Chapter 12
The Stones that the Builders Rejected
I. The Locational Revolution
In the conclusions of his excellent
recent book Power in Motion: Capital
Mobility and the Indonesian State (1996), Jeffrey Winters states that for
labor the party is over. The poor will
stay poor. Low wages will stay
low. High wages will fall. The
pessimistic conclusions of Winters' book are not only about Indonesia. Indonesia provides local data to prove a
global thesis.
Winters' theory is that capital mobility causes
nation-states to offer low wages, and other incentives such as low taxes and
lax environmental standards, in order to attract investors. His theory is about the entire global
economy. The nations of the world (and
within the nations the regions) are in a race to the bottom.[1] The jurisdictions whose laws favor capital
over labor tend to win the race to attract investors, but in the process of
winning the race to attract investors they also participate in a race to lower
standards. Competitors on the verge of
losing the race to attract investors shift their policies so that they favor
capital over labor still more, and still more, and still more.
Indonesia is a test case, from which Winters
draws confirmation of his theory.
Winters' data show not only that the Indonesian government bent its
policies to favor capital, but that it bent its policies the most to favor the
most mobile capital, and bent them the least to favor the least mobile
capital. Thus he is able to construct
a proof of the form John Stuart Mill in his Logic
called “induction by concomitant variation.”[2] The mobility of capital must be the cause
explaining why governments grant favors to investors, because the more mobile
the capital is, the more favors the investors who own it get. The less mobile capital is, the fewer favors
its owners get.
Important parts of Winters' argument are
summarized in the following passage from Richard Robbins' own excellent recent
book, Global Problems and the Culture of
Capitalism (1999):
The case of Indonesia offers a good example of what countries need to do to attract capital (Winters 1996). Indonesia fought for and gained independence from the Dutch in 1949. After a period of intense regional competition, President Sukarno, the victor in the competition, instituted a policy to free the country from foreign influence, carefully trying to balance power between the army and a strong Communist Party. Among his actions, he began nationalizing foreign firms. With their property at risk, and no longer guaranteed by the state, companies and investors began to pull their money out of the country. Consequently, the economy collapsed. Then in 1965 the military, under General Suharto, put down an alleged coup by the PKI, the Indonesian communist party. The subsequent blood bath led to the slaughter of hundreds of thousands of Indonesians believed to be sympathetic to or members of the Communist Party and removal of Sukarno from power.
With little money, the new ruler, President
Suharto, faced the problem of rebuilding an economy in ruins. To solve the problem Suharto turned to
economics professors at the University of [Indonesia at] Jakarta and assigned
them the task of designing a policy to attract foreign investors. The first thing they did was to send signals
through the press that they were changing economic policies and appointing
people to government offices known to be friendly to foreign investors. Next, they applied for loans from
multilateral institutions such as the World Bank and the IMF, hoping their
approval would build the confidence of foreign investors in their country. Then, to assure capital controllers that
their country was politically stable, the government suppressed all political
dissent and limited the power of workers to mobilize unions. The result was that foreign capital began to
flow into the country, and in the late 1960s and early 1970s the Indonesian
economy began to thrive.
But the story did not end there; what happened
next illustrates how the power of capital controllers to create conditions
favorable for investment is not absolute.
Indonesia has large oil reserves, and when in the early 1970s oil
revenue increased, Indonesia's need for foreign investment decreased. Since it had another source of money, the
country became less friendly to foreign investors: taxes increased, preference
was shown to domestic industries, and bureaucratic procedures became more
cumbersome for foreigners wanting to do business in Indonesia. As a result, foreign investments decreased
dramatically. As long as oil revenues
were stable, Indonesia had no problem.
But in the early 1980s, oil prices plunged, and once again the
Indonesian economy was close to ruin.
Once again, in response to domestic political pressure from those who
were suffering from economic decline, the government, still under the control
of President Suharto, found itself instituting the measures outlined above to
attract capital investors once again.
Foreign investment did return to Indonesia,
particularly in the growth of assembly plants; thus until late 1997, the
economy was doing well. However the
collapse of the value of Asian currencies in late 1997 left the Indonesian
economy once again in ruin, its currency plummeting in value, unemployment
spreading, and social unrest increasing.
The government responded with greater social and political repression
but ultimately Suharto resigned (110-11).
Although the case Winters uses to test his theory is
Indonesia, he also comments on events in a number of other countries. He finds that humanity is now experiencing
a Locational Revolution, whose eventual consequences will be as profound as
those of the Industrial Revolution. The
comfortable middle masses of the First World, who enjoyed the benefits of high
wages and generous government programs in the middle decades of the twentieth
century, have only begun to feel the effects of the Locational Revolution that
happened as the century closed.[3] Structural forces that are now at work are
bringing most people lower wages and fewer government benefits. Governments are
inexorably led to adopt measures favoring capital against labor.
In the light of Winters' extremely gloomy prognosis (which
nobody will deny has a great deal of truth in it, even if it is not the whole
truth) the diagnosis of the problem, and the prescription of the cure, if any
cure is possible, become extremely urgent.
The tragedy of the situation is heightened by the somber reflection that
there is no natural reason for poverty.[4] The natural sciences stand ready to provide
appropriate technologies, which could be used to meet the basic needs of all
human beings, within the limits of presently existing resources, without damage
to the environment.
The tragedy of the situation is mitigated, however, by the
reflection that there has always been poverty.
In some periods of history it has been worse than it is now, and perhaps
it once was even worse than it will have become when the full impact of the
Locational Revolution is felt.
Indonesia is not as poor as most of Africa. How bad poverty seems to be (from the points of view of onlookers
who are not themselves poor) depends on the criterion for badness--whether the
situation here and now is compared with what might be, or with some other time,
or with some other place.
We believe that the appropriate criterion is what might be,
insofar as it would be if we (i.e.,
responsible human actors) took steps to make it be. We are the cause of the suffering that exists because of our
actions, and because of our inaction.
The first step, and in many ways the hardest step, is to undertake a never-ending process of thinking about the causes of poverty. Actions without concepts are blind. The thesis of this book is that the causes of poverty are to be found primarily in the constitutive rules of capitalism. Otherwise put, its causes lie in the failure of human beings to construct the constitutive rules of a poverty-free social order.
What drives us to despair, in our more pessimistic moments,
is not the inherent hopelessness of the situation of the majority of humanity,
nor is it the spin-offs of the majority's poverty, which make the biosphere
insecure for all of humanity, including the wealthy. The situation is not inherently hopeless. What drives us to despair is that humanity
sometimes seems to be incapable of thinking solutions to the problem. What drives us to despair are the power
paradigms and exchange paradigms that make the cultural resources that could
solve the problem entirely invisible to social scientists. What drives us to despair are the clueless
activists who protest the Locational Revolution with no concept whatever of its
cause or its cure. What drives us to
despair are the mainstream economists who implement short-term fixes that
instead of solving the problem make it worse--as an addict's fix makes the
addiction worse. What drives us to
despair are the social democratic true believers (known in the United States as
"liberals") who still expect the angels on horseback of human rights,
compassionate welfare states, and collective bargaining to be the saviors of
every proletariat in distress.
