In the heated debate on neoliberalism, economists, particularly those who strongly uphold market economy principles, apparently put themselves in an innocent light against the allegations. They are innocent thus should not be accused or blamed for their defensive responses to their critics. The reason is simple.
Open all economics textbooks used by economics students and you will find no mention of neoliberalism or anything whatsoever related to that controversial term. Over one hundred years ago, economics was born into a field of study called political economy and it has evolved into a scientific discipline by abandoning the "political" in its title. Today economics, as most economists would boast, is a science relying on pure logic not much different from natural sciences, such as physics or chemistry.
This is attributed to the extensive use of mathematical models and the desire to search for generalized patterns that govern economic behavior. In other words, models and concepts developed by economists are believed to be as universal as natural laws discovered by physicists. Some economists even dare to claim that the market, which is the primary explanatory factor in economic analysis, is as real as natural phenomena. In their view, market force is likened to a hurricane; both come with brute force.
Grasping the way in which mainstream economists interpret their discipline and how it should be imposed on public decision-making, it is futile to have a debate on neoliberalism with economists. Most economists believe that politics are toxic to the economic system, thereby suggesting that good economic policies must be cleansed of political influences.
And because the state is a political institution that carries a set of interests, it is deemed harmful to the smooth operation of economic systems that rely on "the invisible hand".
Accordingly, economists strongly recommend market systems to be arranged in such a way that minimizes, as much as possible, state intervention and control.
Nobody is able to deny that markets are fundamental in contemporary societies. Almost every activity we do every day involves the presence of markets, both real and virtual. But we should underline the fact that what we call markets are social institutions.
Its existence and all principles that govern the way it works are socially constructed. Furthermore, the whole body of knowledge about markets is socially constructed because the production of this knowledge is massively shaped by a multitude of social factors.
Having said that, we need to carefully examine the claim that economics is existentially attached to "objective reality".
This is not to say, however, that economics is all bogus. The knowledge of economics only applies within certain boundaries and beyond those boundaries exist a set of other realities that cannot be detected by economic tools. And it is these boundaries that set economists apart from neoliberal critics.
Hence, to make a more productive debate requires abandoning the notion that the market is everything and everything is about the market. Rather, let us focus our debate on the state itself without having to juxtapose it with the market. Almost all problems we see in Indonesia today can be attributed to the weakening of the state institution.
The weakening process of the state in Indonesia resulted from ruptures after the collapse of Soeharto's patrimonial structure that underpinned the establishment of the New Order state for three decades. This was exacerbated partly by democratic transformations and partly by the imposition of neoliberal (market-oriented) policies in public sectors. For the latter, they reduced state authority in many ways and consequently degraded, rather than strengthened, the state's institutional capacity.
The concern over the state is plausible because the state is the only institution that bears obligations to protect its citizens. It is in fact the raison d'*tre of a modern state. Globalization may have produced effects that render the state irrelevant in some aspects, yet the state remains pivotal to the fate of every individual.
Certain cases have shown that the state is potentially harmful to citizens, but it is also the state that possesses the authority and power to keep its citizens from risk and free from the dangers posed by the modern world.
In the era that witnesses the revival of the state, a trend that is increasingly appearing in many countries, most notably in the United States after Obama, it is relevant to rethink not only the role of the state in Indonesia, but more importantly, how that role must be played in a situation where the state's capacity is plunging. This requires more than just anti-neoliberal rhetoric like some politicians are touting to appeal to voters.
We need to stop debating what neoliberalism is and what is not, or who are neoliberals and who are not. It is healthier to draw our attention to the problem of the state that is suffering from downgrading institutional capacity. Transferring all public matters from the state to the market, as market-oriented economists relentlessly suggest, is not solving the main problem because it lies in the institutional capacity of the state. To some extent, it even makes it worse.
We need to bring the state back to its main business, which is to serve its citizens. It involves capacity improvements through bureaucracy reforms and institutional replenishment, not charity programs offered by the ruling elite to please the public ephemerally.
This is what the next government must do whoever wins the presidential election. To rephrase Bill Clinton's campaign slogan, "It's the state, stupid."
The writer is an assistant professor of sociology at Nanyang Technological University, Singapore.
