Chapter 13
Middle-Class Values[1]
In our opinion, the major tragedies of the twentieth century
happened not because of bad people but because of good people with limited
understanding. We use the phrase
"middle-class values" to describe the values of good people who do
not understand the limitations of capitalism.
Capitalism is a system and way of life that we believe to be seriously
inadequate and incomplete. In this
chapter we will share more of our views on the causes and cures of historical
tragedies, of endemic violence and poverty.
We shall continue to draw our historical illustrations from the history
of Indonesia.
The idea of "middle-class values" became a focal
point for our musings about a year ago as a result of a conversation with the
young principal of an elementary school in a small city in Indiana in the U.S.
Midwest.[2] She lamented the disorderly conduct of some
of her third graders, second graders, first graders, and even
kindergartners. They had no interest in
books, and would rather tear them up than learn to read them. They flew into uncontrollable rages and
attacked other students and sometimes the teacher. They sometimes ran away, and sometimes they were found sneaking
into someone's house to steal. They
were shameless liars, sexually precocious, insolent and indolent--although
sometimes they broke out crying and wailing, wanting to be comforted. She did not remember any children so
difficult to deal with from her own school days, and took their presence in her
school as a sign that society was deteriorating.
She identified the problem children with problem
parents--drugs, alcoholism, single mothers with a series of boyfriends, fathers
in jail, unsteady employment or none, wife-beating. The good children, on the other hand, took music lessons, played
Little League baseball, did their homework.
They wanted to please their teacher as they wanted to please their
parents. They came from good, solid middle-class
homes. They had middle-class values.
Somewhere, maybe in college, this young school
principal had encountered somebody who had asserted that it was ethnocentric
and undemocratic to believe that middle-class values are better than other
values. Middle-class as opposed to
what? The "others" who lack
middle-class values are presumably those many people refer to as the lower
class and the upper class, which we prefer to refer to as the working class and
the leisure class. Whoever it was who
had asserted that there was nothing special about the middle class was somebody
she was eager to refute.
"Middle-class values are just values that work," she
said. "All children should learn
middle-class values because that is what they need to succeed in
life." She argued that it was the
right and the duty of the schools to reinforce middle-class values in the
children who already had them, and to instill them in children who did not have
them yet.
Her philosophy neatly sidestepped the issue of
race. African-Americans and the many
Spanish-speaking immigrants now arriving in Indiana can never be White
Anglo-Saxon Protestants, but they can be middle class. White Anglo-Saxon Protestants can be poor,
or, even if they have middle-class incomes, they can fail to have middle-class
values. By making class the issue, the
principal made race irrelevant. At the
same time, since the criterion was not class per se, but the values attributed
to a class, she allowed for the possibility that even the poorest of the poor,
and even the richest of the rich, could redeem themselves by adopting the solid,
practical values of the middle class.
Having thus discovered the idea of
"middle-class values" while doing anthropological research among the
Hoosiers in central Indiana, Howard Richards asked himself whether this concept,
which his informant found so persuasive and so vital, could open a path leading
through Indonesian history to a general philosophy of social reality.
The general philosophy we have in mind is roughly this:
Throughout the history of the human species, cultures have socialized the young
to internalize conventional norms, also known as ethics, morals, values, rules,
or customs. The norms have on the whole
gradually improved over time in the sense that they have generally led to more
functional behavior. We call this
gradual process of improvement, "the ethical construction of social
reality" (a phrase we also apply
to the more conscious and less gradual improvement we believe is needed
today). There was a break in the
continuity of ethical development at the beginning of capitalism. Part of the break was the splitting off
from ethics of economics. Economics
became a realm regarded as quasi-nature, studied by a quasi-science. This split is a conceptual error. Economics is best regarded as part of
ethics. Its subject matter consists of
deliberate action guided by conventional norms. It is an error that has consequences for the progress of social
democracy, which has been first slowed down and then reversed in the second
half of the twentieth century by structural impediments which appear to be
"human nature" or "economics" but which are in fact cultural structures. We regard the progress of social democracy
as virtually equivalent to the progress of peace and justice. We believe that the further progress of
social democracy would be facilitated by seeing through, as opposed to seeing
with, economics.
"Middle-class values" appears to be a
popular name for some important contemporary conventional norms. We believe that conventional norms are deep causes
that explain historical events. We
shall use the phrase "middle-class values" as a bridge to connect
Indonesian history to a general philosophy of social change.
First we will
repeat, by restating in slightly different terms, some of the bold general
claims that frame the context for this chapter.
1. Little can be accomplished in the construction of peace and social justice in the world without finding solutions to two fundamental problems:
a. How to pay high wages, given today's
competitive global markets, given factor mobility, and given that worldwide
labor supply greatly exceeds labor demand at nearly all skill levels; and
b. How to provide access to the basic requirements of a decent life for the millions, nay billions, who are now excluded, lacking prosperity and security.
2. The above (1) must be accomplished
simultaneously with a reorientation of the human relationship to the earth,
from exploitation of nature to cooperation with nature.
3. The above (1 and 2) require new
thinking. They cannot be accomplished
by relying on the cure-all prescribed by Keynesian and mainstream economics,
namely "growth;" nor by relying simply on shifting government budget
priorities from armaments to social programs.
4. Conceptual reform is needed because
mainstream social science is not now capable of showing how to accomplish the
above (1, 2, and 3), not because it has not studied the problems long enough,
and not for lack of data, but because its characteristic methods and worldviews
are fundamentally flawed.
5. Nevertheless, the above (1, 2, 3, and 4) can be accomplished. There are no inherent obstacles in nature or in human nature that make it impossible to construct a sustainable world that works for everyone.
This chapter is intended
as a contribution to the "conceptual reform" called for in (4)
above. Perhaps it would be better to
say, following Antonio Gramsci, "moral and intellectual reform," in
order to emphasize that the concepts to be reformed are at once practical and theoretical. They are idees-forces, principles that guide action, normative structures,
rules, ideas and ideals that shape practice.
Following Gramsci again, one might call a move from "middle-class
values" to "human values" a move from "common sense"
to "good sense."
We suggest that when social science makes
the post-Wittgensteinian move from mechanical models to rule-based normative
understanding, the distinction between the social sciences and the humanities
dissolves. The distinction between
economic base and cultural superstructure disappears because the causal
mechanisms economics uses to explain phenomena are seen to be pseudo-mechanisms
made of rules.[3] Consequently, science rejoins the world of
values. It rejoins the world of les moeurs, from which Descartes
separated it, and to which Wilhelm Dilthey and many others have already sought
to reconnect it.[4] Findings in the fields of religion,
literature, philosophy, history, and art are then every whit as capable of
being causal explanations of human behavior as findings in sociology, political
science, economics, and psychology.
