Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261 ISSN 2477-8060 (print), ISSN 2503-4456 (online) DOI: https://doi.org/10.15294/ipsr.v3i2.14227 ©Political Science Program, Universitas Negeri Semarang

The State, Class Struggle, and Capitalist Development in Indonesia and South Korea: A Marxist View

Muhammad Ridha Northwestern University, United States

Abstract This paper aims to understand why similar efforts of state intervention can generate different economic outcomes. It argues that the different economic outcomes of state intervention can be traced back to the different processes of class struggle. Mobilizing Marxist view, it suggests that the state role in the economy should be understood as inseparable from capitalist development. That is, economic development is the terrain for class struggle between capital and labor. Although the contradictory relation between capital and labor is universal and global in capitalism, the form of contradiction will always be different across societies. That is the case because the form of class struggle depends on the specific development of the configuration of class power that has developed historically in each country alongside with its international process due to the expansive nature of capitalism itself.

Keywords: State; Class Struggle; Capitalist Development

INTRODUCTION state intervention to enhance their This paper aims to understand why economic development. Especially under similar efforts of state intervention can the rule of the authoritarian governments generate different economic outcomes. To of Suharto and Park Chung Hee in the address this question, this article will use 1960s, both countries enacted systematic the cases of economic development in and comprehensive economic plans to Indonesia and South Korea. The reason develop the national economy. The for this choice of cases comes from the economic trajectories of these two nations fact that both countries have implemented also have strong similarities: Neither Indonesia nor South Korea interfered Muhammad Ridha is an Arryman Scholars and doctoral student at Political Science Department, under the orientation of a socialist Northwester University, Scott Hall 2nd Floor, 601 University Place Evanston, IL United States. His centralized economy, and both research interest about development and political consciously made a serious effort to build economy. Email correspondence: [email protected]. a modernized capitalist economy. The previous version of this paper has been presented in International Symposium on Nevertheless, these similarities did Indonesian Politics in Universitas Negeri Semarang-Indonesia April 2018. I am thankful for not translate into identical outcomes. The the insightful comments of the anonymous reviewers for this paper. level of development is significantly diffe-

Received April 28th, 2018; Accepted July 5th, 2018; Published July 15th, 2018. 240 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261 Graph I

Source: Rabobank in Erken (2017)

-rent between the two countries. South between capital and labor is universal in Korea has been declared a new developed capitalism, the form of contradiction will country in the global economy, while always be different across societies. That Indonesia’s economy is still struggling to is the case because the form of class be dominant in an international struggle depends on the specific constellation. The difference can be seen development of the configuration of class on how the two countries compare power that has developed historically in according to GDP in 1970 and in 2016. each country. One needs also to bear in Erken (2017) finds that in 1970, the mind that this specific development is GDPs of Indonesian and South Korea was attributable not only to the national marked by relative similarity. process but also to the international Nevertheless, in 2016, the level of GDP process due to the expansive nature of between those two countries was different capitalism itself. Thus, this article argues drastically different. that the different economic outcomes of This article argues from a Marxist state intervention can be traced back to view that the state role in the economy the different processes of class struggle. should be understood as inseparable from capitalist development. That is, economic Problematizing the State in Development development is the terrain for class Before we continue our analysis, struggle between capital and labor. there should be an explanation of why Although the contradictory relation Marxist analysis is preferable to other

