ECONOMIC DEVELOPMENT
AS A CULTURAL PROBLEM
(Konfrontasi, September-October, 1954)
SOEDJATMOKO
TRANSLATION SERIES
MODERN INDONESIA PROJECT
Southeast Asia Program
Department of Far Eastern Studies
Cornell University
Ithaca, New York
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640 Stewart AvenueECONOMIC DEVELOPMENT
AS A CULTURAL PROBLEM
Soedjatmoko
(Konfrontasi, September-October, 1954)
-■ PROJECT
studies
TRANSLATION SERIES
Modern Indonesia Project
Southeast Asia Program
Department of Far Eastern Studies
Cornell University
Ithaca, New York
19581
@ 1958 by Cornell Modern Indonesia ProjectIll
PREFACE
Although the subject of Indonesian economic devel-
opment has commanded the attention of a number of writers,
including several able economists, very little serious
writing has been concerned with its social context. One of
the few significant exceptions has been Mr. Soedjatmoko’s
article in the September-October, 1954, issue of the Indo-
nesian scholarly journal, Konfrontasi. This article stimu-
lated considerable discussion among Indonesian intellectuals,
but, being written in the Indonesian language, has been
available to few Western readers. The Cornell Modern
Indonesia Project is happy to have the opportunity of pro-
viding in its Translation Series an English translation of
this important article. We wish to express our appreciation
to the editors of Konfrontasi for their willingness to make
it available to a wider audience and to Mr. Soedjatmoko for
his careful checking of the translation.
Ithaca, New York
January 25, 1958
George McT. Kahin
Director1
It is hardly necessary to discuss at length the impor-
tance for Indonesia of economic reconstruction and develop-
ment. The hopes for a fuller and better life, which inspired
the Indonesian people during our revolution, have not yet
been fulfilled. These aspirations derived from and coincided
with the extensive social changes which we have been experi-
encing. The hitherto closed social structure cannot any
longer, hold out against the penetration of modern economic
life. The villages cannot now ensure adequate means of
sustenance, and the situation so arising is felt as an in-
tolerable restraint. As a result, the existing social struc-
ture begins to disintegrate, peasants wishing to find new
means of livelihood drift to the city, while some, with the
same motive of seeking a better existence, join armed gangs.
Thus it can been seen that the fulfillment of independence
and the consolidation of an independent state impose the need
for a new social structure involving a higher level of pro-
duction and a more equitable distribution of the goods pro-
duced. in a situation such as that now prevailing it is only
that social structure and political system which is able to
furnish a solution to the problem of widespread poverty in
Indonesia that can endure. Consequently, the form and the
character of the political, structure of our state, and the
real extent of our independence will be essentially determined
by the, methods we adopt for bringing about our economic
development.
If we analyze the position Indonesia occupies in the
world it is apparent that, with our economy at its present
level the situation of the Indonesian people is still to a
considerable degree determined by factors beyond our control.
Obviously, as long as the circumstances remain so, the prin-
ciple of self-determination is, for us, a concept bereft of
meaning. It is, of course, possible over a period to effect
some consolidation of our position and protect our national
interests by various political measures, but such measures
.will bring only limited and temporary results. The real
guarantee of our being able to give tangible realization to
the principle of self-determination can be provided solely
by increasing our economic strength. The pressing need for
economic development in Indonesia becomes even more evident
when it is noted that numerous other countries have already
attained, and even surpassed, the pre-war economic level.
The figures included in the survey recently compiled by
Dr. Daniel Neumark for the State Planning Board showed that
the pre-war level of national production in Indonesia had not
yet been regained, and moreover that we had not been able to
arrest the decline in the standard of living that had already
begun before the war. The dangers created by this reduction
in national strength are all the more evident when we observe
that the higher the economic level of any state the greater
is its ratio for further economic growth. In other words the
economically backward countries lag continually further behind2
the economically advanced countries, and it becomes increas-
ingly more difficult for the economically backward countries
to attain the more rapid rate of economic development of the
advanced countries. The danger of an even more pronounced
lag in the development of the economically backward countries
and the consequent weakening of their position, is not to be
taken lightly.
