When the State Decides Who Counts: Peasants, Politics, and the Roots of Rural Inequality

I have spent a long time thinking about why some postcolonial states treat their rural communities as partners in development while others treat them as problems to be managed or threats to be suppressed. The question is not purely academic. The answer shapes who gets land, who receives investment, who has a political voice, and ultimately who remains poor across generations.

Indonesia and Malaysia offered me a compelling place to look. These two countries share more than a neighborhood. For much of the nineteenth and twentieth centuries, they shared a colonial economy built on rubber, an agrarian workforce shaped by the same plantation logic, and the same urgent challenge of building something new after independence. Smallholder farmers in both countries had survived the Dutch and British plantation systems, endured the disruptions of World War II, and arrived at postcolonial statehood with a reasonable expectation that their labor, their land claims, and their voices would matter in whatever came next.

For Malaysian rubber smallholders, that expectation was largely met. For Indonesian peasants, it was answered with massacre.

My new article, published in Sociology of Development, traces this divergence and offers a concept I hope contributes to how we understand rural inequality more broadly: peasantry embeddedness.

The question behind the research

Why have postcolonial states pursued such different approaches to incorporating peasants into agricultural development? The standard answers point to colonial legacies or rural class structures. Both matter. But neither alone can explain why two countries that shared so much — the same commodity, the same colonial logic, the same structural position in the global rubber economy — ended up with such different state-peasant relations.

I argue that the difference came from specific political decisions made during moments of crisis and uncertainty. Not from structural inevitability, but from the choices that states made when peasants mobilized, when Cold War pressures intensified, and when governments had to decide who counted as a legitimate actor in national development.

A new peasantry born from colonial rubber

To understand the divergence, it helps to appreciate how similar the starting points were. Colonial rubber cultivation transformed subsistence agriculture across Southeast Asia into a commercial system oriented toward European markets. The British in Malaya and the Dutch in the East Indies both recruited labor through coercive means, segmented workforces along ethnic and regional lines, and developed legal frameworks that kept plantation workers bound to their contracts and their employers’ interests.

Out of this system emerged what I call a new peasant class: smallholders who cultivated rubber on plots adjacent to large estates, participated in global commodity circuits, and moved between sharecropping, estate labor, and independent cultivation. By the 1940s, these smallholders were already outproducing the colonial estates. By the early 2000s, they accounted for roughly 90 percent of output in the world’s major rubber-producing countries. The colonial capitalists who had once dismissed them as inefficient and technically backward had been displaced by the very communities they sought to control.

When independence came, both Indonesia and Malaysia confronted the same fundamental tension: how to centralize control over agricultural production while managing the demands of peasant communities who had spent decades asserting their right to land, resources, and autonomy. Both governments faced rural unrest. Both operated under the pressure of Cold War geopolitics. And both had to make choices about which social actors would be treated as partners in development and which would be treated as threats.

Two critical events, two diverging paths

In Indonesia, the trajectory before 1965 pointed toward inclusion. The Basic Agrarian Law of 1960 formally replaced colonial land tenure and institutionalized a nationwide land reform agenda. The Bogor Declaration of 1964, signed by ten political parties, committed the government to smallholder agricultural development. Peasant organizers wrote confidently of their growing movement and its role in strengthening the postcolonial state. The evidence I found in the National Archives of Indonesia suggests that most political leaders, and the peasant communities themselves, expected this trajectory to continue.

It did not. In October 1965, a military faction orchestrated a coup, blamed it on the Indonesian Communist Party, and launched a political massacre that killed between 500,000 and one million civilians, the majority of them peasants and plantation workers in the rubber trade. The army under Suharto received political and financial support from Western allies, including the United States, Britain, and Australia. Peasant organizations were dismantled. Lands were seized under the pretense of reclaiming communist-held assets. The massacre was not the culmination of some long structural tendency; it was a rupture that destroyed an entire institutional vision for how Indonesia might have developed.

In Malaysia, the shift toward smallholder support was equally unexpected, but in the opposite direction. From 1922 onward, British colonial policy had systematically disadvantaged rubber smallholders to protect estate companies. A 1947 observer wrote that official policy over the previous 25 years had worked greatly to the disadvantage of the rubber-growing smallholder. The pivot came in 1950, driven by the intersection of Cold War counterinsurgency, a rubber price boom triggered by the Korean War, and the ethnic politics of Malayan society.

