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Enterprise occupied an ambiguous position in the Le-Trinh polity ...

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Enterprise occupied an ambiguous position in the Le-Trinh polity ...The,the

Gerard Sasges, “The Landscape of Enterprise in Colonial Vietnam”

    I. Introduction

    In 2001, the French scholars Pierre Brocheux and Daniel Hémery observed

    1that “the economic history of Indochina has yet to be written.” A decade later, that

    statement holds largely true. Martin Murray’s 1980 The Development of Capitalism

    in Colonial Indochina remains the most authoritative work in a European language on

    2the topic. However, its focus on how the Vietnamese economy was restructured to fit the needs of global capital can obscure the degree to which the processes at work were also local. Works in Vietnamese, such as Nguyễn Văn Khánh’s Cơ cấu kinh tế

    xã hi Vit Nam thi thuộc địa feature a similar focus on how Vietnam was integrated within a global and colonial political economy and the resulting legacy of

    3underdevelopment. This sort of analysis flows in equal measure from the sort of meta-level sources that are most accessible to scholars and from a certain kind of

    4post-colonial politics. This paper is intended to help us shift focus from these sorts of debates by going from the global to the local, investigating the political economy in

     1 Pierre Brocheux and Daniel Hémery, Indochine: La colonisation ambiguë, 1858-1954

    (Paris : Découverte, 2001) 427. 2 Martin Murray. The Development of Capitalism in Colonial Indochina (1870-1940) (Berkeley:

    University of California Press, 1980). See also John F. Laffey. “Land Labor and Law in Colonial Tonkin Before 1914,” Historical Reflections 1978: 223-263. Studies relating to specific enterprises in Indochina include Yasuo Gonjo, Banque colonial ou banque d’affaires; la Banque de l’Indochine sous la Troisième République (Paris : Imprimerie nationale, 1993). Michel Bruguière, “Le Chemin de fer du

    Yunnan : Paul Doumer et la politique d’intervention française en Chine (1889-1902),” Revue d’histoire

    diplomatique January-March 1963: 23-61, April-June 1963: 129-162, July-September 1963: 252-278. David Del Testa, “Paint the trains red : labor, nationalism, and the railroads in French Colonial Indochina, 1898-1945” (Ph.D. dissertation, University of California at Davis, 2001). 3 Nguyễn Văn Khánh, Cơ cấu kinh tế xã hi Vit Nam thi thuộc địa, NXB Đại hc Quc Gia Hà Ni,

    2004. 4 The post-colonial orthodoxy has in turn evolved its own reaction. See for example Jacques Marseille, Empire colonial et capitalisme français : histoire d'un divorce (Paris: A. Michel, 2005) 13-14

    (originally published 1984; all references are to the 2005 edition). For similar revisionist analyses of colonialism see David Landes, The wealth and poverty of nations: why some are so rich and some so poor (New York: W.W. Norton, 1999). Sylvie Brunel, L’Afrique (Paris: Editions Bréal, 2004).

    Vietnam itself and how it promoted the accumulation of local capital and the development of local enterprises. To do that, it examines what I’ve called “Colonial

    Conglomerates”: French-owned enterprises with capital over $1 million francs whose

    5operations were largely but not exclusively based in Vietnam. I hope that by

    examining these local enterprises, this paper will contribute to the writing of an indigenous history of the economy of colonial Vietnam.

     This paper has two main parts. The first is a description of the Vietnamese political economy, from its pre-colonial roots to the end of the colonial era in 1945. The second is a case study of a typical Colonial Conglomerate, the Fontaine Group. The two parts of the article correspond roughly to two different types of sources. The first is the Annuals of Enterprises (Annuaires des entreprises) published beginning in

    1912. Compiled by a colonial lobby group the French Colonial Union and based

    on information supplied by the enterprises themselves, these Annuals are far from perfect. However, for revealing officially invested capital, patterns of ownership and investment, and general developments over time, they are a fascinating and important source. The second type of sources is state and other records related to the French Corporation of Distilleries of Indochina (Société française des distilleries de

    l’Indochine, or SFDIC) and the other components of the Fontaine Group. As the main supplier of the state’s alcohol monopoly, the SFDIC generated a huge amount of official documents, not to mention public scrutiny. As a result, it is one of the easiest Colonial Conglomerates to follow, providing important details that fill out the larger story of the accumulation of capital and the development of locally-based enterprise in the colonial era.

     5 This means that large French-based enterprises like Ciments Portlands Artificiels or Michelin are

    outside the scope of our discussion.

