e-Con e-News

blog: eesrilanka.wordpress.com

‘Before you study the economics, study the economists!’

e-Con e-News 11-17 May 2025

India is allegedly attempting to prevent the economic advance of Hambantota Port as a node for Sri Lanka’s industrial renaissance (see ee Random Notes). This blockading makes this ee recall SBD de Silva’s signalling of the vast difference between the ports in the settler states (USA, Canada, Australia, etc., but not only them) and in the non-settler colonies like ours. Sri Lanka’s ports are stunted, as:

‘Depots for the storage & transfer of goods

and administrative, commercial & financial

centres; they were not nodes of production’

*

In the settler states, however, such as in French-settled Algeria:

‘The differentiation in port facilities & services led to

the use of specialized equipment for the handling &

storage of minerals (petroleum, coal, etc.), of grain

elevators, wine banks connected by pipelines to the

ships, and food-packaging & food-freezing plants.’

– SBD de Silva, The Political Economy of Underdevelopment

*

An allegedly besieged Denmark has hurried to Colombo, their ambassador to Sri Lanka Rasmus Abildgaard Kristensen, who is housed in India. Apparently unperturbed about his country’s largest colony Greenland being grabbed by the USA – he flew in to sing (we’re told, see ee Business) the praises of their capitalist bootprints in Sri Lanka (eg, that horrible chemical cocktail called Sunquick – whose labels sport fake fruit to mislead drinkers) and shipping monopoly AP Moller-Maersk.

     We were not told what his corporate backers or his hosts think, about last week’s opening of a modernized Vizhinjam Port in nearby Thiruvananthapuram, Kerala. Chatter about the port, only mentions the role of India’s Adani Group, but not the role played by such traditional ‘shipping’ conglomerates as P&O: England’s colonial Peninsular & Oriental Steam Navigation Company, has long controlled shipping in this country (now through their so-called ‘local’ conglomerates, Keells, etc.), and the role of sludge funders like US BlackRock (which has replaced Goldman Sachs in the anarchist pandemonium). P&O allegedly funded the relentless media attack on the port of Hambantota.

     The latest attack on Hambantota is directed at Sinopec’s oil refinery project. This again recalls SBD de Silva’s thesis on the differences in the choices settler & non-settler colonies make. The strategic commodities a country chooses to prioritize & produce, can not only just enable the production of the most advanced technological methods (though certain modern products may be made in less-advanced ways). What is most important to de Silva, is how this strategic choice leads to an escalating manufacture of other commodities: ‘One Thing Leads to Another’. But first, in anticipation about what imperialism sends by post:

*

‘The US will send letters within the next 2 to 3 weeks to

trading partners setting out a tariff decision as it was not possible

to meet all the countries, President Donald Trump said.’

(see ee Economy, Letters)

*

‘Even though industrial policy may have been the more

dominant consideration for the imposition of para-tariffs

in the early years of their use, fiscal (revenue) implications

have become a key factor in the continued existence of such tariffs.’

– Anushka Wijesinha, Senith Abeynayake (see ee Economists,

Priority trade & competitiveness reforms for SL)

*

The hijacked Institute for Policy Studies (IPS)’s Wijesinha & Abeynayake are being coy. ‘Industrial policy’ has rarely been the ‘more dominant consideration’. Really? It has been sabotaged, misled, if not misunderstood. Take US President Trump’s advertized wishes to impose tariffs on our much-deified exports. One overly celebrated export is the garment fraud. There is never-ending praise for the ‘Garment’ which even became a synonym for ‘factory’ in Sinhala. We don’t know of Japan’s Mr Juki (which rhymes with quicky), but his sewing machines that filled those larger halls around the country evoked yet other epithets for the young women recruited to toil there. There was no advancement of the skills they had earlier deployed in their more-modest homes. The pins & needles, the thread & textiles, the resins & the dyes, the largely low-tech machinery, the assembly lines, the cars that transport the egos of their ‘executive’ mimic men, and the lorries that convey their goods, the ships & the planes – are not made here, and are all imported.

     How much of the IPR – Intellectual Property Rights (patent, copyright, royalty) – payments in the garment fraud go to London & New York, the historical bases of the ‘rag trade’? This, we are not told. Are all these inputs and royalties calculated into Mr Trump’s AI computations of tariffs? Apparently. But sometimes. Only if these inputs come from their current friends and not their enemies.

     Indeed, as SBD oft quipped, if Sri Lanka was turned into one large garment factory, one grand ‘oriental’ hotel, one big ‘ye olde’ tea plantation (named with an evocative Scottish brogue), we would not need to have schools & universities. Close them down. No need.

