The development of capital, public policy and the role of the state in Thailand

This thesis examines the development of capitalism in Thailand and in particular the relationship between the state and capital. It is argued that the specific form of this relationship has emerged as a consequence of a particular historical, social and political context in which both domestic and international factors converge. In this study two factors are emphasised: first, the central role of the state in the process of capitalist development; and second, the importance of the growth of a domestic capitalist class. That these two factors are significant might appear self-evident, but in the case of Thailand neither position has ever been seriously pursued. In studies influenced by structural-functional and modernisation theories it has generally been argued that the Thai political 'elite' would not want to adopt or enforce any general rules to protect the property interests of businesspeople. At the other end of the political and theoretical spectrum 'radical' writers, heavily influenced by dependency theory, have usually suggested that Thai capitalism is not 'real' capitalism and that the Thai capitalist class can never be more than a subordinate, comprador class. The data assembled in this thesis refutes both propositions, arguing that the Thai state has indeed developed policies, strategies and rules which have been directly beneficial to the capitalist class (or particular fractions of it) and has protected the property interests of this class. Similarly it is argued that an economically and politically powerful capitalist class has emerged in Thailand, having developed a strong, domestic accumulative base. Part I of the thesis is an examination of various, competing theoretical models of Thai politics and society. It is posited that neither those influenced by structural-functionalism nor dependency theory have been able to argue such positions on the development of capitalism and the role of the state because their theoretical models are inadequate, preventing them from asking even appropriate questions, let alone providing adequate discussions of capitalism and the This is state. followed by an examination of a number of Marxist categories of analysis which are shown to be useful in generating a more thoroughgoing discussion of capitalism, class and state in Thailand. The aim is not to produce another model, but rather to allow for a theoretically informed analysis of these aspects of Thai political economy. The study then turns to the analysis of Thailand proper, moving along lines established in the theoretical discussion. Part II of the thesis examines the development of capitalism in Thailand from about the middle of the nineteenth century to 1980. Particular stress is placed on both the position of the state and industrial development in this process. It is argued that the overthrow of the absolute monarchy in 1932 heralded the rise of a state determined to promote economic development and the further expansion of capitalism. The origins and development of the capitalist class are also examined. It is shown that by 1980 Thailand was a rapidly industrialising capitalist country with an interventionist state operating in the interests XV of continued capitalist development. Political and economic intervention by the state has allowed the capitalist class to expand its accumulative base to the extent that, by 1980, it had moved from a reliance on trade and small-scale production to become a political economy dominated by financial and industrial activities. While such intervention has enhanced the position of foreign capital, the state also been has concerned to promote the situation of domestic capital. Part II is thus a demonstration of the inadequacy of perspectives based on structural-functionalist and dependency models of Thai politics and society. Part III turns to an examination of the structure of the capitalist class. The four principal fractions of capital - agrarian. commercial, industrial and banking - are each discussed, with the analysis being based on ownership data for some 1,100 companies. The data indicates that Thai capitalists form a class which is tightly bound by a plethora of business and family interconnections. Banking capital is shown to be the most powerful fraction of capital and a major force behind the emergence of Thai corporate capitalism. Essentially then this thesis indicates that a transition to capitalism has taken place in Thailand, and that the capitalist ‘revolution’ continues, influencing every aspect of the Thai political economy