit & Hew:ison 2002). "This conclusion is dependent on exactly which expenditures are considered

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part of the social and welfare sectors. Mathana & Hewison (2002) refer to the broad area of community and social services. The World Bank (2001c: 73) uses a different definition to conclude that expenditure on anti-poverty programmes increased from 1997. Even so, the figures used in this Bank report (200 le: 88) appear to include errors in calculation. 16 For a World Bank-funded study that argues that business and

landowners suffe~ more than workers, see Behrman, Deolalikar & Prance (2001: 3). This is based on the share of wages in GDP, showing that workers did proportionately better. This ignores the impacts of unemployment, underemployment, the use of savings, and declining wealth. A more mainstream and arguably more thorough Bank report draws different conclusions (W.B. 200lc: 30), as discussed -below. 17

References to the Chuan government are to the coalition that

replaced the Chavalit Yongchaiyudh-led government on 9 November 1997. This new coalition, led by the Democrat Party, with Chuan Leekpai as prime minister, remained in power until 9 February 200I. It is often referred to as the Chuan II government. 18

The World Bank produced various figures on public health

coverage. While one report noted that up to 40 percent of people, mainly in rural areas did not have access to adequate heal.lb care, especially in rural areas (W.B. 1998: 15), other reports were of 26 percent lacking adequate access (W.B. 2000d: 12). 19

For a flavour of the more extreme version of this see the website

DoctorFreedom.com, maintained by private sector doctor Chotichuang Chutinatbom, where Edmund Burke and Winston Churchill are quoted on freedom, while attacking the welfare state and identifying the 30 baht health scheme as the beginnings of socialised medicine and state paternalism, leading to socialism. Citing Marx, the site argues that this scheme is aimed to redistribute wealth.

References Abonyi, George & Ninsananda, Bunyaralc.s , Thailand: Development Planning in

Turbulent Ttmes. University of Toronto-York University Joint Centre for Asia Pacific Studies, Toronto. Behnnan, Jere R., Deolalikar, Anil B. & Tinalcom, Prance (2001) The Effects of the

Thai Economic Crisis and of the Thai Labour Market Policies on Labour Market Outcomes: Executive Summary. TORI Quarterly Review 16 (3), 3-9.

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Brenner, Robert (1999) Competition and Class: A Reply to Foster & McNally. Monthly Review 51 (7), 24-44. Brown, Andrew, Thonachaisetavut, Bundit & Hewison, Kevin (2002) Labour Relalions and Regulation in Thailand: Theory and Practice. City University of Hong Kong, Southeast Asia Research Centre Working Papers Series No. 27, July. Christensen, Scott, Dollar, David, Siamwalla, Ammar & Vichyanond, Pakom (1993) The Lessons of East Asia. Thailand: The Institutional and Political Underpinnings of Growth. World Banlc, Washington DC.

Deacon, Bob, Hulse, Michelle & Stubbs, Paul ( 1997) Global Social Policy. International Organisations and the Future of Welfare. SAGE Publications, London. Glassman, James F. ( 1999) Thailand at the Margins: State Power, Uneven Development, and Industrial Transformation. Ph.D. Thesis, Faculty of the Graduate School of the University of Minnesota. Greenspan, Alan ( 1998) Market Capitalism: The Role of Free Markets. Vital Speeches of the Day. 64 (14), 418-21. Hewison, Kevin ( 1985) The State and Capitalist Development in Thailand. In: Higgott, R. & Robison, R. (Eds) Southeast Asia: Essays in the Political Economy untries, the true reactionary nature of the Stalinist regimes in Eastern Europe and Digitized by

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the Stalinist Communist Parties in the West, resulted in the growth of previously existing or new non-Stalinist Left organisations in this period (Birchall 1974). Some of the non-Stalinist Left from this era, for example the Fourth International in France, or the International Socialist Tendency in Britain and Greece, have survived to be important actors in the new global anti-capitalist movement today. It is important to understand that the massive international wave of class struggle in the late 1960s and early 1970s was followed by a generalised offensive in the mid- l 970s, conducted by all ruling classes, which resulted in the defeat of the Left, the working class and the peasantry throughout the world. In many cases, especially in Western democracies, this defeat of the movement was brought about by the actions of Stalinist Communist Parties or reformist Social-Democratic parties which sought to demobilise the revolutionary situation in order to make the world safe for capitalism. France, Italy and Britain are very good examples of where such parties used their influence among the organised working class to demobilise the struggle. That this was carried out by Communist Parties, should surprise no one, since the declared aims of Stalinist Communist Parties were always to establish or strengthen the "Democratic Stage" of capitalism. Similarly modern Social Democratic parties never ever claimed to be in favour of the revolutionary overthrow of capitalism. Where mass Social Democratic or Stalinist Communist Parties did not exist, such as in the United States, radicalism was destroyed through a mixture of buying-off middle class sections of oppressed groups, such as women and blacks, coupled with direct repression of working class blacks (Harman 1998, Neal 2000:191). In many less developed countries, where the political system was less open to the non-violent manipulation of Civil Society by the state (see Gramsci in Forgacs 1999: 227), the ruling classes resorted to naked oppression. This can be seen, for example in the bloody crack-downs of the 1970s in Chile, Mexico, Argentina and Thailand. The 61h October 1976 massacre in Bangkok resulted in the destruction of the Left in open Thai society (see Chapter 7 and Ji et al. 2001), pushing radical . students and workers into the arms of the C.P.T. in the countryside. The subsequent failure of the C.P.T., in its Maoist strategy to stage the 'Thai Digitized by