     Yet someone has to teach the English, English. About their history, and teach Idaho, etc, too. Someone has to teach by word or by example, teach the US and European working classes that it is we (not all of us) who through 500 years of invasion and genocide have been dismembered, murdered, and most importantly ‘ripped-off’. And no amount of media erasure & bloviating by artful real-estate dealers can efface that memory. And yet they try.

*

Continuing to excerpt SBD de Silva’s exposure of the changes made in settler states, this ee Focus looks at differences in the Mahgrebin nations of Algeria, Tunisia, Morocco, and the roles of the white settlers & expatriates there. He highlights the ‘phenomenal’ input of labor per hectare in settler agriculture, vs the dire impoverishment of ‘native’ agriculture. Settlers created and focused on building their national ‘home’ markets, closely integrating industry with agriculture.

     Settlers & Tariffs – Settler states also used the revenue from tariffs, not to pay salaries or play the stock market, but to invest in modern industry to upgrade the lives of white settlers. Whereas they relegated the darker ‘natives’ in their ‘dominions’ to a backward form of agriculture: plantations that were non-mechanized, and an agriculture that was non-monetized and non-commercialized.

     SBD also examined the purported exceptions to his thesis on differences in development: This ee focuses on the fabulous & besieged Congo, where the entry of settlers was regulated, and there were relatively fewer white people. He then goes on to show how copper processing, unlike even iron & steel, led to phenomenal other fields:

*

‘The specific character of the mining operations in the Congo

gave the economy a dynamism of its own. First, these operations,

especially the reduction of copper ore before smelting, are far

more complex than those for many other metals, including iron

& steel, and they released a long line of products which were

the basis of separate industries – eg, explosives, sulphuric acid,

ferrous & ferric sulphates, soda & pyrestrol, industrial glycerine,

insecticides, paints & varnishes, glass, pharmaceuticals & perfumery.’

*

Belgium, subject to a lot of propaganda about the horrors of English Victoria’s cousin Leopold, actually ended up creating an advanced African working class, who then it, along with the US, had to conspire to destroy. All this is recorded in SBD de Silva’s excerpt.

     As long recalled, if any autobiography would be written about SBD (not of his personal life, but of his dedication to a finest scholarship & method, anywhere), such a book should be called, One Thing Leads to Another – his favorite phrase to describe what real industrialization means. Its coinage is attributed to the US’ Albert Hirschman, who himself attributed the idea to Canada’s Harold Innis, the first to describe the role of Canada’s fur trade & the role played by what he called ‘Staple Base Dynamism’ (SBD!) in that country’s industrial modernization: how wheat was made into flour & bread & cakes, etc, and grains into sources of energy. Yes, Staple Base Dynamism, yes, SBD! SBD de Silva, who provides a great example of ‘One Thing Leading to Another’…

*

• On 27 May 1970, led by Sirimavo Bandaranaike, a United Front government, comprising the Sri Lanka Freedom Party (SLFP), the Lanka Sama Samaja Party (LSSP) and the Communist Party of (then) Ceylon (now, CPSL), won a landslide victory. Short of just one year, on 5 April 1971, the JVP launched an ‘insurrection’. This led to not just repression, but the need for land and housing reform. That eventually led to a split in the government. This ‘split’ was certainly fueled by larger international forces such as a dramatic rise in the price of oil (blamed on OPEC – Organization of Petroleum Exporting Countries) and a food crisis that led to shortages – not to mention US-funded destabilization. The attempt to industrialize the country was undermined by a misunderstanding of the challenges involved. This included sabotage by merchants, who engaged in massive smuggling to both undermine industrial policies and accumulate vast profits.

     These very same merchants who benefited from these changes (they were too shy to thank the positive policies of that government) then went on to usher in the so-called ‘Open Economy’ led by JR Jayawardena’s United National Party, that opened the country up to consumer imports and the destruction of much of any local industries. The UNP then released the remaining leadership of the JVP, and when it could not fulfil the needs of another generation for fitting employment, then graduated to annihilating the JVP, both of whom went on to dismembering and massacring, not just each other. The large corporations carried on, suffering little of the consequences they are ultimately responsible for. For they have in the meantime suborned the entire wealth of the nation, which they instead blame on sundry ‘native’ politicians wearing ‘national’. Such experiences led SBD de Silva to conclude that industrialization required not just economic and political but also military strategies. The so-called drug dealers & smugglers, after all, can inevitably be traced to the large corporations that control the entry into and egress out of the ports of the country.