Ridha/The State, Class Struggle, and Capitalist Development in Indonesia... 241 theoretical positions. I argue that although contesting the authority of others, and there is a bourgeoning scholarship that attempting to structure institution in their aims to explain the role of the state in own favor” (Robinson, 2012: 102). development, most studies propose that a Similar yet different from Acemoglu and certain distinct quality of the state is Robinson’s proposition is Johnson’s necessary in promoting development. The (1982) exposition on Japan’s purpose of the analyses in these studies development. He suggests that the then is to illuminate those qualities of the Japanese government was success in state for explaining economic rationally planning development through a development. In this view, there is a strategic, or goal-oriented, approach to the precise position of the state that is most economy” (Johnson, 1982: 19). While preferable for economic development. In the Japanese government also introduced these works, three main positions aim to close collaboration with the domestic explain the unique quality of the state. business sector, this collaboration was founded under a competitive basis which Institutional Attribution “stress[ed] rule and reciprocal concession” This position suggests that the (Johnson, 1982: 20) related to the overall success (and failure) of the state is development goal of the country. It is attributable to certain characteristics of unsurprising that the economic rationality the institution of the state. This position of the Japanese government required can be seen in the work of Acemoglu and details of “state policy at micro level” Robinson (2012). Through their historical (Johnson, 1982: 27) which enabled the reading, they suggest that the state individual enterprise to strictly follow and institution is crucial for “providing be guided by the developmental goal. economic incentives and prosperity” Johnson argues that this degree of (Robinson, 2012: 102). In order for the intervention made the institution of the institution to be supportive of Japanese state-led market economy development, its institutional character distinct from other economies. should be inclusive. For Acemoglu and The institutional attribution argument Robinson, the inclusivity of the institution emphasizes the specific nature of must be based on “intense conflict as institution that is compatible with different groups competed for power, capitalist development. However, that 242 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261 argument omits an elaboration on the ties” (Evans’, 1989: 581). Following unevenness of the state institution. One Polanyi and Weber, Evans stresses the also needs to address why a certain state capacity of the state to constrain can have an interest and be successful in economic power by the existence of promoting that kind of inclusive and socially insulated bureaucratic institutions rational institution while others cannot (Evans’, 1989: 567) as an important promote this kind of institutional factor that determines the state’s attribution which leads to developmental successful role in development. Evans’ failure. In this case, institutional argument is reaffirmed by Skocpol’s attribution argument neglect relational (1985) which posits that the essence of nature of the state with other states in state autonomy lies in the position of the particular and broader societal process in state “as a set of organizations through general. It is unsurprising that due to this which collectivities of officials may be omission, the argument of institutional able to formulate and implement attribution seems to posit that there is an distinctive strategies or policies” (Skocpol, exact institutional prescription for 1985: 20-21). Consequently, Skocpol economic development in which the role suggests that the state as organization has of the state is just following this definite a certain capacity to place itself beyond prescription. social relation. That is, the degree of the autonomy varies from a “committee of the Structural-Organizational Condition bourgeoisie’ to the absolutely autonomous Unlike the institutional attribution state” (Chang, 2009: 20). argument which seems obsessed with The structural-organization argument developmental prescription, the state- provides a more fundamental explanation structural argument aims to understand about the nature of the state in the structural dynamic of the state that development than does the institutional enables development. This position is attribution argument. For proponents of represented by Evans’ (1989) work on the structural-organizational approach, the “embedded autonomy” which argues success of the state in pursuing about the importance of the structural development relies heavily on the autonomy of the state organization such insulation of the state organization from as bureaucracy with “dense public-private particular social interests or groups that

Ridha/The State, Class Struggle, and Capitalist Development in Indonesia... 243 might harm the agenda of the state Japanese lineage of South Korea organization. However, by using this developmental success represents this definition, the explanation of the argument. Kohli suggest that Japanese developmental process of the state might colonialism transformed the social succumb into ahistorical position. institution of South Korea “into highly Although Evans suggests the importance authoritarian, penetrating organization, of history, his historical exposition is capable of simultaneously controlling… limited to certain historical facts production oriented alliances… and the suggesting that the state has the capacity lower classes in both city and the to control the market. Thus, the structural- countryside.” (Kohli, 1994: 1269). Thus, organization argument, shared by Evans, in Kohli’s argument, Japan’s colonial rule over-stretches the status of the state as became a blessing in disguise since it external to the historical existence of provided a necessary foundation for the society. Understanding the state as enabling role of the state in development. organization also overlooks the possibility Vu (2007), among other scholars, of social relation to penetrate into and proposes a different view, despite his through the state beyond the actor agreement with Kohli’s framework on the position. As this article will argue, this importance of historical process. Rather penetration can be seen in how a than emphasizing the role of colonialism, particular logic of capitalist social relation Vu suggests that the history of the affects the political preference of the state divergent dynamics of elites (whether they organization. compromise or polarize) and masses (whether they are incorporated or Historical Process suppressed) are the basis for the The third argument situates the developmental structure of the state. For historical process as the main factor in Vu, the state ability to develop is the result explaining the success of state of a power struggle that occurs historically intervention. Thus, the structure that and thus explains why some state political sustains economic development within leaders are more capable to promote a the state is strongly determined by the development institution than other history of the existence of the state itself. leaders. The eminent work of Kohli (1994) on the 244 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261