In defense of the somewhat abrasive tone of the preceding
paragraph, we would plead that although we usually try to make it a practice to
refrain from insulting people, nonetheless, with respect to the causes and
cures of the Locational Revolution, it is so important to foment debate on
vital issues that, all things considered, we have come to believe that it is appropriate
to feign a certain degree of hostility and intolerance. Much as we would prefer a dispassionate and
impersonal analysis, we have regretfully come to believe that to get attention
amidst the cacophony of voices sounding as brass in the maelstrom of today's
accelerated world, we should try to make a deliberate effort to be rude. We hope that someone will feel sufficiently
offended to defend the ideas we are attacking, and then, the debate once
joined, the corrosive acids of free speech will, in the fullness of time,
separate gold from dross, truth from error.
There is, of course, no a priori reason why the opinions of those whom
we have pejoratively characterized as blind, clueless, shortsighted, and outdated
are wrong, while ours are right. In the
following pages although we shall heap scorn upon mainstream political
scientists, many anti-globalization activists, most mainstream economists, and
many progressive political leaders, it is not because we are certain that our
views are right and theirs wrong.
1. Poverty: A Class Struggle Lost, or an
Unsolved Social Problem?
We could
criticize mainstream political science for the treatment its practitioners have
meted out to General Ibnu Sutowo, who retired in disgrace from his post as
chief of Indonesia's government-owned oil monopoly Pertamina, after it ran up
short-term debt that it could not possibly pay. Sutowo treated Pertamina as a source of quick money for worthy
projects. In his own words, "I
helped all the military people with their projects, and you can't find a single
road or school or hospital that wasn't at least partly funded by the money I
borrowed through Pertamina (Interview with General Ibnu Sutowo, quoted in
Winters, op.cit.: 84). Political
scientists have uniformly looked at Sutowo through the lens of patron-client
power politics. He has been categorized
as a power-holder building his power-base by dispensing patronage. Were there, somewhere in rural Indonesia,
military officers and their wives civic-minded enough to want a hospital built
as a contribution to the common good, then they too would be as invisible when
viewed through the lens of a power paradigm as the man of good intentions
Sutowo thought he was. Or we could
criticize exchange models a la Gary Becker, hardly better than, and hardly
different from, power models.[5] But we will not. Instead, we will focus a critique of power paradigms on the idea
of "class struggle." Since
the concept of history as class struggle is a specific form of the larger
concept of history as power struggle, our comments on class struggle may have
some bearing on the larger concept of the course of history being determined by
power, in one or more of the many senses of that ubiquitous word.
Neither Winters nor Robbins employs the phrase
"class struggle," perhaps because using it would divert attention
from broader issues to narrower issues raised by images of narrow-minded
radicals bent on violence. "Class
struggle" is, nevertheless, an unavoidable topic in the discussions they
pursue, since the struggle between capital seeking to raise profits and labor
trying to raise wages is at the heart of the dynamic which propels capital
around the globe in quest of ever more favorable legal frameworks in which to
do business.
"Class struggle" is, moreover, a major
species in the genus "power politics," which is a central object of
study in the academic discipline of political science, Marxist or not. Thus when Anthony Giddens (1981) wrote a
book to refute Marxism, what he argued was that not all power politics is
between classes narrowly conceived as economic interest groups--some struggle
is about military security, or control of territory, or religion, or prestige;
and in some struggles the state itself, not the state as the instrument and
representative of a class apart from the state's own apparatus, is the
principal protagonist. Giddens, and
non-Marxist social scientists generally, tend to reject a narrow concept of
"class struggle" only in favor of what could fairly be called,
"class struggle broadly and loosely defined."[6] For those of us who regard the ethical
construction of social institutions as a vital force in history, therefore, it
is convenient, as well as necessary, to demur to the claim that class struggle
is the motor of history--not just to refute the few who still maintain a narrow
Marxist doctrine of class struggle, but also to introduce into the debate
considerations which, while they serve to refute narrow Marxism (which is not
to be confused with intelligent Marxism), also refute mainstream social
science.
It is almost an unconscious reflex, rather than
a deliberate mental choice, for a modern mind to construe the facts adduced by
Winters and Robbins in agonistic categories:
Capital won. Labor lost. Can labor fight back? Or is the victory of capital decisive and
permanent?
A moment's reflection, a pause designed to
convert reflex to choice, will show that the proposition that the defeat of the
poor in the class struggle explains poverty is not obviously true. The bourgeoisie is not struggling to
achieve the poverty of the masses.
Poverty's continuing persistence is not an intentional objective pursued
by rich people. It is certainly true
that Shell Oil Company has committed and continues to commit numerous bad acts,
not all of which are strictly required by the structural features of
capitalism. The same is true of
individual executives employed by Shell.[7] Nevertheless, it is difficult to imagine
that the investors and executives of Shell Oil Company, which reaps large profits
from exploiting Nigeria's oil reserves, are rejoicing because they have won a
class struggle against Nigeria's poor.
Do they keep golden telescopes in the windows of the upper stories of
glass and steel office towers in Lagos, so that they can enjoy their triumph
over the poor by peering from a distance into the squalor of the slums? When they sight a baby dying of diarrhea do
they toast each other with martinis and set up a shout, "Hip Hip Hooray! We won the class struggle!" Do they measure pain and suffering, and then
count high scores as the trophies and proofs of their victory? Not bloody likely.
The argument that the bourgeoisie will
inevitably fight to keep in place a system that gives them privileges and keeps
the poor poor--from which it is deduced that the cause of poverty is a class
struggle that the poor have so far not won--is further weakened by the fact
that mass poverty takes away from the rich the one thing that neo-Hobbesian
mainstream political science postulates that all political actors want:
power. Given the proclivity of the
disinherited of the earth to enforce the sharing of the wealth by private and
public violence, by knife-point in dark alleys, and by riots in public streets,
the existence of millions of impoverished fellow citizens obliges the rich to
pay for protection. The more
desperately poor people there are, the more the rich must pay for security, and
the less security they get for their money.[8]
Adam Smith thought it was a law of history that
whenever people hire other people to do their fighting for them, they end up
dominated by their defenders. Smith
could have produced no better example to illustrate his law than
Indonesia. Most of Indonesia's private
wealth is held by a small ethnic Chinese minority. It is normal in Indonesia for TNI, the Indonesian armed forces
(formerly known as ABRI), to be all-powerful or nearly so, while the wealthy
Chinese minority, lacking political power of its own, pays handsomely for
favors from those who do have political power.
