The Prayut government has been on the receiving end of another round of negative press in the thick of the coronavirus crisis, due to the Prime Ministers’ recent comment that he would “seek help from the wealthiest members of society” to alleviate the oncoming economic concerns.
This decision has been met with a barrage of criticisms online, with the hashtag “Beggar Government” trending on Twitter over the past few days. The cultural implications of the move may loom large, which is an issue which other writers on this site have tackled in extensive detail. However, from an economic standpoint, the decision itself isn’t particularly outrageous, and the vitriol being shown at the government is misplaced.
Evidently, it raises questions about the relationship between the state and private owners of capital, which has been a touchy subject in Thailand in recent years. The current government has come under fire for being influenced by big business in the past, as has virtually all of its predecessors.
It is impossible to shy away from the fact that state and capital are going to have to collaborate – the question should really be about who is leading the way and what the public is gaining out of the cooperation. In other words, the fact that the government and business leaders are making deals isn’t worth the outrage, it’s the manner in which those deals are being done.
The ‘ideal’ relationship between the state and the private sector has been a hot topic of discussion among political economists for generations now. Marx believed that the state was a vessel used by owners of private capital to create favourable regulations and institutions for further enriching themselves. Meanwhile, other scholars see the state as the steering wheel, regulating and ‘guiding’ private investment in a partnership for development.
A good summary of these ideas comes from an iconic campaign speech by former US president Franklin D. Roosevelt, who addressed the supposed antagonism his government had shown the nations’ business elite at a rally for his second term in New York in 1936:
“We had to struggle with the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.”
President Roosevelt may not have intended it at the time, but he was endorsing Marx’s view by claiming that the administrations prior to him, especially that of Republican Herbert Hoover, had allowed for the takeover of the state by private interests. To draw the obvious analogy, the cart was driving the horse, and it had driven it right into the Great Depression of 1929.
Roosevelt continued:
“I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master.”
Here, the President promises to continue his fight against the private interests which had plagued the country’s prosperity for their own gain by “mastering” the “forces of greed”.
The administration Roosevelt led got the horse back in front, using its leverage to push private capital to work for public good, culminating in a government-led shift to a “war economy” to ramp up production and eventually defeat the Nazis. The unprecedented crises of Roosevelt’s tenure required the co-opting of the business elite, but in a manner in which the state both acted in the public good and remained uncorrupted by those it was meant to be regulating – a very rare sight in the modern day.
The fact is, the Prayut government does not own all of Thailand’s means of production. The ability of the government to mobilize it during times of hardship requires mechanisms which are built up over many years.
Whether it’s the Defense Production Act in the United States which President Trump is belatedly using to build ventilators, or the nationalized banks and credit controls which drove Japan and Korea’s rapid development in the second half of the 20th century, the government needs to develop strategies for co-opting private capital during times of crisis.
It is certainly problematic that the government needs to call on “help” and “donations” from the private sector, but the issue lies mostly in the framing of the PM’s approach. It is a reflection of the lack of institutions present for co-opting their support when it is desperately needed; something that can only be built up over an extended period of time.
If you want something to be outraged about, be upset at the decades of laissez-faire capitalism which has led us to be unprepared for this moment, not at the fact that the government is trying to remedy the situation in the only way available to it.
There is an understandable worry that the cart drives the horse in this country, but surely we shouldn’t be outraged that the two have to go together in the first place.