Download 1 Sarah Merette Paper Presented at the Departmental Seminar

Sarah Merette
Paper Presented at the Departmental Seminar (EH590) June 5th, 2013
Department of Economic History
London School of Economics
Preliminary Analysis of Inequality in Colonial Tonkin and Cochinchina*
Abstract
Despite estimates showing a significant gap in GDP terms between Tonkin and
Cochinchina, its effect on the majority of the population is unclear. In this paper, we
intend to design social tables for colonial Tonkin and Cochinchina, and thus to drive
at the inequality that existed in these two regions of colonial Vietnam. From this, we
will construct some preliminary evaluations of their respective Gini coefficient. The
analytical approach will be based on Branco Milanovic, Peter Lindert and Jeffrey
Williamson's "Pre-Industrial Inequality" paper. This study will be mostly limited to
the 1930s, and will draw primarily from various official French publications,
contemporary evaluations of Indochinese society, as well as the recent GDP estimates
calculated by Jean-Pascal Bassino. Because of data limitations on income and
distribution, the ratios calculated will be quite preliminary and dependent on various
assumptions. Despite potential limitations, these calculations enable an initial
discussion on inequality in colonial Vietnam that has, as yet, not been possible. The
results show somewhat surprisingly that Tonkin was more unequal than Cochinchina,
despite the latter's greater potential for high levels of extraction.
*
This paper is a draft. Please do not cite without the author's permission
1
I. Introduction
Many colonies have had the reputation of being extractive, meaning that profits were
extracted from the resources of the economy, to the benefit of European colonists. By
default such extraction would have resulted in very unequal societies. Indeed,
Sokoloff and Engerman have extensively used the difference between settler and
extractive colonies to explain long-lasting institutional differences between countries,
mainly due to the effects of inequality.1 This type of research has proven very exciting
in evaluations of long-term economic development of ex-colonies. However, with
respect to Southeast Asia and specifically Vietnam, this type of analysis has not been
done. In fact, with respect to colonial Vietnam, little research in terms of income
inequality has been done. Even in contemporary times, research on income inequality
in Vietnam has been minor, with the majority of research being done using the 19921993 Vietnam Living Standard Survey.2 More research on this would allow new
evaluations of the long-term economic development of Vietnam, and indeed would
help test the oft debated question over the "positive causal effect of low inequality on
economic growth and with low inequality of income as an independent contributing
factor to East Asia's rapid growth".3
Fortunately, in the last decades, more research into the colonial economy of
Vietnam has been done. For example, recent research has generated the first estimates
of Vietnamese GDP during French colonial rule, separated in its three component
regions of Tonkin, Annam and Cochinchina. These estimates show a staggering gap
in the GDP per capita of Tonkin and Cochinchina, with Cochinchinese GDP per
capita more than twice Tonkinese GDP per capita throughout the period 1900-1940.
Although many scholars of Indochinese economic history have acknowledged and
mentioned this gap before, these new estimates prompt further questions. Specifically,
how this GDP gap was reflected into the living standards of the Vietnamese
population. In this paper, we propose to evaluate income inequality in Tonkin and
Cochinchina, to better understand whether these regions experienced different
1
Stanley Engerman & Kenneth Sokoloff, “Factor Endowments, Inequality, and Paths of Development
among New World Economies”, Economia, Vol.3, No.1, 2002.
2
Dominique Haughton; Jonathan Haughton, Sarah Bales, Truong Thi Kim Chuyen, Nguyen Nguyet
Ngu (eds), Health and Wealth in Vietnam: An Analysis of Household Living Standards, Singapore:
Institute of Southeast Asian Studies, 1999.
3
Nancy Birdsall, David Ross & Richard Sabot, "Inequality and Growth Reconsidered: Lessons from
East Asia", World Bank Economic Review, Vol.9, No.3, 1995, p.477.
2
colonial experiences. Consequently, this paper proposes to elucidate the question of
how unequal were Tonkin and Cochinchina in the colonial era?
Anne Booth has argued that “it is widely recognized that trends in per capita
GDP are not reliable guides to changes in living standard: economic growth often
confers much greater benefits on some groups in society”.4 Although the literature on
the economy of colonial Vietnam has always acknowledge a significant gap between
the economies of Tonkin in the North and Cochinchina in the South, researchers have
rarely wondered whether this would have resulted in very different living conditions
for the majority of the populations of Tonkin and Cochinchina. In my previous work,
I have argued that in fact the general living conditions of the majority of peasants in
both Tonkin and Cochinchina would have been quite similar. Considering the
significant difference in the GDP of the two economies, this has prompted me to
research the inequality that existed within these two societies. Because of the
significance of GDP differences between the two core regions of Vietnam, it has
seemed more prudent to use a regional perspective. Indeed, the differences in wages
and economic structure are large enough to suggest that using a single country-wide
measure would provide little use in understanding the development of this fragmented
country, at least during the colonial era. In fact, even contemporary research on
Vietnamese inequality uses a regional perspective, as the economic gap between the
two regions remains significant.5
This research ties to a variety of literatures. On the theoretical side, it draws
strongly from the methodologies developed by Branko Milanovic, Peter Lindert and
Jeffrey Williamson's 2007 paper "Measuring Ancient Inequality". Indeed, their
suggestion of evaluating inequality in pre-industrial economies through extraction
ratios initially prompted these calculations, despite the potential limitation in data.
Indeed, these authors admit that their data often is not ideal but that it does provide an
initial basis for evaluation. 6 Furthermore, Williamson's earlier paper "Growth,
Distribution and Demography: Some Lessons from History" provided the means to
test our calculations of Gini coefficient with a cruder proxy of inequality.
4
Anne Booth, Colonial Legacies: Economic and Social Development in East and Southeast Asia,
Honolulu: University of Hawai’i Press, 2007(1), p.131.
5
Paul Glewe, Nisha Agrawal & David Dollar (eds), Economic Growth, Poverty, and Household
Welfare in Vietnam, Washington D.C.: The World Bank, 2004, p.75.
6
Branko Milanovic; Peter H. Lindert & Jeffrey G. Williamson, "Measuring Ancient Inequality",
NBER Working Paper 13550, October 2007, p.6.