The vulnerability of the rich is demonstrated when the forces of order
either lose control, or choose not to exercise control, or divide, as
periodically happens. Mobs kill Chinese
men, rape Chinese women, burn the buildings of Chinese businesses, and burn
their cars. Although the July 2001
transfer of presidential power from Wahid to Megawati proved to be fairly
peaceful, thousands of Chinese left the country anyway as a precaution, fearing
the repetition of the violence of the dispossessed typical of moments of
political tension in Indonesia.
That the existence of mass poverty brings fear
and expense into the lives of the privileged, and power into the hands of the
military, is illustrated at the level of the United States of America, the
world's global superpower, in the 1998 report entitled "Vision for
2020," issued by the United States Space Command, which states that
because of the corporate "globalization of the world economy," there
will be a widening gap between the "haves and have nots." The U.S.
Space Command intends to "control and dominate" space in order to
protect U.S. "interests and investments" (U.S. Space Command, “Vision
for 2020,” quoted in Ong 2001: 6).
The conclusion of this line of thought is that
the bourgeoisie can enjoy political power, peace, tranquility, human rights,
and democratic governance only when social tensions are reduced.
Thus the
concept of "class struggle" is a misleading concept, and the broader
concepts of the power paradigms of mainstream political science are hardly less
misleading. Worse: the power paradigms
of mainstream political science tend to make invisible and therefore
unimaginable the intelligent options that sane rich people, as well as
enlightened poor people, would choose if they could see them and imagine them,
and if they could see and imagine the means to make them real.
It is true that the revenue of a firm can be
divided only once--what goes to pay wages is not available to disburse as
profit, and what goes to profits is not available to disburse as wages. It is true that many business people have
grown rich by paying low wages, while many businesses have failed because they
could not meet payroll. It is true that
generals and colonels have carried out military coups around the world at the
behest of property-owners, for the immediate purpose of crushing labor unions
and socialist political parties, and for the ultimate purpose of restoring
conditions under which profits could be accumulated. But it is not true that under capitalism the rich have
plenipotentiary power and can do as they please. And it is not true that it is in the interest of the rich for the
existing capitalist global economy to continue as it is. Any sane rich person offered a choice
between living in a world with mass poverty, and living in a world without mass
poverty, would choose the latter.
Giving up some privileges for the sake of cooperating in the ethical
construction of a better world is an intelligent choice.
2. Post-Seattle Global Activism
The world changed at Seattle. Prior to December of 1999, when the protests in Seattle's streets
led to the cancellation of top level meetings of the World Trade Organization,
there was no visible worldwide grassroots anti-globalization movement. Since Seattle, wherever capitalism's top
brass convene to press further the advantages that the Locational Revolution
has given capital over labor and big business over small business, it is
predictable that they will be confronted by thousands of activists, ready and
willing to play bit parts on the stage of history, whether the venue be Prague,
Genoa, or Göteborg; Quebec, Washington, or Mexico City. United by the internet, by a common enemy,
and by a common cause, the world's social activists have become the visible
opposition to the world's economic system.
The actions of the violent fringe of protest against the
world's economic system confirm the sad truth that even when grave issues are
at stake, even when the future of life hangs in the balance, young males are
prone to imagine themselves as knights in shining armor when they are really
only crackpots. Many imagine themselves
to be the contemporary voices of the philosophies of Peter Kropotkin or Rosa
Luxemburg, while what they do contradicts their ostensible purposes. They smash the windowpanes of small
businesses for the ostensible purpose of protecting small business against big
business. They impose on the local
governments of host cities millions of added police and security expense, for
the ostensible purpose of empowering local institutions to resist being
engulfed by the tidal waves of globalization.
Through the media they telecast to all the world a picture of the
anti-globalization movement as irresponsible and irrational, for the purpose of
convincing the public that the cause of economic justice is the cause of
wisdom.
Meanwhile, the peaceful majority accumulates
grievances against the police. The
great majority of the demonstrators desire only to communicate their message,
and in many cases to employ nonviolent self-suffering, as Gandhi did, to
demonstrate the sincerity of their convictions. Sometimes the police are unable to distinguish the legitimate
activists from those drawn to the dangerously false romantic image of revolutionary
violence. Sometimes police officers
lose it. Sometimes they have orders to
intimidate the opposition. Sooner or
later, citizens who have assembled peacefully to petition for the redress of
their grievances are bludgeoned on the head with a police truncheon. At that point whatever the issues had been,
the issues immediately become human rights and freedom of speech--whether the
demonstrators have the right to express their ideas. But what are their ideas?
Several methodologies might be employed to
identify the ideas animating today's worldwide anti-systemic activism. Since we ourselves have participated in some
of the protests, we might use introspection.
It would be more scientific to interview a random sample of protest
organizers--the moderators of the websites, the nonviolence trainers, the
inventors of creative tactics, the facilitators of affinity groups, the
captains of medical and legal support teams, the coordinators of logistics--in
order to identify the principles that prescribe for the protagonists the point
and purpose of protest. Instead, for
better or worse, our method will be to comment on the ideas found in one
well-chosen book, Globalization from
Below (2000), by Jeremy Brecher, Tim Costello, and Brendan Smith.
The back cover of Globalization from Below quotes Newsweek:
"There are now two visions of globalization on offer, one led by commerce,
one led by social activism." Globalization from Below is a strategy
proposal for the second vision, the vision of humanity's future offered by the
social activists. The authors write,
"The argument of this book is that people can indeed exercise power over
globalization, but only by means of a solidarity that crosses the boundaries of
nations, identities, and narrow interests.
A corporate-driven, top-down globalization can only by effectively
countered by globalization from below" (2000: x).
The argument of the book is incomplete and
flawed. If it is true that
"people" can exercise "power" over
"globalization," then the first things "people" need to
know, in order to guide their actions intelligently, are the causes of
globalization. And even before
explaining the phenomena over which it is proposed that "people"
should exercise "power," one ought to justify naming them
"globalization" when a greater practical and intellectual heritage
could be identified by naming the problem as "capitalism."
Globalization
from Below does not
make, or cite as its theoretical premise, any argument about the dynamics of
capitalism, either in general, or in its current phase. Instead of an account of the causes of
"globalization," it reports on the genesis of a global coalition of
social activists. Globalization from Below does, to be sure, successfully name some
of the key problems that appear on the surface of our suffering world, such as:
"global competition to lower labor, environmental, and social costs (the
global race to the bottom); the power of highly mobile capital to pour into a
country, create an economic bubble, and then devastate it by withdrawing
[Indonesia in 1997 was a prime example]; the bargaining power of corporations
vis-a-vis governments; the power concentrated in the nexus that links the US
Treasury, corporations, and global institutions such as the WTO, IMF, and World
Bank" (Ibid.: 35-36).
