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