3
Furthermore, more textbook work such as Barry Chiswick's and Frank Cowell's
allowed a greater understanding of the value of the ratios calculated. On a more
substantive side, this work ties in with analyses of the socio-economic situation of
colonial Vietnam, such as the works of Jean-Pascal Bassino, Pierre Brocheux, Paul
Bernard, Jean Goudal... to name a few. Although these are renowned authors whose
work has helped illuminate much of the situation in colonial Vietnam, as of yet,
research or even mention of income inequality has not been extensive. On the other
hand, research into inequality in other colonial economies or just developing
economies has been quite significant. For example, Loren Brandt and Barbara Sands'
work on Chinese inequality suggested potential reasons for unexpected results: land
inequality and income inequality are not always the same, while Anne Booth's work
on living standards in Southeast Asian economies has been central in providing a
background for comparison and evaluation.
Intuitively, it seemed that the inequality in Cochinchina would have been higher
than in Tonkin, mainly because this was the locus of the economic activity in colonial
Vietnam, with rubber plantations and large commercial trading houses. Moreover,
because the GDP per capita was much higher than in Tonkin, while my previous
research suggested that peasants forming the vast majority of the populations of both
regions had similar living standards, I expected for inequality measures to show a
large difference between the two regions. This proved not to be the case. This paper
will first outline the background for this research, explain the methodology for the
results calculated and try to explain this apparently perplexing outcome.
4
II. Background
It is crucial to understand the economic background of Tonkin and Cochinchina,
before tackling a more detailed quantitative analysis. The existence of a GDP per
capita gap that is not explained through price-adjusted wages raises the question of
inequality differences between the two regions. Figure 1 shows the evolution of this
GDP per capita gap during the colonial era. Figure 2 shows the evolution of wages
and prices in Hanoi relative to Saigon over a slightly shorter period of time.
Figure 17
7
Using constant prices would result in an equally significant gap.
5
Figure 28
Hanoi urban wages were between 41% and 64% lower than Saigonese urban
wages between 1925 and 1940. It seems clear that the lower wages in Hanoi were not
compensated by proportionately lower prices. Figure 2 highlights this discrepancy.
Although in 1936 the price of the basket of goods in Hanoi was almost 31% lower
than in Saigon, this was the lowest differential. Furthermore, between 1928 and 1932,
the price of a basket of goods in Hanoi was higher than in Saigon, presumably due to
the turmoil associated with the Depression. Even though this gap in the wages of the
two regions seems large, the gap between their GDP per capita was even larger:
Figure 1 showed that GDP per capita in Tonkin was a mere 30% of GDP per capita in
Cochinchina, on average between 1900-1940. Even accounting for cost of living
differential, the wage gap between the two regions is not nearly as large as the GDP
per capita gap between those regions. Clearly the economic divide suggested in GDP
per capita data far over-estimates the actual differences between the standards of
living of the urban populations of Tonkin and Cochinchina.
Using urban data may even overstate the actual gap in the average income of the
majority of the population. Indeed, rates of urbanisation were quite low in colonial
8
Methodology for the price level indication is found in Appendix A. Source for the wage data: JeanDominique Giacometti, "Wages and Consumer Price for Urban and Industrial Workers in Vietnam
under French Rule (1910-1954)| in Jean-Pascal Bassino, Jean-Dominique Giacometti & Konosuke
Odaka (eds) Quantitative Economic History of Vietnam 1900-1990, Hitotsubashi: Institute of
Economic Research, 2000, p.163-214.
6
Vietnam. Both Hanoi-Haiphong and Saigon-Cholon were the main arteries of
economic activity in Tonkin and Cochinchina respectively, as they held the political
and commercial powers of their respective region. The data used to derive the relative
size of each city come from the censuses. These data are limited and provide, at best,
a lower bound estimate of urbanisation rates. As can be seen from Table 1, our
previous explanation could be representative of a maximum of 1 to 3% of the
population of each region respectively.
Table 1: Estimates of Population in the Main Cities, Using Census Data, 1921-1936
Population of the Region
Urban population
(1000s)
Tonkin
Cochinchina
Hanoi
Haiphong
Saigon
Cholon
1921
6 854
3 797
75 000
118 000
83 000
94 000
1931
8 075
4 484
124 000
122 000
122 000
134 000
1936
8 680
4 616
149 000
70 000
111 000
145 000
Urban Population (% of region)
Hanoi
Haiphong
Saigon
Cholon
1921
1.09
1.72
2.19
2.48
1931
1.54
1.51
2.72
2.99
1936
1.72
0.81
2.4
3.14
Urban Population = (number of people in the city / number of people in the region) * 100
Source: Gouvernement Général de l’Indochine: Direction des Affaires Economiques, “Territoire et
Populations”, Annuaire Statistique de l’Indochine, Hanoi: Imprimerie d’Extrème-Orient, 1927-1939.
According to Pierre Gourou, Cochinchina was the most urbanised part of the
Union, with 14% of its population living in urban centres, as opposed to Tonkin’s
urban population of about 4.3%.9 Gourou identified ‘urban centres’ by the presence of
‘commercial activity’, rather than purely by population size.10 A village ceased to be
classified as rural when there was a significant market for goods produced outside the
village boundaries; when many inhabitants were not engaged in agricultural
production; and when there were ‘foreigners’ living within the village bounds.
Gourou’s research on urbanisation was more precise for Tonkinese urban centres than
for Cochinchinese ones and it is difficult to evaluate his claims because he does not
explain his method.
9
Pierre Gourou, Land Utilization in French Indochina, Vol.1, 2, 3, New York: Institute of Pacific
Relations, 1945, p.92 & p.141.
10
ibid, p.92-93.
7
Gourou argued that these low urbanisation rates showed “the overwhelming
predominance of rural activities, and above all agricultural activities, over all other
forms of economic life in French Indochina”.11 Although changes in the economy
during French rule did result in higher standards of living in urban Cochinchina than
urban Tonkin, they may not have had any impact on the wider rural population.
Scholars have argued that many of the benefits of economic works during the colonial
era only accrued to the elites.12 Considering this, it has seemed crucial to undertake a
more serious analysis in the breakdown of Tonkinese and Cochinchinese society.
Constructing social tables permits us to delve deeper into the way in which income
was distributed in both of these economies.
11
ibid, p.141.
Anne E. Booth, “Night Watchman, Extractive, or Developmental States? Some Evidence from Late
Colonial South-East Asia”, Economic History Review, Vol.60, No.2, 2007(2), p.256.