During the Malayan Emergency, as the colonial government fought a communist insurgency led primarily by ethnic Chinese, it simultaneously offered ethnic-Malay rubber smallholders replanting funds, technical support, and eventually formal representation in the bodies that designed and administered agricultural development programs. This was not a principled commitment to rural welfare; it was a political calculation. But its institutional consequences were transformative and lasting.

What peasantry embeddedness means

I use the concept of peasantry embeddedness to describe the quality and structure of political and institutional incorporation of the peasantry in the state’s developmental agenda. It captures not just whether peasants receive state support, but whether they are recognized as legitimate actors in shaping policy, whether their organizations survive, and whether the relationship between state and rural community is one of partnership or coercion.

I conceptualize this as a spectrum. At one end, peasants are regarded as development partners, with access to land, subsidies, and participatory planning. At the other, they are treated as passive labor, potential threats, or obstacles to modernization — and the state may actively repress their mobilization.

Crucially, disembeddedness is not simply the absence of support. It can be an active political achievement. States can and do deliberately sever ties with rural communities, suppress their organizations, and reorient agricultural development toward elite interests. That is what happened in Indonesia after 1967, as military networks absorbed agricultural assets, development funds were channeled toward state-owned plantations, and any peasant advocacy that might have checked these decisions had been eliminated.

Why contingency matters for development theory

One of the arguments I press hardest in this paper is on contingency. The outcomes I describe were not predetermined. Before 1965, Indonesia was on a path toward what would have looked like an embedded peasantry model. Before 1950, Malaysia’s agricultural policy was systematically biased against smallholders. The events that changed these trajectories were shaped by Cold War geopolitics, domestic political conflict, and decisions made under uncertainty — not by the deep structures of colonial inheritance or rural class composition alone.

This matters for how we build development theory. Much of the comparative literature on postcolonial development treats outcomes as more path-dependent than they actually are. When we look closely at the archival evidence — the internal government reports, the peasant organization documents, the policy memos from national archives in Jakarta, Kuala Lumpur, and Amsterdam — we see something more contingent, more political, and ultimately more instructive.

Enduring patterns of rural exclusion are rooted in historically contingent political decisions rather than inevitable institutional failure.

Southeast Asia as a site of theory-building

This article is part of a broader intellectual project I have been building for some years, one that insists on repositioning Southeast Asia — and Indonesia in particular — as a site of theory-building on economic development rather than simply an empirical testing ground for frameworks developed elsewhere.

Too much of the comparative development literature treats cases from the Global South as illustrations of concepts forged in studies of Western industrialization or East Asian developmental states. I want to push in the other direction. The specific historical experiences of postcolonial agrarian societies in this region generate concepts that speak to dynamics far broader than Southeast Asia: the political construction of rural exclusion, the role of critical events in reshaping institutional trajectories, and the question of who gets to count as a legitimate actor in development.

Peasantry embeddedness builds on foundational ideas from economic sociology — Karl Polanyi’s argument that economic activity is always embedded in social and political institutions, Mark Granovetter’s relational account of how social ties shape economic action, and Peter Evans’s work on embedded autonomy in developmental states. But it extends those frameworks into terrain they did not fully address: postcolonial agricultural development, the politics of rural inclusion and exclusion, and the historical contingency of the ties that either connect or sever states from the communities they govern.

What this means for addressing rural poverty

The patterns of rural poverty and exclusion that persist across much of the Global South are not simply the residue of structural inevitability. They are the legacy of decisions made in moments of political crisis and geopolitical pressure — decisions about who counts as a development partner and who counts as a threat. Understanding those decisions, tracing them through archives and across decades, is a precondition for building development strategies that are genuinely inclusive.

You cannot design your way out of a problem you have misdiagnosed as structural when it is in fact political. The structures that produced rural exclusion were made by human choices. They can be remade by different ones.

If development strategies are to contribute meaningfully to the reduction of global poverty, they must take seriously the political and institutional conditions that determine whether rural producers are treated as partners in development or as obstacles to modernization. That requires not just better policy design, but historically grounded understanding of how these conditions were produced in the first place.

This blog is based on my article “Embedded Peasantry: A Critical Event Analysis of Postcolonial Agricultural Development in Indonesia and Malaysia,” published in Sociology of Development (2026). The research draws on archival work conducted between 2016 and 2019 at the National Archives of Indonesia, the Arkib Negara Malaysia, and the International Institute of Social History in Amsterdam.