The Asiatic Mode of Production: Definition and Characteristics

The concept of the Asiatic Mode of Production refers to an economic and social system characterized by the extraction of economic surplus from peasants by means of a strong central authority, alongside the absence of private ownership of land. This mode appeared in many Asian agricultural societies such as China, India, Ancient Egypt, and Mesopotamia, where the state played a principal role in organizing resources and controlling irrigation and agricultural systems.

Karl Marx discussed this concept in his writings, indicating that the state's monopoly over resources and the absence of private land ownership led to the entrenchment of authoritarian systems that hindered the development of productive forces and prevented the emergence of production relations based on the free market¹. Marx considered this mode to differ from other modes of production, where the owning classes did not hold a central role; instead, the state was the dominant force, which made the transition to capitalism more complicated compared to Europe².

2.​​ Historical Materialism and the Evolution of Modes of Production

According to the materialist conception of history, Historical Materialism is based on the idea that the development of human societies is closely linked to the transformations in modes of production and ownership relations. The economic structure of any society is considered the material base upon which its superstructure is built, including its political, cultural, and ideological systems³.

Social change occurs when the productive forces (such as technology and labor) come into conflict with the relations of production (such as class-based ownership), leading to social revolutions that trigger a transformation in the prevailing economic model⁴.

3.​​ Modes of Production in Historical Materialism

The Primitive Communal Mode
It is considered the first form of production, where ownership was communal, and production was directed toward meeting basic needs. There were no social classes, as individuals cooperated in hunting and farming without the existence of a central authority. Example: hunter-gatherer societies in the Stone Age⁵.

The Slave Mode
It appeared with the development of agriculture, where production depended on the forced labor of slaves. A small class owned the means of production, while slaves worked without rights, leading to the emergence of clear social classes. Example: the Roman Empire and Pharaonic Egypt⁶.

The Feudal Mode
It was characterized by the ownership of land by feudal lords and the exploitation of peasant laborers (serfs), who were tied to the land and did not have the freedom of movement. The economy relied on local agricultural production, with a personal dependency relationship between the peasant and the feudal lord. Example: Europe in the Middle Ages⁷.

The Capitalist Mode
It is based on the bourgeois class's ownership of the means of production and the exploitation of the proletariat's (working class) labor power to achieve profit. This mode is characterized by capital accumulation, commodity production, and market expansion. Despite its economic dynamism, it is also characterized by class exploitation and inequality. Example: the Industrial Revolution in Europe⁸.

The Socialist Mode
It is based on public ownership of the means of production and is considered a transitional stage between capitalism and communism. It aims to eliminate class exploitation and achieve social justice, as the proletariat controls the state and the means of production, thereby limiting the power of the bourgeoisie and leading to a fairer distribution of wealth, paving the way for a classless, exploitation-free communist society⁹.

History is not merely a random sequence of events but rather a dialectical process that evolves according to changes in modes of production and ownership relations. From this perspective, the Asiatic Mode of Production is a historical phenomenon reflecting the nature of ancient centralized systems, while capitalism and socialism represent advanced stages in economic and social evolution. Despite the criticism directed at Marx's theories on this subject, they remain an essential and indispensable reference for understanding the historical development of economic and social relations.

The Position of the Asiatic Mode in the Evolution of Modes of Production

Karl Marx did not include the Asiatic Mode of Production among the five established modes of production (Primitive Communal, Slave, Feudal, Capitalist, and Communist), but he considered it an important model for understanding the relationship between centralized authority and economic development in traditional agricultural societies¹⁰. Marx discussed this mode in his writings on India and China, indicating that the absence of individual land ownership and the central influence of the state hindered independent economic development, rendering these societies less dynamic compared to Western Europe¹¹.

In contrast, later Marxist thinkers, such as Maurice Godelier and Eric Hobsbawm, viewed the Asiatic Mode as a parallel model rather than merely a backward stage of development, as it enabled some states to achieve prolonged political stability despite economic stagnation​​ ¹²¹³.

The Asiatic Mode is considered an economic and political phenomenon distinct from other modes, as it enabled states to impose long-term political stability thanks to the state's monopoly over production, while at the same time limiting market growth and economic development. Despite the debate surrounding its place within Marx’s theory, it remains a necessary model for understanding the relationship between the state and economic development, especially in traditional agricultural societies.

