Download the simple reproduction squeeze in semai society

MERCHANT CAPITAL AND
THE SIMPLE REPRODUCTION SQUEEZE
IN SEMAI SOCIETY
Colin Nicholas
Published in Ilmu Masyarakat, Vol. 21, 1992, pp.74-82.
For centuries, Semai communities have been relating with non-Orang Asli. These
contacts were for the most part limited to occasional exchanges of forest produce
for other goods such as cloth and iron. In the main, however, the traditional
economy of the Semai has been one dominated by subsistence-oriented production.
Recently, especially over the past decade, it has been observed (Williams-Hunt
1984, Nicholas 1985, Gomes 1986) that the Semai are increasingly involving
themselves in producing simple commodities for a cash return. Petai, durian and
rattan are the main commodities produced; bamboo, gaharu, medicinal plants and
resins are others. Many Semai are now also involved in cash crop production,
especially of rubber and oil palm.
In earlier work (Nicholas 1985, 1990), I asserted that production in two Semai
settlements, Kampung Sungei Buntu and Kampung Kuala Tual in Pahang, have
been reorganized by the state and merchant capital. Such reorganization was
initiated in the interest of 'national security' for the state and for the realization of
profit by merchant capital. The consequences of such reorganization were varied,
but generally detrimental to Semai autonomy and well-being. The part played by
merchant capital is the subject of this article.
Merchant Capital and Semai Production
Merchant capital's active participation in Kampung Sungei Buntu and Kampung
Kuala Tual coincided with the increased accessibility to the villages in the early
1980s. Nevertheless, merchant capital's only reason for being involved in the two
Semai settlements is to profit from unequal exchange.1 There was, however, one
setback: the products produced in the traditional economy of the Semai (such as
blowpipes, water-containers, root crops and traps) do not possess any significant
exchange value. This is so since the more materially-sophisticated external society
either does not have any need for these products, or it has developed its own
superior substitutes.
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Nevertheless, the subsistence base of the Semai does contain a number of materials
which are required by the external economy either as end-products or as
intermediary goods. Examples of the former are fruits such as petai and durian
while the latter would include the various species of rattan. Other intermediary
goods required by the external economy, and for which the Semai are able to
provide, include resins, incense-wood (gaharu), jelutong (for the manufacture of
chewing gum) and bamboo (for the manufacture of awnings, baskets or for the jossstick industry).
However, the products which are demanded by the external economy do not feature
prominently in the productive activities of the Semai's traditional economy. If
merchant capital is to penetrate Semai economy, it needs to reorganize Semai
production so that the products that have exchange value are produced in sufficient
quantities. Only then will mercantile trade be feasible.
Merchant capital's modus operandi for reorganizing Semai production has been
through subtle, yet equally forceful, means. For one, it plays on the Semai's
appreciation of the usefulness of manufactured goods, and so continually creates
new wants.1 And in order to satisfy these new wants, the Semai need to generate a
cash income. Rather than sell their labour power directly, the Semai resort to
producing simple commodities in order to exchange them for cash. It is not
uncommon, for example, for Semai individuals to go into the forest for a few days
at a stretch to gather sufficient rattan or gaharu so as to meet the cost of, say, a
cassette recorder or a mosquito net.
The disbursement of small loans to the Semai is another means by which merchant
capital encourages simple commodity production. These loans are basically interestfree, goodwill advances. They enable the Semai to purchase the manufactured items
they require or want. For repayment, the merchant usually dictates that the Semai
produce those products which have exchange value, and hence, a potential profit
from unequal exchange. Through such loans, merchant capital is provided with an
avenue for the reorganization of Semai production.
Semai Surplus
That a surplus is produced by the Semai of Kampung Kuala Tual and Kampung
Sungei Buntu is evident from the observation that present-day Semai production
retains the subsistence-oriented mode of its traditional economy while
accommodating newer forms of production viz. simple commodity production. Hill
rice is still being planted, while hunting and gathering continues to be a significant
source of subsistence. The introduction of simple commodity production
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(particularly petai and rattan production), while still retaining the traditional
subsistence-oriented activities, suggests that Semai labour power - which earlier had
been utilized solely for use-value production - is now being directed towards simple
commodity production as well. This implies either that labour power which was
previously unutilized productively (e.g. that which was spent on leisure) was now
being directed towards simple commodity production or, alternatively, it could
mean that the production of use-values was now achieved with less labour effort,
with the residual being utilized for simple commodity production. It could also have
involved a reorganization of the division of labour with the menfolk, womenfolk
and children playing complementary roles in a social formation now organized for
both simple commodity production as well as use-value production.
