PROFESSIONAL MONEYLENDERS AND THE EMERGENCE OF CAPITALISM IN INDIA AND INDONESIA

Abstract

A widely held assumption is that contemporary financial landscapes and regional differences are to a large extent the outcome of historical processes. A recent hypothesis the author put forward was that professional moneylenders are a structural phenomenon of expanding merchant capitalism, and that once the market integration of particular regions has been achieved, professional moneylenders are eventually replaced by banks. Alongside such large-scale professional moneylenders there have always been and still are various small-scale and mostly semi-professional moneylenders. In the contemporary world they are found in great numbers in developing countries. They have been interpreted as structurally supporting capitalism because they provide marginalised people who are beyond the scope of banks with purchasing power for the commodity markets based upon credit. In this paper the author compares large-scale professional moneylenders of precolonial/colonial India and colonial Indonesia. The analysis shows that particularly non-Western bankers emerged in India, while in Indonesia comparable financial agents seem to have existed only in limited numbers. What seems to speak against the above hypothesis can be interpreted as follows. While the structure of expanding merchant capitalism provides a framework in which such non-Western bankers may emerge, the particular world market integration of trade during the expansion period and colonial policy may develop different financial landscapes with regard to economic opportunities for private enterprise.