The promoters, both civilian and military, had given their political movement a nationalist label, but unanimity among them went no further than acceptance of the official ideology. Although it was essential for the stability of any cabinet that they work together, relations between the civilian and military factions steadily deteriorated as more civil offices went to military personnel. Sensing a tendency toward military rule that he could no longer contain, Phahon retired in December 1938. Phibun took office as prime minister, with his rival, Pridi, as finance minister.
The Phibun regime sold nationalism to the public by using propaganda methods borrowed from authoritarian regimes in Europe, and nationalism was equated with Westernization. To make clear to the world--in Phibun’s words--that the country belonged to the Thai, in 1939 the name of the country was officially changed to Muang Thai (Land of the Free), or Thailand. That same year Pridi introduced his "Thailand for the Thai" economic plan, which levied heavy taxes on foreign-owned businesses, the majority of them Chinese, while offering state subsidies to Thai-owned enterprises. The government encouraged the Thai to emulate European fashions, decreeing, for example, that shoes and hats be worn in public. Betel chewing was prohibited, and opium addicts were prosecuted and, if Chinese, deported.
Although nationalism was equated with Westernization, it was not pro-Western, either politically or culturally. Thai Christians, especially those in government service, as well as Muslims, suffered official discrimination. The clear inference of government statements was that only Buddhists could be Thai patriots. At its source Thai nationalism was anti-Chinese in character. Regulations were enacted to check Chinese immigration and to reserve for the Thai numerous occupations that had formerly been held predominantly by Chinese.
Phibun’s nationalist regime also revived irredentist claims, stirring up anti-French sentiment and supporting restoration of former Thai territories in Cambodia and Laos. Seeking support against France, Phibun cultivated closer relations with Japan. The Thai nationalists looked to Japan as the model of an Asian country that had used Western methods and technology to achieve rapid modernization. As Thailand confronted the French in Indochina, the Thai looked to Japan as the only Asian country to challenge the European powers successfully. Although the Thai were united in their demand for the return of the lost provinces, Phibun’s enthusiasm for the Japanese was markedly greater than that of Pridi, and many old conservatives as well viewed the course of the prime minister’s foreign policy with misgivings.