How Economic History is Erased in Sri Lanka
Posted on June 16th, 2024

e-Con e-News

Before you study the economics, study the economists!

e-Con e-News 09-15 June 2024

Many histories have been written about Sri Lanka, but none about what really counts. Well, there’s SBD de Silva’s classic The Political Economy of Underdevelopment but that lies buried underneath a mountain of muck. One of the biggest purveyors of dubious histories has been the International Centre for Ethnic Studies (ICES). ICES took office in 1982 in a renovated Colombo 7 mansion of an arbored byway in Sri Lanka’s 3rd-most-expensive tenderloin of real estate (after spare-parts Panchigavatte & body-parts Kanatte). ICES has been financed by the US Ford Foundation (FF). The FF’s eponymous founder Henry Ford had famously declared, ‘History is bunk.’ Yet ICES has come to publish 1000s of copies of ‘bunk’ histories on Sri Lanka, etc. All these histories are of ‘ethnic’, ‘caste’ & ‘gender’ encounters, but not of ‘class’.

     Busy ‘unmaking the nation’, ICES is yet to fund even one study of any of the leading multinational corporations (MNCs) & banks in Sri Lanka, from Unilever to Standard Chartered, from Exxon to Citibank. And why should they? ICES’ funders are based in the fortresses of the mightiest nation-states the world has ever known, with their ever-powerful executive presidents & royalty.

     Indeed, there is another reason why there’s still no economic history of Sri Lanka. It may make too much sense:


‘Production, banking, insurance, shipping, brokering, blending

& distribution were linked by interlocking directorships. In 1965

7 people controlled 162,892 acres of plantation land in Sri Lanka.

The Earl of Inchcape, who took over Peninsular & Oriental Steam

Navigation Co (later P&O) and British India Steam Navigation Co (BI),

was a principal in 41 companies involving various phases of the tea business,

including banking, shipping & insurance in Sri Lanka. Agency Houses

linked to shipping would hold up cargo to make profits for the principals…’

– Nawaz Dawood, Tea & Poverty, 1980


This concentration of ownership has probably only got more condensed in 2024 (and not just in Sri Lanka, hence the repeatedly advertised and somewhat frenetic claims to diversity, inclusivity & equality). This class concentration is not just a question of family rule or the corruption of any Rajapaksas-come-lately (see Random Notes, Colombo’s Family Compact). There are however no more social scientists to tell us about this incestuous interlocking. Social scientists nestle deep indeed within USAID’s green lunkets. And what has happened to ‘our’ economists? Covert in the master’s other orifices. This ee therefore thinly examines Sri Lanka’s early production of ‘postcolonial’ economists, with no idea of what colonialism really produces in a non-settler colonial economy (Production is probably too modern a word to describe such ‘postcolonial’ fabrication. Their ideas are more a colonial mishmash. Assembly is more like what it is, with the main components from London and Washington)


The International Centre for Ethnic Studies, itself headed by Colombo 7 denizens of colonial patrimony, was a slightly younger darker sibling of the Marga Institute. Calling itself ‘an independent non-profit Centre for Development Studies’, Marga was established in 1972, in the year of republican independence, ‘under the Companies Act of Sri Lanka’ (a leafy Act which also offers its shades to our beloved ‘International Schools’, which are illegal under the Education Act).

     Marga was set up in the wake of the 1970 election of a United Front coalition government including socialist parties, and the subsequent ‘insurgency’ against that government. After the 1977 trouncing of that government, amidst the flooding of loans for imports, Sri Lanka was tsunamied by ‘development’ NGOs & their experts bearing gifts…. 


‘For reasons best known to them, economists have now dropped

the term underdevelopment in favour of ‘developing’ economies.

The term originated in what may have been a political gesture

by the international aid agencies. It was readily adopted by economists,

heedless of the fact that it served to mask the hard reality that

these economies were not ‘developing’ but underdeveloping.’