12
8
III. Constructing Social Tables
Basic indications of GDP per capita and wages do not provide us with a good
understanding of the distribution of income within an economy; that much is clear.
There is no doubt that relying on social tables is prone to result in some limitations,
mainly that there is a large degree of heterogeneity within each social class. 13
However, when working in economic history, gathering the required data to answer
most of the questions we have is almost impossible. Consequently, the building of the
social tables that are the cornerstone of this paper has been based on several
assumptions and many generalisations. This section carefully explains how the tables
were built.
As seen in the previous section, the urban population was relatively small,
leaving no doubt that much of the population of Vietnam was engaged in rural,
primarily agrarian, occupations. Goudal suggested that out of the 23 million people
living in Indochina in the late 1930s, 18 million were peasants.14 This would fit with
Gourou's suggestion of the size of the urban population, if we keep in mind that some
people within the agrarian sector were engaged in non-agrarian work. There is no
doubt that the agrarian sector was the main employer of labour. The strong tie of the
workforce to the agricultural sector was clearly seen in the aftermath of the
Depression: “the dismissed native workers apparently adapted themselves to [losing
employment as a result of the situation] by returning to agricultural and other types of
family work in their native villages, and unemployment affected Europeans far more
acutely”. 15 The majority of the population remained engaged in agricultural
production, if only on a part-time basis. Consequently, it is important to understand
labour utilisation in the agrarian sector to gain a better understanding of income
distribution.
In Table 2, we provide a preliminary estimate of the breakdown of population
by occupation in both Tonkin and Cochinchina. This was the first step in constructing
social tables for these two regions.
13
Frank A. Cowell, Measuring Inequality, Second Edition, Hertfordshire: Prentice Hall/Harvester
Wheatsheaf, 1995, Chap. 1-2.
14
Jean Goudal, Labour Conditions in Indo-China, (Geneva: International Labour Office, 1938), p.186.
15
Virginia Thompson, Labor Problems in Southeast Asia, (London: Oxford University Press, 1947),
p.199.
9
Table 2: Estimated Distribution of the Population in Cochinchina and Tonkin, by
Occupation, 1929, (%)
Cochinchina
Tonkin
'Rich' Europeans
0.275
0.150
'Average' Europeans
0.007
0.040
14.000
4.300
Commercial/Industrial Contracted Labour
0.724
0.873
Mining Contracted Labour
0.000
0.857
Agricultural Contracted Labour
0.497
1.095
Daily Wage Labour (Rural)
38.023
27.989
Tenant/Farmer/Small Landowner
46.356
63.950
0.117
0.744
Urban Population
Large Landowner
Table 2 provide only preliminary estimations based on various assumptions.
This data is for the year 1929. In 1929, the total population of Tonkin was 9 036
million people and that of Cochinchina was 5 471 million people.16 The Annuaires
Statistique de l'Indochine (ASI) provided the information for the European
households paying taxes. We assumed that these taxpayers were in charge of
households of an average size of 3 individuals (including themselves). A household of
3 is lower than Gourou's general assumption of peasant household of 5, and reflects
the fact that many Europeans did not come with their families to Indochina. This
provided the population share for the 'rich' Europeans in both Tonkin and
Cochinchina. The ASI also provided the information for the total European in each
region in 1921 and 1931. By assuming constant growth in this group's population, we
derived that there were about 17 111 Europeans in Tonkin in 1929 and 15 444
Europeans in Cochinchina in 1929.17 We subtracted the derived number of individuals
from tax-paying households from this number to obtain the share of the 'average'
European population. The share of the urban population is taken from Gourou's
previously cited work as 4.3% in Tonkin and 14% in Cochinchina.18
16
Maks Banens, “Vietnam: a Reconstitution of its 20th Century Population History” in Jean-Pascal
Bassino, Jean-Dominique Giacometti and Konosuke Odaka (eds) Quantitative Economic History of
Vietnam 1900-1990, Hitotsubashi: Institute of Economic Research, 2000, p.1-40.
17
Gouvernement Général de l’Indochine: Direction des Affaires Economiques, Annuaire Statistique de
l’Indochine, Hanoi: Imprimerie d’Extrème-Orient, 1927-1939.
17
Gourou, op.cit., p.538-543.
18
ibid, p.92, 141.
10
Including the social classes for specific labourers was considered important
because these are the few categories for which we have solid income data. The worker
regulations established in the later part of the colonial era provided guidelines that
allowed us to be precise with the suggested income for each of these classes,
specifically with respect to the number of days they were employed. Furthermore,
Goudal's work showed the number of workers that were engaged in contracted labour
either in agriculture, mining or industrial/commercial employment in 1929.19 We used
these data as the number of active workers in this category of workers. Banens'
estimated share of the population that was active was used to calculate the total
number of people that would have been part of this class of society (i.e. including
dependents).20 Banens' estimates show that the active labour force in both Tonkin and
Cochinchina was about 58% of each region's respective population, throughout this
period. If we compare these labour force data to those from other countries in the area
in the 1930s, we find that 42% of the Indian population was active, 37% of
Indonesia's and 47% of Thailand,21 suggesting that colonial Vietnam's labour force
was unusually high, in both regions, a fact that remains true today.22 Adding up these
various shares provided us with a basis to estimate how the rural sector was broken
down.
To calculate the share of the population that owned large estates, we used the
number of parcels as indicators. In 1931, Tonkin had nearly 7000 parcels while
Cochinchina had 1284.23 We used this number as the number of households that
owned large landholdings. In Tonkin, Gourou argued that large landholding
households had on average 9.6 members. 24 In Cochinchina, all of Gourou's
households were assumed to have 5 members.25 Using this, we derived the number of
people that might belong to this class in each region.
19
Goudal, op.cit., p.294.
Banens, op.cit., p.33.
21
Members of the IPR International Secretariat, A Brief Political and Economic Handbook of Eastern
and Southern Asia, 12th Conference, Institute of Pacific Relations, Kyoto, Japan, September-October
1954, p.17.
22
Glewe, Agrawal & Dollar, op.cit., p.55.
23
Gourou, op.cit., p.336.
24
ibid, p.538-543.
25
ibid, p.538-543.