Instead of an account of the constitutive rules
that produce the key problems it names, however, and instead of a method for
transforming the cultural structures that cement the problems in place, Globalization from Below reports on the
genesis of a worldwide multi-issue activist coalition. The women's movement has become aware that
most women are poor, that the majority of women live in Asia, and that the
workers exploited in third world sweatshops are mainly women. It has dawned on environmentalists that the
environment is being destroyed for the sake of profit. People of conscience, in churches and out,
have noticed that the Locational Revolution undermines social justice. Small farmers around the world, who are
losing their lands and their livelihoods, have realized that global free trade
gives the upper hand to big farmers.
Labor has learned from experience that the promised benefits of free
trade do not accrue to labor. Human
rights activists have documented many cases of abusive practices that are part
and parcel of economic development strategies designed to attract
investment. The story of the building
of a coalition is one thing; an analysis of the causes of the problems is
another.
Lacking a diagnosis, Globalization from Below prescribes a cure. The cure is not a treatment the movement
will administer; it is the movement itself.
This surprising conclusion, that the very social movement whose genesis Globalization from Below reports is
itself the solution to the world's principal problems, is deduced from Gene
Sharp's theory of power, which the authors of Globalization from Below endorse.
According to Sharp (1973), people have power because other people
consent to their having power.
Consequently, power disappears when there is withdrawal of consent. If one adds as a surreptitious petitio principii a causal diagnosis
that is operative even though it is unstated, namely that the cause of the
world's problems named as "globalization from above" is that the
multi-national corporations, the IMF, and the World Bank have too much power,
and therefore the solution of the world's problems is to take power away from
them; one can then move on to the further results: 1) that withdrawal of
consent causes the world's problems to disappear, and 2) the movement in itself
simply is the solution to those problems because it is withdrawal of consent.[9]
Globalization
from Below quotes
Gene Sharp: “[T]he exercise of power depends on the consent of the ruled who,
by withdrawing their consent, can control and even destroy the power of their
opponent" (1973: 4). What the
movement is doing is "utilizing the hidden power of social movements--the
dependence of all power centers on the consent of the people--to force
institutions to comply with global norms.”
“By such means do the people of the world withdraw their consent from
globalization from above and impose their own norms on the global economy"
(2000: 121, 120).
The title of the concluding chapter, Chapter 9,
summarizes the cure as "Fix It or Nix It." The paradigm for "fix it or nix it" is the strike. A caricature carrying the same logic farther
will make clear its limitations: If the world's agriculture and food
distribution systems are working so badly that half of humanity is going
hungry, then "fix it or nix it" implies that everybody should
threaten to withdraw their consent to the established institutions. Everybody should demand that somebody
"fix it," i.e., make it work for everyone, or else they should
"nix it," i.e., shut it down.
As the capitalists wield power not by producing goods, but by refusing
permission to use their property until their terms are met, so globalization
from below will change the world by organized inaction, "for example, by
blocking roads, occupying buildings, or demonstrating in violation of injunctions
and police orders. . ." (2000: 113).
Roland Barthes has observed that a strike is always a scandal because it
always injures the innocents, the general public (1972: 39).[10] Its asymptote is paralysis, which is
intolerable. We would add that the
reliance of labor and social activism on slowdown and stoppage is not as much
the key to structural change as it is evidence of the need for structural
change. It is a structural trap. The cultural structure is such that what
appears to be a general means for changing it, and which is indeed at some
times and places appropriate and useful, slowdown and stoppage, is a
boomerang. The power to shut down is
necessarily the power to make oneself unpopular.
Globalization
from Below is a
symptom and a representative sample of ideas which, if they are not the only
ones that animate today's global social activism, are widely believed and acted
on. Its authors have made other major
contributions to the movement literature, including Global Village or Global Pillage (1994) and Strike! (1983).[11] Its quotes and notes parade a Who's Who of
voices activists listen to, such as Vandana Shiva and Walden Bello. Other writers whose opinions carry weight in
the movement have endorsed Globalization
from Below, including Medea Benjamin, Susan George, Saskia Sassen, and
Frances Fox Piven. Much of the book
summarizes pronouncements of NGOs and coalitions of NGOs which, like Globalization from Below itself, deplore
injustice more than they analyze its causes, while making threats that they
will "nix it" if they are unable to persuade other people, whom they
think have power, to "fix it."
The ideas in Globalization from
Below are not a sneeze; they are an epidemic. Worse, they are symptoms of deeply entrenched patterns of
thought, which make it difficult to imagine and to implement constructive
solutions to social problems.
3. The Dismal Science
As this is written, the world's mainstream press is praising
Megawati, Indonesia's president, for appointing a cabinet dominated by non-political
economists, known in Indonesia as "technocrats," or "the
Berkeley mafia." The saddest news
is that the mainstream media are probably right. Given the existing practical limitations on what is thinkable and
on what is doable, she probably made a correct decision.
Everybody knows what the technocrats will do. They will restore investor confidence in Indonesia. They will make Indonesian policy conform to the demands of the International Monetary Fund. They will declare that it is their professional opinion, supported by the weight of hundreds of well-funded and highly quantitative studies, that people who propose to redistribute wealth, in any form, are no friends of the poor. As IMF orthodoxy asserts, the free market is the true friend of the poor, as it is the friend of all. The IMF will release a five-billion-dollar loan, which Indonesia desperately needs, which it has frozen until Indonesia falls into line with the teachings of orthodox mainstream economics.
The economists in Indonesia's cabinet will
administer a quick fix. They will
cement ever more solidly into place the structural traps that keep most of
humanity poor, and almost all Indonesians poor, in a world where natural
science stands ready to provide technologies that can meet everybody's needs
with existing resources. The nation
will become even more addicted to profit, while labor will become even more
powerless. The economists will do these
things blindly, without seeing what they are doing. They will do them not because they are uneducated, but because
they are highly educated. They see the
facts through the lenses of the concepts they learned at Berkeley.
There is an extensive literature carefully dissecting the conceptual errors of mainstream economics.[12] We will not say anything new. We will not add another voice to the already redundant chorus of proofs that the discourses and practices of mainstream economics are historically limited and valid only when confined to certain institutional settings. Our aim is not to discredit economics, but to contribute to building something better which will embrace its findings and methods in a wider synthesis. If not economics, what?
We will be brief.