– SBD de SilvaThe Political Economy of Underdevelopment, 1982


‘For the last 50 years’, Marga has worked with ‘over 25 INGOs, International Donor Agencies, and over 10 Ministries’, producing 100s of studies on all matters under the sun and on & under Sri Lankan soil. Marga thanks the German Friedrich Naumann Stiftung, US Ford Foundation, Rockefeller Foundation, USAID, Save the Children, CIDA, Asia Foundation, NORAD, SANEI, WHO, World Bank, SAREC, SACPS, IOM, ILO, World Vision, UNIREST, ESCAP, UNICEF, IDRC, UNCTAD, UNDP etc.

     Operating mostly in English, and hence as a local disinformant, Marga, drawing on the ‘productions’ of arts graduates, was a more intellectual in-Colombo counterpart of the Sinhala Sarvodaya, which went ‘down’ to the village to get its hands muddy, also greased by US & German funds. Where have all these Sarvodayas & Margas & ICESs come from? Where have they gone? Many are family businesses run by children & grandchildren of the founders & their classmates.


ICES, Marga, et al, may be traced to the 1960s, when US ideologists proclaimed ethnic studies programs” as breakthroughs at US universities in the tumult against the draft of white youth to fight the US War in Southeast Asia. They were also waging internal wars against the original Americans & African-Americans (The US government’s Cointelpro program promised to expose, disrupt, misdirect, discredit, or otherwise neutralize” and they did: targeting, assassinating, maiming & jailing for life – members of the Black Panthers Party & the American Indian Movement).

     These ‘histories’ were soon turned around and used against the ‘ethnics.’ Imperialism sponsored and financed Asian Studies,” Black Studies,” Puerto Rican Studies,” Indian Studies.” Ethnic Studies”. Some of the most publicized 3rd World intellectuals in the US Empire, who scraped & scratched & begged to ‘speak’ as ‘subalterns’, started getting paid high salaries by the imperialists to teach us our histories but only of a certain superficial genre.


The greatest invention of the 19th century

was the invention of the method of invention.”

After Europe’s World War I, the US government & corporations developed a systematic, scientific method, setting up research universities, inventors, and the major industrial research&development labs that dominate patenting, and prevent further innovation.

     RAND, the USA’s first thinktank, was created after their World War 2, as a ‘civilian’ NGO by the US Army Airforce & the Douglas Aircraft Co, to supposedly improve aerial warfare. But its aim was more to hide Douglas’ role as the main beneficiary of US airforce war contracts. Airforce general Curtis LeMay, aerial mass murderer of Koreans, called RAND a ‘gimmick’ – contracting a ‘non-profit’ organization to fund programs for intercontinental missiles & supersonic planes (see ee 11 Jan 2020).

     RAND became the center of the US war machinery to generate a science of military strategy to aid ‘leaders’ to make ‘superior’ decisions, free of politics. This science influenced all decision-making, from strategy & defense budgets to weapons design. Confident policymakers were supposed to use such decision tools to make rational choices in warfare. This process was soon transferred to domestic use in the form of ‘rational-choice theory’ which claimed people with equal power & information were making rational decisions.

     The misleading1957 report of a ‘Missile Gap’ between the USA & the USSR, was written by HR Gaither, RAND’s first Chairman. Hired by Henry Ford II to set up the Ford Foundation in 1947, Gaither wrote, Report of the Study for the Ford Foundation on Policy and Program, calling for a society managed by ‘rational’ professionals funded by capitalist philanthropists.

     Using dollars and their control of ‘mass’ media to shift policymaking away from popularly elected legislatures to ‘professionals’, claiming decisions were based on logical reasoning – these ‘rationalists’ were actually agents of private profiteering US war-suppliers, who used fear to manipulate populations.

     Ford was part of a large phalanx of funders of NGOS in the 1970-80s, operating alongside the ‘neoliberal’ rhetoric of ‘free trade’ & ‘laissez-faire’, midst the power of MNCs & the imperialist states that backed them, against the rising nation-states, seeking to ring them in with supranational chains.