     Will the JVP have to relive its own past, its karumaya? Europe’s ‘Establishment’ we learn, has developed expertise in ‘domesticating’ the ‘populism’ of Lefts & Rights. Just a few weeks after the announcement of a company to produce salt – Elephant Pass Salt! What a winning name! – the Minister of Industries now declares they will import salt to deal with scarcities. The importers must have gone into high gear against the threat of a good example. Yet, did the JVP not gauge the scale of production needed? Are these merely PR pronouncements about good intentions – virtue signaling? Did they not gauge the nature of our import merchant mafioso and take active measures to prevent scarcity? These are the bittersweet lessons to be learned, not just from the ‘70-76 government, which everybody seems to have had a role in undermining.

     Then there is the more recent obvious and blatant example of the Gotabhaya Rajapakse government 2019-22, of a crew and its captain apparently taken by surprise, again unaware or unable to challenge our pirate merchant overrulers and their MNC backers, who would go to any length to easily create scarcities and havoc to topple any government, frightened by the idea of a state that claims to cater to a majority. Some blame GR’s propensity to join up with largely anti-worker intellectuals – so-called professionals & experts. Yet who could have been prescient enough to foresee and challenge the effects of the nature and level of the biological warfare (2020 Corona) waged on China, simultaneous with the US war on Russia via Ukraine? Can we just keep blaming leaders for failing to see the urgency or the need for creating a strong state that would first ensure a minimum of food, fuel, pharma, finance production security, like what England enacted to maintain its power here during their World War 2?

     After over 50 years of ‘struggle’ and annihilations and other lessons learned, why did the JVP not gather the dedicated workers in these salterns, pre- & post-privatization, retired and existing, and combine them with our salt scholars and security officials to ‘map’ out a strategy to outmanoeuvre and quell these merchants… Industrialization, indeed, requires a political, economic and military strategy, as SBD concluded.

*

• What exactly is corruption? Is it such a horrible crime as the media says it is? Or is corruption inevitable in a merchant society where primacy is determined by the grabbing or gaining of a state-licensed monopoly to hide the price of some national asset by buying it at one shadowy location and selling it at another for a higher price? Is commerce, ‘generally cheating’, as that US luminary, media and slave owner Benjamin Franklin concluded (and who Marx quoted in Capital. Why has not any newspaper (we can understand the Sunday Times not wishing to) seen fit to investigate the Times own ‘investigative’ journalist being given an award by a Trump government that just ‘issued an Executive Order that suspended the Foreign Corrupt Practices Act (FCPA) for 180 days, giving an all clear to US corporations to bribe officials in foreign countries to get business deals approved’? Comedy?

     Then there is the revelation about the ‘publisher’ of the USA’s Organized Crime & Corruption Reporting Project (OCCRP), fearless ‘exposer’ of the names in the Panama Papers, suggesting that ‘journalism organizations’ disguise their funding by ‘sensitive donors’. Drew Sullivan told the International Journalism Festival ’25 in mafia-friendly Perugia, Italy, that ‘journalistic organizations’ should ‘launder money legally’ to protect donors’ identities!

     This comes one month after OCCRP successfully sued the US government to restore its frozen USAID funding… Ahem! There’s many a social-media outrage-ifier who may not wish to get outraged by their use of OCCRP’s supposed exposures of stolen moneys. But the problem is all this deliberately avoids the larger corruption, the original sin itself – the legalized private capture of the country’s natural and living resources, which refuses to invest in employing and treating our people with dignity. This week saw the usual cover-up of the mass murder on the roads, with the murderers themselves, which includes the media, shedding copious alligator tears.

*

‘Reasons are plenty; disregard for road rules & traffic

regulations, excessive speed, driver possibly being under the

influence of alcohol/drugs, overcrowding, poor vehicle maintenance,

insanitary conditions, sexual harassment and not being on

schedule,’ complained [Bloomberg’s] Anoushka Ondaatje’

– Daily Mirror (see ee Workers, Bus journeys that whisper death!)

Ms Bloomberger forgets to ask who sets the rhythm for such frenetic folly. English law until recently declared train & road accidents in Sri Lanka as ‘acts of god’. Hooray for Ashok Leyland! Is it their god that sets the pace, the rush to gain Rs30 from a passenger at the next bus stop before another bus gets there? Blame has been heaped on transport workers, ignoring the role of such luminaries as the World Bank & IMF ever pushing for privatization, Japan, the import lobby & the banks that invest in them, plus the officials & politicians who have enabled the horror. SBD de Silva often asked, how it is that the capitalist who may wish to have their workers full of energy when they enter the factory gates, sees more profit in tiring them out before getting them in there?

