f power and the volatile collisions that have accompanied its transformation in Indonesia over the past

four decades have been characterised by a remarkable degree of acrimony. In part, this is because many
of the battlelines were drawn up at the height of the Cold War, laying the foundations for highly
passionate attitudes towards the Soeharto regime – the ascendance of which was accompanied by the
massacre of hundreds of thousands of real and imagined communists. The problem, however, is deeper
and more critical not least because market-oriented liberals found themselves for over three decades
immersed in an uncomfortable and ongoing embrace with a repressive and authoritarian political
regime. They had to defend the very principles of neo-liberal ideology from attack as the advance of
capitalism seemed to enhance rather than undermine an arbitrary and predatory system of power.
Moreover, rather than dismantling the centralised authoritarian rule that underpinned Indonesia’s state
capitalism, the growth of powerful private interests increasingly became an integral part of it.
This study is therefore drawn into larger and more general debates about the relationships between
globalisation, markets and systems of state power, investigating in the Indonesian context
circumstances where global markets might actually throw out a lifeline to authoritarianism and enable
an oligarchic ascendancy to prevail. Furthermore, in the volatile circumstances following the demise of
the New Order, it challenges widespread neo-liberal assumptions about the processes of convergence.
While the Indonesian debates recall in many ways earlier ones regarding market and democratic
‘transitions’ in former Soviet-bloc countries, they have also been increasingly drawn into newer
controversies about the salvaging of so-called ‘failed states’, and about institution-building, especially
given the ongoing experiences of Afghanistan after the Taliban and Iraq after Saddam Hussein.
It is significant that the case of Indonesia had long presented neo-liberal orthodoxy with difficult
paradoxes. The protracted metamorphosis of power in which authoritarian rule and state capitalism
were colonised and harnessed to the interests of a pervasive politico-business oligarchy in the 1980s
and 1990s took place as Indonesia’s integration with global financial and capital markets
PREFACE

deepened and became more intense. Even the more direct and instrumental leverage over domestic
policy agendas enjoyed by such bastions of neo-liberal orthodoxy as the IMF after the 1997 crisis and
the collapse of authoritarian rule in 1998 did not produce the expected liberal transition. What instead
emerged was an extraordinary scramble for power and wealth in an apparently chaotic system of
parliaments and parties while old relationships between the state and business proved resilient as a
procession of bankrupted (or should have been bankrupted) tycoons struggled to keep their corporate
empires intact under assault from domestic reformers and foreign creditors.
The sheer density of events in Indonesia since then, the uncertainty of back room intrigues and
shifting alliances, the confusing struggles to maintain or to dismantle economic empires, led some
analysts towards highly descriptive attempts to keep up with the day-to-day complexities of economic
and political life where the problem became