The main characteristics of this mode can be summarized as follows:

• Absence of Private Land Ownership: 
  1.​​ Land was not owned by individuals but was considered communal property of the community or tribe, while the state monopolized the right to collect the agricultural surplus from peasants. This situation led to limiting individual incentives to invest in the development of productive tools, as the peasants’ role was confined to meeting their basic needs and paying taxes either in kind or in cash to the state¹⁴.

• Control by the Central Authority:

The Asiatic Mode of Production was characterized by the existence of a strong central authority that controlled the land and monopolized the economic surplus resulting from agricultural labor, making it the main intermediary between producers (peasants) and the mechanisms of resource redistribution. This authority's role was not limited to imposing taxes but extended to organizing production processes themselves, particularly concerning the management of irrigation systems and major projects that required broad collective cooperation. This role enabled the authority to consolidate its political and social power, as it became capable of directing the economic surplus to serve its own interests, whether by financing the army or supporting the bureaucratic class that managed state affairs¹⁵.

Although this authority contributed to maintaining social stability and ensuring the continuity of agricultural production, it simultaneously hindered the emergence of an independent bourgeois class, which Marx considered one of the main reasons for the stagnation of Asian societies. The state's monopoly over the surplus deprived individuals of the opportunity to reinvest it in the development of productive tools, thereby preventing the emergence of new production relations based on individual initiative and the free market. As a result, these societies remained stuck in a pre-capitalist stage, unable to transition to the stage of industrial production based on capital accumulation and market competition¹⁶.

• A Closed Economy Based on Self-Sufficiency 
  Due to this mode's reliance on subsistence agriculture, economic activities were limited to meeting the basic needs of the population, with no incentives to achieve a surplus that could be used for trade or invested in the development of production tools. This situation led to the economy remaining in a state of self-sufficiency, isolated from regional and global markets, thereby preventing the emergence of wide-ranging trade networks that could stimulate economic growth. The absence of competition and the lack of opportunities for achieving commercial profits also contributed to weakening market dynamics, as there was no incentive to expand production or improve its quality due to the absence of external demand beyond the local community.

Additionally, the state's dominance over the process of surplus collection limited individuals' ability to accumulate private capital that could be employed in developing new productive activities. As a result, these societies remained trapped in a state of economic stagnation that hindered the development of productive forces, which led to their continued existence within a rigid economic structure reliant on traditional agricultural labor, unable to transcend the threshold of subsistence production toward commodity production aimed at the market¹⁷.

• The Role of Ideology in Reinforcing Stability: 
  The state’s authority was not limited to the economic and political domains but extended as well to the ideological sphere, where religions and traditional beliefs played a role in consolidating the legitimacy of central rule. In many Asiatic societies, the ruler was considered a representative of divine will, which contributed to reinforcing obedience and submission among the population, thus ensuring the stability of the social order despite its authoritarian nature¹⁸.

The Rentier Economy: Definition and Characteristics

The concept of the Rentier Economy refers to an economic model that primarily depends on revenues generated from natural resources or monopolistic privileges, rather than industrial production or productive economic activity. In this model, the state or economic elites earn substantial revenues from sources such as oil, gas, monopolistic taxes, or even foreign aid, without the need to develop a diversified productive sector¹⁹.

This model allows the state to obtain significant income without the need to levy taxes from citizens, which leads to a reduction in political accountability, as the government becomes less exposed to popular pressure and demands for reform due to its lack of dependence on tax revenues as a primary source of income²⁰.

The concept of the Rentier Economy appeared in economic thought as early as the time of Adam Smith and David Ricardo, who discussed economic rent as income obtained by the owner without active participation in production. In modern times, researchers Hazem Beblawi and Giacomo Luciani developed the concept of the "Rentier State" in the 1980s, indicating that a state that relies on natural resources or rent revenues becomes less motivated to develop its local economy or enhance productive sectors, which leads to stagnation in innovation and a decline in long-term economic development²¹.

The Rentier Economy is characterized by the absence of an interactive relationship between the state and society; since the government derives its revenues from external sources, such as oil exports, it does not need to impose direct taxes, and thus citizens do not feel the need to demand political rights or influence economic decisions. This explains why many rentier states suffer from weak democracy and a lack of transparency, as governments use the revenues from natural resources to fund political loyalty networks or offer social subsidies that prevent widespread popular protests²².

