1969 was our own cataclysmic economic depression of the 1930's. It brought to the surface, gnawing economic disparities between the major races in Malaysia. Most significantly, it exposed the economic deprivations of the Malays.
What caused it? The easy answer was capitalism or free market economy. The depression of the 1930s in America impressed the minds of the American people of the efficacy of government. Only the government can remedy the situation provided of course government is in the hands of 'good people' like us naturally. Good people like us naturally exclude those agitating for reforms and more naturally those asking for a break from a siege mentality.
From 1970 onwards, what we have is our own New Deal in the form of NEP. It sought out primarily to redress the economic problem of the Malays. We saw coming into being, various regulations and institutions armed with the explicit agenda of jumpstarting the Malays in various economic enterprises. A fuller analysis of our New Deal isn't the subject of this essay today.
What is the subject is the perception molded about government's role in the pursuits of our industry and improvement. The fundamental perception is this- active intervention of the government especially central government is the remedy to the economic problem. The economic problem disemboweled up to 1969, was viewed largely as the failure of market economy. Capitalism was the cause of Malay backwardness. Free market has largely benefited the more industrious and uninhibited Chinese. The conventional wisdom was, in order to remedy the situation is to enlarge the role of government and at the same time, put up with regulations to curtail Chinese economic enthusiasm.
In what form/s did this perception express itself/themselves? It took the form of allowing benevolent public servants, disinterested experts, assuming almost unbridled powers which once narrow minded and selfish economic royalists held that were widely abused. Businessmen are just not responsible people. 1970 was our own beginning year when "the moneychangers have fled from the high seats in the temple of our civilization". This phrase was used by Roosevelt when announcing his new Deal that sought to justify the enlarged role of big government.
In my opinion, the thinkers behind our own NEP were inspired by Roosevelt's New Deal in two senses; one- in accepting that the economic problem was the result of the failure of market economy and two- accepting in turn that the remedy is bigger government and therefore bigger and almost unchallengeable powers. I am now more convinced those thinkers of our own NEP didn't sit down to think of the problem from our own local perspectives and must have been studying excessively the NEW DEAL and adopting its approach almost carte blanche here in Malaysia.
The main by-product of this thinking is the change in the belief from individual responsibility, laissez faire and decentralized and limited government to a belief in a more robust government led of course by benevolent public servants and politicians. The new belief was basically about the role of the state. The state is now viewed as the power that is created to protect people from the vicissitudes of fortune and to control the operations of the economy in the general interest of the people. These roles must be agreed upon even if it involved, as we were to see from 1970, government ownership and operation of the means of production.
This idea fitted into the strategic thinking of Malay politicians because enlarged government role conferred unto them powers that would not be achieved if left to free market forces. It allowed them to build a fortress which Dr. Mahathir wanted to disassemble through his thinking in later years. What Tun Mahathir did not realize was that government money changers have occupied and entrenched themselves in the high seats in the temple of our civilization.
If the agenda of Malaysia is to be achieved, this temple must be invaded.