20
11
Bernard argued that 45% of Cochinchina's rural population was engaged in
work on landholdings larger than 50 hectares.26 We assumed that this meant that 45%
of the remaining population was daily wage labour or coolies. This share represents
38.023% of Cochinchina's total population. The remaining part (46.356%) was thus
assumed to be tenants/farmers/small to middling landowners. For Tonkin, Popkin
estimated that by 1930, 69% of all rural families were either landless or cultivated less
than 0.36 hectares.27 This equated to 63.953% of the total population. The remaining
share of the population (27.989%) thus became part of the tenant/farmer/small
landowner share of the population. These shares seemed unlikely given the generally
held belief that the majority of the peasants in Tonkin owned their own land.
Consequently, we switched the resulting population shares in Table 2. This switch
seemed to fit Bernard's view that 60% of the rural population worked on communal
lands or on landholdings smaller than 5 hectares.28
The second step to constructing social tables was to match each of these social
classes to an average income. This was a trickier step than the first because it is very
difficult to obtain reliable information for income for many of these social classes.
The suggested social table for Tonkin is provided in Table 3 and the social table for
Cochinchina is in Table 4.
Table 3: Tonkinese Social Table, in 1929
Share of Population,
%
Average Income,
$
Rich Europeans
0.150
1527
Average Europeans
0.040
333
Large Landowner
0.744
167
Commercial/Industrial Contracted Labour
0.873
136
Agricultural Contracted Labour
1.095
70
61.790
70
Urban Population
4.300
68
Mining Contracted Labour
0.857
65
Daily Wage Labour (Rural)
30.151
18
Tenant/Farmer/Small Landowner
26
Paul Bernard, Le problème économique Indochinois, Paris: Nouvelles Editions Latina, 1934, p.7.
Samuel L. Popkin, "Corporatism and Colonialism: The Political Economy of Rural Change in
Vietnam", Comparative Politics, Vol.8, No.3, 1976, p.156.
28
Bernard, op.cit., p.7.
27
12
Table 4: Cochinchina Social Table, in 1929
Share of
Population, %
Average Income, $
Rich Europeans
0.275
Large Landowner*
0.117
Average Europeans
0.007
333
Commercial/Industrial Contracted Labour
0.724
264
14.000
133
0.497
132
Tenant/Farmer/Small Landowner
46.356
96
Daily Wage Labour (Rural)
38.023
27
Urban Population
Agricultural Contracted Labour
1527
673
1000
5026
* the text will explain why this category has 3 Options for class income
Income for the 'rich' Europeans was calculated from the data on taxed European
income recorded in the ASI. The difficulty with this calculation was that the data was
not particularly detailed: for each income bracket, they recorded the number of
individuals whose income fell within that tax bracket. In other words, we do not have
specific incomes. This was particularly problematic for the last income bracket which
was simply 'above 13 200$'.29 For all other income brackets, we multiplied the
number of individuals within that bracket by the average income of the bracket. For
the last bracket, we took 13 200$ as the income for these individuals. We then divided
this derived 'average' income for 'rich' Europeans by 3, to achieve a 'per person'
figure. For average Europeans, we took an average income that was lower than the
first income bracket for Europeans paying taxes: 1000$, and divided that by 3 as the
household size.
Table 5: Daily Wages for Select Categories of Workers, 1929, $
Tonkin
Cochinchina
Specialised worker
0.77
1.5
(Male) unskilled worker
0.4
0.75
(Female) unskilled worker
0.22
0.46
Mining unskilled worker
0.37
n/a
Source: Jean-Dominique Giacometti, "Wages and Consumer Price for Urban and Industrial Workers in
Vietnam under French Rule (1910-1954)| in Jean-Pascal Bassino, Jean-Dominique Giacometti &
Konosuke Odaka (eds) Quantitative Economic History of Vietnam 1900-1990, Hitotsubashi: Institute
of Economic Research, 2000, p.163-214.
29
$ throughout this paper refers to the Indochinese piastre.
13
The income for the urban population was based on the assumption that a third of
the active share of the population (based on Banens's estimates of the share of active
workers in both regions)30 worked as specialised workers, another third as male
unskilled workers and a final third as female unskilled workers, for an average of 250
days a year. The choice of 250 days rather than 300 is due to the potential insecure
nature of some of the jobs available in the urban economy. The equivalent income for
each active worker was then divided to reflect average income per person. The wages
were used are found in Table 5. For contracted labour, we used unskilled wages for
agricultural labour, mining wages for mining workers and specialised wages for
commercial/industrial workers, this time assuming they worked 300 days a year, as
stipulated by Labour Regulations (25 days of work had to be provided a year).31 The
income was then divided to reflect 'per person' rather than per worker.
Table 6: Income Per Person, in Various Categories of Households, 1936-1938, ($)
107.6
Middling
Landowners*
(8 hectares)
107.6
Small
Well to do rural
Landowners* (1 Landowners* (1
hectare)
- 5 hectares)
18.4
36.2
104.2
Wealthy Rural
Landowners**
(>5 hectares)
167.4
Small Tenants*
(< 5 hectares)
Coolies
27
Cochinchina
Middle
Tenants* (5-10
hectares)
40.6
30.2
Large Tenants*
(>10 hectares)
Tonkin
Poor Peasants* (few hundred
square meters)
* households size of 5; ** household size of 9.6.
Pierre Gourou, Land Utilization in French Indochina, New York: Institute of Pacific Relations, 1945, p.531;
p.538-543.
The
average
income
for
the
(Rural)
Daily
Wage
Labour
and
Tenant/Farmer/Small Landowner categories of rural workers came from Gourou's
research, replicated in Table 6. Specifically, rural daily wage labour income was
based on the income of the lowest category of peasants in both regions, and divided
by 5, as the household size, to achieve income per person. For the tenant/farmer/small
landowner, the income suggested is that of an average of the middle categories in
those tables, again divided by 5 as the household size for these categories. In both
Tonkin and Cochinchina, the rural population engaged in rural work, as either
30
31
Banens, op.cit.
Goudal, op.cit. & Thompson 1947, op.cit.
14
landless wage labour or small landholders/tenants/farmers, are shown to be the two
largest classes of the population. This is in line with previous research on the rural
economy of Indochina.
Finding information for the income for larger landowners was more difficult. In
Cochinchina, as we can see from Table 4, a number of alternative incomes were
provided for large landowners. Landholdings were much larger than in Tonkin, so in
Option 1, we used Bernard's classification of 50 hectares as the size of a large plot.
