Nepal occupies a unique global position as a peripheral social formation subject to decades of relative isolation from capitalism. Although the agrarian sector has long been understood to be dominated by pre-capitalist economic formations, it is important to examine whether contemporary changes underway in the country are transforming the rural economy. There has been an expansion of capitalist markets following economic liberalization and improvements in the transport infrastructure. Furthermore, neo-liberal commercialisation initiatives such as the Agriculture Perspective Plan provide the ideological justification and pre-conditions for the broader process of capitalist expansion, despite the pro-poor rhetoric. However, just as neo-liberal poverty alleviation strategy is flawed, there are also shortcomings in many Marxian understandings of the transition from pre-capitalist to capitalist agriculture in peripheral social formations. There is a tendency for political-economic theorists to assume the inevitable ‘dominance’ of capitalism, contradicting considerable evidence to the contrary from throughout the world. The central objective of this thesis is to understand how pre-capitalist economic formations have been able to ‘resist’ capitalist expansion in rural Nepal. There is a necessity to understand the mechanisms through which older ‘modes of production’ are reproduced, their articulations with other economic formations – including capitalism – and how they are situated globally. As a case study, one year’s fieldwork was completed on Nepal’s eastern Terai using both qualitative and quantitative methods. The research suggested that surplus appropriation through rent in a mode of production which can only be described as ‘semi-feudal’, has for a majority of farming households impeded accumulation and profitable commercialisation, a precondition for the emergence of capitalist relations. Semi-feudalism has been reproduced for decades internally by the political control over land and externally by Nepal’s subordinate position in the global economy. The latter process has constrained industrialization and rendered much of the peasantry dependent upon landlords who have no incentive to lower rents. The economic insecurity which has arisen in the context of semi-feudal production relations has allowed further forms of surplus appropriation in the sphere of circulation to flourish, through for example, interest on loans and price manipulation on commodity sales. This further hinders profitable commercialisation amongst both semi-feudal tenants and also owner cultivators who farm under what can be termed an ‘independent peasant’ mode of production. Even wealthier independent peasant producers who could potentially become capitalist farmers are constrained both by high cultural capital expenses, oligoposnistic activity by industry in the capitalist grain markets, and Indian rice imports which depress local prices. Furthermore, development initiatives which could potentially facilitate capitalist transition through the introduction of productivity boosting techniques have had limited success under the prevailing relations of production and the associated ideological relations of caste and gender. The above findings are of crucial significance if one is to develop policies and political strategies for equitable change in peripheral social formations such as Nepal.

ABSTRACT During Dutch Colonial domination, one of the most controversial themes was that why the Indonesian society had failed to generate an indigenous bourgeoisie. Since the post-colonial era, most developing countries are facing three dilemmas: the state building, the formation of social classes, the capital accumulation. For the methodology, the dissertation both takes a¡§state-center¡¨view and tries to apply an approach to explore the formation of Bureaucratic Capitalist during Suharto time with a view of historical-structure from the concept of state, class and capital. Furthermore, the studies will focus on three fields. First, why over 350 years, the mercantile policy of the colonial regime had failed to penetrate into the whole Indonesia shaping an indigenous bourgeoisie. Secondly, from 1950 to 1965, President Sukarno had taken the state-capitalism as a developmental strategy why Indonesian society still had not found indigenous bourgeoisie strong enough to take responsibility of leading capitalist revolution. Thirdly, after 1965, in the power of Suharto, the state has played a decisive role in the shaping the development of big entrepreneurs in the post-colonial Indonesia. In addition, the studies will review and provide a critical analysis of the works of Indonesia Studies in the West, and continues to dialogue with the contemporary academician in the field. Key Words: Agricultural Involution, Asian Mode of Production, Pre-capitalism, Dual Economy, Articulation Theory, State Apparatus, Capital Accumulation, Commercialization, Bureaucratic-Capitalist Class