It can be argued that the historical argument posits the state as an entity that process argument is more nuanced than is immune from the dynamic of broad the structural-organization argument and social relation. For example, despite the institutional attribution argument. It “success” of the state role in development, argues about the importance of the no state is immune from economic crisis. historical social relation that shaped the One can argue that such a crisis might be condition of the state and how that external in its cause. But by looking to the relation can also contribute to the state fact that a state’s economic crises tend to developmental agenda. However, the happen regularly, it is hard to see that the historical process argument seems to fall state can be separate from a certain social into a deterministic view of history since it relation of the regular occurrence of fails to recognize the fluid character of the economic crisis. Therefore, it is important historical process. The relation between to illuminate the social relation as a whole the past and current events cannot be systemic understanding that shapes the understood linearly. There might be some characteristic of the state. forms of social relation that do not necessarily comply with the construction Marxist Theory of the State: A Theoretical of historical categorization, but might also Reconstruction play a role in shaping the state outcome. As a body of thought, Marxism has For example, the active role of US various explanations on how the state imperialism in shaping the dynamics and should be defined. However, there is political option of the state after World common ground in Marxist analysis in War II is almost neglected in the historical which the existence of the state should be process argument, although one cannot related to the historical development of ignore the fact that this imperialist power capitalism. According to Marx and Engels has always become a factor in any global (1948), the state is best understood as historical development. the “executive committee of the What these three positions share in bourgeoisie.” They suggest that the state understanding the state role in has an intimate relationship with the development is how the state is defined capitalist class which is manifested as an entity isolated from a broader social through the state’s role in managing the relation. Consequently, this kind of common affairs of the whole capitalist's

Ridha/The State, Class Struggle, and Capitalist Development in Indonesia... 245 class. This intimacy necessarily leads to can be defined as the “relative autonomy” the position that the executive committee argument, since the state should be should be understood as merely the analyzed as relatively autonomous from instrument of the capitalist class that the operation of capital power. usually rules the market (Lenin, 1968; Despite of its merit, this kind of Miliband, 1969; Engels, 1978). “relative autonomy” argument seems to However, Poulantzas (1980) argues obscure the exploitative nature of labor that the state should be understood as under capitalism that sustain by the state relation rather than static because class power (Bonefeld, 1993: 36). It reduces struggle effectively is present in the capitalism as merely “the economy” physical space of a given state’s which structurally can be distinguished apparatuses. The state is not the direct from the state as “the politics.” The determination of class power, but is rather problem then, this analytical proposition the condensation of the material neglects the abstract operation of the relationship of force determined by class capitalist law of motion that can struggle. Consequently, it can be said transcend this structural distinction. To that the state is a locus for the collision preserve what is important in “relative and contestation of power. This notion autonomy” argument, one needs to be means that the state is not necessarily coherent about the nature of the state simply determined by the capitalist class; with regards to the capitalist’s law of it suggests no deterministic outcome in motion. The state is imperative in the relation between the state and class. capitalism since it “contain and manage” Jessop (1990) argues that this non- (Kennedy, 2006: 190) the fundamental deterministic relation is a strategic contradictory relation of capital and labor relationship. By strategic, he means a (i.e. worker) in capitalism. As capital tries system whose structure and operation are to gain profit through exploiting labor, more accessible to some forms of political labor will simultaneously resist against strategy than others. Thus, a given type of capital exploitation. If this relation left on state policy will be more open for certain its own, capital accumulation as a whole class interests than others, according to will be declined and as a system is not the strategies that have been adopted to sustainable. For this particular logic then gain state power. This theoretical position the entity of extra economy like the state 246 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261 becomes inevitable in securing production more efficient since it can accumulation process of capitalism. reduce the needs for worker while process leads to what Mcgill and Parry’s increasing the number of commodity (1948) call as “the unity of the opposites” production. For Marx, since profit is a of the state in capitalism; while its role is money-form of surplus value and the fundamentally different from capitalism, accumulation of capital understood as its existence cannot be separated from accumulation of surplus value of unpaid capitalism itself. labor in commodity production, Other proposition that important in investment over machinery enable worker understanding the motion of capital is the to produce more commodity which means role of capitalist competition. Competition more surplus value i.e. profit. This then in capitalist world is not a perfect makes the firms more profitable than competition in which firms tends to be before. passive in determining the price and cost Within this capitalist competition, it is of production (Moudud, 2010: 15). unsurprising for some capitalist to Rather, capitalist competition imposes concentrate and centralize the ownership every firms to be active in minimizing of capital. Concentration of capital their unit cost and thus maximizing profit. understood as the increase of capital Therefore, it is imperative for firms to through the capitalization of surplus value utilize tactics and strategy in order to hold by capital, while the centralization of market share. Price cutting and reduction capital is the joining together of various of cost become the major features of individual capital unit which thus form a capitalist competition (Shaikh, 1980; new larger unit (Bukharin, 1927: 117). Shaikh, 2016). According to Marx In here, the competition between those (1981), competition facilitates the firms which are able to mechanized their capitalist to lower the unit cost of the productive forces and those firms which capitalists by mechanization of means of unable to do that create a winner-loser production in the long run. It means that relation in which the winner will crush the the imperative for increasing the loser in competition. The centralization investment in machinery to boost and concentration lead to what Trotsky productivity becomes inevitable. (Allinson & Anievas, 2009) calls as Mechanization makes the process of uneven and combined development. He

