Corruption and Patronage: The Missing Pieces to a Marxist Theory of the State

I argue for a rethinking of Marxist theory to incorporate corruption and patronage as key elements in understanding post-colonial societies, state formation and capital accumulation regimes.

Malaysia defies easy characterisations at every turn. Its economy is mixed, with strong property rights and a relatively open economy on one hand, and a state-dominated finance sector that has controlling stakes at the commanding heights of a modern economy – services, commodities and real estate – on the other. Its political parties are hard to place on standard economic and political left-right spectrums, with elements of neoliberalism, social-democratic welfarism and race-based affirmative action all thrown into the mix. Yet, in this messy pile of categories, it would be challenging to claim that the state and political class as a whole primarily serve the interest of capitalists. While it most certainly does not serve the proletariat or peasantry as classes, interest of the masses are maintained up to a point – particularly for political ends. Given these contradictions and differences with Western capitalist democracy, Marxism would have very little to offer a study of the Malaysian state – or any post-colonial – without a serious rethink. A key aspect of which remains a persistent theme through Malaysia’s history, corruption and patronage. (1)

Why Rethink Marxist Theories of the State

Standard Marxist accounts of the state either have the state as the “executive of the bourgeoisie” or in some cases, a neutral arbiter between contending social classes. Many of these accounts also centre on Western societies that are industrialised and deeply influenced by proletarian-struggles. European social democracy and its accompanying institutions of accountability were born out of workers’ struggles alongside socialists, communists and anarchists.

Analyses of post-colonial societies take for granted that nation-states that embark on the capitalist road eventually end up at something approximating Western-style capitalist democracies. Where many Western societies had workers and peasant unions play a crucial role in pressuring elites into developing (social) democratic institutions, many newly independent nations in the global south had their states born under conditions of revolution – where the political power of unions would be absorbed and diffused into the independence struggles, or colonial midwifing that would often see unions and popular movements crushed in the name of anti-communism. These deviations are not insignificant given such demobilisations change the relationship between the state and popular movements and institutions – even if these formations were nurtured by the political party that would come to power.

Conventional Marxist accounts of the state also do not take into account the subsequent form of state construction under which corruption and patronage become a crucial means of both party reproduction and state reproduction. These accounts have little to no interface between capitalist accumulation and the reproduction of the political class, in which corruption plays an integral role. I have also not found an account of capitalism that considers political financing as a factor in capitalism accumulation. Many discussions of state capitalism generally veer towards state facilitation of capital accumulation. This lack of theorisation of political corruption or patronage under capitalism makes Marxism an insufficient tool for explaining the Malaysia state, class composition and economic structures, not to mention other societies like it.

The Malaysian State under Capitalism

Malaysia’s state apparatus was born and shaped during its colonial period. The earlier Malayan state was one built for British extraction with minimal industrial development, allowing for a small ethnic Chinese bourgeoisie confined to import substitution and trading sectors. After independence, Malaya and then later Malaysia would inherit this state but make important modifications to consolidate its political rule as the British helped complete its anti-communist counter insurgency campaign. The leading Malay political party, UMNO would replicate welfare and service provision tactics employed by the Malayan left to consolidate their support base. The funds for this strategic redistribution came from both their wealthier ally, the MCA – dominated by the wealthy ethnic Chinese merchant class – and the state. A combination of state-distributed and party-distributed aid and mediated access to utilities and state services would entrench the rule of the Alliance (later expanded to becoming Barisan Nasional or National Front).

The political acculturation of the Malaysian masses to this form of patronage would define its society up till today. The racial riots of 1969 would give way to the affirmative action agenda of the state and the ruling political class that entrenched further this acculturation. More importantly, it allowed UMNO to cast off MCA as a key source of political funds and have the state as the prime site of extraction. The subsequent rapid expansion of the state allowed for it to take on this role of political ‘redistribution’ to the ethnic Malays and engage in primitive accumulation on their behalf.

The resultant state is then quite a different creature to those of Western monopoly capitalism where class conflict between capitalists and workers produce state institutions of a relatively more mediating character. To call the Malaysia state the “executive of the [Malaysian] bourgeoisie” would be somewhere between a mischaracterisation and an oversimplification depending on your perspective. At the height of its dominance between 1970 and 2018, the UMNO party-state nurtured competing cliches of crony capitalists linked to various individual warlords and factions within the party. This stands in stark contrast to countries like the United States where capitalist fractions traditionally line up behind one of the two parties – tech and finance with the Democrats, oil and big agriculture with the Republicans. However, it is also a state that is not particularly reliant on workers for its direct economic nor political reproduction unlike a Western state like that of maybe the USA. Malaysia’s state apparatus collects approximately 12% of its revenue from income taxes while the USA collects 48.5% in individual income taxes.

The history of Malaysia’s development – constricted by the culture of patronage and the racial politics which reinforces it – has resulted in an underdeveloped and weak industrial bourgeoisie, a largely repressed and informal mass of proletariat and petty bourgeoisie, and a capitalism in which the state and political class lead industrial and financial development. Complicating matters further is the revolving door of a Malaysian variety where business people are in politics and politicians are in business. The political nature of Malaysia’s economic structures at the micro and macro level seem inescapable.

