Markets and Entrepreneurs

Abstract

‘The development of native enterprise must be a chief object of policy in any dependency which is valued as a market for the products of the colonial power’ wrote Furnivall (1948: 293) in his comparative study of Indonesia and Burma. But as Furnivall went on to point out, while the European colonial powers in many parts of Asia and Africa wanted to bring indigenous populations into the cash economy in order to expand the market for their own manufactures, at the same time many colonial officials were ambivalent about the consequences of rapid commercialisation on the welfare of the populations under their control. Nowhere was this ambivalence more obvious than in colonial Indonesia. Dutch officials debated endlessly the extent to which Indonesians were being incorporated into the ‘Western sphere’ of economic influence, the factors which promoted or inhibited such incorporation, and its effects on the economic and social welfare of the population. In the early nineteenth century, the cultivation system was imposed at least partly because the Dutch authorities felt that government coercion was the only reliable way to secure a large exportable surplus of crops from Java’s peasant producers. Market forces could not be relied on to achieve this goal. But, by the early twentieth century, the debate had become far more complex.