Historical events can be better explained if
they are seen as largely caused by, and in any event conditioned by,
conventional cultural norms. Some norms
are more basic than others, in various senses of the word "basic,"
including the sense that a norm is basic when it governs the acquisition of the
necessities of life, such as food. The
critique of neoliberalism and the renewal of the progress of social democracy
can be better accomplished if basic conventional norms (especially constitutive
rules) are brought into focus under a bright light that makes it clear that
there could be other, modified, and different norms.
The idea of ethical construction of social
reality leads to a benign and optimistic philosophy. It agrees with Plato that knowledge of the good provides a
motive to do the good. Evil results
more from ignorance than from ill will.
The disasters of the 20th century--Hitler, Stalin, Pol Pot, the World
Wars, the Great Depression of the 1930s, terrorism, and our other major
disasters were caused, in a reconstructed sense of the term "cause,"
by incomplete ethical construction.
They were caused by failure to build a world that works for everybody
without ecological damage. Tragedy is
not inevitable. The disasters of the 20th century do not need to be
repeated.
We certainly do not mean to say that the ethical
construction of social reality is easy, to be accomplished simply by correcting
conceptual errors. It is the real work
of the world. It is the slow and
laborious improvement of human institutions.
We will be examining two tragedies that befell
Indonesia in the second half of the 20th century: 1) the dashing of hopes for
social democracy in the first two decades after independence from the Dutch,
culminating first in the abolition of democracy by President Sukarno, and
second in a reign of terror marked by the mass murder of hundreds of thousands
of Indonesians upon the fall of Sukarno; and 2) the ongoing intolerable poverty
of the Indonesian masses, exacerbated by the economic collapse of 1997 and the
subsequent economic stagnation.
A first reading the history of Indonesia in
1965-66 lends credence to a philosophical view that we hold to be false, namely
the view that tragedy is inevitable.
Reading about Indonesia during that period is like reading a Greek
tragedy in which the tension that Sophocles packed into intimate relationships
is magnified to grip a nation. It is
also like reading about Chile in 1972-73 or Spain in 1937-38. Amid all the lies and confusion, amid
everything accidental, there is an implacable military power in operation,
which is stronger than anything else, which can--and when the time comes
will--massacre the left. The military machine
of the right wing is irresistible.
Whatever the progressive and democratic forces say or do, whatever
anybody says or does, there is going to be a bloodbath. There is going to be a reign of terror. The people who have joined and supported
left-wing political parties and labor unions are going to be the victims.
Somewhat similarly, reading the history of
Indonesia in 1997 is like reading the history of the bursting of any economic
bubble. The biggest one was the
worldwide depression of the 1930s.
After 1997 Indonesia is like many other so-called depressed areas. All the elements required to establish a
system for meeting human needs are there, but they do not come together to
function. Unemployed people, unused
resources, and unmet needs coexist in gridlock.
We will approach these topics in Indonesian
history using "middle-class values" as a starting point.
"Middle-class values" is a rich phrase with many connotations. We believe that the phrase can properly and usefully be applied to name great traditional and popular values East and West, in a truncated form that separates ethics from economics. The middle class needs and espouses the great values of which civilizations are built, but it also needs to adjust to capitalism and to live in it.[5] It accomplishes the required adjustment partly by regarding economic calculations as similar to physical calculations. Economists are commercial engineers. Business is nature. An accountant is a professional person in the same sense that a dentist is a professional person, although the accountant works with money and the dentist works with teeth.
If the ethical critique of economics is beyond the
middle-class horizon as what it does not see, concern about base instincts
getting out of hand is at center stage, as what it does see. The middle class is the class that is not
vulgar. The idea of middle-class values
thus brings into play the theory that civilization is built on the repression
of instincts. This Freudian theory
combines neatly with the Whig doctrine that the middle class is the civilizing
element in political society. The
middle class is, par excellence, the class that sublimates.
Freud deduced a brilliant theoretical insight
from his humble empirical observation that poor people like to talk dirty. (He apparently did not make any observations
of the poor people who join puritanical religions.) For Freud the proclivity he observed among members of the working
class of Vienna to banter about sex and other forbidden subjects was a symptom
of rebellion and rejection. The working
classes reject the bargain society offers them. Society demands the repression and sublimation of the basic
instincts (Trieben), especially
sex. In return for hard work and clean
living, society offers the joys and comforts of middle-class life.[6] "There is nothing in it for us,"
say the people in the working classes, and they opt for the direct satisfaction
of instincts. Their speech reflects
their rebellion, or, to update Freud's language to make it post-Foucauldian,
their resistance.[7]
Building on Freud, our Hoosier informant, the
young elementary school principal mentioned earlier, could have said that
middle-class values are by definition pro-social, since they grow from the sublimation
of instincts and the redirection of natural energies into channels prescribed
by society. Working-class values, she
could have argued, are anti-social because they express unsublimated instincts.
She could also have built on the thinking of Emile
Durkheim to argue that leisure-class values are anti-social. Durkheim found that rich people suffered
from the affliction of easy lives. They
could become playboys, or playgirls.
They are free of many of the limits that structure the lives of ordinary
people. He called the social disease
the rich were likely to suffer from “anomie,”
which is usually translated "normlessness," which we take to be
roughly equivalent to being anti-social.[8]
Another, somewhat similar, experience in Indiana reinforced
the salience of the theme of middle-class values. Again it was a matter of coping with the anti-social behavior of
rebellious young people. The occasion
was a planning meeting of a group of self-selected volunteers, who had come
together to implement in an Indiana county what is called the
"Assets" program.
"Assets" is based on research painstakingly assembled at a
Lutheran-sponsored thinktank in Minnesota called The Search Institute, and published
in a book by Peter Benson (1997) entitled All
Kids are Our Kids: What Communities Must Do to Raise Caring and Responsible
Children and Adolescents. The
research team reduced what is known about the factors that are correlated with
children turning out well (as measured by a series of indicators) to a list of forty
"Assets" (for example, the availability of healthy forms of
recreation). Children who live in
families and towns that possess and provide the forty assets turn out well. Community action guided by these research
findings is now underway in several hundred places across the United States and
is being undertaken statewide in Kansas.
As Howard Richards sat in a high school cafeteria in Indiana
with a volunteer group assembled to be "boosters" for
"Assets" in their county, he asked himself, "Who are these
people? Who are these people who
voluntarily give their time and treasure for the good of the
community?" As people introduced
themselves one by one, and as he became better acquainted with them, he learned
that almost all of them were members of mainline Protestant churches:
Methodist, Presbyterian, Lutheran, Anglican, Baptist. A disproportionate number were related to law-enforcement
officers. To the best of his knowledge,
none of the boosters had high incomes or personal wealth. Nevertheless, in the event the group proved
itself able to support its programs by mobilizing resources to meet
needs--cash, volunteer time, use of equipment, use of space, donated food, and
the like. The resources came from diverse
sources--local government, local foundations, schools, individuals, churches,
and local businesses.
