‘Before you study the economics, study the economists!’
US & Indian warships sail in & sail out of Colombo & Trincomalee, singing, ‘Free & Open!, Free & Open!’ While England, playing the role of white-faced ‘good cop’ (vs the US red-faced ‘bad cop’ threatening 20% tariffs), promises to allow exporters tariff-free access to their market. They also airily announce they have struck a deal on ‘our’ debt. Though we apparently had better pay them back by 2028. (With typical barefaced transparency – hypocrisy? – the English High Commission promises, ‘The full text of the agreement will be published in the Treaty Series in due course’).
Again, why don’t the English tell us now, how much Intellectual Property Rights (IPR) royalties, the ‘rag trade’ pays England, and for what? Pins? Needles? Threads? Is this what all this week’s English largesse is about? English multinationals (MNCs) were heavily involved in setting up the ‘garment’ business in Sri Lanka in the 1980s. And for sure, the English media, with or without AI, cannot dare calculate and pay what they owe us, after over 200 years of colonial violence. ‘In due course’ of course!
Then there’s the UN – hijacked of its mandate to represent all the nations of the world – holding us to standards their white overseers simply shunt aside. A warmongering EU (with the UN in tow) keeps busy sending overpaid white emissaries, singing ‘Rule-based Order! Rule-based Order!’, while acquiring suntans along the way, threatening to shut off our ‘privileged’ access to their markets. Instead of protecting our own market, we find out from Japan’s Nikkei this week (see ee Quotes), that we are aiding Japan’s auto industry, by buying their old cars at inflated prices, so Japanese citizens can sport new cars every few years, selling their old jalopies at a profit, while keeping their home market & auto factories buzzing.
After having fully hyped an export-based economy, the USA & EU, through their agents in the IMF & World Bank, while dangling open markets etc, they are now preventing countries like ours – which can be made subject to their arbitrary export tariffs at any time – from compensating for our losses in exports. One way is to enlarge our own home market (see ee Quotes, Patnaik). Yet, expanding our (especially, the rural) home market, to enable consumption of locally produced goods, is only possible through greater government spending, says Indian economist Prabhat Patnaik, via financing, either through a fiscal deficit or by a tax on the wealthy. But, both are prohibited by the IMF (aka USA aka Wall Street). So, what’s a state that cannot push-start its own economy supposed to do?
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* The government is perhaps trying to compete for a putative Nobel Peace Prize? – which yet another warmongering US President has laid claim to. They are apparently truthifying & reconciling history – though not by handcuffing any corporate executive or chartered accountants. English MNCs – Standard Chartered, Unilever, Citibank, Ceylon Tobacco, CIC, HSBC, etc – who have turbo-charged our underdevelopment, and are the true repositories of our bloodied history – are still proudly cruising the streets, monopolizing billboards & ads proudly proclaiming Diversity, Inclusiveness & Equality (DIE! indeed)
In the last few weeks, the government has arrested a Navy Commander, an IGP, and a former President & PM, along with several former ministry officials, while threatening further arrests of cantankerous opposition politicians & officials. Unable to take the former PM/President on about such matters as Batalanda & the Bondscam, which can easily backfire, they have settled on a doctored travel coupon by yet more academics hungry to acquire yet another accolade from yet another English degree factory…
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How many know the US government derailed India’s 1 National Industrial Plan? They first hyped a fake crisis that announced India would be on the edge of starvation by 1966? A US Ford Foundation (FF) team had been parachuted into India (in 1959), without even an invitation by India’s government. Using doctored statistics on population & foodgrains production, the FF projected an imminent & ‘ominous’ food crisis & mass starvation in 7 years (1966). Laughably, unscientifically, they extrapolated the only available statistics from 15 years earlier (1951). The Ford Team only spent a few weeks in India, but then issued an instant report, which was force-multiplied in the English media, showering images of ‘starving’ Indians across the world.
The Ford Team demanded that all earlier economic priorities for industrialization be shunted aside and superseded by their agricultural plan aka ‘Grow More Food’. They called for using scarce foreign exchange to import expensive fertilizer & high-yielding hybrid varieties (which the English media soon hyped as a lovely ‘Green Revolution’ vs a scary ‘Red Revolution’). The FF claimed that profits would come more quickly than thru investments in heavy industry or large irrigation projects.