It can be seen that a complete fulfillment of our inde-
pendence and the possibility of our achieving real self-deter-
mination are dependent on our ability to set into motion the
process of development by achieving advancement to an extent
and at a rate corresponding to the scope and the urgency of
this problem. The measures taken will similarly determine
the pattern of the political structure of the Indonesian
state and the degree of real independence that we shall at-,
tain.
Although we have, in the course of the last few years,
registered some measure of economic progress, there is never-
theless the impression that this progress has failed to catch
the imagination of the Indonesian people. Moreover, it must
be conceded that the progress achieved up till now is far
from sufficient to meet the demands of our time as indicated
above. The results up to the present are also too limited
to strengthen our self-confidence and enthusiasm and to in-
spire us to further efforts. It seems that the economic
development plans emanating from the Government have failed
to come to life in our society as a whole, although the areas
directly involved are aware of the importance of these plans.
There is a general feeling that the projected developments
will remain mere Government schemes, in which each Ministry
will go its own separate way, not as a constituent part of an
integrated over-all development plan. At the same time the
political parties likewise suffer from a similar failing.
Although their leaders pay lip service to ;the Kea.of economic
development, there is no evidence of any real concern for
this issue. In the present situation in Indonesia party
maneuvering for political advantage takes priority, while
the question of economic development is apparently treated
as a matter of little urgency. It is hardly surprising then
that there does not exist among the public any clear idea of
the meaning of economic development or of the public’s role
in this process. Instances of local individual initiative
are not lacking, but as often as not such enterprise has been
generated by disappointment at the inefficacy of government
planning for the region. In any case, the individual citizen
generally does not have the feeling that he is becoming an
active participant in a large-scale joint undertaking of the
Government and the people aimed at national development. For3
this reason one cannot escape the conclusion that the
attempts at economic development have only been made half-
heartedly and that the program really never got off the
ground. Yet, economic development should be the expression
of a popular movement consciously guided by the Government.
The reasons for the failure to achieve a significant
degree of economic development are manifold. Some of these
reasons are, of course, political in character, since any
nation must fulfill certain political conditions before
being able to take effective action in this field. In our
opinion one of the most important reasons—outside the fac-
tors of a political nature—is the lack of understanding of
the significance of economic development for the country, so
that there is virtually no recognition of the urgency of
this issue. There is also a lack of understanding of what
economic development could mean for each individual in his
own immediate environment. Moreover, it is also not ade-
quately realized that economic development is a process
which touches every sphere of our existence. Neither has
there been any systematic stock-taking of the various obsta-
cles which are rooted in our pattern of culture. In order
to establish a realistic approach we must see the question
of economic development in its relation to all facets of our
way of life, or in other words, in its relation to our cul-
ture .
It is not the intention of this essay to examine speci-
fic economic or political factors related to the formulation
and implementation of any program of development. Conse-
quently we will not analyze those political conditions which
must be fulfilled in Indonesia before we will be able to
-carry out schemes of economic development. Nor will we dis-
cuss the formulation of a policy of economic development.
It is merely the intention of this essay to review briefly
some aspects of the relationship between economic develop-
ment and various cultural problems, some of which are direct
ly related to the basic characteristics of the nation. For,
it can be definitely asserted that economic development is
directly related to the national character of a people just
as is its political and social structure.
That economic development is not exclusively an econom-
ic problem can be deduced from the fact that the determina-
tion of the objectives and the nature of any development
plan and e.g. the ratio of investment for the manufacture of
capital goods and the production of consumer goods are based
on political and therefore non-economic decisions. Similar-
ly, decisions regarding the manner in which any economic4
development program is to be implemented—the degree of cen-
tralization and decentralization, the question whether the
program is to be carried out by government agencies alone or
whether the co-operation and active participation of the
population is to be sought—the extent of personal initia-
tive allowed in the formulation and implementation of the
program and the degree of individual freedom within this
framework, are all inseparably linked to the underlying
drives and aspirations of a people, and to the unconscious
purposes of that society; in other words they touch upon the
cultural basis of that society.
Economic Development as a Process of Social Change
The extent to which one single factor comes into play
can be illustrated with just a few examples. Among the meas-
ures taken to bring about economic development the establish-
ment of co-operatives is of considerable importance. Co-op-
erative enterprises also constitute a jumping-off point and
an intermediate step towards modern economic activity which
is sufficiently close to the atmosphere of our traditional
ways of life and at the same time capable of being used as a
basis to build up our economic strength and of creating forms
of larger scale economic activities.