The youth boosters displayed themes in U.S.
culture that are analyzed in Habits of
the Heart (1985), a sociological study of America by Robert Bellah et
al. Bellah and his co-authors find to
be deeply ingrained in the United States values and "languages" like
those of John Wesley, Jean Calvin, Martin Luther, The Book of Common Prayer, and Roger Williams. Well-remembered languages, which are older
than today's prevailing idioms of business and therapy, are available to
express sub-dominant alternative worldviews.
They can nudge communities toward the practice of more cooperative and
less individualistic norms.
The youth boosters were one of many groups we
have known which have led us to ask the question, "If there is so much
good will in the world, why is the world so messed up?" This book suggests an answer to that
question: Because of conceptual errors.
Long before his recent close encounters with the
middle-aged middle class in a mid-sized midwestern city, Richards learned in
literature classes in school that in 18th-century England, the
novels of Henry Fielding expressed the values of the traditional aristocratic
ruling classes, while the values of the rising middle classes were expressed in
the novels of Samuel Richardson.
Richardson was born into a Whig and Protestant family in middling
circumstances. Like Benjamin Franklin,
he was apprenticed to a printer. Later
he set up his own printing business. He
prospered. He attributed his prosperity to hard work and strict rectitude. Although money could not buy him admittance
to upper-class English society, he acquired his own circle of admirers among
those who appreciated his literary talent and shared his values.
Richardson's literary works are all about
marriage. The moral of his stories is
that the reader should be punctiliously good in every way, if s/he wants to be
rewarded by winning the hand in marriage of a being who is, also, punctiliously
good in every way. The critic Samuel
Johnson (1933) described Richardson's work as "placing the passions under
the command of virtue.”[9] The first volume of his Pamela, or Virtue Rewarded concludes
with these memorable lines:
. . . I will allow you two hundred pounds a
year, which Longman shall constantly pay you, at fifty pounds per quarter, for
your own use, and of which I expect no account; . . . . And, added the dear generous man, if this be
pleasing to you, let it, since you say you want words, be signified by such a
sweet kiss as you gave me yesterday. I
hesitated not a moment to comply with these obliging terms, and threw my arms
about his dear neck, though in the chariot, and blessed his goodness to
me. But, indeed sir, said I, I cannot
bear this generous treatment! He was
pleased to say, Don't be uneasy, my dear, about these trifles: God has blessed
me with a very good estate, and all of it in a prosperous condition, and
generally well tenanted. I lay up money
every year, and have, besides, large sums in government and other securities;
so that you will find, what I have hitherto promised, is very short of that
proportion of my substance, which, as my dearest wife, you have a right to.
In this sweet manner did we pass our time till evening, when the chariot brought us home; and then our supper succeeded in the same agreeable manner. And thus, in a rapturous circle, the time moves on; every hour bringing with it something more delightful than the past! Surely nobody was ever so blest as I!"[10]
Significantly, in the passage quoted, whether it was proper for a
lady to kiss a gentleman in a chariot was
an issue, while whether it was proper for the dear generous man to become
wealthy by collecting rent and interest was not
an issue.
Much water has passed under the bridge since the
18th century. Humanity has experienced
the rise of consumer society, and then the spectacle society; the rise of the
mass media and mass popular culture; the prosperity and then the decline of
unionized labor and the middle masses; the rise and decline of Keynesian
economics; and now neoliberalism, globalization, and the race to the
bottom. Nevertheless, even today some
of Richardson's 18th-century puritanical middle-class ideas live on
in certain minds and hearts. Among them
are the work ethic, and the idea that in the natural and just and normal course
of events, those who are good are rewarded with prosperity, leadership
positions in the community, and happy marriages.
We will now elaborate a bit more on the meaning
of "middle-class values." We
take the phrase to reflect a human universal: namely, the need to socialize
youth to internalize the values of society, any society. More particularly, in the West, middle-class
values are a modern version of ancient Western values, those of the tradition
that was formed by synthesizing Greek, Roman, and Judeo-Christian ethics, and
then transformed by the Protestant Reformation and the Catholic
Counter-Reformation, and then transformed again by the Enlightenment. Middle-class values are adaptations of
ancient religious ideals, philosophical ideals, and folk ideals to the
practical needs of life in the new worlds created by capitalism. They are virtue truncated--truncated because
they accept the economic structure of the world as it is now. It is a structure much different from the
world as it was back in the ancient days when the ancient ideals were first
formulated, and presumably also much different from the world as it will be in
some future happy day when peace, economic justice, and a sustainable
relationship to the environment are achieved.
Middle-class values are the great values of the distant past: honesty,
self-discipline, wisdom, courage, justice, faith, hope, charity--adjusted and
modified to become the values of the most influential class in a society based
on private property, money, and “free” (i.e., somewhat managed) markets.
Fifty years earlier than the described encounters in
Indiana, and two hundred years later than the publication of Richardson's
novels in England, in 1945, the Republic of Indonesia declared its
independence. What the Republic began
with was not, properly speaking, either capitalism or socialism. When the Dutch left, the capitalists left,
and to the extent that they could, they took their capital with them. Indonesia as a newly independent nation
emerged from the ravages of the Depression of the 1930s, the ravages of
Japanese occupation in World War II, and the ravages of a prolonged struggle
with the departing Dutch. What might be
constructed from the shambles that remained was an open question.
We have been saying that an economy is a cultural
structure. It follows that the project
of building some sort of viable economy in the midst of the shambles that remained
in Indonesia when the Dutch finally agreed to leave in 1949 was a project of
cultural construction. The need for
cultural construction was recognized, in its own way, by American social
scientists funded by generous grants from the Rockefeller Foundation and the
Ford Foundation, who sought to make comprehensive studies of what might be done
by the young Indonesian Republic. They
generally realized that middle-class values and capitalism go together. One does not function without the
other. Capitalism needs honest and
dependable people who will dutifully perform the roles of buyer and seller,
employer and worker, investor and entrepreneur. Clifford Geertz, the lead anthropologist for the Indonesian teams
of the Massachusetts Institute of Technology and the University of Chicago
"new nations" research projects, arrived in Indonesia with the
explicit purpose of studying the conventional norms operating in everyday life,
in search of the cultural values required for economic takeoff. The result was a classic series of studies
of everyday life in Indonesia during the early independence period.[11]
Geertz's conclusions were, on the whole, pessimistic. Disregarding the smaller ethnic groups, he
classified the Muslim majority in three divisions: the abangans, the majority, who tended to mix Islam with older and
looser spiritual traditions; the santri,
more strict and businesslike; and the priyayi,
the aristocratic and civil servant class, also inclined to syncretism, and
especially inclined to estheticism. It
was among the santri that Geertz
found the best hope for the emergence of an Indonesian analogue of the
Calvinist entrepreneurs, celebrated by Max Weber, whose middle-class values
facilitated the rise of capitalism in Europe.[12]
Somewhat at cross purposes with the plans that
the U.S. foundations and universities had for their country, the intellectuals
and political leaders of newly independent Indonesia, did not want a capitalist
takeoff at all, but rather an autochthonous version of social democracy. A
synthesis of European social democracy and Indonesian (mainly Javanese)
cultural reality had been the ideal envisioned by Indonesia's nationalist
intellectuals during their decades-long resistance struggle against Dutch
colonialism, as is touchingly recounted in a series of historical novels set in
the period, written by the great Indonesian novelist Pramoedya Ananta Toer.[13] Now, the promised time had come. Once liberated from the Dutch, it was time
for Indonesians to realize the ideal.
