Clientelism, Corruption & Capitalism

According to Former Prime Minister David Cameron:

Corruption is the cancer at the heart of so many of our problems in the world today. It destroys jobs and holds back growth, costing the world economy billions of pounds every year. It traps the poorest in the most desperate poverty as corrupt governments around the world syphon off funds and prevent hard-working people from getting the revenues and benefits of growth that are rightfully theirs. It steals vital resources from our schools and hospitals as corrupt individuals and companies evade the taxes they owe. It can even undermine our security…

Later in the same volume Francis Fukuyama would argue that,

Corruption hurts life outcomes in a variety of ways. Economically, it diverts resources away from their most productive uses and acts like a regressive tax that supports the lifestyles of elites at the expense of everyone else. Corruption incentivises the best and the brightest to spend their time gaming the system, rather than innovating or creating new wealth. Politically, corruption undermines the legitimacy of political systems by giving elites alternative ways of holding onto power other than genuine democratic choice.

One can here see that corruption, and its companion clientelism, are said to be at the centre of a variety of social ills. The producers of poverty, underdevelopment and oppression. Yet what corruption and clientelism are also said to produce is exploitation. They are said to produce a poor and immiserated population who are dependent upon clientelistic structures of power and governmental handouts, and they are said to produce elites who can maintain their power and wealth through the concession of small benefits to their clients who then labour and work so that their patrons might stay rich.

Many discourses on corruption and clientelism are discourses on exploitation and this is particular evident in the work of Malaysian political cartoonist Zunar. Zunar’s cartoons represent, in a variety of guises, the relationship between patron and client, kleptocrat and people, which juxtaposes an oppressed and immiserated people against a lavish elite who maintain their lifestyle through the provision of minor cash benefits only to take back what they have given through a variety of any other means.

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What is being critiqued in such displays is an inequality of exchange. The poor are oppressed it is argued and inspite of what they receive they are forced to give more in return to their patrons such that they emerge as servants to a system of clientelism and corruption over which they have no power. Key here are forms of vote-buying, patronage and the provision of developmental goods.

Yet whilst this is for many a persuasive narrative, it has little to say about the kinds of transformations undergone in post-Colonial states in the last decades and fails to acknowledge that whilst in such states discourses of clientelism remain prevalent, the material base on which they were built has fundamentally altered. To focus on Southeast Asia, its major economies, Malaysia, Thailand, Philippines and Indonesia at the time of the end of the Second World War were largely rural agricultural economies with a limited capitalism typically linked to extractive industries and the major urban centres. What the next few decades brought was an intensification of such capitalist development which saw post-Colonial states challenge their economic dependency and develop national capitalisms which aimed to more broadly and equally institute the processes and benefits of capitalist production and on this basis in Malaysia under the New Economic Policy, Thailand under the Generals, Indonesia under Sukarno and then Suharto and the Philippines under Marcos, there was witnessed a major transformation in social and economic forms..

On the one hand this was to be through the development of capitalist relations of production through: agriculture becoming mechanized, the development of industrialisation and of a manufacturing base which saw mass migration to urban areas to work in factories, the growth of autochthonous corporations and the growth of a local business-class, mass privatisation, the growing financialization of economic life and the growing neoliberalisation of the state (as the subjection of the state to market logic). On the other hand it was to occur through processes of accumulation by dispossession and proletarianization which broke apart existing modes of production through the appropriation of indigenous lands, the enclosure of the commons, the closure of traditional industries, the consolidation of land and the production of a reserve army of labour. Processes described by Tania Murray Li as the production of permanent surplus populations.

