Cambodia: the Abolition of Money (1978)

From the October 1978 issue of the Socialist Standard

We have been asked to comment on the situation in Cambodia. “Here is a country three years without money”, writes one correspondent. “This is proof that the moneyless system works”.

On 17 April 1975 the Cambodian capital Phnom Penh was captured by the Khmers Rouges (Red Cambodians). The new state of Democratic Kampuchea (Cambodia) was established, with Norodom Sihanouk, who had been ruler from 1941 until the 1970 coup, as Head of State. The victory was followed by an immediate evacuation of Phnom Penh and other large cities, their entire populations being deported to the countryside to build their own dwellings and grow their own rice. The country is now controlled by the Angkar (Organisation, a euphemism for the Cambodian Communist Party), and has to a remarkable extent shut itself off from the rest of the world.

For this reason, information about what is going on in Cambodia is rather hard to come by, the main sources being official government statements and refugee accounts, neither of which can be regarded as fully reliable. Refugees often blacken the state they have left in order to justify their leaving, and say what they think their interviewers would like them to. But even when due allowance is made for this, there are independent accounts which give the impression of a slave-like system based on unremitting work, little food and arbitrary killings at the whim of the Angkar, making it impossible not to give some credence to them.

The refugees ‘stories could scarcely be more different from the government’s depiction of Cambodia as a society without money, classes, or exploitation. Here is the picture drawn by Sihanouk (interview in Far Eastern Economic Review 14.11.75):

“I am very proud that Cambodians are the first to create a classless society. The Khmer Rouge have introduced into Phnom Penh the same sort of regime they had in the countryside. Everything has been levelled. There are no longer rich or poor, exploiters and exploited; no longer any differentiation because of class or fortune. There is one single class—the Administration feeds and clothes everyone according to their needs. At present there is no money and no markets. Everyone works, repairing and running electric power and water supply, making bicycles and textiles; refining sugar; or transforming destroyed tanks into agricultural and kitchen implements. Within their working organisations, there are FUNK (United Front of Cambodia) committees at every level which draw the necessary supplies from the Minister of Trade. Equal distribution on a family per-head basis is made through the FUNK committee. If clothing is needed, Government stores are there to provide it.”

There is, however, plenty of evidence that “moneyless, classless Cambodia” is nothing but a myth.

Privileged

For one thing, Sihanouk himself is one of the privileged. When he “retired” from his post as Head of State in April 1976, the government voted to pay him an annual pension of eight thousand American dollars — an odd gesture in a society without money. Many refugees have reported that the Angkar and their soldiers are better fed and clothed and receive better medical attention than the ordinary population. As far as decision-making is concerned, the population at large is totally excluded, political power being firmly in the hands of the Angkar.

The distribution of food rations (mostly rice) may well be conducted without the intervention of money, but some exchange of goods still takes place. A Phnom Penh radio report stated that silk products not “needed” by local people are traded for goods from other co-operatives (Summary of World Broadcasts, Far East, Weekly Economic Report 7.4.76). Cambodia’s need to import raw materials, medicines, and the like has necessitated the setting-up of a trading company in Hong Kong. A large foreign-trade deficit has been financed by China, but certain Cambodian products are exported, including rubber to China and North Korea. At a time when the daily rice ration was a mere 250 grams per person, Deputy Prime Minister Ieng Sary stated that rice was being exported to earn foreign exchange (FEER 29.10.76. and 10.12.76). Most people live on little more than rice, yet according to Phnom Penh radio:

“We are boosting the production of our fresh and salt water fish for export. This will bring the money we need to buy various engines and motors for our factories and build the economy of cur new Cambodia” (SWB 25.6.75).

In their drive to industrialisation, Cambodia’s rulers are well aware that they cannot do entirely without money.

Rivalry with other newly-established regimes in Southeast Asia has led in recent months to a border conflict with Vietnam. The Vietnamese press has published accounts of Cambodian-committed atrocities which in their horror equal any of those recounted by refugees to Western journalists. One Hanoi paper described the new Cambodian villages as “forced labour brigades of the age of slavery” (Guardian 20.7.78).

Evil cities

While Cambodia is certainly not a moneyless society, dislike of money and other trappings of “civilization” in pre-revolutionary Phnom Penh seems to have been widespread among the Khmers Rouges. During the forced march from Phnom Penh, soldiers were reported to have searched evacuees for their money and then thrown notes in the air, saying that the Angkar had put an end to money (Francois Ponchaud: Cambodia Year Zero). At a commercial bank in the capital, notes were burned or just dumped by the victorious troops (John Barron and Anthony Paul: Peace with Horror). On the day of the Angkar takeover, one of their commissars told some foreign priests:

“Cities are evil. There are money and trade in cities, and both have a corrupting influence. People are good, but cities are evil. That is why we shall do away with cities”  (quoted in Peace with Horror).