Ridha/The State, Class Struggle, and Capitalist Development in Indonesia... 247 suggests that competition generates expand beyond the territory of the country geopolitical relation which constitute in which the state has to play a crucial internal development of a nation (Allinson role in securing property for investment & Anievas, 2009: 51). He uses the and ensuring capital accumulation in experience of Russia during the end of overseas territories. 19th century in which its economic This theoretical abstraction suggests development was determined by that the state is integral to the operation of geopolitical rivalries due to direct capitalism. The state’s existence will economic competition. The development always be related to class struggle. and innovation of economic technique However, the form of the class struggle and organization in the developed cannot be generalized, since capitalism Western countries restrains the always operates in uneven conditions. development of Russian economics. This Due to the unevenness, the class power relation leads to the imbalance relation of that emerges in certain state might have a geopolitical power that generates a world different form of social alliance which is capitalist system which consisting of less the power basis of the state and its developed (periphery and semi periphery) relative autonomy. This argument puts the and developed (advanced and core) importance of seeing the form of class countries. The structural implication of struggle within a certain state in its this relation is it enable the relation of specificity, since the degree of capitalist exploitation of surplus in by the core development might differ from one state countries to peripheral countries. This or another. This argument also suggests exploitative phenomenon between that capitalism also should be seen as a countries is known as imperialism (Lenin, global system in which national 1999). Capitalist competition that leads to development can influence the concentration of wealth will enable high international process and vice versa. level of capital monopolization in certain Thus, rather than seeing the international countries. If this capital monopolization is condition as mere background, the not channeled into a more profitable international factor can play an active role outlet in a particular country, then the in shaping the state outcome of crisis of overproduction might occur in development. that country. Therefore, it is important to 248 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261

Putting South Korea and Indonesia in into democratic-socialist and communist Historical Context streams. The socialists mostly originated In understanding how capital and from the Western-educated middle class class struggle shaped Indonesia’s and and the communists from the working South Korea’s economic trajectories, we class and small peasantry. need to trace the political dynamics of For South Korea, the configuration post-colonialism in both countries. The was quite different. Prior to the civil war first dynamic is the power configuration in in the 1950s, Korea was a unified the post-colonial state that was shaped by country (in which South Korea was part). colonialism. In Indonesia, the However, the relation between the north configuration has tended to be centralized and the south was conditioned by Japan’s in Java. The reason for this development partial colonial development in Korea in is that Java is the most populated island which it tended to industrialize the north in Indonesia. Therefore, Dutch colonial and eliminate the royal families. In the development in Indonesia concentrated 1930s, Japan developed mines, hydro- on Java to generate a high level of electric dams, steel mills, and economic surplus. This process has led manufacturing plants in northern Korea Java to be the primary terrain of political (Cumming, 2005: 174-5) to maintain its struggle among social forces in Indonesia. presence in neighboring Manchuria in The form of these social forces tends to be order to challenge the growing influence arranged according to an ideology that is of the Soviet Union in the region. The strongly related to the class structure that consequence of this partial development arose from the colonial development. was crucial to the form of the power Three ideological lines have relation in post-colonial Korea. The dominated Indonesian politics since the dominant social forces that appear in the Independence: Islamism, Nationalism, post-colonial north came mostly from a and Marxism. Islamism as a political force working class background as a is socially based in the urban and rural consequence of Japan’s industrialization. middle class. Nationalism comes from the There was also a commercial and layer of the aristocratic middle class manufacturing bourgeoisie elite in the (priyayi) that had a strong relation to north with relatively uninfluential power Dutch bureaucracy. Marxism was divided due to its small number and historical

