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Laissez-faire economics opens door to 'exploitation', Sri Mulyani warns
Market mechanisms must not be allowed run their course, the finance minister says, warning that a lack of control by the state opens the door to exploitation.
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Finance Minister Sri Mulyani Indrawati stands before the press on Mar. 25, 2024, for a photoshoot prior to a press conference at her office building in Jakarta. (JP/Deni Ghifari)
M
arket mechanisms must not be allowed run their course, Finance Minister Sri Mulyani Indrawati has said, warning that the market cannot resolve every problem and that a lack of control by the state opens the door to exploitation.
Speaking at the National Seminar of Jesuits Indonesia on Thursday, Sri Mulyani said the state, representing the will of the people, had to have a presence to keep the economy in check.
“No country must let the market work on its own because [...] exploitation will take place. That’s what was known as colonialism and exploitation during the colonial era. The basis has always been capitalism and market mechanism,” said the minister, adding, “to balance things out, the state must be present”.
Sri Mulyani also quoted some paragraphs about neoliberalism out of Fratelli tutti, a book of encyclical compilations from Pope Francis published in 2020.
The Pope wrote, “Whatever the challenge, this impoverished and repetitive [neoliberal] school of thought always offers the same recipes”, which were “liberalize, let the market work”, explained the minister.
Sri Mulyani then cited the Pope again on how neoliberal “magic theories” of spillover and trickle-down effects could not resolve inequality, which she said was “really true”, since the market only worked on [principles of] “efficiency, resource allocation”.
Equality-focused state intervention in Indonesia was present in the country's progressive tax regime, she said, where the haves were taxed at higher rates than the have-nots.