Nevertheless, heavy reliance on the rentier economy carries significant risks, the most important of which is economic volatility due to fluctuations in natural resource prices in global markets. When prices rise, the state generates massive financial surpluses, but when they fall, it faces severe fiscal deficits, which leads to unstable economic development and general budget instability. For this reason, some rentier states today are trying to adopt reform policies aimed at diversifying income sources, strengthening the role of the private sector, and investing in education and technology to reduce dependence on rent and achieve economic sustainability²³.

The Economic and Political Impacts of the Rentier Mode of Production

Relying on natural resources as a primary source of revenue leads to a fragile economy that is significantly affected by cyclical fluctuations in the prices of key commodities such as oil and gas. When prices are high, rentier states generate enormous financial surpluses that are often used for government spending and consumption, rather than being invested in productive sectors such as industry and agriculture. However, when prices fall, these states face acute financial crises that affect their ability to fund public services and development projects, exacerbating social inequality and increasing unemployment.

Economic Impacts

Rentier economies focus on the export of a single resource or a limited group of resources, leading to a lack of economic diversification, as other productive sectors like agriculture and manufacturing are marginalized. This leads to what is known as the "Dutch Disease," where the influx of rent revenues leads to an appreciation of the local currency, making productive exports less competitive in global markets²⁴.

Due to the easy revenues generated by rent, the incentives for governments and investors to develop sustainable productive sectors are weakened. The state relies on government spending to stimulate economic growth, making that growth short-term and unsustainable in the event of shocks in natural resource prices²⁵.

Rent revenues are often used to expand the public sector rather than support the private sector, as a large proportion of the population is employed in unproductive government jobs. This leads to disguised unemployment, where many employees receive salaries without actual productivity, increasing the burden on the public budget.

Political Impacts

In non-rentier states, governments rely on taxes as the primary source of revenue, which creates a relationship of accountability between the state and society, where citizens demand greater transparency and political participation. However, in rentier states, due to the absence of taxes, citizens do not feel that they contribute to financing the state, which leads to weak popular pressure to demand political and economic reforms.

Rentier governments use oil revenues or other natural resource revenues to buy political loyalties through the provision of social subsidies, increasing public sector salaries, or financing security apparatuses to suppress opposition. This enables them to retain power without needing to meet the demands of democracy or reforms.

Since revenues do not come from taxes but from a rent-based source unrelated to citizens' production, governments in rentier states tend to distribute revenues in a non-transparent manner, opening the door for the spread of corruption and patronage, where contracts and major projects are awarded based on political loyalty rather than economic competence.

Instead of directing revenues toward investment in sustainable development projects and infrastructure, financial resources are often used to fund security forces to ensure the stability of ruling regimes, as has occurred in some oil-rich countries that have witnessed extensive political repression against opposition movements.

The rentier mode of production leads to an unsustainable economy dependent on natural resource prices, exposing states to significant financial risks when prices fall. It also weakens productivity, entrenches corruption, and diminishes political accountability, making both economic and political reforms more complicated. Therefore, the solution lies in adopting policies aimed at diversifying the economy, promoting transparency, and investing in human development to ensure a stable economic and political future.

Among the other historical examples of rentier economies is Spain in the 16th and 17th centuries, where the influx of silver from American colonies, especially from the Potosí mine in Bolivia, led to an increase in financial wealth without developing local productive sectors. As a result, the country’s commercial expansion shrank, its gross domestic product declined, and Spain recorded high inflation rates and a decline in industrial competitiveness, making it vulnerable to economic crises²⁶.

The Rentier Economy in the Modern Era

In the modern era, the Gulf Arab states are considered among the most prominent examples of rentier economies, as they primarily depend on oil and gas revenues to finance their public budgets. According to the International Monetary Fund, oil revenues constitute approximately 62% of total government revenues in Saudi Arabia. The fiscal deficit is expected to widen to 3% of the gross domestic product in 2024 due to falling oil prices and increased spending on major projects​​ ²⁷​​ .

