Landlords and Capitalists: Class, Family, and State in Philippine Manufacturing

Why has the Philippines Failed to Industrialize?
In the 1950s, the Philippines had the most promising record of economic growth in Southeast Asia. From 1950 to 1962 the state nurtured a number of Import-Substitution Industrialization (ISI) industries that contributed to industrial growth. More than four decades later, the Philippines had become the “basket case” in the region. Why has the Philippines failed to industrialize?
In the book Landlords and Capitalists: Class, Family, and State in Philippine Manufacturing by Temario Rivera, offers some answers to this question.
Weak captive state. Temario Rivera in his study of the postwar economy said that “enjoying little autonomy from dominant social classes and entrenched particularistic groups, the state is captured by … competing societal interests. He further remarked that the ISI bourgoisie was dominated by major landed elite families and merchant capitalists who diversified into manufacturing during the 1950s and 1960s. However, their diversification into import-substituting manufacturing did not result in a class transformation strong enough to drive industrial growth and development. Consequently, the domination of the manufacturing sector by the landed classes, in conjunction with a weak captive state, reflected a structural constrain that made it difficult to sustain industrial growth in the country. In the long run, the domination of the ISI manufacturers by the landed capitalists further foreclosed one option for the deepening of industrial growth that started with the ISI program. The persistence of a weak Philippine state has made it difficult for its various apparatuses to formulate and implement policies independently of the powerful vested interest groups in society. With the preservation of the economic power of the landlord class, the state, in effect, allowed the persistence of a class structure that proved inimical to industrial growth and development. Moreover, with the continuing capture by powerful elites of various sites of formal governmental power, the state was in no position to nurture an effective social coalition that could underpin sustainable industrial growth and development.
Contradictory interest of the bourgeoisie. The landed ‘oligarchy’ and the ‘progressive’ national bourgeoisie’ constitute separate and contending classes and that national and foreign capital are structurally autonomous; that the relationship between them is ‘external’ and their concrete interests contradictory; and that, in consequence they are driven into conflict over the nation’s development” (Zeitlin and Ratcliff 1988, p. 217) In occupying a “self-contradictory intraclass location” (Zeitlin and Ratcliff 1988, p. 208) in the manufacturing process, the landed-capitalists bared a structural weakness that was to compromise the industrialization effort from the very start. This weakness was made more fatal and glaring y the absence of a relatively autonomous state with the capacity to carry out a coherent program of industrialization. According to Rivera, as the dominant segment of the ISI bourgeoisie, the landed-capitalist families confronted an inherently self-contradiction set of interests forced upon them in their situation as both landlords and capitalists.
Rent seeking. The ISI bourgeoisie singles out their lack of dynamism as a capitalist class fraction due to the pervasive rent-seeking activities imposed by the state apparatus and the society as a whole.
ISI dependent on foreign inputs. The ISI industries developed into an oligopolized sector heavily dependent on foreign inputs with little dynamism for growth and innovation and engaged in pervasive rent-seeking activities. The pervasiveness of foreign linkages with leading domestic-oriented manufacturing firms nurtured an ISI constituency strong enough to resist the state’s indecisive efforts toward greater export orientation.
Absence of strong state. The continuing economic and political power of the landed families in the formative years of ISI combined