We will not bore people who are already familiar with the anti-economics
literature, but instead we will make a slightly novel point not previously
mooted in it. For people not familiar
with the anti-economics literature, who, perhaps, if left to themselves, would
see no alternative to the common sense of every day life under capitalism, and,
therefore, no alternative to economics, we will try to show that, yes,
conceiving of society as an ethical construction is a real possibility. Our slightly novel point will serve our
immediate purpose, which is to show that as humanity tries to cope with the
so-called Locational Revolution, mainstream economics is a source of
despair. It will also serve our larger
purpose, which is to contribute to building social democracy. To make our slightly novel point, we change
our metaphor from "seeing" to "speaking." After saying that economics is
"blind" and that mainstream economists cannot "see," we
switch to asking, "What is the language of economics?" "What can economists say?" "What can economists not say?"
We begin our discussion with quotes from two writers who laid foundation stones for the building of modern society: Rene Descartes and Jean-Jacques Rousseau.
From Descartes' Discourse on Method, originally published in 1637: "I took
pleasure more than anything else in Mathematics, because of the certainty and
clarity of its reasoning, but I did not yet discern its true use, and thinking
that it served only the mechanical arts, I was astonished that on foundations
so firm and so solid nothing higher had been built" (1986: 16). Descartes, the inventor of analytic
geometry, was not a single isolated individual, who happened by chance to hit
on great ideas, which happened by chance to become influential. He was a child of nascent capitalism in
Europe. He was a part of the invisible
college, the Republic of Letters, including both rationalists and empiricists,
who, together, as Richard Rorty (1991) has observed, labored to create a modern
secular worldview as an alternative to the traditional religious worldviews
which had, thitherto, been the only worldviews (155-57, 172).[13]
The economists, if anyone, have fulfilled Descartes' dream of building something higher than mechanics on the foundations of mathematics. Economics is nothing if not Cartesian. From beginning to end it consists of graphs drawn on Cartesian planes. It is made of functions, defined as sets of Cartesian ordered pairs. Demand curves and supply curves move up or down, left or right, slope backward or slope forward, in Cartesian space.
Less obviously, but with profound and powerful
ramifications, there is a parallel between a basic distinction of economics,
the distinction between exchange-value and use-value, and the distinction drawn
by the early modern philosophers between primary and secondary qualities. Descartes complained that the ancient and
medieval philosophers had speculated endlessly about the virtues and the
passions, without coming to any solid conclusions. He proposed that science be built anew, on solid foundations,
starting with the clear and distinct ideas of mathematics. It was but a hop, skip, and a jump from this
proposal to the conclusion that what is
expressed in mathematics--because it can be known--is what is real. The colors, sights, and sounds of life were
deemed to be mere secondary qualities.
When Descartes analyzed a piece of wax, and concluded that its
substantial reality was not in what could be felt, but in what could be
measured, he started the tradition in which economists stand when they focus
their attention on money. Money, the
medium of exchange, is pure quantity.
Anybody can use it to buy anything.
The only thing that matters about it is how much of it there is. Thus exchange-value abstracts from all
qualities, ignoring them all in favor of one summary measure: the price. It is part and parcel of a worldview that
identifies what is clear and distinct and measurable with what is real and
operative and worthy of consideration.
From Jean-Jacques Rousseau's La Nouvelle Heloise, originally
published circa 1755: "Love is mere illusion. It invents, so to speak, another universe; it surrounds itself
with objects that do not exist or to which only love itself has given
life. Since it expresses all its
feelings by means of images it speaks only in figures (“comme il rend tous ses sentiments en images, son langage est toujours
figure”)" (1961: Volume II, 15).
Mere illusion?
No. Of "love" it could
be said, as Gandhi said of "God," that it is one of the richest words
in language, and that a lifetime is not long enough to plumb the depths of its
meaning. Nonetheless, Rousseau's
brilliant remark illuminates not just love but all the virtues. Love is a virtue (the greatest of the seven
cardinal virtues), and like the other virtues it surrounds itself with invented
objects, it gives life, it speaks in images.
Its language is not found in the lexicon of mechanics.
Love talk
is soul talk.
"Soul," another ancient idea, whose
history has been interwoven with the history of "love" at least since
Plato defined lovers as soul-mates, is classically defined as an inner source
and principle of motion. Humans, like
dogs but unlike stones, have souls.
Economics is inaccurate when it employs mechanical principles of cause
and effect--independent variables as causes, dependent variables as
effects--because humans are more like dogs than like stones. If one kicks a stone, it will move in a
direction and with a velocity given by the parallelogram law, the first
corollary to Newton's three laws of motion.
If one knows the independent variables, the vector force of the kick and
the mass of the stone, one can calculate the dependent variable, where the
stone will go and how fast. But if one
kicks a dog, there is no telling what will happen. A dog is an "animal"--a word which originally meant
something with an anima (Latin for
"soul"), i.e., something animated, something that moves of its own
accord. Humans, being more like dogs
than like stones, have especially well-developed imaginations, and especially
well-developed voices. We have what
Plato called a logistiche psuche, a
rational (word-guided) soul. Human
action is characterized by deliberation, and by acting on the basis of what one
believes to be true.[14] It is governed, for those who are properly
socialized, by moral habits, also known as character, formed by acting and
talking in interaction with other people, crystallized as stable virtues and as
adherence to social norms.
Descartes complained that the philosophies of
virtue and social norms (moeurs),
which had been elaborated in philosophical discussions by the Greeks and the
Romans, were indefinite and variable, built, as he put it, on sand and mud,
sable and bone. He argued that the
right way to build society was to build it on solid foundations, as mechanics had
been built, with the tools provided by the clear and distinct ideas of
mathematics. The opposite is true. Because humans have souls, socialization and
social reform are accomplished precisely by the method of Socrates, by
dialogue.
Cartesians to the core, mainstream economists advance a number of excuses for ignoring the details of how humans actually make decisions. Some say that economics is concerned only with human behavior in the aggregate, and that in the aggregate individual psychology does not matter. Some say that as long as an economic model yields correct predictions, it does not matter whether its assumptions are realistic. Some say that whatever their initial errors may be, over time their science is self-correcting, since an infinite series of empirical tests of well-defined hypotheses will confirm or disconfirm their economic theories, and thus systematically improve them, regardless of which first principles they start out with. Some say that empirical evidence confirms that people are in fact materialistic, calculating, payoff-maximizing creatures, just as economic theory postulates. Some say that economic theory is true a priori by definition, and need not rely on facts at all, since it is necessarily true that debits equal credits as A equals A, income equals consumption plus investment, total sales equal total purchases, maximum welfare equals maximum satisfaction of revealed preferences, net investment cannot exceed net savings. Some say that pure economics is a theory of rational choice, not an empirical study of the actual choices that flesh and blood human beings make. Some say that economics, as it was elaborated by Ludwig von Mises and the Austrian school, already possesses an adequate philosophy of human action, or that economics has nothing to learn from ethics because the principles of ethics and the principles of markets are the same. Some say that economics has more to teach psychology than to learn from it, as is evident when psychologists use exchange models and reinforcement schedules in their research. Some say that they find words like "soul" unintelligible, and that until someone can clearly explain to them what such words mean, they will assume that they mean nothing. Some say that although it may be true that somebody should study the details of how humans actually make decisions, such studies fall in someone else's field, not in economics.