Saudi Arabia is currently undertaking massive economic reforms known as "Vision 2030," which aims to end its dependence on oil—a transition that requires hundreds of billions to develop new economic sectors and generate more sustainable revenue streams​​ ²⁸​​ . The fiscal deficit in Kuwait is also expected to reach 5.1% of the gross domestic product for the fiscal year 2024/2025, due to declining oil revenues​​ ²⁹​​ .

Nigeria: Oil and Economic Corruption

In Nigeria, oil accounts for approximately 90% of export revenues and 75% of government revenues​​ ³⁰​​ . However, the mismanagement of oil revenues and the widespread prevalence of corruption have resulted in weak investment in infrastructure and education, rendering the Nigerian economy incapable of achieving sustainable development. According to a study, the Nigerian economy suffers from the "resource curse," whereby the increase in oil revenues has not translated into improvements in living standards or infrastructure.

Venezuela: Inflation and the Economic Crisis

Venezuela represents one of the most prominent examples of a rentier economy that has led to severe crises due to excessive reliance on oil. Following the collapse of oil prices after 2014, the economic crisis deepened as a result of unsustainable spending policies. According to the World Bank, Venezuela’s gross domestic product fell by 35% between 2014 and 2018, and the country recorded a hyperinflation rate of 10,000,000% in 2019, causing a severe shortage of basic goods and triggering mass emigration³¹.

The Non-Oil Rentier Economy: Lebanon and Expatriate Remittances

In addition to the oil sector, other forms of rentier economies appear in some countries that rely on remittances from expatriate workers as a primary source of income. In Lebanon, remittances from expatriates constitute about 32% of the gross domestic product​​ ³²​​ . This dependence has led to the weakening of productive sectors and increased reliance on external financial inflows without genuine economic development, leaving the country repeatedly and increasingly vulnerable to the impact of global financial crises, the most prominent of which was the economic collapse between 2019 and 2021​​ ³³​​ .

These models reflect how rentier economies, despite generating large profits in the short term, may constitute an obstacle to sustainable development. Excessive dependence on non-productive revenues makes economies fragile in the face of global price fluctuations, leading to the absence of economic diversification and the mismanagement of resources, which increases the susceptibility of these states to severe economic crises.

Integration into the Global Capitalist Economy

Unlike the Asiatic Mode of Production, the rentier economy is linked to global markets, as natural resources are sold on international markets, generating enormous income that is used to finance government spending. However, this model often leads to what is known as the "resource curse," where excessive reliance on rent revenues weakens local productive sectors, hindering economic diversification and exacerbating class disparities.

The Relationship Between the Two Modes: Similarities and Differences

Points of Similarity:

Points of Difference:

 ​​​​ Historical Context:
The Asiatic Mode belonged to a pre-capitalist era.
The Rentier Economy is part of the global capitalist system.

 ​​​​ Ownership of Resources:
In the Asiatic Mode, the state owned the land and controlled its distribution.
In the Rentier Economy, resources can be owned by the state or the private sector within a capitalist legal framework.

 ​​​​ Role of the Market:
Markets in the Asiatic Mode were limited due to the nature of agricultural production and self-sufficiency.
In the Rentier Economy, resources are sold in global markets, yet the state remains less reliant on the local market.

Class Relations in the Asiatic Mode of Production

Class relations in the Asiatic Mode of Production were characterized by the absolute control of the state over the means of production, particularly agricultural lands, as private ownership of land was uncommon; rather, the state was the principal owner and responsible for the distribution of resources and the organization of agricultural labor. This model led to the formation of social classes distinct from those that emerged in feudal or capitalist systems, where there were no independent landowners exercising control over the peasants; instead, the state acted as the primary intermediary between all social groups.

This mode, as adopted in the societies where it prevailed, shaped the nature of class relations, where no clear class conflict emerged between factions, as was the case in other economic systems. Rather, social stability depended on the state’s ability to manage the economy and distribute resources fairly, or to suppress any unrest arising from economic grievances.

In this context, society was divided into several principal classes, each of which had a specific role within the structure of the economic and social system. At the top of the hierarchy stood the state and its rulers, followed by bureaucrats who supervised the implementation of state policies, then peasants, who worked the land without owning it, and finally artisans and merchants, who contributed to economic activities under the supervision of the state, which made the economy directed by central authority rather than based on competition or private ownership.

