Revenue Farming and the Changing State in Southeast Asia

Abstract

The study of revenue farming is a powerful means of focusing on the state. The state claims the sovereign and sole right to levy certain taxes and to charge for certain goods and services in order to maintain and extend itself. However, the state may choose for whatever reason not to undertake the actual collection of some revenues itself but instead farm out this task. In other words, the state may grant a private contractor the exclusive right for a specified period to collect a tax or provide certain goods and services in a particular territory. If we look at the farm as a business, we can say that the private contractor, or ‘farmer’, paid the state an agreed fixed rent for the enjoyment of this right. Yet a farm was more than a business. Arguing that the farmer collected ‘for and in the name of the State’, Abendanon (1886, pp. 525–7) drew the conclusion that rather than the farmer paying the state in the form of rent it was more correct to regard the state as paying the farmer for his services by requiring him to hand over only an agreed amount rather than all that he collected. Either way, of course, the driving force behind revenue fanning — the incentive that propelled men to become revenue farmers — was the same: the farmer was able to keep for himself whatever money he collected over and above the amount he had to pay the state. Nevertheless, Abendanon’s conception of a farm highlights the fact that the farmer, though a private merchant working in his own interests, was also acting on behalf of the state or at least was expected to do so. Farmers were thereby granted certain powers to carry out their work. There was, in short, a division of authority between the state and the farmer.

Although I have in no way done justice to their perceptive criticisms and many suggestions regarding sources and alternative approaches, I would very much like to thank Bruce Cruikshank, Howard Dick, Christine Dobbin, Bob Elson, John Gullick, Brian Head and Nick Knight for reading earlier versions of this chapter. I would also like to thank the Australian Research Council for a grant that made possible the collection of materials in the Netherlands.