Ridha/The State, Class Struggle, and Capitalist Development in Indonesia... 249 character as subservient to the Japanese. capitalist world-system… [that] In the South, while the economic subordinated them, and held them tightly structure was still dominated by within an integrated whole” (Arrighi, agriculture, the destruction of the feudal et.al., 1987). The issue, then, is that the system created definite social forces. The structural delinking that resulted from South’s social terrain was dominated by anti-colonial struggle does not necessarily the middle class yangban (the undermine the power of capital at the bureaucrats that work for the feudal lord) international level. The change of the that mostly worked and collaborated with power constellation at the international colonialist Japan, the local landlords and level after World War II, with the rise of the lower class such as peasants. This the US as a superpower nation, maintains process generated a unique ideological the power and domination of capital. This line in Korea. The North tended to be constellation itself emerged as a response unified and communist ideology became to the increasing influence of the “real the dominant force, while in the South, existing socialism” of the Soviet Union in because of its variety of social classes, the post-war international order that might ideology tended to be scattered, with threaten the influence of the capitalist conservative, liberal moderate, and left- world-system. Known as a “cold war” wing radical elements (Barone, 1983: between the US and the Soviet Union, 57). this international constellation became the Another political dynamic that need to representation on how capital operates be accounted for is the international and shapes the form of power relation context of capitalist development. The within the post-colonial state. anti-colonial struggle that generated the These two dynamics of within (power emergence of the post-colonial state was configuration) and outside (international a systemic reaction to the domination of context) of the state with relation to capital toward the nation. As argued by capital power became the important Arrighi, et.al. (1987), the main aim of processes for the structure of capitalist anti-colonial struggle (i.e. national development in Indonesia and South liberation movement) is to change the Korea. “unequal relation among different zones of the modern world-system… the form of 250 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261

Struggle for the Soul of the Nation However, the ideological unification As a post-colonial state emerges, at the level of state foundation was not class struggle appears as part of political necessarily translated into unification of contestation in shaping the political class forces to support development. The agenda of the state. However, the form of contrasting points of view became the the class struggle will vary according to source of political instability in the new the context of power configuration, as independent state. In its first seven years, explained before. Contestation is related to Indonesia experienced the rise and fall of the struggle for organizing the new state seven cabinets (Vu, 2007: 43). For some and how this organizing process is related moderate forces (especially that comes to the international context of capitalism from the Islamists, Nationalists, and some as a whole. Different forms of class faction of Socialists), Indonesia’s struggle therefore become an important development should follow a pragmatist factor affecting the social relation for approach in which the government should sustaining further capitalist development. accommodate capitalist economic rationalization and reduces the influence Indonesian Case of politics (especially mass politics). In the case of Indonesia, the form of Meanwhile for some radical forces, mostly class struggle seems characterized by coming from the communists, the post- consensus between antagonistic classes. colonial government should maintain its Before Indonesia gained its official anti-colonial tendency in development. independence, the new political elite was Therefore, economic development could successful in reaching a consensus about not be separated from the political the foundation of the state. The plurality process, and mass participation in of ideological lines was acknowledged development became inevitable. Such and accommodated in the state deep political division hinders the constitution. The elite promoted Pancasila effectiveness of any economic initiative (five principles) which consists of introduced by the government, since no principles, believing in God, humanity, social force can play a dominant role to unity, democracy, and social justice, that support a certain policy measure. This implicitly recognized the tenets of Islam, dynamic can be seen in how a Nationalism, and Marxism (Mintz, 1965). government initiates an industrialization