What this also meant however is a major transformation in the kinds of political subjects present within Southeast Asian societies. They have transformed from rural peasants, subordinate to local landholders, contained within rural localities, often largely disconnected from urban metropolises and still in possession of land or a means of production, towards subjects who migrate between the urban and rural in search of work, who work for major corporations in technology driven industries or service industries, who increasingly inhabit urban spaces or migrate between urban and rural spaces as Eric Thompson has described, outside the direct control of local power-brokers and who rely directly on central government for the provision of welfare and development opportunities and on large corporations for the provision of basic services from healthcare to communications. What this entails is both a process of abstraction away from embedded local relations of power to more distanciated and abstracted relations of power, and the transformation from subjects caught in a binary divide between patron and client, between an individual capable of providing loyalty and labour, and an individual capable of providing material benefits and security, towards the production of individuals separated from their means of production and rendered precarious and subject to the whims of the market-place through which individuals enter into a multiplicity of relations.

This of course isn’t to deny the presence of a prominent informal economy in many Southeast Asian countries within which personalised relationships continue to dominate. Nor does it deny the presence of pre-capitalist modes of production or communities in which relations between patrons and clients similarly remain important, though these are all the time diminished through processes of accumulation by dispossession. But what it does imply is a fundamental transformation in the overall dynamics of power which should necessitate a transformation in the discourse of power, something which has seemingly been lacking.

In this vein when approaching discourses of exploitation it is necessary to confront these new realities. In particular in the age of advanced capitalist development, exploitation occurs typically not on the basis of personal relationships between economic agents but occurs on the basis of impersonal relationships between individuals and the relations of production or the marketplace. To understand this it is worth highlighting the difference between clientelism and capitalism.

As James Scott has argued, clientelism can be defined by three fundamental features. The first an inequality between the client and patron, the second, the presence of a face-to-face relationship, often mediated by trust and affection, and finally the flexibility of the relationship or the fact that it covers a many areas of social, economic and political life. Yet what is important to note about the clientelistic relationship is that exploitation isn’t an inherent element within it. Whilst there is inequality of exchange, insofar as it is based upon an exchange, often an explicit exchange, clientelism ensures that both parties benefit. Thus for Scott insofar as clientelism is a face-to-face relationship defined by a relationship of trust and affection, the relationship of the patron to the client is one of care, the relationship of the client to the patron one of loyalty. This of course doesn’t rule out the idea that clientelism can enable exploitation, certainly in certain circumstances, bosses and big men have been able to rule their regions through fear and threat and have extracted from their client loyalty with little exchange. Yet such exploitation should be seen as secondary to and not inherent within clientelistic exchange.

Such relations change with the onset of capitalism. Capitalism as defined by Marx is “an immense accumulation of commodities” and it is commodities which for Marx come to mediate between the relations of individuals. As Marx will argue in his famous definition of commodity fetishism capital is a relation between people expressed as a relation between things. Yet insofar as the commodity sits at the heart of capitalism it isn’t static but rather Marx argues only a moment in the circulation of capital. The commodity is important for capital insofar as it is a means through which money can valorized into more money, as Marx will write it M-C-M’, more then than just a relation between individuals and things, capital is for Marx a process, it is circulation. Yet the secret by which money can beget more money (M-C-M’ ) lies for Marx in labour. To realise this circulation Marx argues the commodity owner must meet in the market place the free labourer to purchase their labour-power which is sold as any other commodity, they do so as equals. Yet labour he argues is a commodity unlike other commodities, it is “a source not only of value, but of more value than it has itself” and can thus be employed to increase the value of commodities. Yet labour, as all commodities has two different forms of value, its exchange-value and its use-value. For Marx the exchange-value of labour is defined by the cost required to reproduce such labour (housing, healthcare, nutrition etc.) whilst the use-value is defined by the quantity of labour which can be gotten out of the labourer in a given time period. The labourer Marx argues sells their exchange-value but cannot help but also give their use-value which is what the capitalist puts to work to valorize his commodities. Thus whilst the capitalist pays for the reproduction of the labourers labour, he takes from the labourer their capacity to valorize commodities at the highest rate of valorization possible. Thus the capitalist can get the greatest use-value out of the labourer by ensuring the intensification of the use of labour through the extension of the work day and the division of labour. Marx comes to describe the process as such:

By turning his money into commodities that serve as the material elements of a new product, and as factors in the labour-process, by incorporating living labour with their dead substance, the capitalist at the same time converts value, i.e., past, materialised, and dead labour into capital, into value big with value, a live monster that is fruitful and multiplies.