The building of a uniquely Indonesian form of
social democracy was the will of the Indonesian people after independence
according to all available means of ascertaining the people's will--the results
of the single free national election held in 1955, the platforms of the major
and minor political parties, and the texts of the several draft constitutions
that were composed and discussed. The
early governments of the Republic actually made some progress toward social
democracy, including setting up a vast system of cooperatives, and organizing
some major enterprises in the public sector.
Parts of the private sector too made some progress after Independence,
and in the years from 1950 to 1953 rice production increased by 22 percent (Eng
1996: 89, 134-35). But social democracy
was not to be.
During the early days of independence in the
early 1950s, under what is called the Old Order, Indonesia was favored with
high export earnings because of the Korean War. Moderate leaders such as Mohammad Hatta and the socialists
grouped in the Indonesian Socialist Party (PSI) favored a version of social
democracy that encouraged foreign investment and a strong private sector within
a framework of long range national planning.
As time went by, their efforts were frustrated, and they lost
influence. With the confidence of the
major foreign and domestic investors flagging, the shattered Indonesian economy
remained shattered. President Sukarno's
solidarity-building rhetoric tried to compensate for the cooling of standard
profit motives by igniting the fires of traditional communal values of gotong royong (“mutual aid”), and by
fanning the flames of patriotism.
Efforts toward building solidarity, however, were dampened by ethnic
rivalries and by every other kind of rivalry known to humankind. The stirring speeches of the president faded
away into mists of illusion. In his
1960 Independence Day address President Sukarno declared to the nation:
[F]or those who join in that mighty current of
the Revolution, the dynamic of the Revolution becomes a Romanticism arousing a
passionate spirit--drawing, binding with spiritual longing, inspiring,
fascinating. Frankly, I tell you: I
belong to the group of people who are bound in spiritual longing by the romanticism
of Revolution. I am inspired by it, I
am fascinated by it, I am completely absorbed by it, I am crazed, I am obsessed
by the romanticism of Revolution. And
for this I give utter thanks to God who commands all nature![14]
Mass mobilizations of the dispossessed and
occupations of land by squatters achieved paralysis, but did not achieve
transformation. Efforts to implement a
Lenin-style New Economic Policy that would harness old-fashioned profit
incentives within the broad framework of socialist policy floundered in a
morass of corruption. For example, when
the government tried to incubate a new class of small entrepreneurs among the
Malay majority (the pribumi) by
granting them licenses and contracts, many of the pribumi simply turned around and assigned them to established
ethnic Chinese entrepreneurs. They used
political connections to derive a quick profit from government favors, without
doing any work, and without starting any businesses. The Chinese, in turn, reportedly stashed their profits in foreign
banks. When the bloodbath and reign of
terror began in October of 1965, the Indonesian economy was, on the whole,
still a shambles, back at Square One, where it had been when the Republic
commenced (Booth and McCawley 1981: 1, 91-93).[15]
A focus on constitutive rules makes it easy to
see why the newly independent Republic's attempt to build social democracy had
to fail. It had to fail because it
could neither generate enough investor confidence nor could it find any
substitute to replace private investment for profit as a motivational system
for mobilizing resources to meet needs.
There was no way to stimulate and organize the pro-social functional
behavior required to meet the needs of the people. Otherwise put, conventional behavior, governed by the main
conventional norms operating in post-colonial Indonesia, would only mobilize
resources to meet needs to the extent that the conventional expectation that a
business would show a profit was satisfied.
The rules set up the system in such a way that it either worked because
people had confidence in it and decided to invest their talent and treasure, or
else it did not work. Given that the
rules were the rules, the only way to discourage the profit motive and
simultaneously increase production and make distribution more equitable would
have been to transform social conventions and personal motivational
patterns. Given the utter
impracticality of doing the latter rapidly, a practical solution might have
been what moderates like Hatta had proposed in the beginning, to encourage
normal profit incentives, while transforming society slowly, at a viable pace,
carefully building on the cooperative traditions that already existed in
Indonesia.
President Sukarno understood well enough that
middle-class values could not be counted on to function in post-Independence
Indonesia, and that even if they could, what he needed to build revolutionary
socialism was not a limited and prudent virtue like that of a Whig middle
class, but unity and solidarity, of the type he attributed to idealized native
Indonesian traditions. He understood
the problem well enough, but it was a problem he was unable to solve. It will never be known what might have
happened if the Sukarno regime had enjoyed, instead of the hostility of Western
governments, the unstinting largesse of Western foreign aid donors of the kind
that poured forth soon after his fall.
Nor will it be known what would have happened if a Communist coup had
succeeded and been followed by a full-on effort to build an Indonesian command
economy. No doubt if those or any
number of other things had happened, there would have been a somewhat different
story to tell. Nevertheless, in the
context of what actually happened, the basic structure--the constitutive
rules--of the system Sukarno was trying to transform made his strategy for
transforming it unworkable.
Middle-class
values, the conventional social norms conducive to the functioning of
capitalism, cannot be regarded as the cause of Indonesia's inability to
construct social democracy between 1945 and 1965, since we have the testimony
of Geertz and others that such values were lacking. Nevertheless, our broader claim that historical tragedies are less
due to bad people than to good people with limited understanding can be
illustrated by the Sukarno epoch. Gotong royong and revolutionary
romanticism, for example, do not count as middle-class values, but they do
count as good intentions. It was a
conceptual error to suppose that the political program associated with those
good intentions was feasible.
The construction of capitalism in Indonesia
commenced, or recommenced where the Dutch had left off, after a hiatus of
several decades, when the military took over the government in 1965.[16]
The soldiers were supported by mass demonstrations of university students. The citizenry had already lost its right to
hold the government accountable by the ballot box, since President Sukarno had
already, six years earlier, replaced democracy with a bogus "Guided
Democracy."[17] He had arranged to have himself designated
president for life. Many were more than
happy to give up what little freedom they had left in exchange for the reforms
they expected from the army. Indonesian
capitalism was, nevertheless, a camouflaged capitalism, which remained, and
still remains to this day, formally within the framework of the social
democratic constitution of 1945.