Since Gourou's data in Table 6 only provides us with income for landholdings of 8
hectares, we did a proportional calculation to obtain the average income for the large
landholding, again dividing by household size. However, this seems a very low
income and it seemed unlikely that the relationship between size of landholding and
income would be this proportional. In Option 2, we base our average class income on
a suggestion by Michitake Aso: he suggested that a 'typical' Vietnamese rubber
grower in Cochinchina would have had an income of 5 000$ and a household size of
5. 32 However, this was for a landholding of about 30 hectares, which does not
necessarily fit with our category for 'large landowner'. Consequently, in Option 3, we
base our average class income on a different suggestion by Michitake Aso: he
provides the example of a household of 11 people who earned in total 75 400$, or
5026$ per individual, on a much larger plantation.33 This suggestion seems more in
line with the specific class of landlords in this category, especially considering the
concession regime in place in Indochina and specifically the large tracts of land being
given as concessions in Cochinchina.34
The large landowner's income in Tonkin is based on Gourou's information from
Table 6, and adjusted for a household size of 9.6. The income these larger landlords
are suggested to have received is very low, relative to the suggestions for that same
class in Cochinchina. However, it is documented that very few large plantations
existed in Tonkin: Ennis suggested there were only 152 large plantations, and these
were owned by French planters,35 which may have been taken into account in the
32
Michitake Aso, "Profits or People? Rubber plantations and everyday technology in rural Indochina",
Modern Asian Studies, Vol.46, No.1, 2012, p.29 footnote 23.
33
ibid, p.28.
34
Alexandre Deroche, France Coloniale et Droit de Propriété: Les Concessions en Indochine, Paris:
l'Harmattan, 2004, p.186, p.236.
35
Thomas E. Ennis, French Policy and Developments in Indochina, Chicago: University of Chicago
Press, 1936, p.129.
15
'rich' European category. Considering that the population density of Cochinchina was
so much lower than Tonkin's, it does seem to make sense that more of Cochinchina's
population would have been engaged in working larger fields. As previously
mentioned, in 1931, Tonkin had nearly 7000 parcels while Cochinchina had 1284.36
Although many of these parcels were further divided in smaller plots, there is no
doubt that there was more potential for larger estates to be had when the land was
divided into fewer parcels and between fewer people. The tradition of dividing the
family plot into shares for each male offspring would have resulted in more numerous
and smaller parcels in Tonkin than in Cochinchina merely because of differing
demographic characteristics. Colonial policy may have perpetuated the possibility for
formation of larger estates in Cochinchina: the large public works undertaken in the
Mekong delta to expand the canal system, improve infrastructure and reclaim land
were likely to have increased the land available for the establishment of large estates.
In addition, the regulation of the property rights made it easier for larger landholdings
to be established in Cochinchina than in Tonkin, illustrating why there could be such
a large gap in the income for the same type of social class ('large landowner').
It may appear strange that there is no social class in Tonkin with 'average'
income that can compete with Cochinchina's large landowners, especially as previous
research on the structure of the Tonkinese economy suggests that this region had a
thriving, if small, industrial sector. Nonetheless, Mitchell commented that there was
“virtually no modern industries other than the extractive and processing enterprises
required to exploit the country’s resources and prepare them for marketing”.37 Such
industrial development was exemplified in Indochina's mining industry.38 Although
mines had been exploited prior to the colonial period, Goudal, Mitchell and Shepherd
all argued that scientific mining operations only dated back to French involvement in
the sector.39 Out of 1 863 permits for mining concessions given out in 1925, 1 478
were for areas in Tonkin.40 One would assume there might have been a few rich
industrialists, primarily engaged in mining activity. However, these mining ventures
36
Gourou, op.cit., p.336.
ibid, p.191.
38
Jean Chesneaux, Contribution à l’Histoire de la nation Vietnamienne, Paris: Editions Sociales, 1955,
p.171.
39
Goudal, op.cit., p.108; Kate L. Mitchell, Industrialization of the Western Pacific, New York:
Institute of Pacific Relations, 1942, p.154 & Jack Shepherd, Industry in Southeast Asia. New York:
Institute of Pacific Relations, 1941, p.14.
40
French Indochina, Service de la Statistique Générale de l’Indochine, Bulletin Economique de
l’Indochine, Année 1926, Hanoi: 1927, p.651.
37
16
were not the property of any specific individuals like the rice and rubber plantations
of Cochinchina, but rather of corporations. For example, 60% of coal production in
Indochina was controlled by the Société Française des Charbonnages du Tonkin in
1929.41 Consequently, although there are of course limitations with regards to some of
the assumptions and data used to derive Tables 3 and 4, these social tables should
provide an adequate overview of the income inequality for households within each
province for the year 1929.
41
French Indochina, Service de la Statistique Générale de l’Indochine, Bulletin Economique de
l’Indochine, Année 1929, Hanoi: 1930, p.830.
17
IV. Results
A first way to evaluate both the scope of extraction, and thus of inequality in the
colonial economy of Vietnam is to look at the income share of the European
population. In Tonkin the proportion of Europeans paying income taxes in 1929
represented 0.04% of the total population of Tonkin. In Cochinchina, the proportion
of Europeans paying income taxes in 1929 represented 0.06% of the Cochinchinese
population.42 These shares increase if we consider that these European taxpayers
probably were in charge of an entire household of Europeans as we did in Tables 3
and 4, but it remains that these were the main holders of wealth in the European
community. These data were collected in the ASI, in income brackets and number of
Europeans paying taxes within each income bracket. As such, we can calculate the
minimum share of total income that this proportion of people held in each economy.
As previously explained, it is not possible to calculate the maximum share of income,
seeing as the last income bracket is 13 200$ and above. In Tonkin, it turns out that the
0.04% of the population held 6% of the total income of the region. In Cochinchina,
0.06% of the population held 5% of the total income of the region. This is much
smaller than we might expect, although it remains disproportionate. If we assume that
the rest of the population was one homogeneous social class, the remaining share of
GDP per capita would have been 35$ in Tonkin and 75$ in Cochinchina. 43
Comparatively, the European taxpayers earned on average 4 581$ per household in
Tonkin and 4 584$ in Cochinchina. There is no doubt that this means a very unequal
distribution of income in both regions. Although for Europeans in the region the
difference in average income is minor, the resultant average income for the nonEuropean population does differ substantially between Tonkin and Cochinchina, by a
factor of 2. This is largely due to the fact that the total GDP of the region is much
higher, but it does show a very significant gap between the two regions.