What emerges then between the exchange-value and use-value of labour-power is what Marx terms surplus-value as the value produced over and above the value purchased from the labourer. And whilst for Marx the production of surplus-value has been common to all modes of production, it is with capitalism that it emerges as absolute, as the fundamental object of social organisation. And linked then to surplus-value is the problem of exploitation. Exploitation is defined by Marx as the difference between the exchange-value of labour power and the value extracted from this labour-power in its use in the production process. Exploitation isn’t then simply an inequality but a structural distinction between the market-value of labour and its capacity for producing value and historically exploitation is then a fundamental point of struggle between the capitalist who wishes to increase the distinction between use and exchange value through the lengthening of the working day, “capital has one single life impulse, the tendency to create value and surplus-value”, and the worker who wishes to contain the working day within the limits of what is required to reproduce their own labour.

Yet in its practice exploitation expresses something fundamental of the hidden working of capital, a tendency towards constant valorization of commodities and thus the need to increase capital’s circulation through the intensification of the extraction of use-value from labour. As Marx would poetically describe:

Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks. The time during which the labourer works, is the time during which the capitalist consumes the labour-power he has purchased of him.

Yet how then does capitalist exploitation differ from clientelist modes of exploitation?

To begin with it could be argued that exploitation under capitalism is normalised. In pre-capitalist economic formations, labour for subsistence predominates and whilst the appropriation of surplus-value occurs, this is often undertaken through force, through direct appropriation of products or through forced labour, for example corvee labour. Similarly whilst local landlords, feudal chiefs or bosses might live off of the surplus-labour of their clients or subjects, such exploitation is open to contestation or negotiation in which concessions can be gained and were often gained. See for example E.P. Thompson’s account of food riots in 18th century England, aimed against profiteering. Under capitalism on the other hand exploitation becomes fundamental to the economic process, the labourer, stripped of possession of the means of production must sell their labour on the market to the commodity owner who aims for the valorization of their commodity in a process aimed towards the production of profit and not subsistence. Exploitation isn’t here direct but implicit in the process of the sale of labour and whilst the terms of ones exploitation can be contested, through challenging the length of work, the intensity of work, through strikes, machine breaking and working to rule, the ability of capital to isolate labour and separate it from a means of resistance and any legal protections has meant that exploitation has become consistently normalised in capitalist societies.

Equally under capitalism, exploitation isn’t the direct effect of a personal relationship but is the outcome of an abstract market exchange. This means two things, on the one hand that capitalism doesn’t require exploitation to occur on the basis of a face-to-face relationship, but occurs rather through the exchange of labour on a market-place which can be particular, indirect and depersonalised. Whilst similarly, exploitation cannot be seen as the outcome of particular actions within a face-to-face relationship, for example the direct appropriation of economic product but rather the abstract rules of market exchange, and the economic laws of value. Thus as Engels framed the problem of understand the source of surplus-value:

Whence comes this surplus-value? It cannot come either from the buyer buying the commodities under their value, or from the seller selling them above their value. For in both cases the gains and the losses of each individual cancel each other, as each individual is in turn buyer and seller. Nor can it come from cheating, for though cheating can enrich one person at the expense of another, it cannot increase the total sum possessed by both, and therefore cannot augment the sum of the values in circulation. (…) This problem must be solved, and it must be solved in a purely economic way, excluding all cheating and the intervention of any force — the problem being: how is it possible constantly to sell dearer than one has bought, even on the hypothesis that equal values are always exchanged for equal values?

It is not for Engels a problem of cheating, conning or theft, it is rather a matter of economic logic of a process rather than a particular instance. Similarly as Marx would argue, in the exploitation of labour nothing formally improper occurs. Surplus-value isn’t the outcome of individual trickery, rather in the purchase of labour:

the laws that regulate the exchange of commodities, have been in no way violated. Equivalent has been exchanged for equivalent. For the capitalist as buyer paid for each commodity, for the cotton, the spindle and the labour-power, its full value. He then did what is done by every purchaser of commodities; he consumed their use-value.