Slogans used by the Khmers Rouges in “education” classes included: “We are building the only true communism . . . Our communism will be better than in Russia or China where there are still classes” (ibid).

Some of these views are probably best interpreted as a reaction to the corruption and inequality of the American-backed Republican regime which ruled Cambodia from 1970 to 1975. Many of the Khmers Rouges leaders are Paris-educated intellectuals who on the one hand look back to the pre-monetary agricultural economy of traditional Cambodia and on the other look forward to the country’s modernisation and “independence”. The radicalness of their policies has led to an almost unimaginable degree of suffering, with some estimates of the deaths since April 1975 exceeding one million, out of a population of about seven million. It should perhaps be said that many of these would have died of starvation in any case (the inhabitants of Phnom Penh were previously only fed by massive American airlifts of rice). But, as was shown above, food desperately needed by the Cambodian people is being exported for the sake of foreign exchange. As production in Cambodia increases, money will be reintroduced, together with wages and prices (Ieng Sary has accepted that a monetary system might be set up later, see FEER 23.3.76.). When that happens Cambodia will be more fully integrated into the world capitalist system.

In reply to our correspondent’s remark, we can point out that there have been many human societies which have functioned without money and even without exchange relations at all, so that the fact that people can live together without the intervention of money is incontestable. But Cambodia provides evidence of no such thing.

Paul Bennett

Letters: On the Abolition of Money in Cambodia (2022)

Letters to the Editors from the March 2022 issue of the Socialist Standard

On the Abolition of Money in Cambodia

Dear Editors

In a recent issue of the Socialist Standard Paul Bennett correctly identifies that money was not abolished in Cambodia during the brief regime (1975-1979) of the Communist Party of Kampuchea. Rather, senior members of the CPK suspended currency with the intent to revisit their decision at a later point. The defeat of the Khmer Rouge at the hands of the People’s Republic of China precluded any evaluation of their policies; that said, the presumption that currency was abolished remains a stalwart of the historiography of Democratic Kampuchea (as Cambodia was renamed by the CPK). More broadly, Bennett’s commentary addresses a fundamental question: What exactly was the economic system established under the Khmer Rouge?

For many scholars, the question is moot. As a self-professed Marxist-Leninist party, the Khmer Rouge were absolutely communist; what matters is the supposed variant of ‘communism.’ However, too often, the terms ‘Marxist’, ‘socialist’, ‘Maoist,’ and even ‘Stalinist’ appear as empty signifiers when assessing the policies and practices of the Communist Party of Kampuchea. As such, much of my scholarship documents the ‘actually existing’ social and structural relations executed—often literally—under the Khmer Rouge. I’m grateful therefore that Bennett calls attention to my recent article on currency in Democratic Kampuchea. By-and-large, we are in agreement; a possible point of divergence, however, pivots on my assertion that the resultant economic order of Democratic Kampuchea resembled more so a hybrid form of state capitalism and non-market socialism. You write: ‘But there simply cannot be a mixture of state capitalism (or any form of capitalism) and socialism: the former has money, wages, profits, the latter has none of these.’ Here, it is helpful to think beyond idealized abstractions of economic systems and consider the historical and geographical material realities of Democratic Kampuchea.

Although some people find the phrase ‘mode of production’ antiquated, as a concept it effectively underscores the observation that myriad relations of production can coexist, however uneasily. In the United States, for example, capitalism of a particular sort remains dominant; that does not preclude the co-constitution of localized forms of exchange, for example, the so-called informal economy. So too in Democratic Kampuchea, where senior cadre formulated a spatially variegated economic policy that separated foreign and domestic activities in word but not in practice. To posit Democratic Kampuchea as capitalist or socialist presents a false dichotomy, for although capitalism and socialism in the abstract are indeed contradictory, such an assertion misses the ambiguities of an economy in violent transformation. And therein lies the crux of my argument. The social relations that comprise productive, distributive, and consumptive activities do not materialize fully formed. And despite rhetoric to the contrary, the revolution that culminated in military victory on April 17, 1975 did not translate into a coherent whole. Whatever was unfolding in Democratic Kampuchea was certainly not a functioning capitalist society; nor was it a socialist society. Perhaps it is best to follow Vilfredo Pareto and conclude that the political economy of Democratic Kampuchea was like a bat, for in it we can readily see both birds and mice.

James A. Tyner

Reply:

You object to our statement that there cannot be a mixture of capitalism and socialism, and point out that within capitalism there can be different relations of production, such as the informal economy. Certainly, capitalism can include workers’ co-operatives, but these still have to operate within the overall capitalist set-up, with wages, prices and the need to make a profit.

