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Cambodia: New Home for the Pyramid

Scheme. Now that Egypt has refused to take part in the selection of the Wonders of the World, the pyramid seems to have moved to Cambodia. I’ve written recently on the problem with enclosures and the enormous land-grabbing problem that is ongoing in Cambodia. Every economist since Marx (and many prior) have understood that the process of enclosing the commons is crucial to the transition to full-blown capitalism. It’s crucial in two ways: first, it gives the nascent capitalists their ‘start-up’ capital – the means of production with which they subsequently move on to make money based on other people’s labor; second, it deprives people of access to those commons and forces them into the wage-labor world. Enclosing the commons therefore is a single move with two effects, which together comprise the absolute basis of capitalism. Marx termed it “primitive accumulation,” and explicitly compared it to the birth of capitalism, or called it ‘capitalism’s pre-history.’ As Cambodia continues its tumble into the global roulette wheel, all these things play out over again. As Marx said in another context, history always happens twice: first time as tragedy, second time as farce. Of course, the first time it happens to anybody, it’s always a tragedy.

The problem with becoming a full-blown capitalist in one of the world’s poorest countries is that you need access to start-up capital even to begin the process of primitive accumulation. You need to be able to pay soliders, police, and security guards to force people off their lands, out of their forests, and into the factories (or, more often, just back into their houses where they can starve to death quietly, since there’s no serious effort at industrialization in Cambodia). Where does this money come from? Overseas. Always has, really. Post-socialist Cambodia (which was already post-communist) has acquired monumental amounts of capital from overseas in the form of international development aid, foreign direct investment, and even more straightforward corruption, such as the selling off of massive amounts of food aid. From 2003-2004, while I was in Cambodia, over 44 percent of the 72 million dollars of food aid sent to Cambodia through the WFP was estimated to have been illegally diverted by the government. At the end of that period, a massive amount of rice in a WFP storehouse in Anlong Veng (where I also did fieldwork) simply disappeared. You won’t find mention of that on the WFP Cambodia Press page, but you can read a little about it in lots of places, including here. (It’s all the more disheartening since the WFP just slashed its funding for Cambodian hunger and TB prevention programs.)

So, again in line with classic economic models about ‘development,’ primitive accumulation is serving the needs of a developing capitalist economy: benefiting the capitalists, or their future selves, and pauperizing the peasants. This accumulation is primitive in Marx’s most basic sense: the use of violence – in this case the ‘legitimate’ violence of the state – to accumulate basic capital. But what about the supposedly emerging Cambodian middle-class, that is going to make Cambodia look just like Thailand in a few years, according to the sunny predictions of the World Bank, WTO, and IMF? What are they supposed to use to accumulate their own capital?

Of course, many of those emerging bourgeois rely on their connections to ministers, generals, and such. Theirs is therefore a secondary accumulation of capital. But others have heeded the sage advice of ubercapitalist Donald Trump and used ‘OPM’ (other people’s money) to invest and sell real estate. This is all quite normal, I suppose, and is the basis of private-property capitalist economies the world over. Even putting aside criticism of that for the moment, we must acknowledge that the regulations and enforcement of private economic dealings in Cambodia are almost nil, and protections non-existent. So the emergence of a new pyramid scheme, brazenly advertised by the English-language press in Cambodia apparently as a means for Cambodian’s to ‘lift themselves out of property,’ is unnerving, at least. Here’s an excerpt from the article in the Cambodia Daily. Having explained how he took his inspiration to engage in land-investment from the Donald, Siev Sophal explained the process to his audience and encouraged them to do the same.

But rather than taking a loan from a bank with its legal fees and requirements, Siev Sophal told his audience that they should purchase land from his lot in Takhmau—4,000 units at 600 square meters each—and take a loan out from his company to buy one.

In two years, he claimed, the plots will be worth 40 percent more than they are today.

He had sold 1,000 units before the seminar, and a day after the talk, four officials with the customs department bought 50 units each.

Notwithstanding the fact that land prices are going up by this percentage throughout the country without such intensive management and investment, he’s clearly right that the plots in Takhmau (one of Phnom Penh’s wealthiest suburbs and location of one of Hun Sen’s primary homes) will rise by at least that much. But Cambodians are not dumb. They know that putting all their eggs in Sophal’s basket is a bad idea. So it’s more than a little telling that the customs department officials were the biggest single buyers. Customs officials are those with some of the greatest money-making opportunities at the border between Cambodia’s internal economy and its integration into the Modern World-System, and they are perfectly positioned to convert the primitive capital secured for them by Sophal, into the mobile capital that wealthy Cambodians so desperately need, in order to move it outside of Cambodia’s borders, where it will be ‘safe.’

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