The official story told by the Indonesian armed
forces is that the downfall of Sukarno and the Old Order was precipitated when
the Communists unsuccessfully attempted a coup d'etat, designed to eliminate
anti-Communist military officers and clear the way for bringing Indonesia
within the Communist orbit. One
established fact is that in the early morning hours of September 30, 1965, six
important anti-Communist generals were assassinated. Although it is probably impossible to know exactly what happened;
although in the midst of chaos and violence, with almost everyone trying to
deceive almost everyone else, with fortuitous accidents having great
consequences, with no one sure of anyone else's intentions, it is doubtful that
even the principal actors themselves knew exactly what they were doing and why;
and although an early study by two Cornell scholars cast doubt on the army's
official story; recent scholarship tends to confirm that the army's official
story is substantially correct (Feith and Castles 1970: 17, 412-13; Schwarz
1994: 19).[18] It is probably true that there was a leftist
coup attempt, and it is probably true that it almost succeeded.
It was the social
democrats themselves, the intellectuals in and around the Indonesian Socialist
Party (Partai Socialis Indonesia, or
PSI), who drew the logical conclusion that post-Sukarno Indonesia would have to
embrace the capitalist logic of economic orthodoxy. The elections of 1955 had shown that the PSI had very little
popular support, less than two percent.
By the time Sukarno fell, the PSI had long been a part of the
anti-Sukarno opposition. It had been
banned. It had opposed Sukarno's
abolition of democracy, his Jakarta-Peking axis in foreign policy, his refusal
to grant any degree of autonomy to Indonesia's regions, and his declaration of
war against Malaysia. Although small,
the PSI continued to be important in university circles, often in conjunction
with religiously oriented parties, Catholic and Muslim, with larger memberships
(Ricklefs 2001: 304; Feith 1962: 129-31).
It was from the milieu in and around the PSI that the non-party
technocrats emerged, who would be the managers of Indonesia for three decades
under General Suharto's New Order, and now, again, under Megawati.
While the blood
was still wet on the corpses of the slain, General Nasution, the chief of the
army (who had narrowly escaped assassination
the morning of September 30, 1965, eluding his captors by jumping over a wall
to seek refuge in the Iraqi Embassy), was instrumental in convening a seminar
of economic experts at the University of Indonesia. Indonesia's president-to-be, General Suharto, also spoke at the
seminar. Nasution, who took the lead in
the army's formulation of an economic policy to "win the peace," was
a somewhat puritanical santri Muslim,
very politically astute, very highly regarded in military circles. It had long been his opinion, and for the
most part the army's opinion, that politicians should leave economics
alone. It had been Nasution's constant
theme, as the spokesperson for the army at the highest levels of government, that
civilian politicians should not meddle in internal military affairs. These were technical matters, to be decided
by technical criteria. They were beyond
the competence of the non-specialist.
By a parity of reasoning, economics was another technical specialty,
concerning which non-specialists should have neither voice nor vote.
The Indonesian
military elite, and the civilian supporters who helped it to establish the New
Order in 1965-66, embraced a value system which affirmed the core
characteristics of western middle-class values. Truth, justice, goodness, and love were its ideals, as they are
the ideals of most civilized people in most places. The people it declared to be its enemies--the Communists and the
radical Muslims--it also declared to be enemies of truth, justice, goodness,
and love. As the New Order took form
over the years, it increasingly made its ideals concrete in the theory and
practice of pembangunan,
development. The army set out to
modernize the country, and that meant to develop it (see, e.g., Booth and
McCawley 1981: 1-20). Pembangunan was serious truth,
measurable in concrete terms. More and
more Indonesians came to enjoy the conveniences of modern life. It was a form of justice that brought real
increases in the living standards of the poor, as contrasted with the empty
promises of the Sukarno era. It was
rice. It was schools. It was the promise and partial attainment of
the good life enjoyed by the middle classes of the developed countries, as
shown in Indonesia on television and in movies. It was patriotic and charitable love, the love of the country and
its people.
The hypothesis that Suharto and the military and
civilian elites supporting him really believed in the values they said they
believed in, is supported by their plausibility. Almost thirty years of substantial, albeit limited, economic
progress seemed to confirm that they were right to put pembangunan first, ahead of democracy and human rights. Virtue had to be truncated to fit the
requirements of Indonesia's technocratic capitalist development model. Sound and serious economic science
prescribed providing guarantees of political stability and guarantees of a
docile workforce to attract investors.
Therefore, middle-class values implied that good people supported
autocracy.
So far we have been writing as if the
middle-class values in New Order Indonesia after 1965 were similar to
middle-class values in the West--solid, traditional virtues, adjusted to fit
the requirements of capitalism. Yet we
must offer reply to the many writers who portray Indonesian autocracy in the
much different light provided by cultural diversity theories. For them the good burgers of Indonesia are
not at all like the good burgers of the West.
For them the constitutive rules that require stability and low wages to
attract investment are not at all what explains New Order autocracy.
Cultural diversity explanations liken Sukarno
and Suharto to traditional Javanese rulers who claimed to have--and were
believed by their subjects to have--mystical power and divine authority. They point to consensus, deference to
authority, and communalism as Javanese values that contradict western ideals of
freedom. They conclude that democracy
and human rights are unsuitable to the Indonesian temperament. The regimes of Sukarno and Suharto are
explained psychologically, as responses to the deep need of the Indonesian soul
to be dominated by an autocrat.[19] Our first response is that while the
cultural diversity explanation might be somewhat plausible in the case of
Sukarno, it is probably not plausible in the case of Suharto and definitely not
so in the case of the three presidents after Suharto: Habibie, Wahid, and
Megawati.
Our second response is to present a list of
reasons why the cultural diversity explanation of Indonesian autocracy is not
plausible, while the rules of capitalism explanation is plausible:
1) Indonesia's predominantly Muslim culture is
not generically different from Western culture:
a. Islam is a Western religion, not an Eastern
one. Its heritage includes the Old
Testament and New Testament, as well as the Koran.
b. Islam shares with Christianity and Judaism
the heritage of the Greek philosophers, who were read and commented on by Arab
scholars before they were rediscovered by Europe.
c. The classic ideals of "virtue" and
"character" come from ancient Greece, and are the common heritage of
Islam, Judaism, Christianity, and secular humanist traditions.
2) Today all over the world people watch the
same television programs, see the same movies, and use the same internet.
3) The advisers to Suharto, the alleged Javanese
mystical ruler, were overwhelmingly either from the United States or trained in
the United States.
4) Many Indonesians are Christian. Middle-class ethnic Chinese are especially
likely to be Catholic and to be educated in Jesuit schools. What could be more Western than that?