     The shift in perspective from the global to the local reveals surprising things. First is the remarkable continuity between the pre-colonial and the colonial economy. Second is the interventionist policies of a colonial state conventionally portrayed as laissez-faire. State intervention in the colonial period took the form of what I’ve

    called “state-related accumulation,” namely state-created or state-enforced

    monopolies that provided highly profitable revenue bases for subsequent diversification. The interpenetration of state and enterprise, whether in terms of personnel or a shared interest in revenue generation, was both a symptom and a cause of this sort of state intervention. As for smuggling, contraband, and other illegal activities, they were simply inevitable effects. The last element is the remarkable size and profitability of the diversified enterprises that grew from these monopoly bases. These enterprises remind us that an economy conventionally described as chronically and purposively underdeveloped could simultaneously feature highly “developed”

    6enterprises that would not be out of place among today’s globalized multinationals.

    II. The Vietnamese political economy

    a. To 1858: state-related accumulation and the Chinese consortiums

    For most of the seventeenth and eighteenth centuries, the present-day territory of Vietnam was administered by two separate polities: the Le-Trinh state in Northern Vietnam and the Nguyn state that after 1558 gradually extended its control

    southward and then westward from its base in Central Vietnam. Despite the shared

     6 See for example Brocheux and Héméry’s description of the colonial economy, and their reference to “l’incapacité à passer au stade d’une industrialization diversifiée.” Op. cit. 133.

cultural and historical roots of their elites, these two regions referred to by

    contemporaries as Đàng Ngoài and Đàng Trong, or the “Outer” and “Inner” regions,

    respectively featured quite different attitudes towards commerce and enterprise. Nevertheless, in each region of precolonial Vietnam we can see threads that will continue to run through the supposed ruptures of 1858 and 1945. The first is the central role of the state in creating opportunities for accumulation, primarily through the creation of monopolies. From this basic feature of the local political economy flow other features, most notably the interpenetration of state and enterprise, and endemic smuggling and off-plan activities. A final thread in the history of enterprise in Vietnam and one which underlines the importance of attention to regional particularities is the importance of regional Chinese commercial and financial networks operating through Gia Định/Saigon.

    In Đàng Ngoài, the agrarian-Confucian worldview of its ruling elites saw commerce and enterprise as a sort of necessary evil. Perhaps the clearest evidence of this is found in language: for example, the official term for businessman or trader, “mạt nghiệp” translates literally as “lowliest occupation.” Analyzing the proliferation

    of copper and silver mines in Đàng Ngoài’s northern periphery after 1700, Alexander

    Woodside wrote how “the central core of the Le-Trinh state, with an anachronistic

    agrarian ideology which revolved around scholars and farmers, survived in a sense only because it was not made to confront and incorporate in any normal or normative way a periphery whose ideology contradicted with it.” Instead, the state “allowed private entrepreneurs and tax farmers to subdivide the mining frontier into their own

    7long-term apanages.” By the latter half of the 1700s, the copper mines of Thái

     7 Woodside, “Political Theory and Economic Growth,” 259

    Nguyên province were among the largest in Southeast Asia, providing the bulk of the Lê-Trịnh state’s revenue, and huge fortunes for the lucky holders of the state’s mining

    8licenses.

    As this example makes clear, trade and commerce in Đàng Ngoài were

    purposely kept at arms length even at the risk of the loss of territorial control. For not only were the holders of the mining licenses the virtual lords of local fiefs, but also they and their tens of thousands of employees were of Chinese origin. Subcontracting certain commercial activities to the ethnic Chinese community was, of course, a common technique for modernizing states throughout the region. Yet the Lê-Trnh

    state was distinguished from its contemporaries including the Nguyn state in Đàng

    Trong by the degree to which the state and its elites consciously insulated themselves from the world of commerce. This absence of even minimal linkages to the world of commerce was no doubt at the root of the failure of the state’s attempt to

    expel the Chinese mining consortiums and reassert control over its Northern periphery

    9after 1767. Yet even in a story of state-enterprise relations that differs, as we shall see, so radically from that in Đàng Trong, three common threads stand out: state-

    related accumulation, the crucial, if ambiguous role played by ethnic Chinese enterprise, and the attempt by a centralizing state to assert control over Chinese entrepreneurs and their revenue streams.

    By contrast, the ideology of the Nguyn Lords who ruled Đàng Trong was

    characterized less by agrarian-Confucianism and more by the pragmatism that flowed from administering an expanding multi-ethnic polity facing powerful rivals to the

     8 Reid, 24. According to the Nguyen historian Phan Huy Chu, these mining monopolies were the primary source of revenue for the Le-Trinh state. 9 Reid, 24.

    10North (Dai Viet) and the West (Siam). One result was an openness to trade and

    commerce: Đàng Trong centers like Hi An, Huế, Qui Nhơn, M Tho, and Hà Tiên

    were important part of regional and extra-regional trading networks that flourished in

    11the 1700s and 1800s. According to Li Tana, “Đàng Trong’s existence as a separate

    Vietnamese state rested directly on its successful commercial and economic

    12development.