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National Democratic Revolution", by using a peasant army, together with the C.P.T. 's total inability to adapt itself to the wave of urban class struggle from 1973, resulted in the destruction of the Thai Left. (Ungpakorn 1997: 94, Ungpakorn 2001: 160, Ji et al. 2001). As disillusioned students left the jungle strongholds of the C.P.T. to return to the Bangkok and open society, many of those who were not totally demoralised became active in setting up N.G.O.s. The same situation occurred in the Philippines (Clarke 1998: 7, 195). The collapse of Stalinist regimes throughout Eastern Europe, which should really be regarded as "State Capitalist" rather than "Socialist" (see Cliff 1974), served to reinforce the total crisis of the Left. It is interesting to note that most of the Left-Wing organisations which have been able to survive this period up to this day, have been those which did not have illusions in the "benefits" of Stalinism. From the above analysis of the international cycle of class struggle, two important conclusions about the present day international situation can be reached. Firstly, although the destruction of the Left was really the destruction of the Stalinism (and Maoism), which proved the bankruptcy of Stalinism and not that of Marxism (Callinicosl991), this destruction did have very serious consequences. It resulted in the total acceptance of neo-liberal and free-market dogma by all sorts of groups and organisations, ranging from reformist 'Third Way" Social-Democratic Parties, through the various reformed Communist Parties, to N.G.O. activists who now advocate "Civil Society Theory". Secondly, the rise of a new international wave of class struggle, starting with the social forum movement in Porto Alegre and the anti-capitalist demonstrations in Seaule and Genoa in 1999200 l, and leading to a generalised level of opposition to capitalism in the form of 13 million workers on general strike in Italy in April 2002, the massive unrest in Argentina and the huge international anti-war movement, creates a massive opportunity for the revival of the non-Stalinist Left. This new wave of international class struggle represents a "collapse of confidence" in neo-liberal policies of free-market capitalism. The main actors in this revolt are young people who are disillusioned with mainstream free-market politics and a revived working class movement tired of making sacrifices in order to increase profitability (Bircham & Charlton 2001). Coupled with this new global anti-capitalism is the disillusionment with main Digitized by

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stream political parties of both the traditional Right and the reformist Left (Klein 1999: 341). A symptom of this is the rise of Populism, the Revolutionary Left, Anarchism and Fascism. The landslide victory of the capitalist but populist Thai Rak Thai party in Thailand is also part of this process, since Thai Rak Thai is the first political party in Thailand to offer Populist policies for the poor in twenty-five years (see Chapter 4). Many young people and ordinary workers today see the existing system as being unable to solve the problems of economic injustice, crisis and war. Naomi Klein reported in 2002 from crisis tom Argentina, that in the federal election more people spoiled their ballots than voted for a single politician and the most popular write-in candidate was "Clemente'', a cartoon character with no hands who couldn't therefore steal (Klein 2002). In the January 2001 elections in Thailand, an historic number of spoiled ballots and abstentions were also recorded, but this was partly because voting had just become compulsory under the new constitution. Never the less, there is growing disillusionment with established parties and the system even in Thailand. Event before the rise of the anti-capitalist mood, the nature of contentious politics in countries such as France was disproving "New" Social Movement theory. Since 1995, the level of trade union struggle has been high in France. What is interesting about this trade union activity is that there has been significant self-organisation among the rank and file, independent of the bureaucracy. This is best illustrated by the formation of a new union federation called S.U.D., which stands for "Solidarity-Unity-Democracy". S.U.D. was formed in 1989 as a rank and file-led union federation. Key activists involved in S.U.D. are members of the Trotskyist Fourth International

(Ligue Communist Revolutionnaire, L .C.R.) and other Marxist activists. The important point, as far as " New" Social Movement theory is concerned, is that not only were Marxist organisations central to the formation of S.U.D., but that both S.U.D. and the L.C.R. played important roles in the anti-capitalist A.T.T.A.C. and the anti-racist "New" Social Movements which arose in France after 1995 (Blakey 2001 ). In the May 2002 French presidential election, L.C.R. stood a 27 year old postal worker from S.U.D. who polled a significant proportion of votes from those under the age of 25.

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