5) For better or worse, U.S.-trained economic
technocrats under Suharto succeeded in modernizing and monetizing the
Indonesian countryside, thus destroying most of what was left of the
traditional peasant cultures associated with subsistence economies.
6) Several scholars[20]
find that there has been a progressive "santrification" of Indonesia,
which suggests that the class of Muslims Geertz found to be most like the
Protestant entrepreneurs of early capitalist Europe has been gaining influence.
7) If it were true, as the cultural diversity
school claims, that the Indonesian people crave a Javanese king, who will rule
over a "just and prosperous kingdom," then Indonesia would be back
under dictatorial rule by now since more than four years of democracy have
brought no prosperity. There is plenty
of evidence that Indonesians treasure their freedom even in times of economic
adversity.
8) Organizations that protest human rights
abuses are as active in Indonesia as anywhere.
Although there is evidence that during the New Order many were convinced
by the argument that human rights violations were a necessary cost of economic
progress, there is not a shred of evidence that the majority of the people of
Indonesia do not want human rights.
We conclude that the ethical basis of Suharto's New Order
dictatorship was mainly what General Suharto said it was: pembangunan. The function
of the New Order's appeals to its conservative interpretation of Pancasila and to traditional
anti-liberal values was more to keep wages down and labor disorganized than to
promote Javanese mysticism for its own sake.
When the
Indonesian economy collapsed in 1997, it revealed that middle-class values
dwell in a house built on sand. The
values and norms that constitute capitalist society conceal a yawning
chasm. At their heart is the
ever-present possibility that people may not buy. Since the value of anything is given by what it can be sold for,
the value of anything falls when, for whatever reason, people do not want to
buy it. The constitutive rules of the
system aim to produce stability, but instead they produce instability. They are designed for the ostensible purpose
of guaranteeing security, but instead they produce an omnipresent
insecurity. For those readers who think
the collapse of the house of cards that was the Indonesian economy is a special
case, not relevant to the future of wiser and more advanced nations, we remind
them of what Karl Marx said to his German friends who complained that his
research at the British Museum on the history of the English economy was not
relevant to Germany: De te fabula
narratur ("The story is about you.") (Marx 1990: 6).[21]
Although we claim that the crash in 1997 in Indonesia is one
of numerous historical tragedies that demonstrate that the very constitutive
rules of commodity exchange make capitalism inherently unstable, we do not
expect that mainstream economists will hear this claim, for our claim amounts
to telling them that their science is based on fundamental conceptual
errors. It amounts to asking them to
shift paradigms.
As Thomas Kuhn recounts in The Structure of Scientific Revolutions (1970), the Ptolemaic
astronomers could not be refuted by empirical observations. They could always employ their theory to
"explain" the facts without giving up their worldview, according to
which the sun revolved around the earth (68-69, 154).
Today's most exasperating flat-earthers are the mainstream
and neoliberal economists, who stubbornly refuse to recognize that mass
unemployment, underemployment, marginalization, and poverty are structural
features of the capitalist global economy.
They make endless calculations about imperfect labor markets, as
yesterday's flat-earthers made endless calculations about epicycles within
epicycles to "explain" the movements of the planets among the stars.
The case of the collapse of the Indonesian economy in 1997
can be compared to the astronomical observations of Tycho Brahe in the late 16th
century.[22] It would be hard to find a clearer empirical
demonstration that mainstream economics proceeds from false premises. Nevertheless, as in Brahe's case four
centuries earlier, ingenious ways of saving the theory from the facts may last
well into another generation before it is finally acknowledged that the
paradigm needs to shift.
Three circumstances combine to make Indonesia in
1997 an especially difficult case for economic orthodoxy to explain away. The first is that mainstream economics was
imposed on Indonesia for thirty years by the all-powerful ABRI, the Indonesian
armed forces. Dissenters were jailed,
tortured, exiled, and killed. They were
lucky if they were merely silenced. Economists can often explain away the failure of policies based on
their recommendations with the excuse that politicians were unwilling to make
the "hard choices" and "difficult decisions" required to
please investors for fear of losing votes.
They blame democracy. No such
excuse was available in Indonesia in 1997.
The hard choices were made by force.
Secondly, for the same thirty years, the Indonesian
government had an open checkbook it could use to purchase the services of the
best economists in the world. The heavy
hitters in the academic literature were at its beck and call. Whatever Berkeley, Harvard, Oxford, or the
World Bank knew, Indonesia knew.
Sometimes mainstream economists can escape acknowledging that there are
fundamental flaws in their discipline's characteristic methods and worldviews,
by claiming that the paradigm is right, but it was wrongly implemented. They blame incompetence, or lack of
sufficient technical expertise. That
excuse was not available in Indonesia in 1997 either.
Third, the mainstream economists were surprised by the
crash. Hal Hill, author of The Indonesian Economy (2000) and an
editor of The Bulletin of Indonesian
Economic Studies wrote: "I did not foresee the set of events which
unfolded after mid-1997. It may be something of a consolation to observe that I
am not aware of anyone else who did" (xiv). If economics were a science, it would be able to predict events,
as well as to explain them after they happen.
The fact that mainstream economics was caught off guard by events in
Indonesia in 1997 is evidence that it is not a science.
Constitutive rules simplify the explanation of
the crash at least as much as the heliocentric theory simplified
astronomy. The basic rules of the game
prescribe that people may choose to invest in Indonesia, or they may choose not
to invest in Indonesia. Sooner or
later, for whatever reason or reasons, or for no discernible reason, many
people will simultaneously choose not to invest (or not to continue investments
previously made). This simple
explanation does not explain why 1997 was the year. It does, however, explain why crashes can be expected to
happen. It explains that middle-class
values, which are famously identified with the passion of the bourgeoisie for
stability, are built on instability.
With 20/20 hindsight, embarrassed mainstream
economists have written many articles and books that attempt treat explaining
the debacle of Indonesia in 1997 as what Kuhn calls puzzle-solving within
normal science, without altering their worldviews. We will not refute them.
The ones that were written soon after the event have already been
reviewed and refuted by Paul Burkett and Martin Hart-Landsberg in their
excellent article, "East Asia and the Crisis in Development Theory”
(1998). We agree with Burkett and
Hart-Landsberg that in 1997 orthodox economic theory did not just stumble. It fell.
What we wish to add, however, is that when mainstream economics fell,
Indonesian middle-class values fell with it.
Many good virtuous citizens had reluctantly accepted police brutality
against labor as unfortunate collateral damage. The physical repression of the working class, and the
psychological repression of the conscience of the middle class, were moral
sacrifices made for the sake of the greater good. The greater good was the scientific path to modernization and
economic development chosen by General Suharto, the military elite, the
technocrats, and the foreign advisers and donors. The economic stagnation of Indonesia since 1997 has demonstrated
that the bloody moral bloody sacrifices made on the altar of pembangunan were made in vain. The devil did not keep his promises.