In Kampung Kuala Tual and Kampung Sungei Buntu, the forces of production have
developed beyond the minimum needed for the survival of the Semai. While the
changed level of the productive forces reflects the potential of the Semai to progress
and their ability to adapt to change, it allows, at the same time, for the production of
a surplus which makes the exploitation of the Semai possible.
Unequal Exchange and Surplus Appropriation
The surplus of the Semai is appropriated by a number of mechanisms, the most
obvious of which is in the sphere of exchange. Here, merchant capital's inherent
need to participate in unequal exchange is perceived as the basis for the exploitation
of the Semai.
It is not difficult to understand why this is so as the difference in prices between that
received by the merchant from his principals and that given to the Semai is usually
great enough to elicit charges of exploitation against them. Without exception, the
merchants of Kampung Kuala Tual and Kampung Sungei Buntu, who perform
'middleman' functions, reap substantial monetary profits by engaging in such
unequal exchanges. For instance, during the peak of the petai season in Kampung
Sungei Buntu in 1983, the price offered by the merchants was RM10.00 per bunch
of 100 pods while the wholesale price in Kuala Lumpur, where the petai was
marketed, was RM46.00 per 100 pods. This represents a market margin of 360%,
shared by the immediate merchant and the retailer in Kuala Lumpur. During the
same period, the price of petai in Kampung Kuala Tual was RM6.00 per 100 pods,
reflecting an even greater market margin of 667% for the mercantile interests. 3
One can, however, argue that other costs (such as transportation and compensation
for risk-taking) have to be considered. But such large margins do not reflect mere
compensation for entrepreneurial activity.4 Instead, it is asserted that it is the very
conditions around which Semai production is organized which provide scope for
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such high margins. Merchant capital's ability to exercise control over the price
system, and hence, the terms of trade, is not the absolute mechanism responsible for
the appropriation of the surplus of the Semai. To insist that this is so would be to
suggest that Semai surplus is extracted through marketing margins and that
exploitation occurs at the level of exchange. This presents a problematic because
exploitation, in the strict sense, is a production relation and is located at the level of
production. More specifically, it is a relation between social classes, i.e. between
non-producers who extract surplus labour from the direct producers in the process
of production (Goodman and Redclift 1981: 77). It is necessary, therefore, to
examine how Semai production is constituted so as to analyze the ways in which the
interests of capital are best served.
The Semai as Wage-Labour Equivalents
The Semai simple commodity producers still retain possession of their means of
production and are generally not employed as wage-labourers. Semai production is
therefore determined by commodity relations and organized along the lines of
simple commodity production, not by capitalist social relations. The latter form of
production would necessitate the generalization of commodity production which,
strictly defined, requires that labour power and the means of production be
separated and circulate as commodities. As it is, the Semai producers of Kampung
Kuala Tual and Kampung Sungei Buntu are not fully expropriated nor dependent
for their reproduction on the sale of labour power for wages. This presents a
problem as the concept of exploitation, defined as being based on the appropriation
of surplus value, 5 cannot be applied wholly to the case of the Semai.
Nevertheless, the Semai are not independent simple commodity producers in the
strict sense. While their relations with merchant capital may be manifested at the
level of exchange, they are not wage labourers per se. Instead, they are 'wage-labour
equivalents' in that the price they receive for their product a pure category of
exchange but a concealed wage (Banaji 1977: 34; Bernstein 1977: 176). That is to
say, behind the superficial 'surface' sale of products, the Semai actually sell their
labour power.
In recognizing that the relations between the Semai simple commodity producers on
the one hand and those of the state and merchant capital on the other meet at the
level of production, the mechanisms by which the surplus of the Semai are
appropriated can be specified. The ability of the Semai to accept lower prices for
their commodities (because the need to meet simple reproduction costs is met by
continued subsistence production); and the ability of the agents of capital to require
the Semai to intensify the use of their labour power (without being adequately
compensated for it), places the Semai in a vulnerable position as far as their
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exploitation is concerned. Bernstein (1979: 166) terms this phenomena, where a
deterioration in the terms of exchange (of Semai commodities for items of
consumption) results in a reduction in levels of consumption or an intensification of
commodity production, or both simultaneously, as the 'simple reproduction
squeeze.'