     This ee also continues the jaded peek into the origins of the world’s biggest capitalist political machine, the secretive Tammany Society and its public stage, Tammany Hall. This story tracks the private capture of public power & resources in New York City (& its state government & the USA itself). The details are adapted from Gustave Myer’s History of Tammany Hall. The book reads like a detective crime novel, packed with a huge cast (a minority, really) of criminals, mainly politicians, with their power in banks, commerce or the ‘common’ people. But, are they the real criminals?

     This excerpt looks at the role played by the US judiciary – judges, police, jailers – in fixing elections. A highly organized art & science it is.

     Myers wrote in the tradition of the ‘muckrakers – as US President Theodore Roosevelt insulted those supposedly ‘independent’ journalists & novelists, Ida Tarbell (Rockefeller’s Standard Oil), Upton Sinclair (Chicago’s meat-packing industry), all influenced by Marx & Engels’ work and the growth of the scientific socialist movement) – who yet managed to find publishers to spread their diggings up of ‘the dirt’ on the undersides of capitalism, US-style, by focusing on one particular family or business.

     Myers was an early investigator of capitalist life, in such classics as: History of Public Franchises in New York City (1900); History of the Great American Fortunes. 3 vols. (1909-36); History of the Supreme Court of the US (1912); History of Canadian Wealth (1914), ‘A Study of the Causes of Industrial Accidents,’ Journal of the American Statistical Association 14 (1915), etc. He had difficulty finding publishers, eventually settling on the cooperative that first published Marx’s Capital in English in the USA.

     In his 1972 introduction to the 1917 edition of A History of Canadian Wealth (1917), the Canadian Communist Stanley Brehaut Ryerson noted the shortcomings of the muckrakers’ and Myers’ analyses, in particular, what propelled Myers to becoming an open imperialist in later life. While Ryerson notes Myers’ exemplary role in investigating capitalism’s workings. Myers’ major problem was his empiricist focus on corruption (naming names & the crimes behind their fortunes) as the root of all evil, to the exclusion of deeper analyses, of the collective capitalist. Analysing production, or the gaining of fortune, by excluding production:

‘With the coming of the 19^th century, ‘The dominant class…

were the mercantile & shipping merchants…’ – precursors

of the ‘trading & sundry other men of capital’ who set about

obtaining (from governments largely made up of themselves)

railway charters that conferred vast & elastic

‘privileges & powers, immunities & rights.’

*

Yet, Ryerson adds: ‘corruption and the suborning of the state for the private enrichment of elites has been the constant corollary of ‘free enterprise’ since its inception’. Ryerson quotes Friedrich Engels’ remarks, that in the bourgeois-democratic state (whether republic or constitutional monarchy):

‘Wealth exercises its power indirectly, but all the more

surely. On the one hand, in the form of the direct

corruption of officials, of which the USA provides

the classical example; on the other hand, in the form

of an alliance between government & Stock Exchange,

which becomes the easier to achieve the more the public

debt increases & the more joint-stock companies concentrate

in their hands not only transport but also production itself.’

(Engels, The Origins of Family, Private Property & the State, 1884)

*

So, it is not only the who & where but how the nation’s wealth is produced socially by millions and hijacked for private enrichment through public misery. Yes, there is a ‘corruption’ of public officials, but as we have learned so well, yet it is we who supposedly owe them an ever-increasing debt, as capitalists concentrate their monopolies not only in ‘transport but also production itself enables an alliance between government and the stock-exchange,’ which forms the ‘basis for the state monopoly capitalism that was to emerge’ in the 20^th century:

Myers’s handling of the workings of this process

is marked by both the enthralling ‘detective-story’

quality of the exposures – & a theoretical weakness.

Capitalism is not corruption alone…

*

Myers’ focus on the ‘designing men and corporations that by the adroit use of corrupt politics vested in themselves huge corporate privileges and powers and enormous wealth’, overshadows ‘the role of production, of productive labour as the well-spring of wealth’. All bribery and corruption, finally depend ‘on the extraction of surplus values from living labour’. It is the productive labour of workers and peasants, that has enabled the initial accumulation of capital and its subsequent self-expansion through re-invested profits. It is not just low wages but the extraction of capitalist profit, which does not profit the producer!

     Instead, aspiring politicians find it more opportune to spew out names & numbers without naming or numbering of the hourly economic processes and political diversions by which the true national wealth is squandered. Ryerson concludes, it is common to both a primitive understanding of Marxism and an ‘economism’ that excises ‘entire areas of reality’ (see ee Random Notes).