Ridha/The State, Class Struggle, and Capitalist Development in Indonesia... 251 strategy through “restrained with the PRRI-Permesta rebellion, the nationalization” (White, 2012: 1284), in situation was quite different, because in which nationalization of a colonial 1958 this rebellion was also supported by corporation should not harm international the foreign forces of the US. The US trade. The Indonesian government still successfully rode the anti-government saw the importance of international trade sentiment that came from non-Java’s civil to develop the indigenous capitalist class and military elite that led to the PRRI- that was weakened during colonial rule. Permesta rebellion. The reason for US Thus it is unsurprising that with the intervention came from the Indonesian condition of balance of forces, the decision to nationalize US and Dutch nationalization and development of corporations’ assets to industrialize the capitalist class policy failed to reach the economy. objective to develop Indonesian economy. The precedence of US intervention The ideological conflict in Indonesia led to the increasing of anti-colonialist faced a crucial juncture when an internal sentiment within Indonesian society. Thus rebellion known as PRRI-Permesta it provided justification for the (Pemerintahan Revolusioner Republik reinforcement of the communists and the Indonesia-Piagam Perjuangan Permesta, marginalization of the moderates in the Revolutionary Government of the Republic constellation of power. The communists of Indonesia-Universal Struggle Charter) successfully penetrated the government challenged the existing power relation in by creating a strategic alliance between 1957. One has to acknowledge that in the Communist Party of Indonesia with post-Independence Indonesia, the the then president, Sukarno. who also emergence of rebellions was quite regular. had an interest in stabilizing the country Most of the rebellions were caused by the and blocking any foreign intervention. At dissatisfaction among certain factions of the international level, Sukarno also allied (para) military groups,as the state had himself with communist countries such as decided for military professionalization China. In order to balance the growing and the marginalization for these groups influence of the communists, Sukarno although they had played an active role also brought the military into the alliance. during the physical struggle for The reason for this inclusion was that independence (Rianto, 2013). However, many anti-colonialist measures that the 252 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261 government want to pursue required an between those the factions that supported effective state machinery which only the the radical policy and those who were military was capable of providing. against it. Consequently, the radical The inclusion of the military became measure of the land reform program failed problematic in the radical anti-colonial to be fully implemented within the measure, because, as an institution, the existing political constellation. Indonesian military consisted of many The hidden conflict between the class interests with many ideological communists and the military burst open backgrounds. This ideological plurality in 1965 when some radical sympathizers created an obstacle to how the in the military failed to evict “contra- government could effectively enact its revolutionary” officers in September 1965 radical measure. The case of the (Anderson & McVey, 2009). This failure enactment of a land reform bill in 1960 became a pretext for the military faction illuminates this issue. Aiming to address that rejected the radical agenda not only inequality and to strengthen the basis for to purge the radical faction, but also to industrialization, the bill allowed state aim at eliminating the communists occupation of any lands that were (Roosa, 2006). Under the leadership of considered unproductive. However, many Suharto, the anti-radical faction state officials seemed reluctant to successfully consolidated its power by implement this policy. This reluctance winning the confidence of Sukarno and provoked many landless peasants, many purging the military institution from any of whom had a relation with the radical influence. Once the military as a communists, to conduct unilateral action whole was controlled by the anti-radical (aksi sepihak) to seize any land that was faction, the military starting to destroy the identified as unproductive. Land seized communists. To destroy the communists, through such unilateral action not only the military mobilized Islamic forces was owned not only by landlords, by the which had been marginalized during the military as a result of the nationalization rise of communist influence. This moment of Dutch plantations after independence. period is marked by the political massacre This condition led to rising tension not in 1965 in which more than 500,000 only between the communist and the people who were identified as military but also within the military itself,

Ridha/The State, Class Struggle, and Capitalist Development in Indonesia... 253 communists were killed by the military or domination remained hostile to resistance the Islamic paramilitary. coming from the peasantry and the The growing influence of the military progressive middle class which mostly still in 1965 provided an opportunity for maintained a relationship with the left- Suharto to topple Sukarno. The possibility wing forces in the north and sympathized of Suharto’s replacing Sukarno became with their radical agenda. This geo- larger when the US returned to intervene politico division between the north and in Indonesia. With the approval of the US, the south enabled foreign intervention Suharto successfully convinced Sukarno from the existing international super to give him a full mandate to maintain the powers to intervene in Korea’s affair. The stability of the country. This transfer of first moment of foreign intervention power then became legitimation for occurred in 1945 when Soviet Union succession from Sukarno to Suharto in the entry the north region, due to its midst of political crisis. With the rise of contribution in fighting the Japanese Suharto, the radical anti-colonial agenda colonialism in the Korea peninsula. was put to an end as a full-blown Worried about the rising influence of the capitalist agenda started to emerge. Soviet Union’s strengthening its influence on the left-wing force in Korea, right wing South Korean Case politicians in Korea invited the US to post In the South Korean case, the division a military base in the south. The between the north and the south become intervention of the US played a major role an important factor in shaping the class in shaping the class structure in the south struggle. The industrialized north become that was inclusive of capitalism (Cumings, dominated by the working class politics 2005). represented by the left-wing radicals. In The existence of the US provincial the south, the underdevelopment led to military government changed the balance the domination of the social class that of power between competing forces in previously had a relation with Korean supporting the right-wing developmental feudalism. This social class included agenda in the south. To defuse mass landlords and some conservative yangban radicalization from the peasantry and to who represented the interest of the right- promote industrialization, the right wing wing current in Korea. However, their politicans, backed by the US, launched a 254 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261 partial land reform to redistribute land of the instability came from the assets, with a policy implemented in resentment of the peasantry and the 1945. The US military government educated middle class against Rhees’ redistributed 600,000 acres of land incapable and corrupt government and its which mostly had been confiscated from subordination to US power. The instability the Japanese which then sold it to Korean was then exacerbated with the reaction of tenant. With the support of the US, the the north which felt provoked by the right wing could effectively neutraliz the existence of the state of South Korea. One political challenge coming from the year after the establishment of South progressive and communist forces. At the Korea, the north established the People’s same time, the US abolished a radical Democratic Republic of Korea. To reduce program of the Peoples’ Committee that the instability that was beneficial for the aimed to replace the colonial Japanese communist north, Rhee’s government, political structure but reestablish a with US backing, launched a second land colonial administrative structure, one reform policy. This second land reform governed by lower Korean officials who was much more comprehensive because had previously worked for the Japanese. it eliminated the landlord class by The US also reutilized the Korean police constraining land tenants to less than that had been trained by the Japanese three hectares (Barone, 1983: 60). and were hated by the Korean people Landlords were compensated for he (Barone, 1983: 57). The political confiscated land and many then become influence of the US was at its peak when the new capitalist class. The elimination it held an election in 1948 which was of landlords became a necessary factor for boycotted by all political parties except the the high acceleration of capitalist right-wing which elected a conservative development in South Korea. figure, Syngman Rhee, and declared Despite the success of Rhee’s South Korea the Republic of Korea with government in maintaining right-wing Rhee as its head of state. domination in South Korea with the However, the emergence of South support of the US, the existing right-wing Korea that consolidated with the right government was still unable to boost the wing through the support of the US did economy. Even after the civil war at not necessarily create stability. The source 1953, South Korea’s economic