The establishment of a co-operative in a village means
the introduction of specific techniques of organization. An
administrative apparatus is required with the modern methods
of bookkeeping, and the functioning of the enterprise demands
financial responsibility. Then, the attitude of the villag-
ers toward money and credit will have to change as a result
of the functioning of the co-operative, and the members of
the co-operative will, moreover, have to be paid in money.
The setting up of a co-operative will inevitably lead not
only to a change in the social relations in the village but
also to a change in the hitherto prevailing customs and in-
stitutions. The pattern of village administration and the
character of the intercourse between the village and the sur-
rounding regions must be adjusted accordingly. With the
setting up a co-operative in a village there is introduced
into the existing relationship of forces a new center of
power, contesting the influence of the traditional order of
things, so that a revision in the previously unchallenged
political pattern takes place. Out of necessity the villag-
ers must adapt their activities, their concepts, and their
customs to the existence of these new bodies. Also as a5
consequence of the setting up of a co-operative there will
be a new group in the community with specialized knowledge
and skills which were formerly not known in the village, and
the villagers must be prepared to respect and to receive in-
to their midst, the members of this group.
The superficial similarity between the functioning of a
co-operative and the practice of gotong-rojong (mutual aid)
actually obscures the significance of the changes resulting
from the establishment of a co-operative in a village, and
not infrequently this very similarity becomes an obstacle to
the success of the co-operative. The practice of gotong-
rojong is based on the feeling of kinship existing in a vir-
tually isolated and largely autarchic community. As was
pointed out above, the functioning of a co-operative entails
the payment of monetary reward for services, a procedure
usually not found with the practice of gotong-rojong. A
co-operative is set up by a decision taken deliberately and
voluntarily by the participants in the enterprise. Those
making up the membership of a co-operative have joined to-
gether with a specific objective in view and have done so on
the basis of a reasoned understanding of their individual
and common rights and interests. Through the co-operative
an outlet is found to a way of life more open and wider in scope
than was previously possible. In our experience with co-op-
eratives it has been found that if the difference between
the functioning of a co-operative and the practice of gotong-
rojong which is rooted in the feudal-agrarian structure^ Is
riot fully appreciated, the danger exists that the co-opera-
tive will become no more than a new embodiment of feudal-
agrarian traditions. There are not a few village co-opera-
tives which are no more than associations of the local feudal
elements and which are thus used as a new means of perpetu-
ating the traditional power over the poorer villagers.
In any case, it is quite clear that the success or
failure of a village co-operative depends not only on the
ability of the leaders and members to conduct the enterprise
but on social and cultural changes as well which are directly
or indirectly related to the functioning of the co-operative.
Therefore, the establishment of a co-operative in a village
is and should be accompanied by various changes in other
spheres of village life, and it can even be said that the
success or failure of a co-operative depends largely on the
degree of ability to make these changes. Obviously, the
co-operative is merely one aspect of the multiple process of
growth and development taking place in different fields
throughout the entire village. If the co-operative is to
achieve satisfactory results, these changes must be effected6
simultaneously; that is to say, we are faced with the ques-
tion of energizing the mode of life in the village in its
entirety.
Introduction of machines and mechanical equipment into
the village—for example, tractors and the establishment of
small-scale industry—similarly requires an adjustment of
the pattern of existence so as to meet the new situation.
In the case of the tractor, for example, it essential that
there should be present not only the ability to operate the
equipment but also the desire to maintain it. Experience
has shown clearly that we, are still far from ensuring the
fulfillment of these requirements. In addition, it is also
necessary that the old methods of cultivation be modified to
conform with the availability of the tractor so as to derive
the greatest advantage from this new facility. The inhabi-
tants of the villages must be brought to the point of treat-
ing mechanical equipment and machinery as implements like
the patjol (hoe)—at the service of and under the control of
man. Once such a viewpoint is acquired the machine will no
longer be an alien thing, but a normal tool brought into
being by reason of the needs of the village community and
the ability of the village community to answer these needs.