These US-funded ‘experts’ thus ‘advised’ against ‘the great Indian planner Mahalanobis’ strategy that had prioritised ‘self-reliance’,’ says economist Patnaik (Prasanta Chandra Mahalanobis, a member of a free India’s first Planning Commission, founded the Indian Statistical Institute). Patnaik’s ’79 I-Day: Imperialism & Open Bullying of India’ alerted ee to a witty and critical response to those US experts’ statistical fabrications to sabotage industrialization (‘Ploughing the Plan under’, see ee Focus).
Sri Lanka’s striving to industrialize, too, has been undermined in many other ways. Indeed, after the attempted 1962 coup & successful destabilization of the 1960-64 Sirimavo Bandaranaike government, the Dudley Senanayake government imposed the 1 of 17 IMF programs on the economy, & in 1968, abetted by the World Bank, also launched the Ford Foundation’s Indian ‘Grow More Food’ campaign in Ceylon.
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* The US Ford Foundation, while promoting their ‘Starving Indian’ meme, was at that same time financing a scaremongering ‘missile gap’, to ignite an ‘arms race’, well-funded by the so-called liberal US Presidents JF Kennedy & LB Johnson. They claimed it was a necessary reaction to the USSR’s launching of Sputnik, the first satellite put into orbit, in 1957. This was also a time when the whites were mongering rumors about the famines & mass starvation caused by China’s industrial resurgence policy, known as the Great Leap Forward. The English authors of ‘Ploughing the Plan under’ (see ee Focus), critical of the FF Report, call these US ‘experts’ opposing Indian industrialization, ‘a bench of amateurs’! And indeed, Sri Lanka continues to be ruled by such fly-by-night ‘amateurs’ from various ‘development’ (aka colonial) banks & agencies, who apparently divert our local banks & finance companies into funding micro, small & medium enterprises (MSMEs) rather than heavy industry…
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This ee Focus also continues reproducing SBD de Silva’s 1 chapter of his classic The Political Economy of Underdevelopment (PEU). This excerpt contrasts the different powers of the state machineries in settler & nonsettler colonies. The state was far more active (genocidal?) in the settler colonies, where the ‘social and economic ties of the natives’ had to be ‘relentlessly’ severed, and a white settler working class was nurtured & advanced to build modern industry. In the nonsettler colonies (also genocidal, but unable to fully defeat the resistance), ‘state intervention was aimed far more at obtaining captive markets for the metropolitan economy’. De Silva shows how it was made easier for Africans to link to Europe than to their own neighbours in adjoining villages and/or countries. He also provided extensive examples of how the plantations damaged the village economy in Sri Lanka, targeting irrigation systems, with roads & rails to serve the expat planter than the villager. SBD also shows how nonsettler infrastructure programs contributed to ‘deindustrialization’, with tariff polices & transport networks uprooting indigenous manufactures, exposing them to foreign competition, promoting exports at the expense of production for the home market…
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* The USA once boasted ‘the world’s largest demographic armoury’. We don’t know if it is still so. Recently, the English media briefly highlighted the state of statistics in the US, after their government sacked the head of the US Bureau of Labor Statistics (BLS) for publishing a poor July ‘non-farm payroll report’. Most international media were critical of the firing, citing the usual bull about ‘independence’. But all such stats are highly political, and are chiefly meant to serve the ruling powers. The present US administration however insists they have created many jobs, through their own initiatives – tariff & other, to protect their industries – and that their salaried number-crunchers are lying. (SBD de Silva always mentioned Karl Marx’s fulsome praise for the English Factory Inspectors, who fearlessly provided statistics on industrialization; but this ‘transparency’ was due to a still-powerful rural aristocracy who was doing battle with the rising industrial capitalists!)
In January 2024, the New York Times reported how ‘a highly inappropriate communication’ by a BLS staff economist, had revealed ‘material nonpublic’, ie, highly secret, information to a select group of ‘Super Users – banks & hedge funds, about how new inflation figures were being computed. Such highly technical details inspire forecasters competing to extrapolate inflation figures to ‘100ths of a percentage point’. These estimates are then used by investors to place bets on huge chunks of securities that are indexed to inflation or interest rates. NYTimes named such ‘Super Users’ as including Barclays (English), Nomura (Japanese), BNP Paribas (French), Millennium Capital Partners (English), Breven Howard (EU, Cayman, US), Citadel; while Bloomberg added the USA’s JP Morgan, BlackRock & Moore Capital.
