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Bulletin of Indonesian Economic Studies

ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20

Reorganising power in Indonesia: The politics of

Oligarchy in an age of markets

Richard Robison & Vedi R. Hadiz

To cite this article: Richard Robison & Vedi R. Hadiz (2005) Reorganising power in Indonesia: The politics of Oligarchy in an age of markets, Bulletin of Indonesian Economic Studies, 41:3, 395-396, DOI: 10.1080/00074910500306619

To link to this article: http://dx.doi.org/10.1080/00074910500306619

Published online: 18 Jan 2007.

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Bulletin of Indonesian Economic Studies, Vol. 41, No. 3, 2005: 395–6

Comment on Review of

R

EORGANISING

P

OWER IN

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OLITICS OF

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BIES 41 (1), April 2005

Richard Robison

Institute of Social Studies, The Hague

Vedi R. Hadiz

National University of Singapore

Ross McLeod’s review of our book Reorganising Power in Indonesia: The Politics of Oligarchy in an Age of Marketsappeared in the April 2005 edition of this journal. Overall we think that the reviewer gave a comprehensive and fair account of our interpretation of the rise and fall of the Soeharto regime and the complex events that have shaped the political economy since then. We do feel, however, that it is necessary to make a brief reply to some of the conclusions drawn in the final paragraph: specifically that we have presented a ‘grossly misleading caricature’ of the views of political scientists and economists and, in particular, that we sim-plify the way in which economists deal with issues of market and institutional reforms.

On the contrary, the book begins, in chapters one and two, with an extensive analysis of the evolution of neo-liberal thinking, from the early perspectives of what Stiglitz has termed ‘market fundamentalism’ to the increasing interest of neo-liberals in the problems of market failure and the need for some form of effec-tive regulatory state. Here we consider the influences of public choice political economy and the new institutional economics in shaping the complex and shift-ing amalgam of ideas and interests now generically known as neo-liberalism. We examine the sorts of internal struggles that characterised the move from the era of the Washington Consensus into that of the so-called post-Washington Consen-sus. Indeed, we go beyond the growing neo-liberal interest in problems of gover-nance and institutions to consider the new neo-liberal interest in civil society and social capital as a central factor in the market agenda. We think that chapter two, in particular, provides as comprehensive and nuanced an analysis of the intellec-tual frameworks that have underpinned various approaches to the Indonesian case as can reasonably be expected.

In other words, we do not feel we have glossed over or treated superficially the nature of neo-liberalism, especially in the analyses of these two introductory chapters that provide the framework for the whole study.

We are fully aware that not all neo-liberals are convinced that ‘shock therapy’ is enough to produce the appropriate regulatory institutions, or that deliberate attempts at institutional engineering or constructing some sort of regulatory state

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will work. And we have all seen the disputes over the role of social policies. How-ever, we also feel that the sort of liberal triumphalism that followed the Asian eco-nomic crisis shows how ideas of ultimate convergence are still alive in neo-liberal circles. In other words, neo-liberalism is a body of ideas and interests in which dispute is most bitter internally, as is the case with manyother forms of funda-mentalism.

Finally, we accept that institutions and ‘governance’ are important in that they do shape political options. But we also argue in the book that institutional fixes, including the new interest in social capital, are no better than policy fixes where they are expected to obviate the need to confront entrenched systems of power relations.

But these are questions that we hope can be debated by scholars of Indonesia more explicitly in the future, and in more theoretical and comparative terms than has generally been the case. Indeed, it is remarkable that the study of Indonesia has not produced intellectual debates of the kind that have characterised, say, the study of Latin America or Russia. And yet there is much to discuss—not least how to account for the lack of self-reflection about why so many got the Soeharto era so wrong and for so long.

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