Unfortunately, this measurement does not provide any further evaluation of
inequality between various groups in the populations of each region. As such, using
42
Gouvernement Général de l’Indochine: Service de la Statistique Générale de l’Indochine. Annuaire
Statistique de l’Indochine. Volume II: 1923-1929. Hanoi: Imprimerie d’Extrème-Orient, 1931.
43
This is based on dividing (GDP-Income from taxed Europeans)/(Population-Taxed Europeans
Households). GDP data from Jean-Pascal Bassino, “Preliminary Estimates of Vietnam GDP 18001970: North-South Economic Divide in Historical Perspective” in Konosuke Odaka, Yukihiko
Kiyokawa & Masaaki Kuboniwa (eds) Constructing a Historical Macroeconomic Database for TransAsian Regions, (Hitotsubashi: Institute of Economic Research, 2000).
18
the previously presented social tables for both regions should provide a more subtle
measure of inequality.
The Gini coefficient that can be calculated for Tonkin in 1929 based on Table 3
is 38.56. The Gini coefficient that can be calculated for Cochinchina in 1929 based on
Table 4 ranges from 32.75 with Option 1 to 33.21 with Option 2. The more drastic
Option 3 provides a Gini coefficient of 39.02. In all but that last case, which is an
extreme, it seems that the Gini coefficient for Tonkin was higher than that of
Cochinchina. In 2008, the Gini coefficient for Vietnam as a whole was 35.6,44 on par
with other countries in the region such as Thailand whose Gini in 2010 was 39.4 or
India with 33.9.45 However, these Ginis are low when compared to Milanovic, Lindert
and Williamson's calculated Gini coefficient for colonial India, which was between
48.2-49.7.46
Although I expected Cochinchina's Gini coefficient to be higher than Tonkin's,
the fact that the Ginis seem to be so close to one another is not necessarily surprising.
Despite some of the social groups very clearly showing stark income differences, such
as urban workers, large landowners and contractual workers; the largest shares of the
population did not show such a stark gap: mainly the rural daily labourers and the
small landowner/tenant/farmer. In both Tonkin and Cochinchina, it seems that the
single largest contributor to the size of the Gini is between those who own land and
those who do not (or own too little). Consequently, if these results do not necessarily
conform to our expectations, it may be due to the inability of social tables to provide
us with a clear overview of land inequality.
That being said, these social tables are basic and cannot perfectly represent the
society in either region. Giacometti suggested that a large number of the native elite
would have had access to outside sources of income apart from wages, thus affecting
our evaluations of average incomes.47 Since the native elite was supposedly larger in
Cochinchina than in Tonkin,48 the omission of this social class, due to data limitation,
may have a significant downward bias on the calculated Gini coefficient in
44
World Bank, Gini Index Data Table, http://data.worldbank.org/indicator/SI.POV.GINI, May 31st
2013.
45
ibid.
46
Milanovic, Lindert & Williamson, op.cit.
47
Giacometti, op.cit., p.182.
48
R.B. Smith, “The Vietnamese Elite of French Cochinchina, 1943”, Modern Asian Studies, Vol. 6,
No.4, 1972, p.459-482.
19
Cochinchina. In addition, workers were often paid income in kind,49 particularly in
Tonkin where small landowners frequently engaged in extra daily wage labour in the
slack season. This omission may suggest an upward bias in our estimated Gini
coefficient in Tonkin.
Milanovic, Lindert and Williamson suggest that it may be more useful to look
not simply at the Gini coefficient but at the extraction ratio of a pre-industrial
economy to better understand the scope of inequality within that society. To them,
this ratio shows "how much of a potential inequality was converted into actual
inequality".50 Table 7 shows the possible extraction ratios of Tonkin and Cochinchina,
using two options for the minimum subsistence level used to generate the maximum
Gini coefficient. The maximum Gini coefficient in a society corresponds to the
highest possible level of extraction in an economy: where all the population bar one
individual earn an income that only allows subsistence while the one remaining
individual earns the remainder of the economy's product. We followed Milanovic,
Lindert and Williamson's example and used a subsistence income of 300 1990$ and
400 1990$ to calculate our maximum Gini.
Table 7: Calculation of the Extraction Ratio in Tonkin and Cochinchina in
1929
Extraction
Extraction
Max Gini Max Gini Calculated
Ratio
Ratio
(s=300)
(s=400)
Gini
(s=300)
(s=400)
Cochinchina
77.71
70.31
39.02
0.50
0.55
Tonkin
54.55
39.57
38.56
0.71
0.97
From Table 7, it seems clear that Tonkin was much closer to its maximum Gini
coefficient than Cochinchina was. This seems unrealistic considering that much of the
colonial economic ventures were located in Cochinchina. However, it is also true that
Tonkin's much larger population and much more lengthy history of intensive
cultivation of its land may have resulted in the early development of rigid social
classes. In Cochinchina on the other hand, the relatively large availability of fertile
land and the low population might have resulted in a much slower extractionary state.
However, if we compare these extraction ratios to some of the ones suggested in
Milanovic, Lindert and Williamson's work, it seems that the situation in Cochinchina
49
50
Giacometti, op.cit., p.186-187.
Milanovic, Lindert & Williamson, op.cit., p.28.
20
was particularly good, while that of Tonkin was more realistic, but not drastically bad,
for a colony. Indeed, British India's extraction ratio was 0.97 when using 300 1990$
as the subsistence income, but a staggering 1.41 when using 400 1990$.51 This is
much more than what we see in Tonkin, let alone Cochinchina.
A good way to test our calculated Ginis is to compare them to a 'reliable' proxy
measure. Advocates of the w/y ratio argue that it is correlated to indicators of
inequality.52 This ratio is useful because it relies on data that is more readily available
in developing economies prior to World War 2. The rationale behind this ratio's
correlation to inequality is that as the daily wage for unskilled labour gets closer to the
daily GDP per worker, inequality is falling, and vice versa.53 This is logical: the
unskilled worker is generally representative of the lowest class of the population. If
his wage gets increasingly close to the wage of the average worker, than his income
gets closer to the mean income and thus we see a decrease in inequality. Table 8
shows an example of these calculations for 1929.
