Precolonial Institutions and Capitalist Investment: Teak Forestry in Upper Burma

• In Event: Environmental Challenges in South and Southeast Asia: Conflict, Cooperation and Exploitation

Abstract

The current dominant approach to explaining historical economic development emphasizes the importance of suitable “institutions,” such as property, contracts, and other legal tools. Industrial capitalism, in particular, has been argued as requiring European-style institutions to render investment secure. Under this paradigm, precolonial Southeast Asian institutions have, with some exceptions, received relatively little appreciation, and the institutional foundations of the region’s colonial export boom have largely been described as colonial imports—nowhere more so than in British Burma.

The paper will seek to challenge this—still—main approach by tracing the institutional roots of capitalist export industries to the precolonial period. Training the lens on the take-off of teak exports during the last years of the kingdom of (Upper) Burma (1853–85), I will argue that the big teak firms could only thrive through interaction with the Burmese state, indigenous foresters, and domestic elites. Support of the Burmese court was crucial as it helped reduce financial risks in an unfamiliar legal environment. Over several decades, both sides slowly built up trust, developing elaborate contracts, new modes of payment, and a more reliable record of legally protecting property. Such important changes, I will show, buttressed the move from short-term transactions to long-term leases, concomitant substantial investment, and the transformation to capitalist teak forestry. The paper will, thus, show the hybrid origins and nuanced modes, but also the limitations of precolonial institutional change, as well as its impact on the British forest regime after the annexation of 1886.

Author

• Jorg Armin Schendel, Independent Scholar