Authoritarian States, Capital-Owning Classes, and the Politics of Newly Industrializing Countries: The Case of Indonesia

Abstract

In the past three decades, the Suharto regime has presided over the rapid industrialization of Indonesia and the development of its capital-owning classes. A complex relationship between state and capital has emerged, based upon structural factors (the need to maintain investment, economic growth, and a revenue base) as well as instrumental factors (the involvement of officials in business as state managers of capital and private investors). Recently, however, significant tensions have emerged between the interests of the regime and its officials on the one hand, and the interests of various elements of the capital-owning classes on the other, in response to broader structural pressures for economic change. These tensions and pressures are a challenge to the pact of domination between state officials and their corporate allies, the system monopolies and protection from which corporate capital emerged, and the nature of political domination exerted by officials over the state apparatus. Although the growing social and economic power of the capital-owning classes is not being converted into formal instrumental control over the state apparatus, economic strategies and political and economic alliances are being restructured, resulting in important shifts in the nature of Indonesian authoritarianism.

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