Table 8: Calculation of the W/Y ratio, 1929
Tonkin
Unskilled Labour: Daily Wage (in $)
Cochinchina
0.4
0.75
360 661 000
445 198 000
5 303 624
3 211 538
1 591 087 200
963 461 400
GDP per worker-day
0.23
0.46
W/Y
1.76
1.62
GDP (in current $)
Active Labour Force
Total days worked per region (assuming
300 per worker)
Wage from: Jean-Dominique Giacometti. “Wages and Consumer Prices for Urban and Industrial
Workers in Vietnam under French Rule (1910-1954)” in Jean-Pascal Bassino, Jean-Dominique
Giacometti and Konosuke Odaka (eds) Quantitative Economic History of Vietnam 1900-1990.
Hitotsubashi: Institute of Economic Research, 2000. Pp.163-214.
GDP from: Jean-Pascal Bassino, “Preliminary Estimates of Vietnam GDP 1800-1970: North-South
Economic Divide in Historical Perspective” in Konosuke Odaka, Yukihiko Kiyokawa & Masaaki
Kuboniwa (eds) Constructing a Historical Macroeconomic Database for Trans-Asian Regions.
Hitotsubashi: Institute of Economic Research, 2000.
Active Labour Force from: Maks Banens. “Vietnam: a Reconstitution of its 20th Century Population
History” in Jean-Pascal Bassino, Jean-Dominique Giacometti and Konosuke Odaka (eds)
Quantitative Economic History of Vietnam 1900-1990. Hitotsubashi: Institute of Economic
Research, 2000. Pp.1-40.
51
Milanovic, Lindert & Williamson, op.cit., p.77.
Jeffrey G. Williamson, "Growth, Distribution and Demography: Some Lessons from History",
NBER Working Paper 6244, October 1997.
53
Michael D. Bordo & Christopher M. Meissner, "Do Financial Crises Always Raise Inequality? Some
Evidence from History", Working Paper, 9/13/2011, p.13.
52
21
Figure 3 shows the evolution of this ratio between 1914 and 1939 for Tonkin
and 1924 to 1939 for Cochinchina. Although in this figure we only show the
relationship between the wage of male unskilled worker and GDP per worker-day, the
relative proportion would not change if using the wage for female unskilled worker,
nor would a change in the number of days worked per year per worker significantly
alter the look of this relationship.
Figure 354
We see that at least until the end of this time period, this proxy also suggests
that inequality was higher in Tonkin than in Cochinchina. Interestingly, it seems that
1929 was a year where inequality in these two regions was most closely similar,
suggesting our Ginis derived from our preliminary social tables may, in fact, be
relatively solid.
It may be that the main reason for Tonkin's apparently greater income inequality
is the very large proportion of peasants with very low incomes. Indeed, Tables 3 and 4
clearly show that the even if annual income for rural daily worker was low in both
Tonkin and Cochinchina, it was particularly low in Tonkin. However, this preliminary
54
W is the (male) unskilled wage taken from Giacometti, op.cit., & Y is the GDP per capita taken from
Bassino, op.cit.
22
evaluation may be misleading. The suggested income may in fact hide part of the
situation and that Tonkinese peasants may have been better off than it seems in these
previous tables. Table 6's data showed the differences in income for various classes of
peasants in Tonkin and Cochinchina. For both regions, Gourou recorded that the
majority of total income came from wages earned collecting the harvests and from
jobs tending to the collected harvest such as husking rice. In addition, some secondary
crops and stock raising supplemented the peasants' income. Gourou’s research
prompted him to suggest that “in Cochinchina there does not seem to be a class at so
miserable a level as in Tonkin”.55 Certainly a preliminary glance at Table 6 showed a
relatively large gap in the income of the Tonkinese 'poor peasant' compared to the
Cochinchinese coolie/small tenant. Poor Tonkinese peasants earned 30-40% less than
the coolies or small tenant of Cochinchina, respectively.
However, in Tonkin, even the lowest income households owned some land,
allowing them access to some home-grown products and potentially reducing the
needs for monetary income. Moreover, more peasants in Tonkin also engaged in some
rural manufacturing such as textile spinning or weaving to supplement their income
than in Cochinchina. It is unclear if Gourou's data fully accounted for this extra
income, but it seems likely that Tonkinese peasants would have needed less monetary
income than their Cochinchinese counterparts. It is therefore not necessarily true that
the Tonkinese peasant was significantly more miserable than the Cochinchinese
peasants. Furthermore, the income patterns of the other classes of peasants in both
regions show much more similarity. Considering that in both regions a large share of
the population would have fallen within these categories, the judgment that Tonkinese
peasants experienced worse living standards than Cochinchinese peasants seems an
exaggeration. Consequently, inequality may in fact have been lower in Tonkin than in
Cochinchina, but this cannot be further tested due to insufficient data.
55
Gourou, op.cit., p.552.
23
V. Conclusion
This paper has attempted to shed some light on inequality in colonial Vietnam.
Although much of the literature on colonial Vietnam has acknowledged an economic
gap between Tonkin and Cochinchina during the colonial era, its impact on the living
standard of the populations of these regions has not been extensively discussed. This
paper produces some preliminary estimates of income inequality in these two regions
so as to foster further research into the actual living standards of the colonial
economies of Tonkin and Cochinchina. It is our opinion that although these measures
suggest that income inequality was relatively similar in both regions, income
inequality may not be the best indicator of living conditions for populations. These
measures rely too much on monetary measures that may be inappropriate in societies
that are not as 'marketised' as modern societies. Nonetheless, it is also our opinion that
these measures are useful tools in understanding the workings of these two
economies.
The Gini coefficient, a traditional measure of inequality, suggests that income
inequality was more significant in Tonkin than in Cochinchina in 1929. A proxy
measure of inequality, the w/y, suggests this may have been the case throughout most
of the 1920s and 1930s. Both of these indicators, however, do not suggest a massive
difference in the scope of the inequality. In fact, both regions seem to have been in
relatively similar positions as today's Vietnamese economy, as well as other excolonies. Furthermore, the extraction ratio calculated based on this preliminary
evaluation of Tonkin and Cochinchina's economies suggest that Tonkin's economy
suffered from a greater degree of inequality than Cochinchina's considering the
potential for inequality that existed within these economies.