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* All these ‘capital pools’ deploy hefty budgets to bribe public officials for ‘insider’ information, even while the capitalist media spends a lot of ink on proclaiming the supposed ‘independence’of state-salaried officials, who apparently have no class interests. A recent claim is made by Kumari Jayawardena in her co-authored book (excerpted in the Island) in describing her father-in-law NU Jayawardena’s role as Deputy Governor of the new Central Bank. The CBSL was formulated & run by a US citizen, John Exter (see ee Focus). NU & Exter were both apparently lovers of the so-called ‘free market’ and wanted a monetary authority ‘independent’ of the ‘political and electoral concerns of politicians’. How really democratic is this? we are led to wonder. As Hayek’s Bastards – a new book on the ‘Austrian School’ of economists that have now come to dominate countries – notes, such ideologues are opposed to democracy and highly misanthropist, white supremacist to the core (see ee Quotes).
There are many questions about Kumari Jayawardena’s take on the parliamentary debates over the then new Central Bank, while the snippets provided of NM Perera and Colvin R de Silva’s speeches should inspire further research. We have not read the records in the Hansard (has it gone digital yet?). Her excerpts portray the Trotskyist MPs as safeguarding the technical competency required to run the bank of banks. Yet, economics is not just about rates & numbers & things. Such inanimate abstractions are also only products of humans, of living & dead labor. SBD de Silva (to whom this blog is dedicated) always insisted that the Central Bank, where he once worked, has always opposed the independence of the country, ie, was against the aspirations of the majority of the people:
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‘Sterling companies in Sri Lanka continued to function outside the legal
framework of the country even after it had achieved its independence.
The agency houses in 1964, when called upon by the Central Bank to
make available for examination, for exchange control purposes, their
service agreements with the plantation companies, declined on the
grounds that they were not legally obliged to do so.’
Capitalist media love to label themselves ‘independent’ & ‘free’. They also claim a monopoly over which institutions only they can rate as ‘independent’ & ‘free’. China has just released their 2025 report on the state of human rights in the USA. Their account highlights the capitalist control of electoral machinery in the US, and the suppression of eligible, particularly African & other darker American voters. Not much has changed in 100 years, as when we read Gustavus Myers’ 1917 History of Tammany Hall, that famous New York NGO – that ‘charitable & benevolent corporation’ – which was a cover for a deadly political machine. Tammany’s control of the media by corporations & their politicians is the subject of this ee’s excerpt, continuing our peek into the history of the Big Man in local US politics; how early capitalism and the monopoly of power requires ‘tender providence over the newspapers’, maintaining several editors & journalists on a municipal or corporate payroll.The Big Man’s ‘greatest success ‘ is in ‘averting public clamor’, manipulating hype and occasional charity, which the Big Man has to appear too humble to lay claim to, refusing a statue in his honor, etc (see ee Focus).
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* Korea was in the local news this week, with an update on a recent incident where a Sri Lankan worker at a brick factory in Naju, South Jeolla Province, was bound to a forklift truck with wrapping tape (see ee Worker, Video showing SL worker moved by forklift prompts action from South Korea police). Those US-invaded southern lands now boast the world’s lowest birth rate, not reproducing themselves fast enough – a side effect of a subordinated modernization. To fill growing gaps in ‘unskilled’ labor, US-Korea is relying on both legal & illegal migrant workers. So, what has happened to industrialization in those lands?
This ee Focus also reproduces Jim Glassman & Young-Jin Choi’s take on ‘The Chaebol & the US Military-Industrial Complex: Cold War Geopolitical Economy & South Korean Industrialization’. Rather than looking into industrial policies and personalities as most researchers into US-occupied Korea have done, they explore the role played by US military offshore procurement (OSP), to feed the US wars on China, Korea & Vietnam, to explain rapid industrial transformation in colonized East Asia. The US war on Korea inspired a ‘flood of new orders for Toyota trucks’, and was referred to as ‘Toyota’s salvation’, and ‘Divine Aid’. During the US war on Vietnam, military contracts accounted for 26% of Hyundai’s construction revenues and 77% of its total profits, 1963-66 (see ee Focus).
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* The Australian government once complained, to the Sri Lankan government of John Kotelawala, that a Central Bank employee (SBD de Silva) studying for his Master’s Degree in Melbourne had been asked to speak at a Communist Party meeting to oppose the US war on Korea in the 1950s. De Silva insisted he had only attended the meeting to learn about what was being said, and had then been put upon, as the only Asian there, to speak about the horrific US (& English & Australian, etc) war. Kotelawala is supposed to have shrugged off the Aussie police report, saying we can’t keep getting rid of employees at the whim of foreign governments (After all, he had just deported the US journalist Rhoda Miller de Silva as a Communist). But it was more Korea’s economy, particularly the US-occupied part, that interested SBD de Silva. He did not accept that it is geopolitics alone that accounts for US-occupied Korea’s rather skewed development (the famed Samsung brand was nurtured under the Japanese colonialism… Most Koreans in the south have officially abandoned the faith and culture of their ancestors, whereas in the North, a prouder people perhaps cannot be found on this earth).