Class Relations in the Rentier Economy

In the Rentier Economy, class relations are defined based on control over natural resources and the income derived from rent rather than direct production, as the state primarily depends on revenues from natural resources such as oil, fertile agricultural lands, or taxes imposed on commercial activities, without the need to develop a strong productive sector.

This economic model leads to the concentration of wealth and power in the hands of the state and the ruling elites, limiting the role of productive classes such as workers and peasants and resulting in the formation of socially unequal classes.

The principal classes in this model are represented by the ruling class, which seizes rent revenues and controls their distribution through networks of political and administrative influence, reinforcing its capacity for domination without the need for legitimacy based on production or economic participation. This is followed by the bureaucracy and intermediaries, who manage the distribution of rent through government jobs and administrative positions, making them dependent on the state for maintaining their privileges rather than relying on productive or investment skills.

As for the working classes and peasants, they are often in a position of dependence, as they rely on the state to provide jobs or financial support rather than owning the means of production or having the ability to improve their economic situation independently. Also prominent is the class of businessmen linked to the state, who achieve substantial profits through government-granted privileges and rentier contracts, creating a non-competitive economy that relies on political connections more than on innovation and production.

This model leads to the absence of the traditional class conflict based on competition between capital and labor, as the fundamental conflict is between the groups that benefit from rent and the marginalized groups that do not receive a fair share of wealth, which can lead to social unrest when the state fails to distribute rent equitably or when rent revenues decline due to external economic changes such as the drop in natural resource prices³⁴.

The Class-Based Approach and Comparison Between the Asiatic Mode and Rentier Production

Both the Asiatic Mode of Production and the Rentier Economy are characterized by a social structure in which the state controls the means of production or fundamental resources, which directly influences the formation of classes and the relationships between them. However, the mechanisms through which these relationships were formed differ in each model: the Asiatic Mode relies on the state’s control over lands and agricultural production, whereas the Rentier Economy is based on the monopoly over natural resources and the generation of financial returns without the need for extensive domestic production.

Although both models rely on the central role of the state in managing the economy, the fundamental difference between them lies in the source of wealth and the mechanism of distribution. In the Asiatic Mode, the state derives its authority from its direct control over agricultural production, depending on the organization of agricultural labor and the achievement of economic stability through the distribution of land and the collection of taxes, which leads to the formation of a class society based on direct dependency on the state.

In contrast, the rentier economy relies on the control of natural resources and their financial returns, resulting in the emergence of non-productive classes that nonetheless benefit from rent, while the working classes and poorer segments remain in a position of dependency due to the absence of a strong productive sector that would allow for independent social mobility.

At the level of class conflict, the Asiatic Mode enjoyed a degree of stability due to the centralization of power and the absence of an independent class of landowners that could compete with the state. However, peasant revolts did occur during periods of economic crises or when taxes were raised. In the case of the rentier economy, conflict emerges when rent revenues decline, as the segments of society that depend on the state for their livelihood are affected, which can lead to severe political and economic unrest as the ruling authority’s legitimacy erodes when it fails to provide rent to various social groups.

This comparison shows that both models rely on the state’s role in controlling economic resources, but the essential difference lies in the fact that the Asiatic Mode is based on agricultural production and the management of human resources, while the rentier economy is founded on natural wealth and its financial returns. Although both models limit opportunities for social mobility and economic independence for productive groups, the rentier economy is more fragile due to its dependence on global market fluctuations, making it more prone to severe crises compared to the Asiatic Mode, which is based on more sustainable domestic production.

The Role of Irrigation in Shaping Class Relations in the Asiatic Mode of Production

The regions in which the Asiatic Mode of Production prevailed — such as China, India, Mesopotamia, and Egypt — relied on irrigated agriculture, which required complex irrigation systems including the construction of dams, reservoirs, and canal networks, unlike Europe, where agricultural production primarily depended on rainfall. Given that irrigation projects required substantial resources and significant funding, local feudal lords were unable to undertake them, which led the state to assume this responsibility in exchange for imposing taxes on peasants and farmers who depended on these systems to irrigate their crops³⁵.