These results are at odds with out initial intuition. Between 1900 and 1940,
Cochinchina's total GDP was much higher than Tonkin's and its GDP per capita was
more than twice Tonkin's. Although wages and income were higher in the
Cochinchina than in Tonkin, even when taking into account the higher prices, there
remained a substantial gap between these two economies. Intuitively, we believed this
would have resulted in larger inequality in Cochinchina than in Tonkin. The fact that
this is not reflected in the previous measures suggests that measures of income
inequality may hide existing inequality, for example in land and wealth. It is also
possible that the construction of our social tables was flawed. Indeed, it seems clear
24
that there is 'income' suggestion for various classes are not robust. This is particularly
true for peasants in Tonkin who were rumoured to have access to a more home-grown
food and home-produced goods, reducing their dependency on monetary income.
Such a situation would place some doubts over our suggested social tables and may
hint at these measures of inequality being mis-calculated.
Nonetheless, the idea of a more unequal society in Tonkin may not be at odds
with historical evidence. Indeed, inequality could be the result of various historical
and institutional factors that evolved over time. In fact, the expansion of Tonkin into
Annam and later Cochinchina was the result of poverty and possibly growing inability
for some to integrate society. It is possible thus that Cochinchina's more 'recent'
settlement, in relative terms, explains its lower extraction ratio and, possibly, income
inequality: its relatively less exploited territory could still be further exploited,
whereas Tonkin's had already been pressed.
25
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Appendix A: Constructing the Price Index
The wages used in this paper are for the working indigenous class. The French
constructed cost of living indices for the indigenous middle-class of Hanoi and
Saigon. Because we cannot find information for the breakdown of the basket of goods
for Saigon's indigenous middle-class, we use that of Hanoi's as a common basket for
both cities. It is unlikely that there would have been a great deal of difference in the
weights associated with various categories of goods included in a typical basket in
both cities. Table A.1 shows the weights French authorities associated with various
goods included in this basket.
Rice was the most significant expense, but it seems rational to expect a more
complete basket of goods to temper the conclusions we reached when looking solely
at rice wages. Unfortunately, as previously mentioned, matched prices are only
available for the goods found in the European basket of goods. Table A.2 shows,
however, that the price differential between the same goods purchased in Hanoi by
Europeans and indigenous people alike were rather similar. Price differential were
likely the result of the greater bargaining power of the indigenous population, as well
as the cheaper options of seats in either the theatre or the trains.
Considering this, we will assume that the prices for goods included in the
European basket of goods were representative of urban prices and that the differential
between European and indigenous people in Saigon would have been rather similar to
that in Hanoi. Consequently, the ratio of prices in Saigon and Hanoi were probably
similar when using goods purchased by Europeans or by indigenous people.
Problematically, not all the goods included in the indigenous basket of goods shown
in Table A.1 were included in the European basket of goods. We therefore need to use
a smaller basket. Table A.3 shows the goods that were included in the basket of goods
of the indigenous populations for which we can find matched prices and the weights
associated to these goods in our new basket. The weights provided are based on Table
A.1's, with some modifications due to either unavailability of prices or incomparable
units.
Prices for these goods were recorded for the years 1910-1922 in Hanoi and
1910-1925 in Saigon. Using the cost of living indices the French published, prices can
be extrapolated until the end of the time period. Because we want to know how the
32
price of this basket of goods evolved in Hanoi relative to in Saigon, we compiled a
ratio of the price in Hanoi relative to the price in Saigon for each good. Table A.4
shows an example year for this calculation. Using these ratios and the respective
weights associated to each goods, it is now possible to track the movement of the
price of this basket of goods in Hanoi relative to Saigon. This is what is represented in
Figure 2.
Table A.1: Weights for Hanoi's Indigenous Middle-Class's Basket of Goods
Rent
8.3
6.4
Chinese
vermicelli
1.4
Bean paste
2.4
Petrol
2.6
0.8
Calico
fabric
7.5
Silk
0.4
Clothing
Fresh
vegetables
Eggs
Water
Wood
0.4
1.3
Beef
3.5
Pork
2.8
Soap
0.3
2
Train
1.4
Tuktuk
0.6
Chicken
Grease
0.3
Various
fishing
products
5.2
Brine
2.5
Fresh fruit
4.9
Tea
Rice alcohol
Other
Food
32.1
Lodging expenses
Rice
1.5
Theatre
2
9.4
French Indochina, Service de la Statistique Générale de l’Indochine, Bulletin
Economique de l’Indochine Année 1923, Hanoi: 1924, p.551.
33
Table A.2: Annual Average of Retail Prices of Goods in Hanoi for Europeans and
Indigenous People, 1912-1922, ($)
Indigenous Hanoi
European Hanoi
Rice 2nd quality (100 kg)
7.18
7.59
Eggs (100)
1.50
1.85
Fish (kg)
0.31
0.59
Railway (ticket)
0.64
3.09
Tuktuk (ride)
0.05
0.10
Theatre (ticket)
0.18
0.57
French Indochina, Service de la Statistique Générale de l’Indochine, Bulletin
Economique de l’Indochine Année 1925: p.442-447; Année 1922: p.645-652; Année
1923, p.556, Hanoi: 1923-1926.
Table A.3: Suggested Basket of Goods for the Indigenous
Populations of Saigon and Hanoi
Weight
Rice (2nd quality)
52
Egg
0.8
Beef
3.5
Pork
2.8
Chicken
2
Fish
5.2
Beer
9.4
Heating Wood
12.6
Calico
7.9
Soap
0.3
Tuktuk
Cinema Ticket
2
1.5
34
Table A.4: Prices in Saigon and Hanoi for Goods Included in Typical
Basket of Goods, 1910*
Hanoi Prices
($)
Hanoi/Saigon
(ratio)
6.26
6.6
1.05
1
0.02
0.01
0.67
Beef
kg
0.26
0.25
0.96
Pork
kg
0.49
0.43
0.88
Chicken
couple
0.6
0.7
1.17
Fish
kg
0.26
0.55
2.12
Beer
48 bottles
12
0.27
0.02
Heating
wood
100 kg
5
2.43
Calico
meter
00.32
0.25
0.78
Soap
kg
0.3
2.12
7.07
Tuktuk
per ride
0.25
0.1
0.4
Cinema
seat
0.8
0.5
0.63
Good
Quantity
Rice
100 kg
Eggs
Saigon
Prices ($)
0.49
French Indochina, Service de la Statistique Générale de l’Indochine, Bulletin
Economique de l’Indochine Année 1925: p.442-447; Année 1922: p.645652; Année 1923, p.556, Hanoi: 1923-1926.
35