As a seeming exception to SBD de Silva’s division of the world into genocidal settler & non-settler countries, the capitalist development of Taiwan, South Korea, Hong Kong and Singapore ‘occurred without their disengagement from the centre’, coming ‘close to transforming their economies, while transferring surpluses to various metropolitan centres.’ While noting that:
‘After encouraging the decolonization movement, the USA
later organized the suppression of national forces
wanting a complete break in centre-periphery relations.
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After 1945, US capital ‘feverishly’ propped up ‘Western Europe and to a lesser extent Japan, Taiwan & South Korea, as bastions against the onrush of communism’, enabling a ‘postwar reconstruction boom… unprecedented in capitalism’s history… underpinned by a very high level of spending on arms and by rapid technological innovation which yielded a crop of new products and raised productivity levels in several existing branches of industry’.
The ‘East Asian tigers’ had been hyped by the English media as a ‘newly industrializing’ (NIC) model for Sri Lanka. However, SBD felt there were other internal factors, ‘contingent upon specific elements, both historical and fortuitous’ that prevented its experience being transferred to Sri Lanka. There had also been a ‘mobilization of surplus rural labour within the confines of the rural economy’, even as US military spending, military employment and export platforms had helped ‘spread purchasing power and an upgrading of technical skills, etc.’
More importantly, there had been ‘a partial reorientation of the traditional landlords from a rentier class to a predominantly entrepreneurial one; from rent & interest as a basis of income to profits’. Land reforms were successful also due to ‘the weakness of merchant & usurers’ capital in the rural districts’: ‘In many underdeveloped countries it is the dominance of merchant capital that makes the agrarian problem less amenable to a conventional land reform; landlordism, being totally functionless, is more easily eradicated than merchant capital which, though unproductive, plays a necessary role in the day-to-day functioning of the village economy.’
SBD de Silva also pointed to the role played by Japanese colonialism in Korea, which was of a very different order than the English species…
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So we asked a US AI app: ‘Does Sri Lanka owe England or does England owe Sri Lanka?’ AI answered thus: ‘The relationship between Sri Lanka and England is complex, shaped by colonial history, economics, and diplomacy. Here’s a breakdown to clarify the question of who owes whom”: Sri Lanka was colonized by the English (1796-1948). During this time, vast resources were extracted – land, labor, tea, rubber, and minerals – benefiting the English Empire. Many historians argue that England owes a historical moral or reparative debt to former colonies like Sri Lanka for the economic exploitation, cultural disruption, and long-term structural disadvantages left behind. Conclusion: On moral and historical grounds, one could argue England owes Sri Lanka…’
* The State of the Unspoken – The media has clutched onto Artificial Intelligence (AI) as their latest hole-filler for their yawning vacuity. Yet for AI to work in Sri Lanka and for Sri Lankans, it has to account for the ‘Abstract Sri Lankan’, ie, the collective ‘natural’ intelligence of tens of millions of people, predominantly cultivators & workers, and mainly Sinhala & Buddhist, who throughout the millennia and centuries have shaped this country, through innovation & resistance.
This collective intelligence is largely off-grid, and will yet not be included, in any ‘artificial’ ‘big data’, ‘blockchain’ or ‘cloud’ reservoir, dominated by the imperialist (II), settler & non-settler colonial intelligence (CI) and mass information circuits. We put ‘natural’ in quotes, since the natural is mixed up with a lot of not-so-natural matters. All any alien AI would do is reinforce the ruling amnesia. The ideas that rule the people are the ideas of the ruling class, and ideas here are shaped by an import-export non-settler plantation colony, dominated by merchants & moneylenders, who are fronts for mostly US, English & European multinational banks & corporations. Money is made here through ‘commissions’ & ‘commissioners’, who prevent local production even while gaming access to importing goods & services is but another way to exact ‘rents’, or ‘commissions’. The English High Commissioner could very easily be called the High Rentier, for how much IPR & other royalties the English have extracted from Sri Lanka, is also concealed. Much vital data & information is classified, or held behind forbidden or high paywalls. As the USA’s BLS fiasco reveals: some get their news hot, hot & fresh- pre-news! What is publicly served to most people, is stale and whitewashed, fake & cold, olds, olds – with any real information, days, if not weeks, if not years old – all long past their use-by expiry date…