Whatever may be the merit, or lack of merit, of
such defenses of mainstream economics, what is at stake in the debates is more
than its scientific credentials. What
is at stake is the relationship of economic science to social change. The central question is whether economists
are going to participate, along with people of good will of every calling, in
the reconstruction of social reality.
If our neo-Aristotelian philosophy of human
action is valid, then people act (at least to a large extent) on the basis of
what they believe to be true. If, then,
economists, or their successors who practice a more comprehensive social science,
are obliged to study the real causes of human action, they will be obliged to
study beliefs. They will be obliged to
acknowledge that belief-systems are embedded in the contexts of the cultural
systems studied by anthropologists, sociologists, and historians. They will come to recognize that the
language of desire, the operative language of the dreams and passions that move
people to action, is more like the langue
figure of Rousseau than it is like the idees
nettes et claires of Descartes.
Mainstream economics, wedded as it is to mechanical
causality, is worse than inaccurate. It
is demoralizing. Its discourse excludes
the edifying dialogues and inspiring images that are the lifeblood of a culture
of solidarity, the air it breathes, the stuff of its dreams, and the causes of
its effects.
4. Human Rights, Compassionate Welfare States, Collective Bargaining: Will they survive the Locational Revolution?
No discussion of the sources of despair in the age of
globalization would be complete without mentioning the social democratic true
believers (known in the United States as "liberals") who still expect
the angels on horseback of human rights, compassionate welfare states, and
collective bargaining to be the saviors of every proletariat in distress.
Instead of naming names and quoting texts, we will tell a story. It is a story whose characters are widely believed ideas, so superficial and so tempting, which give the democratic left today its vision. The ideas in this story are, in our opinion, often believed but rarely examined. They lie in a half-conscious penumbra. Our story aims to make them more conscious, and therefore more open to criticism and improvement.
The story goes like this: "Once upon a time,
before globalization, the citizens of the developed industrial democracies
decided, and enshrined as principles of their constitutions and laws, that
certain things were too important to be left to the mercy of the forces of the
marketplace. The developed industrial
democracies were, in those days, regarded as examples of the future which the
rest of the world would eventually enjoy, after the third world was developed,
and after the second world was liberated, and so their ideals were, in
important ways, all the world's ideals.
"The
citizens believed in the ideal articulated by the 18th-century
German philosopher Immanuel Kant, who taught that everything has either a price
or a dignity. What has a price can be
bought and sold on the market. The
human person has dignity (Wurde), which is beyond all price. For this reason, human rights, which are
nothing other than respect for the dignity of the human person, are absolute,
not to be bought or sold, and always to be honored, regardless of what the
market may say. The citizens agreed
with this philosophy, and voted it into law.
"Similarly,
the citizens of the democracies believed that there ought to be a social safety
net, entitlements, which guaranteed that everyone, regardless of means, would
have enough to eat, basic medical care, schooling, a pension in old age, and a decent
burial. Because they believed that
wealth and income determined by the market should not govern access to
necessities, they voted for the laws that established the welfare state.
"The
citizens also adopted the philosophy that human labor is not a commodity. The price of labor should not, in principle,
be determined by the laws of supply and demand that govern the price of eggs
and the price of cheese, because humans are, unlike commodities, the very
purpose and end of society. The market
is an instrument, a means; the human is an end. Therefore minimum wages, worker rights, and collective bargaining
were made the law of the land, and the principle that wages were not to be
determined by the market was officially declared--for example in the Clayton
Act and Wagner Act in the USA, in the Constitutions of Italy and the Federal
Republic of Germany, and in the concepts stated by John Ruskin in Unto this Last, which were endorsed by the Labour Party of Great Britain.[15]
"Mindful
that efficiency and democracy are not best served when collective ownership is
extended to all of the means of production, the democracies opted for mixed
economies, where a great variety of types of firms, some cooperative, some
municipal, some non-profit, some small, some large, some public, some private,
some employee-owned, some financed by debt, some supported by grants and
subsidies, some supported by donations and bequests, some financed by equity,
some financed by rents and royalties, and some financed mainly by retained earnings,
performed a great variety of functions, all within the framework of the rule of
law, which was the rule of democracy.
"Thus
democracy hedged around the market with non-market principles: human rights,
the welfare state, collective bargaining, and the regulation of business for
the common good. Social democracy had
its ups and downs, but, on the whole, it made satisfactory progress in the
advanced nations in the decades immediately after World War II, and its ideals
were also those of the developing nations, who hoped some day to enjoy social
democracy too.
"Then
something went wrong.
"Free
market capitalism, which had been considered an obsolete 19th-century
ideology, made a comeback. Public
sectors were privatized. Real wages
fell. Holes appeared in the social
safety net. Homelessness exploded. Gangs of criminal youths, rejected by
economies characterized by the permanent unemployment of an underclass, roamed
the streets of first world cities. And
then, suddenly, in June and July of 2001, in Göteborg, Sweden, and Genoa,
Italy, respectively, it was revealed
that the citizens of first world countries could no longer count on their
governments respecting the fundamental human rights of peaceful assembly and free
speech. The third world had invaded the
first world.
"Why
did it happen? There were many causes,
but fundamentally there were two.
First, the corporations bought the governments. Money learned how to buy the technologies
that shape public opinion, learning how to sell candidates, laws, and economic
theories as it had previously learned how to sell soap and automobiles. Second, business made an end run around
democracy. If capital could not get
what it wanted from the voters, it would leave. By leaving and threatening to leave, capital taught the voters of
the first world what the dictators of the third world had long known: you do
not write laws to govern capital, you write laws to attract capital.
"The
remedy follows from the diagnosis.
Grassroots citizens movements must take political power back from the
corporations. Global democratic
solidarity must counter global capitalism.
The world needs worldwide standards for corporate behavior. It needs global labor solidarity. It needs international enforcement of human
rights. Global democracy will leave
capital with no place to go, and no alternative but to play the game according
to fair rules. The measures taken in
the best of the industrial democracies to hedge around the market with non-market
ethical principles, must now be repeated on a global scale."
"P.S.
The big story is illustrated with encouraging small anecdotes, like: jailed
Indonesian labor leader is saved from torture and death, because of pressure
brought by Japanese, U.S., and European unions; and like: Monsanto cancels its
plans to sell seeds that do not reproduce, thus moving toward a monopoly of the
genetic codes of life, because of pressure from a coalition of international
non-governmental organizations."