    Overseas trade was accompanied by the growth of more or less permanent communities of expatriate merchants and settlers. This included Japanese, Southeast Asians, Europeans, and above all, Chinese. Already by the mid-1600s, there was a sizeable community of Chinese in Hoi An. Migration accelerated in 1679 after the fall of the Ming Dynasty and continued after the Qing Dynasty relaxed its controls on immigration in the mid-1700s. These Chinese immigrants played a crucial role in expanding and developing Nguyn Cochinchina’s Southern and Western frontiers,

     13Mc Cu and his successors in Hà Tiên being the most obvious example. They

    were also responsible for much if not most of Đàng Trong’s internal commerce.

    Writing in the early 1820s, John White described the Chinese presence in Đàng Trong.

    These industrious and enterprising people are the butchers, the tailors, the

    confectioners, and the peddlers of Cochin China: they are met with in every

    bazaar, and in every street… they are also the bankers, and money-changers…

    Many of the cooking utensils, and a principal part of the clothing of the

    Onamese [Annamese, Vietnamese] are brought from China, from whence they

    also have their porcelain, tea, many of their drugs and medicines, cabinet-work, 14and, in short, almost every article of convenience which they possess.

     10 Li Tana, Nguyen Cochinchina 11 Anthony Reid, Nola Cooke and Li Tana, Water Frontier, Li Tana, Nguyen Cochinchina, 60. 12 Li Tana, Nguyen Cochinchina 13 Yumio Sakurai writes how in the eighteenth century the region represented a Chinese “promised

    land.” Yumio Sakurai, “Eighteenth-Century Chinese Pioneers on the Water Frontier of Indochina,” in Nola Cooke and Li Tana, The Water Frontier. 35. 14 John White, A Voyage to Cochinchina [1824] (Kuala Lumpur: Oxford University Press, 1972) 261-262

    As White’s example suggests, the itinerant peddlers of Đàng

    Trong/Cochinchina were ultimately linked to regional trading and financial networks through the intermediary of the Chinese consortiums that dominated the economies of nineteenth-century Southeast Asia. From initial bases producing and trading local commodities like rice, salt, dried fish, sugar, or pepper for manufactured goods from China, Singapore, or India, these consortiums might expand to take advantage of the tin mining boom, compete for state revenue farms, or both. As Carl Trocki describes, by the 1800s, Chinese consortiums controlled the farms and mines throughout Southeast Asia that “produced marketable commodities and employed large numbers of Chinese laborers. The laborers, in turn, consumed provisions, clothing and tools, as well as opium, spirits, and other taxable products. They were also users of pawnbroking, gambling, and prostitution farms, all of which were controlled by the

    15same group of merchants who financed and exported their products.” This sort of

    diversification required flexible, if not opaque forms of ownership and management. Trocki describes how even today, Chinese enterprises tend to operate through relatively autonomous local companies who benefit from external infusions of capital

    16and management expertise. This was a sort of diversification that looked for

    synergies as much as profits, accepted few if any limitations to its depth or breadth, and resulted in complex webs of cross-ownership, cooperation, and competition.

     15 Carl Trocki, “The Internationalization of Chinese Revenue Farming Networks” in Nola Cooke and Li Tana, The Water Frontier. 159-174, 164 16 “Even today, Chinese have a tendency to operate through relatively autonomous locally based establishments rather than through tightly organized and hierarchical structures. In each place there was a separate company, often managed by local partners, and international connections were limited to infusions of capital from outside and the involvement of external managers, at least enough so that they could protect their investments and repatriate profits. As a result of this sort of organization, it is rather difficult to establish who was working with whom. Sometimes alliances in one place coexisted with competition in others. Ibid, 169.

     One of the reasons for the rapid growth of trade in Đàng Trong after 1600 was

    the Nguyn Lords’ policy of encouraging the mutual interpenetration of enterprise and state. The first Nguyn Lord, Nguyn Hoàng, adopted as his son Hunamoto

    Yabeiji, a prominent Japanese merchant and state envoy. Nguyễn Hoàng’s son,

    Nguyn Phúc Nguyên, married one of his daughters to another Japanese merchant,

    17Araki Sotaao. As China replaced Japan as Đàng Trong’s major trading partner in

    the 1700s, so in turn did ethnic Chinese traders and officials many of them resident

    in Cochinchina for generations assume positions at the highest levels of the Nguyn

    state. Trịnh Hoài Đức was both a longstanding official in the Gia Định administration

     and at the same time an active often serving as the acting governor of Gia Định

    18petty trader. General and governor of Gia Định Lê Văn Duyệt’s adopted son, the

    Hi An-born Chinese Lưu Tín, was both a successful merchant and the head of the

    19office that administered Gia Định’s foreign trade.