The Simple Reproduction Squeeze and Surplus Appropriation
Semai production has been, and still continues to be, based on the 'logic of
subsistence' - that is, meeting the needs of simple reproduction. Hence, despite the
introduction of simple commodity production, Semai production still continues to
include the production of use-values. As such, a portion of the costs of their
reproduction is met by their own efforts. This is significant note the production of
these use-values represent a potential source of subsidy to the various branches of
capital interested in extracting the surplus labour of the Semai. Goodman and
Redclift (1981: 78) argue that by meeting part of the cost or 'price of production' of
the labour inputs now devoted to simple commodity production, the continued
production of use-values actually exerts downward pressure on the relative prices of
these commodities. Furthermore, since unpaid subsistence labour is not imputed at
its real market price or opportunity cost, the prices of the commodities can fall
below the equilibrium level necessary to ensure that capitalist interests achieve the
long-run average rate of profit. Merchant capital, for example, would realize
abnormal profits while the producers would experience a loss in surplus labour.
The ability of the Semai to accept a lower price (because a part of their reproduction
is met by subsistence production) also affects their bargaining position in the
determination of the terms of exchange for their commodities. As it is, such terms of
exchange are generally determined by the mercantile interests - a result of the
monopsonistic nature of the market and the aggressiveness of the merchants. That
the terms of exchange are not under the control of the Semai is significant because
the determination of such terms is another means by which capital is able to extract
surplus labour. In particular, a deterioration in the terms of exchange for the Semai
has the effect of simultaneously reducing the level of consumption and raising the
costs of reproduction - that is, subjecting the Semai to the simple reproduction
squeeze. 6
The capacity of the Semai to withstand this simple reproduction squeeze is
attributed to the subsidy element from use-value production and their ability to
provide surplus labour. In the face of declining prices, for example, the Semai
producer may restore his previous position by working longer hours or by
intensifying the use of unpaid subsistence labour, or both simultaneously.
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Table 1
Petai Production in Kampung Sungei Buntu:
Quantity produced and Labour-time utilized by
four selected individuals1, August-September 1983
Quantity produced3
(pods)
Labour time utilized4
(hours)
Time of season2
Start
Peak
End
Start
Peak
End
Price per 100 pods2
(RM)
12.00
10.00
18.00
12.00
10.00
18.00
Batin Lat
400
600
150
4.1
7.1
7.5
Katong
200
450
-
3.6
6.2
-
Apat
350
700
150
4.3
6.8
7.1
Nyuk Yat
200
350
-
3.9
6.6
-
Total
1,150
2,100
300
15.9
26.7
14.7
Average
287.5
525.0
150.05
4.0
6.7
7.35
Total Income (RM)
149.50
210.00
54.00
Average Income
(RM)
37.40
52.50
27.05
Notes:
1.
The individuals surveyed were representative of the Semai actively engaged in petai production.
2.
The price categories coincides with the beginning of the petai season (mid-August), the peak
(late-August to mid-September) and the close of the main season (mid-October).
3.
The quantity produced corresponding with the respective prices reflect the average of 3-day
periods surveyed for each of the price-positions.
4.
Labour-time utilized is measured from the time the producers leave the settlement until the time
they return.
5. The average value is that of the only two individuals participating in petai production at this price.
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Whichever avenue is chosen, the effect is that the level of production is increased
and absolute surplus labour is transferred. The simple reproduction squeeze,
therefore, provides merchant capital with an effective mechanism by which its
interests can be advanced.
Empirically, the operation of the simple reproduction squeeze can be seen in the
case of petai production in Kampung Sungei Buntu during August-September 1983.
The average quantity produced and the labour-time utilized by four Semai
individuals, who were actively engaged in petai production, is given in Table 1. The
results are tabulated according to three price positions which corresponded with the
beginning, the peak and the end of the main petai season.
When the price offered was RM12.00 per 100 pods of petai, a daily average of
287.5 pods were procured, with each producer expending an average of 4 hours of
his labour-time. The relatively short time taken to procure the petai is explained by
the fact that the Semai, not unexpectedly, tend to harvest the petai trees closest to
their settlements first. Thus, towards the end of the season, when only the distant
trees had fruits to be harvested, more labour-time was required. As such, despite a
higher price offered then (RM18.00 per 100 pods), only two of the four individuals
sampled participated in petai production, collecting an average of 150 pods and
expending an average of 7.3 hours of labour-time.
During the peak of the season, when the price dropped to RM10.00 per 100 pods, as
a consequence of the increased supply of the fruit, average output increased by
82.9% to 525 pods, while the average labour-time utilized increased by 67.8% to
6.7 hours. The consequence of the low price is to cause the Semai producers to
increase total production in order to meet their consumption demands. Additional
labour power has to be expended in view of both the need to produce more and the
increased difficulty in locating the trees. The Semai could choose not to participate
in petai production at this lower price but they chose otherwise so as to meet their
consumptive needs and wants. The lower price therefore not only caused an
increase in petai production but had also required a greater amount of labour effort
from the Semai.