As such the problem of exploitation is neither a moral nor criminal problem, it is not a matter of fraud, theft or injustice. Rather it is about the fact that the proletarianized worker in possession only of their own labour power is forced to alienate their labour to the capitalist in order to reproduce their conditions of existence which in turn produces an increase in the value of capital, which is not theirs, and then increases the power of capital over the labourer, of dead-labour over living-labour. But on this basis the problem of exploitation doesn’t simply come down to a series of unjust actions but a systemic and fundamental imbalance in ownership. It is not a matter of morality but of power, and not of individual power but systemic power. Capitalist and labourer are for Marx tragers, bearers of relations.

And what this means in the end is that exploitation under capitalism isn’t an abheration nor an exceptional moment, it isn’t bad people doing bad things, but is the normal functioning of the system. It is the way in which poverty, inequality, deprivation and over-work are produced not through bad actions but through the mundane and banal operation of the market-place. It occurs even with the best intention of all actors involved.

This is where the critique of capitalism differs from the critique of clientelism and corruption. For if both are accused of producing the same effects, the way in which they do this is diameterically opposed. Thus the critique of clientelism focuses upon the personalities, the instances of wrong-doing and the wider effects this produces. It focuses on the hidden and secretive world of illegal dealings which fall outside of the formal economy and which enable economic and political elites to obtain power. Yet what these discourses are missing is a critique of capitalism. A critique of the systemic ways in which poverty and inequality are produced and maintained, and a critique of the way in which citizens are disarmed and dominated by a system which subordinates them to the power of capital. Political discourses of exploitation then focus upon the personal and direct expressions of exploitation but leave completely uncritiqued the indirect and systemic forms of corruption. They are concerned with the political importance of corruption, the production of clientelistic vote-banks and the production of economic dependency, but ignore the political effects of processes of proletarianization, accumulation by dispossession and the subordination of labour to capital. Whilst the first can be said to have deleterious consequences for democratic governance and social and economic life, so do processes of capitalism which are increasingly much more fundamental in transforming societies in Southeast Asia.

The neoliberalisation of the state, the growth of economic precarity and the production of inequality remains however under explored as matters of fundamental political and economic importance. Whilst in Western democracies under the sway of a neoliberal consensus a critique of capital has rememerged in opposition to a contemporary political and economic crisis, in the newly developed states of Southeast Asia with some exceptions, a critique of capital and a critique of capital in the role of producing poverty, inequality and deprivation is missing, both at the level of popular discourse and intellectual discourse. The focus remains on clientelism and corruption as the fundamental ills of the nation and the fundamental restraints on the realisation of democratic modernity.

This of course implies ignoring the transformative role of capitalism in Southeast Asian societies, yet it also implies a misrecognition of the problem of exploitation. It roots capitalist exploitation in individual actions, in bad people and non-transparent governance systems, and are the targets for overcoming exploitation. Linked to this the rooting of exploitation within particular relations instead of systemic structures entails the idea, popular within middle-class political discourses, that the ills of society reside not in the system of capitalist accumulation but in the particular elites and governance systems imposed upon national capitalisms, which subvert its revolutionary potentials. It removes exploitation from the province of capitalism and renders it the fault of some alien body grafted onto it. If only this alien body was removed the argue, all could experience prosperity and development. The idea here remains that exploitation and corruption take place in an opposition between a capitalism, which aims towards open and free competition, and systems of governance, which aim towards closure and secrecy. It leads then only to the idea that capitalism itself can be perfected through the removal of such systems of governance and that what should be aimed for is a well regulated and well governed capitalism.