In order to arrive at this stage we must align our
thoughts and actions and production relations with the new
factor of the machine that we introduce into our existence;
in short, we must completely absorb the machine into our
social structure. This point applies to the field of indus-
trialization in general, where the introduction of machinery
represents only the beginning of the process of change in
the social patterns and mental outlook of our people. Not
until we have established appropriate organizational methods
and a new sense of discipline in work, not until we have
mastered the mechanical techniques can the machine be said
to be vitally integrated in our social pattern. Moreover,
we cannot claim that mechanization has been absorbed into
our way of life until we can evidence not only the ability
to handle and maintain machinery but also the ability to
construct mechanical equipment ourselves and continuously
evolve new models more suitable to our own requirements. Ob-
viously the machine is both an expression of the level of
development and an instrument employed by a society to achieve
its aims, and we cannot disassociate machinery and technology
in general from the values and the aspirations of any given
society. In other words, the machinery and technology used
by any people are an embodiment of, and are inseparable from,
the culture of that people. Thus, in analyzing the problem
of industrialization in Indonesia we see that there is re-7
quired a process of all-enveloping change, a process that is
a creative adjustment of our culture.
To accomplish this creative adjustment we must evoke
from within our own cultural pattern appropriate stimuli
which will serve as a catalytic factor in our social struc-
ture, providing an impetus toward a modernization specifi-
cally Indonesian in character. Failing this, the adjustment
we make will be purely passive; we will not go beyond the
level of mere imitation; we will have done no more than
shift from one static position to another static position,
and we will always lag behind. At the same time, in ap-
proaching the question of industrialization we cannot take a
stand of being prepared to accept modern machinery and tech-
nology but unwilling to accept other expressions of modern
culture. There is absolutely no justification for this
narrow eclecticism advocated by certain of our cultural
pleaders; an eclecticism which is also vaguely found among
various sections of the population. As a prerequisite con-
dition for our mastering of machinery and of modern tech-
nology we must first understand the culture and the mental
orientation which brought them into being. An understanding
of occidental culture, the fountainhead of the modern world,
could help us to discover wi.thin ourselves dynamic principles
of our very own, like those referred to above.
However, before going into this point further, it is as
well to turn our attention for a moment to another question.
JThe process of industrialization and economic development is,
as we have seen, a process of change modifying the social
structure and the mental orientation of a people. Against
this formulation the objection may be perhaps raised that
the change in outlook is in fact a result of the introduc-
tion of modern machinery and technology and that cultural
patterns are determined finally by social relations of pro-
duction. Admittedly the course of the Industrial Revolution
in Western Europe proves that these contentions are true in
a general sense, on the other hand we must also recognize
that any country which sets out to change production rela-
tions and raise the level of production within a short period
and according to a set plan, while avoiding as far as possi-
ble such sufferings as the Industrial Revolution inflicted
on the peoples of Western Europe, cannot escape the necessity
of taking into account, the consciously utilizing those cul-
tural factors.
There is the example of Soviet Russia where, at a cer-
tain point, it was felt necessary to make Soviet culture
serve the interest of industrialization, and, to achieve
this object of industrialization, a rigid control was insti-
tuted over all creative activity. The concept of Socialist
Realism is a result of this policy. Similarly in Indonesia
the mentality of the Indonesian people will change with the
spread of industrialization and the social consequences of
this development. In actuality, the Indonesian outlook has
already undergone changes and will continue to change along
with the disintegration of the old social structure. But it
is also to remembered that if we are to respond effectively
to the urgent need for economic development as a means of
safeguarding our independence we will have to mobilize cul-
tural factors so as to facilitate and accelerate this process
.of change.
There is yet another point to be borne in mind. Since
it is only the Government and the national leaders which will
start this process of industrialization and change, it is
above all in their outlook and thinking that a change must
take place before economic development can really be initi-
ated. Here lies the crux of the problem, for it is among
these circles that there is a lack of desire and determina-
tion to proceed with economic development, with the result
that the rate of progress is negligible. As will be demon-
strated later, this situation is partly due to the inhibiting
influence of certain cultural restraints on these groups.
In consequence, neither the change in outlook related to the
disintegration of the old social structure nor the desire of
the mass of the people to explore new ways can be adequately
channeled. There can be no doubt whatever as to the impor-
tance of cultural factors in this connection.