*

– ComBank first private sector bank on cusp of Rs3trillion assets milestone

– Bank of Ceylon’s (BoC) records Rs30bn pre-tax profit in 1Q

– Hatton Bank (HNB) reports growth of 49% in Group Profit

– Sampath Bank reports net up 149% in March quarter

– Nations Trust Bank reports profits up 8%

These are headlines about banks (in Colombo, we won’t call them Sri Lankan banks), who are issuing their 1^st quarter statements – 1Q25, aka ‘how we did in the first 3 months of this gregorian year’. All is wonderful – ‘robust’, ‘non-performing loans (NPLs) aka ‘bad loans’ cut down. Only the now privatized and former state bank DFCC is not so good – ‘bearish’:

DFCC net down 21-pct amid higher operating expenses – EconomyNext

And yet:

DFCC Bank delivers resilient, purpose-driven performance in Q1 – Financial Times

*

We have to read EconomyNext’s DFCC story to find out more about their depression: ‘Lower gross income’. This is a rather cryptic claim for yet another state institution freed into the exciting arms of ‘free enterprise’. But don’t worry, the balance sheets of the other banks read like the latest teledrama scripts – hot, ready to be dished out to ravenous audiences everywhere, ready if unwilling, to jump on the table and gorge in the orgy. But what performances, good & bad, have they performed for Sri Lanka? Why is DFCC income low at the box office? What did they lend, and for what?

*

SL investor confidence surges amidst global trade developments

– EconomyNext (see ee Finance)

And yet:

Fake consultants undermine investor confidence

‘offering exaggerated projections, fast-track approvals,

or guaranteed returns, they lure investors into ventures

that frequently result in financial loss, regulatory

complications, or complete project failure’

– Sunday Times (see ee Finance)

*

So what’s a sucker to do? Then again, volatility is the name of the game. Disturbance. Again, what is the name of the game? A million or more words are printed as ‘news’ by the media in Sri Lanka every week. Most are clearly ‘photocopied’ or ‘duplicated’ press releases, ‘cut&pastes’ of the drivel churned out by the public-relations (PR) divisions of corporations or government departments, diversionary or hagiographic.

     So, who shall judge the judges? Who shall police the police? The media loves to call itself a watchdog aka nursemaid of democracy. But there is no bow-wow, no bedside take-this&call-me-in-the-morning deeper analysis of these banks’ claims. Do the banks pay taxes for paying the media to print out this uncritical gloss? Do the media declare this as income, and pay taxes on it? Or is it all, summa iri sanksthava aka under-the-table? Why is there no comment or analysis of these pronouncements?

     The media in Sri Lanka (we won’t call them Sri Lankan media) won’t tell, refuses to tell, and instead reproduces fairy banking tales, verbatim, and in bold. Their tales aka narratives aka stories are concocted by their cousins to whom they are joined at the hip in the PR shenanigans (we won’t call them an industry).

     This week saw the Prime Minister seemingly begging for yet more attention for her signal virtue, by awarding the media monopoly Wijeya Newspapers’ Chief Operating Officer Janaka Rathnakumara with the Asian Productivity Office (APO) National Award for Productivity Advocates.

     What is productivity? The news item refuses to share. The PM was joined by National Productivity Secretariat Director JD Niranja S Jayakodi, Industry & Entrepreneurship Development Minister Sunil Handunneththi, APO Secretary-General Indra Pradana Singawinata, and Industry & Entrepreneurship Development Ministry Secretary JM Thilaka Jayasundara. That’s quite an unproductive number at yet another unproductive awards ceremony (more on awards ceremonies later). This is the first time we have heard of this Secretariat. We are also unclear how the Wijeya folk promote productivity. And again, but what do they mean by it? Who is investing in productivity, and where & how?

     How has the Commercial Bank of Ceylon (no, not that BoC, but its merchant cousin) made its trillions in profits? It is partly owned by the USA’s World Bank. Does Mr Trump know? Since they call themselves capitalists, what percentage of their investments was in capital formation, in production, and productive production? We know a lot of companies spend their time giving themselves awards and producing wonderful words, like our Prime Minister, who is in no danger of being assassinated or coup d’etated by those intrepid ‘De Sarams’, their relatives & the shadowy company & companies they keep, as long as she sticks to flowery words. She must well be aware about what happened to the world’s first woman PM, who took to the larger seas beyond Mount Lavinia Hotel, and had dared to call for an ocean of peace…

*

_________

Contents:

India Hinders Hambantota’s Industrial Modernization