The question arises, however, whether what existed in ‘Democratic’ Kampuchea can really be described as some kind of hybrid between state capitalism and non-market socialism. This boils down to: was the domestic economy truly an example of socialism? Our answer is simply that no, it was not. As your original article notes, the vast majority of Cambodians were subjected to long working hours, high production quotas and insufficient rations, resulting in exhaustion, illness and death. As their productivity increased, the plan was not to increase the food rations they received.

Plainly this was not non-market socialism. If anything, a more apt comparison would be slavery or some kind of forced labour system, where those who perform the back-breaking toil are ‘rewarded’ with just enough to keep them alive and working away, producing the surplus that the rulers could, in Cambodia’s case, export in return for foreign exchange.

The Khmer Rouge takeover indeed ‘did not translate into a coherent whole’, given the differences between internal and external policies, but there was no connection to socialism. We cannot say what would have happened if they had remained in power for longer than four years, except that they would not have introduced the classless, stateless, moneyless society that you note Marx envisaged. Apart from the fact that such a socialist system will have to be global in scope, Cambodia lacked the essential conditions of being able to produce an effective abundance and having mass support for such a revolutionary change. – Editors

Sanctioned

I was recently sent on a ‘business course’ as part of the government ‘helping’ me back into employment. So after stomaching a week’s worth of nauseating bollocks about the virtues of capitalism, I informed the class that ‘earning’ a right to exist entailed being legally thieved off on a daily basis while making some parasitic cunt rich (not the exact words I used, but the words I wanted to use). For my trouble I was removed from the class and sanctioned. So there you have it. In this country of ‘free speech’ and ‘democracy’, it’s a sanctionable offence to speak the truth.

John Lakin, 

London

Material World: Was Money Abolished in Cambodia? (2022)

The Material World column from the February 2022 issue of the Socialist Standard

The Khmer Rouge governed Cambodia from 1975 to 1979. It was an authoritarian regime, possibly responsible for as many as two million deaths, the result of famine and executions. One of its policies still sometimes remembered today is its supposed abolition of money. As self-proclaimed ‘Communists’, the Khmer Rouge leaders allegedly wanted a society with no wages or means of exchange, hence no money.

Some writers claim that this abolition of money had, and still has, negative consequences for Cambodian society. For instance, an article by Sheridan Prasso (eastwestcenter.org, January 2001) claimed that, although money had by then been in use again in Cambodia for over twenty years, its former abolition had made people there distrustful of money, hence their preference for US dollars or gold and the ineffectiveness of the Cambodian financial system. More recently, Anirudh Bhati (mekongresearch.org, 19 June 2018) has argued that Cambodia under the Khmer Rouge had no money, private property or trade, and states that ‘without money — and therefore without effective trade — there is no possible freedom.’ As can be seen, supporters of capitalism have sometimes seen the abolition of money in Cambodia as an argument against socialism, against the very idea of a moneyless society based on free access.

But it simply is not true: the Khmer Rouge did not do away with money in Cambodia. This was pointed out by an article in the October 1978 Socialist Standard, citing contemporary reports of various kinds. There was still exchange of some goods, and rice, fish and rubber were exported in order to acquire foreign currency. Most Cambodians lived on little more than rice, and that probably was distributed without using money, but the Khmer Rouge and their soldiers were better fed and clothed than the rest of the population: privilege need not imply having greater access to money. Ieng Sary, a Khmer Rouge leader, had accepted in 1976 that a monetary system might be set up later, but in fact such a system already existed, even if ordinary Cambodians had few or no dealings with it. As Prasso says, Khmer Rouge leader Pol Pot ‘apparently concluded that money was fine for the state but not for its people’.

This whole issue was recently raised again by James Tyner in an article ‘“Currency is a Most Poisonous Tool”: State Capitalism, Nonmarket Socialism, and the Elimination of Money during the Cambodian Genocide’ in the open-access on-line journal Genocide Studies and Prevention Volume 14, 2020. He notes correctly that, ‘Marx’s vision of a stateless, moneyless and classless society aimed to encourage the fullest development of human consciousness and creativity’, and then investigates to what extent the Khmer Rouge approached this goal.

Before seizing power, Khmer Rouge leaders had discussed abolishing money, and they announced its supposed elimination in September 1975, just five months after taking control. Workers received food rations, with more for those who performed the heaviest manual labour. Rations were fixed but the working day was expanded, resulting in an increase in what Marx termed absolute surplus value (see Capital Vol 1, chs 12 and 16). But the rulers still needed to ‘raise investment capital for a moribund industrial sector’, and this was done by exporting rice and other goods for sale. Tyner writes that ‘On the one hand, party leaders participated in the monetary-based global economy as state capitalists while, on the other hand, they instituted a non-monetary, non-market domestic economy’ and ‘the resultant economic order of Democratic Kampuchea resembled more so a hybrid form of state capitalism and non-market socialism than it did either a barter economy or an economy of associated producers as envisioned by Marx.’ But there simply cannot be a mixture of state capitalism (or any form of capitalism) and socialism: the former has money, wages, profits, the latter has none of these. The vast majority of Cambodians certainly did not live in a society of free access and democratic control: they were extremely poor and subject to brutal exploitation and oppression.