The death of pembangunan
was not just the death of an economic theory.
It was also the death of an ethics which was but around and which
depended on an economic theory. The
lessons to be drawn do not apply only to Indonesia. They apply to any technocracy anywhere that sets to one side its
culture's traditional virtues of solidarity, drawing a bright line to separate
the province of ethichs from the province of economic science. The way forward is to refine and improve
traditional cultures and modern institutions together. Separating economics from culture leads to a
dead end. It leads to a dead end
because at the heart of economics itself stand the constitutive rules of modern
society. Cultural resources are needed
to supplement them. Left to themselves,
they allow (among other things) crashes like the Southeast Asian crash of 1997.
Burkett and Hart-Landsberg come out in favor of
alternative, socialist development visions based on community empowerment and
sustainability. Reading between the
lines of their review and critique of the mainstream's attempts to explain away
the collapse of an economy it had long lauded as its most exemplary tutee, one
finds the implicit message that the time has come to acknowledge that Karl Marx
was right after all. Capitalism really
does have inherent contradictions. Not
even the technical ingenuity of the world's most brilliant economists, backed
by the irresistible force of ABRI, can make its contradictions go away. The next step, if the message of Burkett and
Hart-Landsberg's subtext is correct, is to specifically identify the contradiction
Marx long ago detected, the contradiction which ineluctably leads to
instability. Our opinion is that the
contradiction is, at bottom, that between exchange-value and use-value. (We
could make this opinion more explicit by unpacking the idea of "exchange-value"
to depict it as a proxy for the constitutive rules of the circulation of
commodities.) Consequently, the
solution to the contradiction is, in our opinion, for humanity to learn to
produce goods and services for use, because they are needed.
In one sense middle-class values are the problem,
because they are truncated values.
Their ethical critique stops where economics begins. Their virtue contributes to the functioning
of capitalism, but refrains from judging it.
In another sense, middle-class values are the solution, because they are
the modern representatives of the ancient ideals of virtue and good character,
which can in principle by expanded and perfected to serve the good more
effectively.
This chapter has
essayed to trace a path through Indonesian history, leading to a general
philosophy of social reality. As a
bridge connecting the tragedies that have befallen Indonesia to a general
philosophy of social change, it has employed the idea of "middle-class values."
"Middle-class values" is not a precise
operationally defined concept. We hope,
however, that what it lacks in precision, it makes up for in resonance, as an
historically existing idee force, a
normative structure, a source of principles and ideals that guide action. While its denotation is variable and
expandable, it has acquired some significant characteristic connotations. Middle-class values are the values of
children who want to please their teachers, who take music lessons, who prefer
team sports to fighting. They are the
values of people who sublimate their animal impulses to form what Freud called
the geistliche Schatzen (“spiritual
treasures”) of civilization. They are
the Whig values for which participation in politics is the practice of civic
virtue. Middle-class values are contrasted
with those of the riff raff, the drug addicts, the criminals; the Communist
labor agitators, the radical Muslim terrorists; and the dissolute rich,
including the entertainment celebrities whose scandalous lives fill the
tabloids.
The closest we can come to defining the ideology
of the middle class is to identify it with its blindness. What the middle class does not see is that
certain conventional norms it dutifully follows--respect for private property,
balancing the checkbook, keeping accurate financial accounts --are norms that
exclude the poor. What is experienced
as honest and correct by the middle class, is experienced as rejection and
indifference by the dispossessed. It is
precisely this rift between the haves and have-nots that enables profit-making,
otherwise known as capital accumulation, to go forward smoothly. Property multiplies as profits, interest,
and rent are reckoned to the accounts of property-owners; and are reinvested to
yield still more profits. Nothing is
reckoned to the accounts of the poor but the proceeds of the sale of their
labor, and sometimes they cannot sell even that.[23] The formation of a set of middle-class
values, such as those of Golkar, the state-sponsored political party which
supplied a thin veneer of democratic legitimacy for Indonesia's New Order
dictatorship, is the formation of a belief-system that shapes traditional
virtues to support the existing model of capital accumulation. In Indonesia that model was pembangunan. Middle-class values were norms that made pembangunan work.
It remains to assess what, if anything, we have
accomplished by weaving an account of Indonesian history around the theme of
middle-class values. We might have
discussed the failure to build social democracy; the fall of Sukarno and the
ensuing genocide in Central and East Java, Bali, and Sumatra; the formation of
the beliefs and values of the military and civilian elites of the New Order;
the collapse of the economy in 1997 and the consequent fall of General Suharto
and the New Order in 1998--all without mentioning the middle class. We might have made the point that the
constitutive rules of society are deep causes of historical events without
mentioning middle-class values.
We hope, however, that in offering the
historical account in this manner, we have accomplished an advance toward
demonstrating, or at least suggesting for the reader's consideration: a) that
the normative structures just beyond the conceptual horizon, and therefore
invisible, for the middle classes, are the same as the normative structures
that are deep causes of the historical events that unfold in a capitalist
world; b) that the values of the middle class are capable of transformation;
and c) that transformation of values amounts to a change in conventional norms,
which amounts to a change in social structure.
Such a change can remove impediments to the solution of the Basic
Problems stated at the beginning of this chapter, i.e., how to have high wages,
how to include everyone in the benefits of society, how to live in harmony with
the environment.
Points (a) (b) and (c) may be made clearer by
further comments on the contradiction between use-value and exchange-value--a
concept we introduced above in offering a structural explanation of why the
Indonesian economy suddenly collapsed.
We will use capital letters A, B, and C to make our respective comments
on points (a) (b) and (c).
A. Adam
Smith (from whom Karl Marx got the use-value/exchange-value distinction) was
quite clear that the whole point of economic activity was use. The purpose, he said, was to provide the
"necessaries, conveniences, and amusements of human life.” Exchange was not an end in itself, but a
means to an end. Smith believed that an
invisible hand would guide exchange so that everybody's needs would be
met. We now know that he was
wrong. It should be acknowledged that
he had the best of intentions: to harness the powerful motive of self-interest,
and the immense efficiency made possible by the specialization of labor, to
build a society in which everybody's needs would be met. Smith did not foresee a situation like the
one in which Megawati's Indonesia finds itself today. He did not imagine that a government would be powerless to
activate the economy because of a lack of sufficient numbers of people, with
enough money and enough motivation, to make the
investments-with-the-expectation-of-profit apparently required to sop up
unemployment and get the economy going again.
There was never any fiendish grand design or
conspiracy to create a world where governments are constrained in the policies
they adopt by the overwhelming need to create a favorable environment for
profit accumulation--and where they sometimes fail to do so in spite of their
best efforts. Yet that is the way
history has turned out, and that is the way the world is. The middle class does not see that there is
an ethical issue here. It accepts the
economy as quasi-natural and economics as quasi-science. The root of the problem and what the middle
class does not see are one and the same.