Yet this binary division between clientelistic exploitation and capitalism isn’t unique to newly industrialised countries. From the early 1960s two British thinkers, Tom Nairn and Perry Anderson in a series of critiques of the British model of national development, which became the basis of the Nairn-Anderson thesis, argued that compared to its European counterparts, British capitalism had remained underdeveloped on the basis of early emergence within the structures of European politics, its failure to overthrow the key institutions of the feudal state, the monarchy, the aristocracy, the established church and its production of an immature and archaic capitalism which was soon outstripped by other emerging capitalisms in central Europe, North America or East Asia. This entailed they argued a failure to modernize British society which was at the root of the failure of the British left to produce a revolutionary situation, Britain had rather remained a fundamentally conservative country. The failure that Nairn and Anderson highlighted was then the failure of Britain to undergo a true capitalist revolution, preferring to retain fundamentally pre-capitalist institutions of governance which had held back the revolutionary tendencies of capital. Such a thesis is today the same thesis reproduced by the middle-classes and many intellectuals of developing and recently developed countries. The failure of such states they argue is to have not undergone a meaningful capitalist revolution, what has been produced they argue is a partial capitalism which has nevertheless retained pre-capitalist systems of governance and production which have fundamentally limited the capacity of capitalism to impose itself on social and political life and produced then a litany of social ills defined not by development but underdevelopment. Within such a reading which talks of Southeast Asian “ersatz capitalism” these states are not true capitalist states and therefore to analyse their politics one cannot simply focus on capitalism but on the relationship between the capitalist economy and non-capitalist formations, upon political business.

Is this however to misunderstand the true nature of capitalism? For Ellen Woods the Narin-Anderson thesis was based upon an idealised image of capitalism which was itself immanent its functioning. It was an expression of the “pristine culture of capitalism” which viewed capitalism as linked to economic and political modernization. Yet Woods would argue for a need to focus on upon the real historical functioning of capitalism which aside from this ideal developed unevenly and in circumstances not of its own making.

As Woods argues the British experience of early industrialisation and later industrial decline doesn’t contradict the logic of capitalism. Capitalism she argues has no connection with the logic of continuous production nor of continuous progress. Capitalism is as Marx pointed out simply the wish to increase the rate of exploitation, to increase the difference between the exchange-rate paid for labour and the use-value obtained from it. Capitalism can in this reading tolerate a variety of social and economic realities so long as this maximisation can occur and for Woods then capitalism has been able to function immanently to archaic forms on the one hand because of its lack of concern for the form of institutional arrangements as against their functioning (do they impede capitalist development?), allowing for the gradual transformation of archaic institutions in line with capitalist demands, as Woods terms it “old wine in new bottles”, and on the other hand because archaic forms are not inherently an impediment to a dynamic capitalism, capitalism has been able to function dynamically alongside a variety of archaic forms and these forms have also been capable of resolving the functional contradictions of pure capitalism, think of the legitimising role of traditonal forms of authority in reproducing the deference of labour against capital. Woods would then paradoxically argue that “Britain may even be the most thoroughly capitalist culture in Europe”, not because it was closest to the model of pure capitalism but because without fundamentally changing its governing institutions it was nevertheless fundamentally transformed by capitalism. It is the economy in which capitalism organically developed earliest and at its most developed and which transformed not only British society but the world around it. Woods comes then to describe the difference as such “What England lacked in political discourse it possessed in historical reality”.

What is produced is an intellectual binary between capitalism and non-capitalism, undermining the real lived practice of capitalism.

It could be argued that what is present today in the analysis of Southeast Asian states which have been transformed by processes of capitalist accumulation is such a disjuncture between political discourse and historical reality, and thus a lack of concern for the real process of capitalist accumulation alongside archaic political and social forms. Similarly with popular and scholarly discourses of exploitation, at the level of political discourse there has largely been an absence of discussion of capitalist forms of exploitation, preferring instead to discuss clientelism and corruption, yet and the level of historical reality there has been a whole series of struggles and contestations over such a concept. Meaningful critique will then have to bridge this gap if it is to have anything of fundamental political importance to say.

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