One noteworthy aspect of his article is the fact that the idea of state capitalism is almost seen as commonplace, not something that needs to be described or explained at length. A footnote defines it as ‘a political-economic system of governance whereby a ruling party controls the state apparatus and in turn manages the means of production in order to appropriate surplus value’, and refers to writers such as Tony Cliff and Richard Wolff.

Marx certainly advocated a society without money (see the Socialist Standard for April 1980), but he saw money’s disappearance as part and parcel of the establishment of common ownership and production for use by workers who supported this and were prepared to make it work. It was not something that could be done by itself, with few or no other changes in society, and certainly not after a military takeover of the state, as happened in Cambodia.

Paul Bennett

Blood on their hands (1979)

From the December 1979 issue of the Socialist Standard

On 7 January this year Pol Pot was toppled from power, and a few days later the founding of the People's Republic of Kampuchea was announced, the president being Heng Samrin. The new government was installed in power with the help of Vietnamese troops, and was very much a Vietnamese creation. The Heng Samrin regime was immediately recognised by the Russian-bloc states, but most countries still regard the Khmers Rouges as the "legitimate" rulers, in spite of the horrors they inflicted on the country and manifest fact that they control no more than a small part of its territory. Norodom Sihanouk, who has distinguished himself solely by often and abruptly changing sides. has prostrated himself before the United Nations, begging for international assistance and support for the barbarians who helped destroy his country. Kampuchea and its people have become entangled in a web of hypocrisy, deceit and suffering which is remarkable even by capitalism's gruesome standards.

China supported and supports the Khmers Rouges, hence those western capitalist states which are becoming increasingly friendly with China and foresee better trade opportunities there are unwilling to upset them by supporting Heng Samrin. The Americans, having done their best to "bomb Vietnam back into the Stone Age", as one of their more candid generals put it, raise their hands in horror at the sudden discovery that wars kill people. Meanwhile the Vietnamese rulers have taken a leaf out of Uncle Sam's book and installed a puppet regime in Kampuchea. A treaty signed in March allows Vietnamese troops to be stationed in Laos and Kampuchea, enabling Vietnam (and its Russian mentor) to dominate Indo-China. This is basically what the dispute is about: over the last thirty years a succession of ruling classes have striven for control of Southeast Asia. After the defeat of the French and then of the Americans, the region was up for grabs between Russia and China. In spite of the Chinese attempt to force a Vietnamese withdrawal from Kampuchea by invading Vietnam, the Russians and their satellites have, for the moment at least, won the contest.

The losers, as ever, are the ordinary people, the peasants and workers of Kampuchea. Out of a 1975 population of around seven million, about three million are now believed to have died under Pol Pot. A further two million are currently starving as a result of the disruptions caused by evacuation and fighting. Only five per cent of the the country's arable land is under cultivation, and the food situation is likely to be even worse next year. Millions of pounds' worth of aid has been sitting around unused while presidents and prime ministers play their deadly games. Heng Samrin's regime has refused to allow the Red Cross to distribute aid to the Kampuchean population, on the grounds that this would mean sharing it with the Khmers Rouges and their supporters. And all the while, countless human beings die and suffer horribly, with their safest place the overcrowded and insanitary refugee camps in Thailand.

Anyone who thought that the defeat of American imperialism would lead to peace and prosperity for Southeast Asia has now been disillusioned. Post-"liberation" Vietnam has turned into such a paradise that hundreds have been prepared to risk drowning in order to escape, after the government has thoughtfully reduced the weight of the ships by relieving them of large sums of gold. Capitalist states like Vietnam and China are now exposed, to all but the willfully blind, as hypocritical murderers and oppressors no more deserving of support than Britain or the United States.

An "independent" country is simply one where a home-grown ruling class lord it over their subjects, to whom the nationality of their exploiters should be of no concern at all. Under capitalism, all countries are forced to behave like predators, including those that have but recently thrown off the "imperialist yoke".

No one who has seen, on their television, or in newspapers, the walking skeletons of Kampuchean children could fail to be moved. The instinctive response may be to dig into one's pocket, but charity will not prevent such horrors happening again and again. Starvation may be rare in industrialised countries nowadays, but for a large proportion of humanity it is it is either an everyday experience or an ever-present threat. It is capitalism, with its inequalities and its wars and its artificial shortages, that is responsible for this situation.

Paul Bennett