    This interpenetration of state and enterprise was, needless to say, mutually beneficial. Trade benefited the Nguyn state both directly through taxes and duties,

    and indirectly by promoting economic growth in its territories. Even more important, Nguyn Ánh’s ability to mobilize support in the Chinese business community of Gia

    Định was crucial to his ability to resist and defeat the Tây Sơn movement. In return,

    the Chinese traders and consortiums were the beneficiaries of preferential rates of taxation, government contracts, tax farms, and monopolies. Examples of Chinese-held monopolies in Cochinchina include the “Wax Taxpayers Association,” with

    exclusive rights to exploit the wax in the forests of Kiến Giang, salt production, and

     17 Li Tana, 64. 18 Choi Byung Wook, “The Nguyen Dynasty’s Policy toward Chinese on the Water Frontier in the First Half of the Nineteenth Century” in Nola Cooke and Li Tana, The Water Frontier. 85-100, 92, See also

    Shimao, White. 19 Ibid, 92

     20the trade in areca nut. State-related accumulation was thus an important feature of the Đàng Trong economy.

    This was not to say that Đàng Trong’s business class was the pliant creature of

    the Nguyn state. Far from it. Counterfeiting, smuggling, and other off-plan activities were endemic to Đàng Trong’s economy. Li Tana argues that inflation

    caused by the widespread counterfeiting of the state’s new zinc currency in the late 1700s helped spark the Tay Son movement. Choi Byung Wook has shown how illegal trading in rice and opium was the pretext for emperor Minh Mạng’s assertion

    of direct control over Gia Định/Saigon after 1832. Whether or not one accepts Minh

    Mng’s contention that Chinese traders were exclusively to blame, the evidence is clear that local businessmen and officials were participating in a flourishing illegal trade in rice, opium, and other goods. The techniques traders used to circumvent Minh Mng’s new controls sound eerily familiar to anyone familiar with business practices in Vietnam today. Chinese traders excluded from the rice trade after 1827 would register their ships under the names of Vietnamese colleagues, wives or concubines. Others might carry on activities for years using forged official

    21documents. These sorts of illegal activities would have been impossible without the collusion, if not participation, of local officials. Indeed, in his response to Minh Mang’s analysis of the problem, Governor Lê Văn Duyệt pointed to the participation

    of government-hired rice ships in the illegal trade. Thus in 1820s Cochinchina, even off-plan activity was, in its own way, a form of state-related accumulation.

     20 See for example Nola Cooke, “Water World: Chinese and Vietnamese on the Riverine Water Frontier, from Ca Mau to Tonle Sap,” in Nola Cooke and Li Tana, The Water Frontier, 139-158, 143-

    144. The classic example, of course, is the opium monopoly. While official opium monopolies in Cochinchina would have to await the arrival of the French, the pattern of Chinese-administered opium monopolies (throughout Java, Singapore, Melacca, Penang, and Hong Kong to name just a few) was certainly one of the most deeply-worn grooves in the region. 21 Wook, op. cit., 94.

    Minh Mng’s policies towards Gia Định/Saigon and its Chinese business

    community after 1827 point to a final thread, namely how newly-consolidated regimes in Vietnam inevitably move to attenuate the dominant position of the ethnic Chinese in Southern Vietnam’s economy. The first emperor of the newly-united state, Nguyn Ánh/Gia Long continued the pattern of close cooperation with the Chinese community in Gia Định. His successor Minh Mng, however, moved not only to

    assert central control over the previously semi-autonomous Gia Định region, but also

    to limit the role of Chinese in trade and enterprise. After 1827, the Minh Mng

    administration pursued policies intended to reduce Chinese participation in trade and commerce, for example effectively banning both Minh Hương and Thanh Nhân

    22Chinese from participating in maritime trade. In 1832, he dissolved the Gia Định

    Thành Tng Trn (Gia Định General Government), replacing it with six provinces under the direct control of the central administration.

    These policies were of dubious effectiveness and a serious source of discontent among the Gia Định Chinese. Chinese were prominent not only in Lê Văn

    Khôi’s uprising against the Huế government in 1833, but also in the various anti-

    dynastic and anti-Vietnamese movements that swept Cochinchina and Cambodia in the 1840s. Moreover, the Huế government’s repression of the various movements

    provoked waves of migration that saw large numbers of Chinese entrepreneurs and

    23artisans relocate to Cambodia and Siam. Last, discontentment with Huế rule was a

     22 94 23 Li Tana credits Chinese migration after the failed Le Van Khoi uprising with the remarkable rise of Chantaburi as a shipbuilding center. Li Tana, Ships and Shipbuilding in the Mekong Delta, c. 1750-1840,” in Nola Cooke and Li Tana, The Water Frontier. 119-138, 129.

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