We hope that this little story serves to bring to greater awareness ideas that many well-intentioned people hold half-consciously. It seems unnecessary to comment that the remedy proposed is not likely to work, at least not without some extra missing ingredient absent from the analysis and the prescription. It seems unnecessary to insist on the obvious, that it is wishful thinking to expect an expanded version of yesterday's strategies to replicate on a global scale the degree of democratic control over market forces that was achieved in the best of the social democracies after World War II.
We believe that the ideas we have expressed in
our story are widely held, and that many people of good will are acting on
them. Rather than criticize these
people, we wish to focus on the missing ingredient that will make the ideals
for which they are striving realizable.
The missing ingredient that will make social democracy work is a love
ethic.[16] The several forms it takes are that which we
call "cultural resources."
We are of the school of thought that regards the
so-called Locational Revolution as a part of the history of capitalism. It is a continuation of tendencies
capitalism has manifested since it began. We
are also of the school of thought that says the same of the Industrial
Revolution. Immanuel Wallerstein (1991)
points out that it was not technical inventions that made the Industrial
Revolution. It was the readiness of the
market for the inventions. The steam
engine, for example, had been invented before, and in several places. Only when commerce had a great need for what
it could do, and not before, the steam engine transformed industry
(41-50). In general, the market drives
technology more than technology drives the market.
If the Locational Revolution is conceived by analogy with the Industrial Revolution, then it should be observed that both happened when capitalism needed them. As David Harvey (1989) has shown, what is called "globalization" (which Harvey subsumes under the larger category "flexible accumulation") came about primarily because of the unsustainability of the Keynesian welfare state. The social democracies were not working. They could no longer sustain their debt burdens, and they could not keep profits high enough to generate the growth needed to sustain full employment.
Contrary to the little story told above, it was not that the greedy corporations destroyed social democracies that were idyllic and would have remained idyllic if only the wrong people had not grabbed power. The system itself was in crisis. It was driven to lower wages, by going global and in other ways, by its inherent need to create profitable opportunities for capital accumulation. Globalization happened because capitalism--and the social democracies retained capitalism even while they ameliorated it and tried to transform it--at a certain stage of its history required it.
It follows that social democracy's strategy for coping with the Locational Revolution has to be a strategy for continuing its efforts to ameliorate and transform capitalism, under adverse conditions that result in part from the failure of the Keynesian welfare states that social democracy constructed. Globalization happened because social democracy did not work; and it is therefore misguided to think that the cure for globalization is either 1) to return to yesterday's national welfare states, or 2) to transpose yesterday's social democracy to a higher level by establishing the same model on a global scale.
It is crucial to remember also that the
Keynesian welfare states, even at their best, even if they had proven to be
sustainable (which they certainly did not) were able to deliver full employment
and high wages only through ever
increasing economic growth. They were
systems that could only stabilize themselves by resorting to the processes that
lead to insane consumerism and ecological disaster.
If a positive future for humanity means
transforming capitalism in ways that hitherto existing democratic socialist
movements have not been able to achieve, it must be asked why they failed even
before globalization, as well as why the reforms they did achieve are being
reversed by globalization. The theories
that hold that the market, not the steam engine, created the Industrial
Revolution, also imply views (sometimes called "circulationist") that
show that socialism was misled by Karl Marx's distinction between the sphere of
circulation and the sphere of production.
Marx believed, and led many others to believe, that nothing of great
consequence could be determined at the level of what he took to be the mere
surface of society, the market, the exchange of commodities, the sphere of
circulation. For change to be
meaningful, it had to occur at a level he thought was deeper: the level of
production. For Marx, the main motive
forces of history were to be found in the technology of production, and in the
ownership of the means of production.
Experience has shown what could have been
demonstrated in theory even without experience (and what Jürgen Habermas
actually did demonstrate in theory in a long footnote in Knowledge and Human Interests): that the contrary is true, that
circulation controls production.[17]
Consequently, coping with capitalism, and
transforming it, is primarily a matter of transforming the circulation of goods
and services. It is phenomena at the
level of circulation--markets, recession, depression, inflation, capital
flight, the collapse of markets--that block the transformation of the ownership
of the means of production into more ethical and sustainable forms. Mixed economies with substantial public
sectors would have triumphed worldwide long ago had not market forces--i.e.,
phenomena of circulation--consistently undermined them.
Perhaps better put: it is the interface between
circulation and production that is crucial.
The general form of the problem of ethically constructing society is:
How can we mobilize resources to meet needs, and do so sustainably? If circulation is defined as production for
exchange, i.e., for sale, then the problems become: 1) How can we produce only
for the market, in a way that meets needs sustainably? and 2) (the same problem stated differently)
How can we organize processes consisting entirely of exchange to reliably serve
the ends of use? The answer to both
questions is: We cannot. The goals are
simply not the same, even though they overlap.
Even though it is true, as Adam Smith said, that the whole point of
exchange is use, if we make exchange the end-in-itself, the chose qu'on aime pour lui-meme, we will, by definition, never make meeting needs sustainably the
end in itself.
It follows that circulation should
not be defined as exchange—i.e., as something that will occur only in order to
realize the exchange-value of commodities.
Circulation has to happen, i.e., people have to decide to do things that
meet their own and others' needs, for reasons other than making a profit on the
sale of the product. We have been
calling these reasons for doing things in order to meet needs "cultural
resources."
The concept of "cultural resources" is
not meant to exclude meeting needs through markets, nor is it meant to exclude
production for profit. It is meant to
include them as cultural resources,
among other cultural resources. What
the concept is designed to exclude, however, is addiction to markets and
profits, which makes a society so dependent on them that it lacks capacity for
autonomy and integrity and ethical judgment because it is driven by forces
beyond the control of conscience to get a fix to satisfy its uncontrollable
dependency.
The idea of "cultural resources" is
inclusive. It reflects a leap to a
higher level of abstraction like those that Gaston Bachelard (1984) identifies
with major breakthroughs in science.[18] As Einstein's physics is more general than
Newton's, and recognizes Newton's as a special case, so "cultural
resources" is a concept more general than "production for
exchange," which is a particular kind of cultural resource. Continuing with the inventory of Indonesian
cultural resources we began in the previous chapter, we offer the following
further examples.[19]
4. Rice Stories
According to the
ancient myths of Java, which were told and retold before Hindu and Buddhist
ideas arrived from India, before the coming of Islam, before Christianity, and
long before Economics, the first human beings cultivated rice. The slametan,
the versatile ritual meal that is the traditional centerpiece of the spiritual
life of the majority of Indonesians, features rice in several forms, as do
Indonesian birth celebrations, circumcisions, weddings, and funerals. A wedding feast, for example, is likely to
feature a layer of yellow rice on top of a layer of white rice, in
each person's banana-leaf dish, the yellow rice standing for love
and the white rice for purity.