Ridha/The State, Class Struggle, and Capitalist Development in Indonesia... 255 performance was not much improved. Fortunately, the mass revolt was put Reckless governance combined with deep to an end when the military enacted a corrupt behavior in the government coup in 1963. Under the leadership of hindered economic development. This Major Park Chung Hee, the military took condition then led to resistance of the over the civil government and established masses against the government which the a military control government. This new government responded to with repressive military regime was not ideologically measures. However, these measures different from the previous regime: it failed to subdue the resistance, leading to maintained the right wing’s capitalist and the resignation of Rhee as president in anti-communist line. However, under 1960. Hee, the capitalism seemed to develop in With Rhee’s resignation, the a specific way which became the marker parliament elected Yun Posun as the new for enhancing capitalist development in head of the state. Posun preserved the South Korea. agenda of the right-wing politics but with less authoritarianism. Yet, under Posun’s Different Economic Outcome in Indonesia leadership, South Korea still faced and South Korea economic problems with government The form of class struggle inherited by corruption. This condition led the popular Suharto and Park Chung Hee each masses once again to rise against the became an important factor in government. Interestingly, within the determining the capacity of state masses, some leftist forces reemerged and intervention in shaping the capitalist played an important role in challenging economy. As is already known, the the regime. These forces consisted of “a leaders shared a similar political unification movement…, supported by character: anti-communist, authoritarian socialist parties, student organizations, and having a friendly relation with foreign labor unions, and other moderate groups capital. Institutionally, both regimes also who continued to be alienated from the were involved in and nurtured a corrupt new regime” (Barone, 1983: 60). This re- political process between the government formation of the left alarmed the right and the capitalist class (Robison & Hadiz, wing ruling class, as the rising leftist force 2004: Winters, 2013; Krang, 2002; You, might threaten their capitalist agenda. 2005). Due to the different forms of class 256 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261 struggle prior to their rule, these leaders North Korea. This situation led to enacted the process for the establishment geopolitical competition for South Korea of capitalist development differently. against North Korea. South Korea needed In the Indonesian case, the political to promote rapid development in order to transition that led to the emergence of contain the influence of North Korea Suharto’s New Order regime had which had already industrialized. The successfully eliminated the political power geopolitical condition also constituted a of the working class. The regime itself “cold war” effect on the Korean peninsula was founded in the consolidation of the in which one could not ignore the role of state machinery, like the military and the the US in South Korea’s development. bureaucracy, which became its political The US had shifted its foreign policy basis (Robison, 1978). To control any orientation from military to economic potential opposition, all other political since the communist bloc started to show forces, like political parties, were rapid industrialization (Kim & Park, 2007: enforcedly subordinated under Suharto’s 193). The active role of the US become rule. Under the New Order, Indonesia the defining factor that enabled South also had a weak capitalist class. The Korea’s economic enhancement. The US failure of land reform implementation, has an interest in developing South Korea which was contributed to by the role of because weak development in South the military faction that supported the Korea might lead to popular discontent New Order, led to the absence of a that might then harm the geopolitical generative condition for the creation of a interest of the US in the region. new capitalist class. With the absence of In the case of Indonesia, the regime’s a strong capitalist class and increasing centralization of power without any repressive power of the state, Indonesian effective competitive environment created capitalist development was highly autonomy regarding the influence of dependent on the political choice made international capital. This autonomy can by the regime (Robison, 1986). be seen on how the regime promoted a A different situation occurred in South “back-and-forth” relationship in Korea. While internally Park neutralized developing its economy. Just after the any political opposition, geopolitically Suharto gained power, the New Order South Korea was still overshadowed by regime launched an economic policy