SBD de Silva quit teaching Economics in disgust at the University of Peradeniya. Nalin de Silva was removed as a professor of Mathematics at the University of Colombo. Nalin & SBD were and are different we are told. They come from similar yet different spaces in our cosmos called Sri Lanka. They sought to represent different forces. The postcolonial university of Jennings has not been able to smother their message, nor the toxic constitutions of Soulbury, nor the Central Bank advisories of Exter, which each in their own way did their bit to hobble Sri Lanka’s long scramble out of underdevelopment.

     By the end of the 20th century, SBD began to see professors getting spouses to mark their students’ papers. He spoke of those too tired to teach on campus because they were operating tuition businesses in Peradeniya town. Most of all, he was concerned about the university becoming a dispenser of certificates: ‘They can easily get this scroll of white paper from someone else. Why waste my time.’  

     This week marks the 6th anniversary since SBD de Silva – to whom this blog is dedicated – made the transition into the next real. This ee therefore recalls some of what SBD also had to say at a seminar on ‘The Teaching of Economics in Universities of Sri Lanka’, organized by the University Grants Commission & the Sri Lanka Economic Association in 1987 (see ee Focus).  

     At that 1987 seminar, when he was a ‘Senior Lecturer in Economics at the University of Peradeniya, SBD discussed ‘Strategies to Upgrade the Teaching of Economics in the Universities.’ He emphasized the importance of ‘style, media & modes’ and more importantly, relevance to Sri Lanka’s priorities, intellectual & vocational. But it was more than that.

     SBD would often lament the lack of scholarship dedicated to examining our economy, in comparison to the industrial changes in Bangladesh, Thailand, Japan, China, India, etc. And not just to such countries but to different economic systems, like in the USSR & People’s Republic of China, North Korea & Cuba, etc.  He also spoke of the need for close interaction between teachers & students, who in the end have to both learn from each other (see ee Focus).

     This ee cursorily examines the rise of economics departments in the universities of a country seeking to reconstruct after 500 & more years of incessant depredation. We would have expected these departments to foreground a laboratory to gestate and flourish a culture of modern industrial production, which is how most countries have ‘developed’. Transforming the economy in such a manner would undergird and ensure its independence. SBD and others who set up Economics Departments perhaps had different ideas. The university & constitution of Jennings had sought to subvert & prevent modern industrialization. The Central Bank of Exter sought to promote instead, its econometrics of consumerism. Even this week saw an Economics Professor and weekly Sunday Times columnist promoting the IMF’s (Toyota-inspired) demand to allow car imports, arguing against import-substitution, without pointing out how Japan itself protects its own auto market when it needs to.


• Suing Economists & Amnesia – The US is targeting those who opposed relying solely on the IMF? Their minions are suing certain politicians and officials. What if we could sue economists? Of course, some wish to sue meteorologists. Others wish to sue to media owners? For not giving any warnings, or for giving the wrong warnings. The media & their economists are more intent on calling everyone corrupt except themselves.

     Anybody can be an economist (or philosopher). There is no regulatory body that confers this title, and sets standards of conduct. Yet some define ‘economists’ as ‘those who hold accredited positions for study and research in economics (which means those who are appointed to University or similar posts as teachers or research workers in that subject)’ (Lament for Economics, Barbara Wooton).

Check the Oxford Dictionary:

economist | ēˈkänəməst | noun | an expert in economics:

‘the result was much better than most economists had feared’

Then check ‘expert’?

expert | ˈekˌspərt | noun | a person who has a comprehensive and authoritative knowledge of or skill in a particular area: a financial expert | experts in child development’

Oxford then offers the origins of the word: ‘Middle English (as an adjective): from French, from Latin expertus, past participle of experiri ‘try’. The noun use dates from the early 19th century. Compare with experience & experiment’Try indeed! And compare.

     There must surely be ‘big data’ to compare what an economist said versus what actually happened. What the IMF accomplished with its 16 previous forays. The same goes for archives, which is why capitalist media limit access to those memories. This ee begins by wondering how the demands of early nationalists were diverted, isolated and eliminated. This ee also recalls the curious amnesia about the ‘demand’ by Ceylon Banking Commission of 1934 for speedy industrialization (see ee Focus).




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