The technocratic economic planning teams of the
post-1945 Republic, in spite of their expensive training in western graduate
schools, never even tried to subject rice, the sacred grain, to the impersonal
forces of the market. Radius Prawiro, a
key policy-maker, explains:
So central is rice that it is conceptually interchangeable with `food.' Rice is more than the basis of Indonesian agriculture, it is the centre of most important social intercourse. It is eaten for breakfast, lunch, and dinner. Typically, when people work together, it is over rice. When a serious communal conflict is resolved, reconciliation is frequently over rice. When they celebrate together, mourn together, or simply come together, as family and friends, rice is the constant that is at the centre of many daily human interactions, rituals, and rites of passage in Indonesia's traditional life. ... For these reasons, whenever rice is scarce, it is a profoundly troubling experience for Indonesians. It portends that the world, in some way, is falling apart (1998: 131-32).
When Indonesia
fell heir to the unexpected windfall of massive increases in oil revenues in
the 1970s and 1980s, the dictator Suharto himself ordered the recycling of
petrodollars to subsidize rice production.
Huge sums were invested in new agricultural technologies, and, above
all, huge sums were invested in producing fertilizers, which were distributed
below cost to farmers. In 1985,
Indonesia became self-sufficient in rice, an achievement that has kindled
national pride ever since. General
Suharto made a trip to Rome to receive a special award from the Food and
Agriculture Organization of the United Nations.
Thus Indonesia hit on a sub-optimal but
nevertheless roughly functional solution to one of the dilemmas posed by the
Locational Revolution. Indonesian firms
could export labor-intensive products at competitive prices by keeping
Indonesian wages low. But the wages of
Indonesian workers were not as low as they seemed, because workers were able to
buy subsidized rice. They also enjoyed
other subsidies. The rice subsidies
expressed the principle that the rents paid by foreigners for the extraction of
Indonesia's natural resources belonged to all the citizens of Indonesia. They
should be spent to meet the basic needs of all citizens. Oil royalties bought fertilizers, which were
distributed at bargain prices. Cheap
fertilizers produced cheap rice for the people. A national agency, Bulog, has long been charged with assuring
that there will always be enough rice for everybody. Prawiro states, "Bulog was deliberately created to distort
the price mechanism for rice. It
violated a basic economic tenet held dear by all the country's economic
policymakers, that is, that the markets themselves should be free to set
prices" (Ibid.: 133).
Indonesian populists have been handicapped in
their decades-long ideological tug-of-war with the IMF and allied agencies over
subsidies. Selling rice for less than
it costs to produce it is a no-no from the point of view of narrow-minded free
market theory. Further, production
costs for rice in Indonesia have been driven to above-market levels because an
Integrated Pest Management policy has been adopted for ecological reasons, in
place of using straight pesticides, which would be cheaper. Producing at higher-than-market costs and
selling at lower-than-market prices is a double no-no. Further, any IMF economist can produce a
mathematical proof that "Indonesia" (which we place in quotes because
the word purports to name a unified entity that is not in fact unified) would
be better off being less self-reliant, producing less rice for home
consumption, exporting more and paying for imported rice with the profits from
the increased exports. And, as if all
these handicaps were not enough, those who argue for legitimate subsidies bear
the burden of proving that the subsidies they advocate are different from
corruption, and different from handing out government largesse to special
interest groups. Nevertheless, in spite
of all this ideological heavy artillery arrayed against them, Bulog and rice
subsidies have survived.
In the decades long tug-of-war between the
Indonesian populists, who pull for subsidies, and the IMF and its allies, who
pull against them, rice stories weigh in on the side of the populists. The social status of rice, as fuel and
symbol of life, is a cultural resource that mobilizes resources to meet needs.
5. Volunteering
One of the best examples of
volunteering in Indonesia has been in family planning programs designed to slow
the rate of population growth. Many
thousands of volunteers have worked without pay, giving their time to share
information and supplies, sister to sister, brother to brother.
6. The Pancasila Ideology
Since the first days
of the Republic, Indonesia has had a five point official ideology, known as Pancasila or the "five
principles." It has had a
checkered career. Often it has been
more a source of pretexts for suppressing independent thinking than a source of
constructive ideas for solving problems.
The five principles and their interpretation have been elaborated in
voluminous writings. In brief English
translation[20] they are:
i. A
belief in one supreme being.
ii. A
just and civilized humanitarianism.
Less literally: internationalism.
iii. The unity of Indonesia.
iv. A people
led or governed by wise policies arrived at through a process of consultation
and consensus.
v. Social justice for all the Indonesian people.
7. Pre-Capitalist Forms of Cooperation and Sharing
The human species flourished on the
planet earth for several hundred thousand years before capitalism. It invented innumerable ways to mobilize
resources to meet needs. The surviving
remnants of pre-capitalist practices and discourses can be regarded as the
cultural equivalent of a gene pool, from which organizing codes can be drawn as
needed to further improve modern improved varieties, and to make them
disease-resistant.
For example, the anthropologist Clifford Geertz
reports on the seka, a pre-capitalist
institution found in the Indonesian province of Bali:
The general organization of the Balinese village, and hence of its economy --for the two cannot be sharply differentiated--is perhaps best seen as a set of the overlapping and intersecting corporate associations the Balinese call seka (literally: "to be as one"; "to be unified"). A seka is a social group, formed on the basis of a single and exclusive criterion of membership, and dedicated to a particular and usually rather narrowly specified social end. . . . Every Balinese belongs to from three or four up to nearly a dozen of these groups, and the value of seka loyalty, putting the needs of one's group above one's own, is . . . a central value in Balinese social life. . . . [F]ield-crop cultivation is carried on within the general framework of a separate and independent seka-type organization specifically devoted to it and usually referred to in English as an “irrigation society.” . . . The members of an irrigation society consist of all those individuals who own riceland which is irrigated from a single watercourse--a single dam and canal running from dam to fields (1963: 84 et seq.).
Geertz borrows from Karl Polanyi the term "embedded" to describe Balinese economic life as embedded in a network of social relations. But for Polanyi, the Christian democratic socialist, the "disembedding" of economics from society that happened in what he called "the great transformation," the emergence of modern society in which the market became a law unto itself, was in many ways unfortunate. The Notre Dame economists Charles Wilber and Kenneth Jameson, inspired by Polanyi, advocate a "moral economics" in which markets will be once again "re-embedded" into a framework of ethical values. Geertz, in contrast, sees the "embedded" economy of the seka as an obstacle to progress. Although Geertz may have changed his mind later in his career as an anthropologist, at the time he described the Balinese seka he was so convinced that Indonesia needed personalities similar to those of the protestant entrepreneurs Max Weber had described in The Protestant Ethic and the Spirit of Capitalism in order carry out "savings and investment" leading to "takeoff" as