B. The transformation of middle-class values is
not mysterious or far-fetched.
Use-value itself, the idea that something should be produced for use
because it is needed, provides a viable growth point. It is a simple concept.
The homeless need homes. The
hungry need food. The sick need
doctors, nurses, and hospital beds.
Muslims and Christians, and everybody in one idiom or another, have
inherited from the distant past the language of zakat and agape, which
mean inclusion. The excluded, the
rejected, ought to be included. Direct
action to meet needs is a logical extension of existing values. It is also what is needed to overcome the
constraint that hogties governments: namely, that they can find no way to meet
the basic needs of their peoples without first establishing the conditions that
will attract investment and create jobs.
By "direct action" we mean seeing a
need and acting to meet the need.
Direct action implements a "care ethic" as Carol Gilligan once
defined "care ethic": i.e. "attending to and responding to
needs."[24] It means volunteering, organizing charities,
non-profit foundations, land trusts, cooperatives, self-help groups,
intentional communities, government programs, labor union programs,
worker-owned enterprises, family farms, farmers' markets, shared housing,
mutual aid, municipal enterprises, traditional tribal forms of cooperation and
sharing, faith-based communities, microcredit programs like the Grameen Bank,
nonprofit hospitals and schools, access to tools for self-reliance, gleaning
from the fields, sharing with neighbors . . . it means whatever works. Although the reason for using the phrase
"direct action" is to say there are alternatives to meeting needs by
creating the conditions under which capitalists will create jobs and produce
commodities, direct action does not imply ruling out private business. Sometimes markets work well. Sometimes private ownership works well. In the situations where capitalism is
working well, there is no need to fix it.
The problem is to find ways to include and meet the needs of the
billions for whom capitalism is not working well.
Thus, to quote from the title of Peter Benson's
book, the goal of middle-class parents, namely to raise caring and responsible
children, is in accord with the broader goal of building a caring and
responsible economy.
C. Neoliberal economists will object that large
amounts of direct action to mobilize resources to meet needs, based on the
principle of use-value ("for people and not for profit") will
"crowd out" private investment.
To the extent that human needs are met by government programs, the
nonprofit sector, and cooperatives, there are fewer opportunities for profit. Thus direct action interferes with the
overriding imperative of neoliberal public policy: to create conditions
favorable to capital accumulation. Much
ink has been spilled to try to prove that the net result of "crowding
out" is to do more harm than good.
Here we are taking another point of view: a change in values, a care ethic,
amounts to a change in social structure, which liberates government, labor, and
everyone from the overriding imperative to create conditions favorable to
capital accumulation. It is true that
the neoliberal drive to privatize everything and to let markets determine all
prices is frustrated by direct action, but that is only a negative result if
one thinks that economic science has already discovered the definition of the
ideal world, and that the definition is private property plus free markets. If one believes that democratic polities
should be able to choose mixed economies, freed from the constraint of having
to subordinate everything else to the imperative of attracting investors, then
one sees the ideal differently. A
better ideal would be a worldwide mosaic of cultures in harmony with nature,
within which many different sets of norms mobilize resources to meet needs.
Neoliberals are wont to reply that history is
over, that history has proven that only capitalism works, and that there is no
empirical evidence that socialism works.
We reply that any short list of the nations whose living standards are
highest will show that a majority of them are nations which have had social
democratic parties in power, either alone or in coalitions, for major parts of
the second half of the twentieth century.
We refer to the painstaking statistical work by Amartya Sen (1997),
Richard G. Wilkinson (1996) and others, which has shown that, measured by
objective standards, the most successful societies are the ones which have
managed to reduce gross inequalities of wealth and income. Limiting attention to the immediate vicinity
of Indonesia, the three nearby societies that work the best appear to be
Australia, New Zealand, and Singapore, all three of which can lay claim to
being social democracies and welfare states, albeit with significant
blemishes. We would add, furthermore,
that throughout the world, even in the United States, wherever ordinary people
have attained high wages, pensions, the rule of law in the workplace, health
care, and education, it has been through the enactment of measures typical of
the social democracies of Western Europe.
What more empirical evidence do you want?
In our long and fascinating conversations with
neoliberal economists, we sometimes suspect that they assume that there is no
empirical evidence to support our views because it seems to them that a radical
philosophical critique of the foundations of capitalism implies advocacy of
something bizarre that has never been tried.
Like a high-tech economy based entirely on barter. Or forcing everybody to live on rural
communes. Because we write about
unavoidable problems inherent in money, in freedom, in markets, in the profit
motive, and in private property, some neoliberals apparently assume that we
must advocate a society with no money, no freedom, no markets, no profit
motive, and no private property. They
accuse us of being hypocrites if we carry a wallet, shop in a store, or own a
bicycle.
Our emphasis on the structural impediments to
economic transformation is not meant to be an argument for something that has
never existed and never could exist.
Today social democracy is everywhere in retreat, and everywhere
struggling to conserve its past achievements.
Our focus on structural impediments is for the purpose of showing ways
to overcome them. We wish to make a
small contribution to piloting the democratic left through the current storms
into smooth sailing that resumes social democracy's steady progress toward a
world that works for everyone.
We regard the argument of this chapter as
support for those promoters of middle-class values who are taking a step
forward from the private to the public.
They are encouraging people who aspire to be good in their private lives
also to engage social issues constructively, from an ethical point of
view. Psychologists and therapists,
schoolteachers, preachers, and youth group leaders, who are showing young
people and adults how to live value-centered lives, should have the courage of
their convictions. They should dare to
challenge the economists and the politicians.
Economics and politics should be conceived as value-centered too, not
just because such a concept would be edifying, but also because norms are the
very stuff of which economic and political institutions are made.
It can be
objected that Indonesia under Suharto cannot be evidence for any claims about
middle-class values because of the government’s legendary levels of
corruption. If honesty is one of the
main middle-class values, then, one might argue, no account of events in
Indonesia (under Suharto, or, perhaps, during any time period) explains
anything about what happens in a society with middle-class values. Our reply to this objection is as follows.
As a preliminary, it should be noted
that the relationship between mainstream economic theory and the kleptocratic
character of the Indonesian government was different before and after the crash
of 1997-98. Before the crash, a major
reason given by foreign aid donors for supporting the technocrats was that the
alternative was even more corruption.
Clear technical reasons for policies, which kept policy-making out of
politics, somewhat limited the opportunities for corruption. After the crash, the mainstream economics
establishment had to explain why a nation that had been their star example of
the benefits of following mainstream advice, had relapsed into economic
paralysis. The high level of corruption
then served as one of several post hoc explanations of the disaster.