The “Culture System” (in Dutch “Cultuurstelsel”), sometimes called the “Cultivation System”, was enforced in Java and other parts of Indonesia by the Dutch colonial government between 1830 and 1870. Under this system, Indonesian farmers were forced to put aside part of their land and labour for growing cash crops such as sugar, coffee, indigo, tobacco and pepper, so that they could pay their land tax to the Dutch.
Holland and Belgium emerged from the Napoleonic European Empire in completely different states of economic viability. The Dutch had lost their shipping, their trade, their colonies, to Britain. Belgium had thrived in the hot-house atmosphere of European protectionism; Liege, Ghent, Verviers and other places had become thriving industrial centres. Holland emerged with a national debt of two milliard florins in 1815; Belgium had a bare 32 million. Amalgamation of the two parts of the Netherlands in September 1815 meant that Belgium was saddled with half of the debt while Holland held the key administrative and political positions. Belgian industry vainly demanded tariff protection while new taxes – mouture and abbatage – hit Belgium harder than they did Holland. Belgium was in effect paying for the rehabilitation of Holland. No wonder that the rallying-cry of the Belgian deputies in the States-General became, towards the end of the ’twenties, “Point de redressement de griefs, point d’argent”.
Nevertheless, these latent conflicts between Belgian and Dutch interests remained dormant as long as the opening up of the Scheldt meant the creation of new markets for Belgian textile manufacturers in the Dutch colonies. When, however, the Java war (1825–30) closed down their most important overseas market and simultaneously imposed an additional tax burden, there was no reason to oppose the overwhelming popular demand for secession. Paris showed the way with the July 1830 revolution and by the following July, Leopold was elected king of an independent Belgium.
Holland was left even more devastated economically than before. Her richest, most industrialized provinces were lost. The Java war and the war of intervention in Belgium cost the Treasury whatever credit it had had. Dutch shippers could do nothing against their British competitors who also had something to carry in their holds and who managed thus to monopolize the foreign trade of Java while the Dutch Government was footing the administrative bill. The colonial debt accumulated; colonial disorder grew daily. At length “the Governor-General was forced to mortgage all the Dutch possessions in the East to a British firm in Calcutta ...” [1]
Something had to be done to save Dutch capital from the wasting disease of British competition, to refurbish it and, at the same time, to replenish the depleted exchequer. But ruined as it was by decades of occupation, wars and revolts and faced with the insistent pressure of a vastly superior Britain – superior, that is, in terms of industrial and commercial power – the Dutch capitalist class was incapable of developing in the ad hoc, unplanned way of traditional capitalism. Like all relatively backward economies trying to secure a place in the economic sun, aggression had to be centrally planned while co-ordination, not competition had to rule at home. Like all relatively backward societies, economic reform had to be undertaken at the rate dictated by external pressure by coupling the economic with the political pivots of power.
Holland followed the road taken by Peter the Great and set the example for the many later exponents of industrialization through State Capitalism: Muhammad Ali in Egypt, the Meiji Restorationists in Japan, Ataturk the Etatist in Turkey, Stalinist Russia and so on. William I of Holland was the State Capitalist incarnate:
“He was more than ready to do everything all at once; on the largest possible scale; and to pay out of his own pocket, if necessary. At his instigation new harbours were built, a network of canals opened; roads and streets were laid down, and later a railway; marshes were reclaimed, and new dykes constructed; engineering works, a porcelain factory and a veterinary school were called into existence by his all-embracing energy, and to finance these new projects the Netherlands Bank was built up on the ruins of the old Bank of Amsterdam.” [2]
The Dutch colonies, primarily Java, were to play a vital role in the process. The Culture System was introduced. It was, however, “only one aspect of a comprehensive plan to encourage Dutch manufacturers, banking, shipping and enterprise. Dutch firms, financed by Dutch banks, exported Dutch cotton goods in Dutch ships in exchange for tropical produce to be sold to the rest of Europe at auctions held in Amsterdam. The Government assisted manufacturers of cotton goods; the Netherlands Trading Company had a monopoly of the trade and shipping, and provided funds for the Government at home; while the Java Bank, on behalf of the Government, financed the scheme in Java. Under the Culture System the whole of Java became “one huge State enterprise.” [3]
The characteristic feature of the Culture System in Java lay in the fact that the peasant “who traditionally was obliged to deliver a part of his harvest to the rulers as a tax in natura, was not free any longer to choose the crops to be sown and delivered. “The Government, as holder of the dominium directum over the soil determined, in accordance with marketing possibilities overseas and soil conditions, which crops the taxable indigenous tiller of the soil, as holder of the dominium utile, must render.” [4] In practice, the peasant was forced to replace rice-cultivation by coffee or indigo-cultivation, or some such crop, depending on the state of the European market.
Inevitably, as in all cases where there is a congruence of economic and political power and where the latter is completely outside the control of the people within its orbit, abuses crept in. [5]
The more flagrant the abuses and the greater the opposition to the regime the more the native administration (in which the key positions were held by Indonesian regents) was raised above indigenous society, and made to rest on the colonial government for proof of the legitimacy instead of on the local population as it had done previously. [6] This derivation of authority from above instead of from below became a feature of village administration as well.
