As I pointed out last week, when we got independence we were bequeathed a government that believed in the status quo as a means of uplifting the country. That status quo subsisted on incomes generated from a stagnating primary sector. Industrialising the country was therefore never a strong point with them, as can be seen by the fact that our debt-to-GDP ratio, which stood at 18% in 1948, would shoot up to 66% by 1966. While this can be attributed to the expansionary policies following the SLFP’s victory in 1956, the truth is that the economy, even under the UNP, had been slugging at a growth rate of 3% in the fifties.
Uplifting the economy meant transforming it to an industrial hub. Because the private sector had largely subsisted on the extraction of raw material, this meant that the State had to play a role. Logically, that necessitated the expansion of the State. The political Right did not believe in expanding the State. For that reason, the task of industrialising the country was left largely to the Left. More pertinently, the Old Left. Which is where I get to the subject of my column.
When Colvin R. de Silva, N. M. Perera, and Philip Gunawardena began reforming the economy, they were vilified as trying to “Sinofy” or “Russify” the country. To date, this propaganda has worked: the Old Left is seen today by Right as having destroyed our potential to equal Singapore and by the nationalists as having destroyed the Sinhalese entrepreneurial spirit. I will get to the second indictment later. I am more concerned here with the first, because in it we see the self-contradictions of the post colonial bourgeoisie.
The LSSP and the Communist Party, with the spate of constitutional reforms initiated by the granting of the franchise in 1931, were given a historical role. This role had two sides: political and economic. I have outlined the first of these in my previous column. With the various splits (ideological and personal) that castrated these parties during the Second World War, however, they could implement any economic programme only through a monolithic party. That party was the SLFP, though it was Sirimavo Bandaranaike, not her husband, who saw in the Old Left an opportunity to revive a deteriorating industrial sector.
The Land Reform Act of 1972 was as much an economic necessity as it was a political response. To be sure, it was the government’s way of asserting its socialist credentials after the first JVP insurrection. On the other hand, its detractors consider it as the cause of our economic downfall. What is forgotten here is that the LRA was actually a toned down version of the land ceilings imposed in East Asia (Japan, Taiwan, and Korea). I believe the numbers prove this: while in those other countries the ceiling was as low as two or three hectares, in Sri Lanka it was no less than 10.
I spoke the other day with the son of a prominent leftist politician from that era who rationalised the LRA with the following observation: “It was necessary simply because Sri Lankans were investing in housing at the expense of productive investment. During the Second World War, the British gave concessions to Sri Lankans to start industries. Instead, they invested in housing.
"It was necessary simply because Sri Lankans were investing in housing at the expense of productive investment. During the Second World War, the British gave concessions to Sri Lankans to start industries. Instead, they invested in housing. This is why a state industrial sector became crucial, simply because local bourgeois investors wouldn’t put their money into manufacturing."
This is why a state industrial sector became crucial, simply because local bourgeois investors wouldn’t put their money into manufacturing.” In other words, it was the Old Left that ironically took the role played by statist, rightwing regimes throughout East Asia with respect to industrialisation.
The failure of the Bandaranaike government to carry these reforms forward, incidentally, has less to do with the failure of the Old Left (inasmuch as it opportunistically caved into chauvinism) than with the shift in the Finance Ministry from N. M. Perera to Felix Dias Bandaranaike.
Perera was the closest we had to a J. K. Galbraith, though their political convictions were different: as H. L. D. Mahindapala noted in 1964 (before the SLFP was routed), if he was born in America, he might have earned a place in the Kennedy administration. Felix Dias was of a different mould: he brought in a blend of authoritarianism and cronyism. Colvin would later fault him for tilting the country to the rightwing excesses that rationalised J. R. Jayewardene’s Open Economy, which to an extent is true.
By the end of his tenure, Felix had appropriated for himself a near-mythical, cartoonish image, the same image that Gamini Fonseka used to lampoon him in Sagarayak Meda (a film which, more than anything else, betrayed Fonseka’s political convictions). That industrial production, which had increased by about 19% annually during the first Sirimavo Bandaranaike government, deteriorated gradually but discernibly after Perera’s departure was only to be expected: Felix simply could not replicate Perera’s reforms.
What most critics of the Old Left in Sri Lanka, whether they be nationalists or pragmatists, therefore miss out is that inasmuch as leftist economics was untenable at a time when neo- liberalism was on the rise, the Left here was combating a real, pertinent issue: the inability of our bourgeoisie to look beyond short-term profits and economic sectors which subsisted on those profits.
By the time J. R. Jayewardene won the presidency, Sirimavo Bandaranaike had wrested the land-based sector from that bourgeoisie. Earlier, for instance, it had been the norm for students from elite schools to join a plantation or an estate: after the LRA, those plantations and estates were opened to less privileged youth, which owing to inevitable class stratifications kept the elite and their children away. That is why the bourgeoisie looked for other channels of earning quick bucks after 1977. They found that channel, not in the industrial sector the previous regime had tried to get them into, but in the Pettah merchant who subsisted on (what else?) short-term profits. The shift from the landowner to the Pettah merchant reflected not only how stunted our bourgeoisie were, but also how incapable they were of aiding the economy even after a horde of tax havens, liberalised foreign exchange laws, and other schemes and incentives had been granted to them.
Moreover, given their slight tilt towards that bourgeoisie, it’s no wonder that even our nationalists, at least the more fiery among them, have an axe to grind with the Left. I leave that for a later column, but I will say this: in Sri Lanka, unlike in the West and the rest of our continent, Marxism and nationalism never really got together. For that, as with everything else I’ve highlighted in this piece, we need to look at the post colonial bourgeoisie. Again.