Ridha/The State, Class Struggle, and Capitalist Development in Indonesia... 257 known as the foreign capital investment mostly in light industries such as bill to attract foreign investment in processing food and textiles. Indonesia. Through this bill, the Meanwhile, the imperative to Indonesian economy become highly undermine North Korea and its dependent on the power of international communist counterparts in the region capital. However, this pattern of became an important reason for the US to development did not last long. As “support” South Korea. US support for Indonesia was experiencing an oil boom South Korea’s economy can be seen in 1973, the government changed its during the US engagement in the Vietnam development orientation to a more War. From 1966-1969, 30% of foreign domestic–minded one. During the oil exchange in South Korea was contributed boom, Indonesia promoted import- to by the US due to its support for the US substitution industrialization and war effort in Vietnam (Hart-Landsberg, selectively limited foreign investment 1988: 49). As argued by Glassman and (Masami, 2003: 13). This domestic Choi (2014), US war engagement also orientation had to be changed in 1982 provided an opportunity for South Korean due to the downturn in the price of oil. industrialists, since it opened access for The regime then changed its industrial South Korean firms to supply war policy to be more export-oriented. To logistics. The US influence on South support this measure, in 1986 the regime Korea’s economy continued when Park’s also launched partial liberalization of the government normalized its relation with Indonesian economy through deregulating Japan in 1966 (Kim & Park, 2007: 196) the banking sector. The reason for the to enable Japan’s investment in South partiality was that the regime still had to Korea. Japan’s investment changed the undertake an industrialization measure by industrial structure of South Korea, since promoting state enterprise and state- most of the investment was in capital- supported conglomerates (Masami, 2003: intensive industries with a high 14). Nonetheless, the change of technological level. This process can be economic orientation resulted in seen in how a high amount of South industrialization. The problem was that Korea’s automobile export to the US in the industrialization being established was 1985 was directly related to the increase 258 Politik Indonesia: Indonesian Political Science Review 3 (2), July 2018, pp. 239-261 of imports from Japan (Hart-Landsberg, structure of both the Indonesian and 1988: 50). South Korean states. This historical process suggests that One can casually observe in the South Korea’s industry is more comparison of Indonesian and South technologically advanced compared to Korea that the degree of imperialist that of Indonesia. In terms of value- involvement in the state is important in added, South Korea’s industrial structure encouraging economic development. has more value-production than However, it can also be said that the Indonesia’s industry (Pratap, 2014). This political pressure that occurs as a difference explains why South Korea’s consequence of class struggle needs to be economic development is higher than taking into account. The South Korean Indonesia’s despite their similarity in the experience would have been impossible if intention and agenda of state intervention. the geopolitical competition with North Korea had not existed. A corresponding CONCLUSION perspective can be taken in the The reason that similar state Indonesian case in which the absence of intervention can result in different effective class opposition to create political economic outcomes is related to different pressure on the regime led to arbitrariness forms of class struggle. Although in the orientation toward industry. capitalism is a universal and global system, its operationalization cannot REFERENCES escape local context. The role of context Allinson, J. C. and Anievas, A. (2009). can be seen in how capitalist ‘The Uses and Misuses of Uneven development emerged in Indonesia and and Combined Development: An South Korea. Different processes of Anatomy of a Concept’. In Cambridge capitalist development during the colonial Review of International Affair 22 (1), era generated different power relations pp: 47-67. among class forces in the post-colonial Anderson, B. R. G., & McVey, R. T. states. The result of class struggle during (2009). A preliminary analysis of the the post-colonial era had an impact on October 1, 1965 coup in Indonesia. the character of the developmental Equinox Publishing.

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