In spite of the ravages made by the Culture System in Indonesia itself – and of this Furnivall states that it lead to “a succession of famines between 1843 and 1848” which “caused such distress that in one regency the population fell from 336,000 to 120,000 and in another from 89,500 to 9,000 [7] – it rained nothing but blessings on the Dutch economy and on the government of the Netherlands. “By 1877 the colony had poured about 832 million guilders into the coffers of the Netherlands Treasury” of which 236 million went on amortization of public debt, 153 million on the construction of railways, 155 million on tax reductions and 146 million on military and other public works. [8] Java had become the monopoly market of a nascent and protected Dutch textile industry served by subsidized Dutch shipping. Amsterdam had once again become a world centre for tropical products. In fact, State protection for private industry and commerce had been so beneficial that its wards had become impatient with the constraints imposed upon them and set about destroying the Culture System. Dutch Liberalism had arrived and jumped headlong into the stream of free trade.
Private capital now demanded a free hand in Indonesia. Direct profits appeared more attractive than derived ones. [9] More money was retained in Indonesia herself and spent on administration and the creation of utility capital to serve the needs of the rapidly growing stream of Dutch investments in the country. After the batig slot (the net export surplus appropriated by the Dutch exchequer) had built railways, irrigation works and the dykes of Holland, it was now partly diverted to Indonesia for the same purpose – to build the “external economies” needed by Dutch private capital. It is not surprising, therefore, that the pioneer planters of Deli were also the pioneers in the campaign to abolish the favourable balance or net-profit policy. [10]
As soon as private capital found itself capable of taking over the exploitation of Indonesia the State was relegated once more to the position of handmaiden accompanied by a tirade of vituperation against the autocratic dictatorship it had exercised over the indigenous population until then. The Ethical Policy was ushered in on a high note of moral sentiment. But:
“These moral conceptions (regarding obligations to colonial peoples) are related to the material possibilities, especially to those which the most powerful group regards as its primary interests. What was most important to the invested capital which was increasing rapidly, was peace, order and juridical guarantees which meant better administration, better police, and better jurisprudence, and for these the money which had previously gone to Holland was required in the Indies themselves. The more capital invested, the greater the development necessary in the equipment of the administration of the country.” [11]
The Culture System shows us the importance of State action in forcing economic development (whether in the Netherlands or Indonesia), it shows the importance of international pressure – in the form of commercial competition – in precipitating State action, it shows that the peculiar form of State Capitalism is adopted or rejected in accordance with the relative backwardness of the economy undergoing development.
1. Furnivall, Colonial Policy, p. 221.
2. Furnivall, Netherlands India, p. 83.
3. Furnivall, Colonial Policy, p. 222.
4. Goedhart, pp. 3, 4.
5. “The condition that only one-fifth of the rice fields of a dessa might be used for the cultivation of crops for the government was never observed. One-third, one-half and even the whole of these irrigated fields were used for that purpose ... Instead of 66 days per year, which originally was the normal period, the interests of certain government cultures was often necessitated those liable to service working 240 days or more ... Another evil was the placing of all responsibility on the Javanese farmers, not only for crop failure but also for all natural and economic factors which adversely influenced the financial results.” (G.H. van de Kolff in Schrieke, 1929)
6. “In order to win the regents for his plan Van den Bosch (originator of the Culture System – MK) not only promised them a percentage of the crops (but) consciously deemed it necessary to increase their influence and strengthen their position in native society by sanctioning the inheritance of office and bestowing official plots of land.” (Gonggrijp, 1949, p. 124)
7. Furnivall, Netherlands India, p. 138.
8. Bousquet, p. 46.
9. “The constitutional revision of 1848 gave the bourgeoisie control of the Government. After this date the idea that greater profits would flow to the Netherlands by means of private exploitation rapidly gained ground. A colony in which free labour flourished, it was thought, would also be a better market for goods. Improvement of the Netherland Government finances made the abolition of forced cultures easier, after the unprofitable ones had already been discarded. The net-profit system was never explicitly abandoned; the surpluses merely withered away through increasing expenditure of the East Indian Government.” (Vandenbosch, 1944, p. 62)
10. “Planters wanted schools for their children and subordinates, medical attention for their families and their coolies, irrigation for their fields, and railways for their produce; only the State could undertake such projects, and private interest demanded the expenditure of public funds on them to the prejudice of the batig slot. The tobacco planters in particular wanted to extend their cultivation on the borders of Achin, but depended on the State for protection against the Achinese.” (Furnivall, 1944, p. 75)
11. Middendorp in Schrieke, 1929.
Bousquet, G.H. 1940. A French View of the Netherlands Indies, Oxford, London, New York.
Furnivall, J.S. 1944. Netherlands India, Cambridge.
Furnivall, J.S. 1948. Colonial Policy and Practice, Cambridge.
Goedhart, A. 1948. De Onmogelijke Vrijheid, Het Gouvernemenals Koffieondernemer, Utrecht.
Gonggrijp, G. 1949. Schets ener economische Geschiedenis van Nederlandsch-India, 3rd Edition, Haarlem.
Kolff van de, G.H. pp. 109–110 of European Influence on Native Agriculture in: Schrieke, B. (ed.). 1929. The Effect of Western Influence on Native Civilization in the Malay Archipelago, Batavia.
Middendorp, W. p. 44 of The Administration of the Outer Provinces of the Netherland Indies in: Schrieke, B. (ed.). 1929. The Effect of Western Influence on Native Civilization in the Malay Archipelago, Batavia.
Vandenbosch, A.J. 1944. The Dutch East Indies, Berkeley, Los Angeles.
The 2-sentence italicised preamble has been inserted by myself for context on the Culture System.
This text forms Appendix A The Culture System (pp. 267–272) of Mike Kidron’s unpublished thesis:
Kidron, Michael. 1957. Problems and patterns of development in overpopulated backward countries with special reference to Indonesia. M.Litt. University of Oxford, Faculty of Social Studies, Balliol College, 289pp.
Last updated on 10 April 2020