This central role of the state in organizing water resources resulted in the expansion of the state’s administrative apparatus, as its tasks were not limited to tax collection and political authority, but extended to include the management of agricultural production, the supervision of water distribution, and the organization of agricultural labor. As a result, the state became the primary driver of the economy, which led to the absence of an independent feudal class, as was the case in Europe, where landowners exercised control over the peasants. In contrast, peasants in the Asiatic Mode were directly linked to the state, which determined the taxes and obligations imposed upon them in exchange for granting them the right to use agricultural lands and benefit from irrigation systems.

This economic structure contributed to strengthening the centralized nature of power, as the entire society depended on the state to ensure the continuity of agricultural production, which made it the principal organizer of both economic and social relations. Consequently, there was no traditional class conflict between landowners and peasants as seen in Europe; rather, the primary relationship was between the state, as the monopolizer of resources, and the peasants, as producers dependent on those resources. This dynamic rendered the central authority more powerful and stable for extended periods, though it also left it vulnerable to peasant uprisings whenever tax burdens increased or resource management deteriorated³⁶.

Analyzing the Development of the Rentier Economy as a Capitalist Model of the Asiatic Mode

The rentier economy can be understood as a modern extension of the Asiatic Mode of Production, where the development of global markets and technology has integrated surplus extraction mechanisms — which are not linked to productive labor — within a capitalist framework. Nevertheless, this model remains governed by the same fundamental dynamics that reinforce central authority and weaken incentives for local production, thereby hindering sustainable economic development.

The rentier economy represents an advanced stage in the evolution of the economic relations that emerged under the Asiatic Mode, where the tools of production have become more complex, but the fundamental relationship between the state and producers has remained based on surplus extraction rather than the stimulation of production.

Case Studies: Comparing the Ottoman Empire and Contemporary Gulf States

A. The Ottoman Empire

In the Ottoman Empire, the state relied on the “iltizam” system, which allowed local elites to collect taxes from peasants in exchange for paying a fixed sum to the state. Although the Ottomans interacted with European markets, the influx of cheap Spanish silver led to the destruction of the local economy, re-imposing a feudal system and obstructing the development of capitalist production relations. This example demonstrates how a rent-based system reliant on external income can hinder economic development and entrench elite dominance.

B. Contemporary Gulf States

In Gulf states such as Saudi Arabia and the United Arab Emirates, oil represents the primary source of income, enabling governments to finance themselves without the need to impose high taxes on citizens. Despite efforts to diversify the economy, reliance on oil remains the principal barrier to achieving a productive and sustainable economy. Moreover, oil revenues enable governments to maintain centralized political systems that reduce the need for popular participation in decision-making, reproducing the patterns of economic and political despotism that characterized the Asiatic Mode of Production.

Conclusion

The comparative analysis between the rentier economy and the Asiatic Mode of Production reveals that both rely on the centralization of the state in the extraction of economic surplus, albeit within different historical contexts. While the Asiatic Mode was based on irrigated agriculture and the organization of water resources to assert the state’s control over production, the modern rentier economy depends on the exploitation of natural resources to generate high income without the necessity of developing other productive sectors.

Nevertheless, both models are similar in their impact on class structure and political practices, as they lead to the emergence of authoritarian systems that perpetuate the gap between ruling elites and productive classes.

On the other hand, analyzing the relationship between the rentier economy and modern capitalism reveals a fundamental contradiction: although the rentier economy operates within the framework of global markets and benefits from international capital flows, it inherently limits the dynamics of sustainable growth and weakens local innovation and production. States that rely on rent often find themselves trapped in economic and political dilemmas when resource prices fluctuate, making them more vulnerable to financial and social crises.

Therefore, addressing the challenges of the rentier economy requires long-term strategies aimed at diversifying income sources, strengthening the role of the private sector, and implementing political reforms that ensure broader societal participation in economic decision-making. The experiences of countries such as Norway and Malaysia demonstrate that successful transitions from a rentier economy to a diversified economy are not achieved solely through good resource management, but also require investments in education, scientific research, infrastructure, and the development of local productive sectors.

In conclusion, it can be said that the rentier economy, despite its apparent modernity, carries structural features that resemble pre-capitalist modes of production. Unless radical reforms are adopted, it may continue to reproduce the same patterns of economic and social despotism, making genuine economic transformation an urgent challenge in the context of accelerated capitalist globalization.