Rent, Rent Seeking and Corruption

Corruption and rent seeking are certainly not unique to capitalism – bribery and abuse of power were commonplace in colonial, feudal, and slave societies. What gives these acts of misappropriation a new dimension is its relationship to surplus value production and the economic surplus under capitalism. Marx’s theory of rent was confined to the realm of surplus extraction of agricultural labour by the landowning class. There have been new attempts at incorporating monopoly rent of intellectual property into the Marxist labour theory of value but nothing of a political nature like corruption and abuse of office. Furthermore, there is a dearth of theorisation about the nature of the state bureaucracy or state bourgeoisie as an economic class – putting aside the underdeveloped idea of socialist societies that have their party state as a state bourgeoisie in the Soviet Union or China.

The best account of such theory making comes from Mushtaq Khan and Jomo Kwame Sundaram in their book, Rent, Rent-Seeking and Economic Development. They lay out in concrete terms, the variations in flows of funds or rent between politicians, state bureaucrats and capitalists to analyse the political economies of a number of Asian societies. Yet, they do not look at its effects on politics and the state itself, rather just focuses on economic and social outcomes. This is a crucial gap (2) given that in many of our societies, the prevalence of corruption has already transformed – in the words of Engels – from “quantity to quality”.

Why A New Theory of Capitalist States

The primary reason for a re-theorisation of states through a Marxist lens is needed is that there has been no satisfactory explanation for many individual events or long-term structural shifts aside from the hunger for power and monetary greed of individual actors in the system. Furthermore, no thorough materialist description of how these discrete acts of corruption - grand or petty - contribute towards a systemic shift in capitalist reproduction. One preliminary attempt I have made at this in another publication links the gravitation of conglomerate capital towards ‘safe’ and less advanced industries due to the political access of these select capitalists to politicians and state bureaucrats, resulting in a draining of capital away from sectors that would develop more national productive capacities. But this is hardly the whole picture to explain the composition of Malaysia’s economy and its state structures.

While on the surface, the giving out of social aid by a state agency versus it being given by a party’s constituency service office have no difference in material outcomes, they serve a similar but likely differentiated legitimation function. The changing nature of Malaysian society since independence – namely industrialisation and urbanisation – would have a dialectical effect on the way political funds are accumulated and how patronage systems are run. With a growing middle class, many constituencies saw the shift from outright vote buying to a greater emphasis on providing municipal services and resolving local issues. Different eras of UMNO rule have also been defined by various degrees of centralisation of accumulation by corruption, allowing for the emergence of factions and regional warlords that eventually create infighting during times of crisis.

The analysis of these varied forms of patronage, the evolution of corruption alongside capitalism, and subsequent theorisations would be useful to many postcolonial societies – often ridden with corruption and stuck at varying degrees of development. In particular, I hope to sketch out in further works a framework of understanding political rent or corruption as an augmentation of one’s rate of profit within a national economy. It would take seriously the quote by Brenner and Riley that “raw political power, rather than productive investment, is the key determinant of the rate of return”. No doubt its opaque and multifaceted nature makes it difficult to integrate into any straightforward M-C-M’ analysis. Yet, I think the attempt is worthwhile simply to give a more materialist account of Malaysian society given much of our discourse centres race and religion as major societal faultlines rather than class or economic factors. Such a theory that centres political rent and corruption as features and not bugs of the capitalist state is needed to also explain the nature of political spending and the policy responses of the political class.

Implications for Socialist Strategy in Malaysia

In present day Malaysia, where union militancy is a thing of the past and communalism remains dominant in political discourse, there are few avenues for rebuilding popular movements. The practice of patronage by political parties in lieu of apolitical provision of aid and public goods leaves no space for left-wing movements to fill that gap. While the politics of anti-corruption has been successful in toppling the once-dominant UMNO party-state in 2018, there has been little to no progress in changing the role of corruption and patronage in the reproduction of the state and political classes.

A serious and pragmatic understanding of the Malaysian state and its links to political parties allow for better identifying weak points in this nexus to exploit. Figuring which localities of class fractions are neglected – and hopefully their potential for socialist consciousness – would pave the way for effective class alliances and strategies for building power. Efforts by the Socialist Party of Malaysia to replicate the capital-heavy model of service politics – local patronage which can only be sustainably funded through illicit funds – have yielded few electoral results.

This assessment of the state would also be needed when any socialist force comes to power in order to clearly navigate the state and its political appendages in order to specifically formulate policies that win it greater support while intensifying class conflict in its favour. More importantly, how can this culture of corruption and patronage be dismantled with popular support and without a revolt from politically-connected capital and the state bureaucracy. Without this dismantling, there will be little social space for a multiethnic class solidarity and very meagre state revenue that one would need to build socialism.

More generally, a nuanced understanding of the role of corruption under capitalism is essential if the socialist Left is going to win power under current conditions in any post-colonial society. History has shown that anti-corruption as politics has the potential to discredit both capitalist and socialist states. But the given dominant discourse is still neoliberal – maintaining the corruption is purely the realm of the state, anti-corruption politics remains a tougher sell for socialists as opposed to liberal or conservatives. If socialists are going to use the state to achieve greater social good, the question of corruption must be answered directly to advance and preserve its project.

Read this and articles on dependency theory, Malaysian nationalism and urban development in Jentayu Issue #1.

Notes

(1) Many thanks to Charles Brophy for his insightful comments and questions on this piece before publication.

(2) The next best attempt at theorising corruption comes from outside the Marxist tradition. James C. Scott in his 1969 paper titled “The Analysis of Corruption in Developing Nations”, systematically analyzes the various regimes of corruption and patronage under different political structures (1. bureaucratic/military polity [Thailand] 2. party-dominated polity, non-competitive [Guinea] 3. party-dominated polity— competitive [Philippines]).