But to return to the main theme. We have seen that
when we face the industrial strength of the modern world we
are in essence confronted with its culture. It was also
pointed out that if we wished to rediscover and develop the
autochthonous dynamic principles within ourselves, we should
also try to grasp the central core of Western culture in
which, in the final analysis, western dynamics are rooted.
Some clarity in this respect may be obtained by an approach
based on two primary concepts—the idea of dominating nature
and the principle of continuous renewal.
In the static feudal-agrarian pattern of society which
encompasses a large proportion of the Indonesian population,
the essence of life is seen in terms of the adjustment and
unity of man with the universe and its laws. This is a con-
ception of life by which man fundamentally establishes
his place in and his relation to his environment through
various rituals and numerical formulae intended to ensure9
his safety and. well-being. On a higher spiritual level ulti-
mate happiness is regarded as being based on an overcoming
of and release from the bonds of his ego and in thus achiev-
ing a supreme feeling of oneness with the universe. This
jputlook excludes any thought of domination of nature by man
and of harnessing the natural resources to serve human needs.
The modern outlook, however, is based on the realiza-
tion that the conquest of nature by man is possible and that
it constitutes a legitimate purpose in life. With this atti-
tude man is no longer an integral part of nature but a being
apart from it and as such begins to investigate nature, and
in so beginning to dominate natural forces. In order to
achieve mastery of nature man must first gain knowledge of
the laws of nature. This urge to understand nature and to
•know its laws for the sake of knowledge itself is in fact
nothing other than the scientific attitude. The scientific
attitude endeavors to perceive nature as a co-ordinated
whole of which a full knowledge and understanding can be
gradually acquired and organized in a logical theory, the
elements of which are interrelated to each other in a consis-
tent fashion. This attitude constantly endeavors to objecti-
vize its conclusions and constantly to re-examine them in
the light of new findings; and when necessary established
theories are revised Thus, the crux of the scientific
attitude is the spirit of continual renewal. Each new
assessment is regarded not as an absolute truth but rather
as a proposition to be re-examined and tested over and over
again. Because to the scientific mind the truths of today
may well be the superstitions of tomorrow, it is realized
that what is today acclaimed as an advancement may well
become an obstacle to the introduction of greater improve-
ments in the future.
The desire to understand and dominate nature, the cease-
less search for a never completely attainable truth, the
readiness to bring the entire pattern of existence into con-
formity with this concept, and the conviction that the con-
ditions of mankind to an important extent can be bettered
through man’s domination of nature—these are the two basic
concepts which have constituted the sources of Western tech-
nological development and the great social dynamism accompa-
nying it. Superficial, no doubt, as any sweeping statement
must be, this generalization can nonetheless be useful in
this study. It can be seen that by merely adopting the
machinery and techniques of others we will not solve our
problem. The equipment we use, the methods we apply must
be felt as part of ourselves, as means that have been evolved
from our own culture to meet our own specific needs. Again10

it may be stressed that our problem consists essentially of
looking for our own autochthonous principles of dynamism,
i.e.principles evolving on their own, from among ourselves,
in accordance with our own specific characteristics. This
dynamism must be such as to ensure that we will not any
longer lag behind the dynamic development of the rest of the
world. Moreover, whatever other constituent elements there
may be, these dynamic principles incorporate more than before
£he conviction that man can and must determine his own des-
tiny in this world. Equally, the desire to know and dominate
nature and the willingness to accept the changes that come
with continuous progress must be fully alive. From this
survey some idea can be gained of the extent and depth of
the changes necessary to create conditions allowing of eco-
nomic development, because essentially we are faced with
problems reaching into the roots of our culture.
Forces Impelling Change and Forces Resisting Change
Generally speaking, inherent in every cultural pattern
are certain forces giving an impulse toward change, toward
an adjustment of the cultural pattern in relation to the
emergence of new problems. These forces act in the direc-
tion of renewal and derive from the vitality of a culture.