It is also significant to note that while the drop in prices caused a 82.9% increase in
average petai production and a 67.8% increase in average labour-time expended,
the increase in average income for the Semai was only 40.4% (from RM37.40 to
RM52.50). This reveals that a fair portion of the Semai's effort was not adequately
compensated, implying a gain being made by another party at the expense of the
Semai. This is, in effect, the consequence of the simple reproduction squeeze.
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The simple reproduction squeeze, therefore, whether it operates in the sphere of
petai production or any other aspect of Semai simple commodity production,
provides the mechanism by which the exploitation of the Semai is effected. More
specifically, in conceptualizing the Semai producers as wage-labour equivalents, the
intensification of both Semai production and labour power can be regarded as
having given rise to the transfer of absolute surplus value from the Semai to the
mercantile interests.
Consequently, the unvarying objective of capitalist production – the extraction of
surplus value – is achieved in Semai social formations.
Notes
1.
Merchant capital is a particular type of circulation capital which is restricted to the
sphere of the buying and selling of commodities. The circuit of merchant capital
involves two transactions but only one commodity. Furthermore, there is nothing
which merchant capital does to this commodity between the moment of its purchase
and its subsequent sale, which increases its value. This circuit can be represented in the
following form: M-C-M' (where M represents the money expended by the merchant to
purchase commodities (C), and M' the amount of money received on resale of the same
commodity). Because the merchant's motive in engaging in such a transaction is to
make a profit, his selling price (M') must be greater than his purchase price (M),
otherwise he would be making a loss. That is to say, the merchant must engage in
'unequal exchange' in order to receive a profit. However, since, there is no change in
the value of the commodity that is being traded, the source of profit for merchant
capital must lie in the sphere of production - as the unrewarded product of labour. By
engaging in unequal exchange, as such, merchant capital is able to appropriate part of
the surplus product of a society. It is not necessary for production to be organized
along a capitalist basis for merchant capital to exist. The only condition that merchant
capital requires is that part of the social product should regularly consist of
commodities.
2.
Aggressive marketing by certain merchants is also not uncommon. For example, a
fishmonger in Kampung Sungei Buntu would persistently urge the Semai to purchase
his fish. Often he would wait outside the hut of a potential customer and continually
call out to him to purchase his fish. The Semai usually give in simply because as one
individual revealed: "It would not be nice to send him away without selling anything."
Another effective ruse used by some merchants to encourage sales is the appeal to the
Semai children's longing for sweets, tidbits, toys and other such commodities. In such
instances, it is very difficult for a parent to refuse a child something he has persistently
asked for, since the parent would incur the wrath of pehunan in frustrating the child's
desire. Most parents, as such, succumb to their children's pleas so as not to be
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responsible for the injury or illness that is sure to result by placing the child in a state
of pehunan.
3.
The same can be argued about the margins received by the merchants in their dealings
with other commodities (such as rattan, gaharu, as well as manufactured items sold to
the Semai). A detailed discussion of the various margins is deemed not crucial to the
ensuing argument as it is not contended that exploitation of the Semai occurs at the
level of exchange, as reflected by price differentials.
4.
That this is so can be illustrated in the case of a merchant in Kampung Sungei Buntu.
Apart from running his own sundry shop, he also acts as a middleman for a Chinese
petai dealer from Kuala Lumpur. His role is to collect the petai from the four Semai
settlements within a 5 kilometre radius and then to deliver them to the Chinese dealer.
For his part, he is paid a 'brokerage fee' of a minimum of RM4.00 per 100 pods. Thus,
despite relatively low transportation costs incurred and virtually no risks involved (as
whatever quantities of petai obtained are always accepted by the dealer), the merchant
is still able to realize a substantial margin. It should also be added that the Chinese
dealer even provides him with a pick-up truck for his use - at no charge whatsoever.
5.
The extraction of surplus value is the specific way in which exploitation takes place
under capitalism. This is achieved strictly by the exploitation of labour in two principal
forms: absolute surplus value, which is extracted when the absolute quantity of surplus
labour-time is expanded, typically by lengthening the workday or speeding up
production; relative surplus value, which is extracted when necessary labour-time falls
relative to surplus labour-time, typically by reductions in the value of labour power.
Surplus value is distributed in three forms: interest, rent and profit (Bottomore, et al
1983: 471).
6.
The costs of production of the Semai can also be increased by the introduction of new
types of production. In the case of rubber cash-cropping, for example, the need to
purchase chemicals and other accessories to process the latex into sheets, represents
additional costs to be incurred by the Semai.
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published in Review of African Political Economy, 10, (1977), pp 60-73.
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