On the other hand, similarly in every cultural pattern there
is a fundamental element of resistance to any innovation, to
any revision of the existing order, and usually, the higher
the degree of integration of a cultural pattern and social
structure, the stronger is this element of resistance to
change. Inevitably in the course of the history of every
people, a clash comes between these two opposing forces,
both of which are expressions of the vitality and the indi-
vidual character of the cultural pattern and the social
structure. In considering the question of economic develop-
ment in Indonesia, we see that the forces resisting change
are manifested in a diversity of forms. There is, for
example, the attitude—encountered not infrequently among
high officials, political leaders, and even professors—
conveyed in voicing doubts as to the need for economic
development, in asking whether it is desirable that the
Indonesian people should be recast in a Western mold, whether
we must lead the people toward an existence dominated by
unrestrained competition where each is the prey of the other,
where the individual no longer has any personal relation
with his work or his fellow-workers, and whether such a
spirit should be introduced into our culture and social
structure.11
This attitude embraces, in fact, two elements. Firstly,
there is the rejection of western capitalism—no new stand
this, for in Asia rejection of western capitalism is general.
But more important in relation to our basic problem is the
second element, the rejection of the pattern of existence
that will evolve with industrialism. It is in this rejec-
tion of industrialism in all its consequences that the source
lies of the varying degrees of opposition in official circles
to the carrying out of economic development in Indonesia.
The point merits further examination. In one sense it is
true to say that the ultimate of happiness is ideally
achieved when an equilibrium exists between needs and the
possibility to meet these needs. To achieve this happiness
man can, on the one hand, endeavor as intensely as possible
to fulfill those needs, however high their level. Equilib-
rium is then achieved on a high material level. Conversely,
he can.also endeavor to attain happiness by lowering the
level of his needs so that no special effort is required in
order to fulfill them. Equilibrium is then achieved on a
much lower material level. In general this second alterna-
tive is found where the general attitude to life is essenti-
ally one of "Weltverneinung," i.e., the rejection of enjoying
wprldly life in its fullness. In various parts of Asia,
particularly where the cultural pattern bears the stamp of
Hindu philosophy, and in general where there is a tradition
of mysticism, this attitude is frequently encountered, and
in these regions the attempt toward restricting material
needs often constitutes a powerful ideal.
Among the advocates of this outlook was also Gandhi who
saw the pattern of modern existence as based on an excessive
preoccupation with purely material demands. In the Gandhian
view, the insistence on what was considered an unnecessarily
high standard of material satisfaction reduced man to a mere
slave of the machines that were the prerequisites for the
fulfillment of modern requirements. It was therefore in his
view extremely dangerous for India and for the Asian peoples
in general if they wanted to compete with the Western nations
on the basis of western industrial life. He therefore urged
the rejection of this dangerous road towards happiness, and
he advocated that India's struggle for independence should
be waged not by the adoption of western industrialization
but by a return to the spinning wheel. The Gandhian rejec-
tion of industrialization was based mainly on moral consider-
ations, on the contention that a spiritual decline must
result from the increasing acceptance of industrial life.
Obviously, such a standpoint could only have grown out of
the relative isolation of Gandhi and of India from the out-
side world; it could hardly be objectively defended in the12
face of the dire poverty of the Indian people, nor could it
prevail against the external forces acting on the situation
in India. It is consequently not surprising that despite
the still widespread influence of Gandhi's ideas, in the
field of economic life India has not followed the footsteps
of Gandhi but has chosen to follow the road of industrial
development advocated by Nehru.
As was noted earlier certain groups in Indonesia also
express in varying degrees a hostility to modernization, and
this is one of the causes for the inadequate recognition in
official circles of the pressing need for economic develop-
ment. Except where some specific project is directly related
to the particular interests of one or other party, the ques-
tion of economic development as a whole is not given any
real consideration by most of the political parties in Indo-
nesia. If there is to be positive action taken to bring
about economic development—and every political party pays
lip service at least to this aim—it is essential that the
urgency of the issue be felt sufficiently so that the will
to act is awakened. Similarly, it is necessary that there
should exist a realization of the speed with which measures
for economic development must be put into effect. There
must no longer be any moral equivocation as to the virtues
or disadvantages of economic advancement. It must also be
recognized that economic development is in the final analysis
related to a rise in the level of consumption and, therefore,
to the growth of the desire of the population to possess and
to use the products of industrial life.
In other words, acceptance of the principle of economic
development means the prior rejection of the idea of
Weltverneinung and an acknowledgment of man's title to enjoy
from life the fullest possible material and spiritual satis-
faction as a legitimate purpose in life. It must be recog-
nized that the concepts of our traditional philosophies and
of the Wedhotomo ethics, whatever the nobility of values
these embody, were rooted in a feudal-agrarian pattern which
pan no longer endure now that the old social structure is
collapsing. The task of the Indonesian nation at the present
stage of its history lies in this world, and not in the
world hereafter. Again we see that the problem of economic
development in Indonesia is essentially related to the out-
look of the Indonesian people. As long as our attitude on
this subject is not clear, the implementation of any program
of economic development will be unsatisfactory because there
will still be resistance in the form of the hostility engen-
dered by the old concepts of life.13
While this question of outlook is in the first place a
matter of moral philosophy, there are also among the upper
classes of Indonesia other fields in which the forces of
resistance to change take on more tangible forms. This
becomes apparent, for example, in the course of the movement
from an agrarian pattern to an industrial pattern, or, more
expressly, in the process whereby the peasant becomes an
industrial worker. In this connection there arises the
question of incentives. At a first glance the increasing
drift to the cities, the influx of the surplus population
of the villages seeking an escape beyond the limited oppor-
tunities offered by village life, is seen as furnishing a
labor force which can facilitate the carrying out of economic
development programs, The possibilities of absorption of
this group, continually swelled in numbers by the pressure
of poverty in the villages, are, however, limited. Most of
the villagers coming to the cities are not skilled workers,
and can thus only be employed in factories using unskilled
labor. So we are still faced with difficulties as regards
other sectors of employment in industry. The problem is
posed of raising these unskilled laborers to the level of
skilled workers, and the possibilities for industrial devel-
opment in Indonesia are largely dependent on our finding a
solution to this problem. If we cannot resolve this diffi-
culty it is highly probable that we will face a situation
in which there is a shortage of skilled workers and an over-
supply of unskilled labor.
Experience in other countries faced with the same
problem has shown that, although impoverishment will swell
the numbers of those seeking employment in industry, impover-
ishment alone does not furnish an impulse to acquire those
skills required for industrial development. There arises
then the question of incentives, of determining the means
of inducing the unskilled laborer to acquire the skills
demanded by modern techniques. Obviously increases of wages
will not always provide the desired incentive; such a system
could only be applicable in a social structure in which
money is the gauge of all values. There are, however, a
number of underdeveloped countries where social values cannot
be expressed simply in terms of currency, for various other
considerations apply in the social and cultural patterns of
such countries. There is the consideration of social pres-
tige, the attitude toward work, the attitude toward the use
of free time, and the prevailing opinion of the majority as
to what constitutes the most important things in life. In
addition, it is also to be recognized that if consumer goods
are not available in considerable quantity and diversity,
the increase of wages has virtually no meaning. All these14
factors restrict the significance of money as an incentive
in the labor field.
There are also certain psychological obstacles to the
absorption into industry of the unskilled peasants. In most
cases those who leave the villages for the cities are sub-
ject to various emotional stresses as a result of the changed
environment. In leaving his village the peasant leaves a
set order of values and a way of life which he knows and
esteems, a way of life which gives a stability and peace of
mind which in several cultures constitute an important pur-
pose of life. For this reason the move to the city is, as
often as not, thought of as a temporary interlude to be en-
dured until the measure of personal prosperity is such as to
enable a return to the village. This is another aspect of
the difficultues encountered in our efforts to raise the
standard of skill of the worker. In the life of the village
there is a specific standing and social prestige attached to
each occupation, and each activity occupies a set place in
the established order. Every member of the village community
is conscious of, and can adapt himself to, this pattern.
The villager coming to the city must, in order to adapt him-
self to the pattern of industrialization, be able to accept
criteria of status and standards of prestige relative to his
work, valid in the new environment. This aspect of the ques-
tion must be analyzed more fully; we must ascertain which
factors are incentives and which are obstacles, and we must
then intensify the operation of those elements in our culture
which constitute incentives and eliminate those that consti-
tute obstacles to progress. Similarly, we must solve other
problems relating to discipline in work, to the emotional
relationship to the work performed, and to the sense of time.
There is also to be determined the means by which we can,
with the shortest possible delay, inculcate new ideas more
in conformity with industrialization.
Then we come to the question of what extent of change
can be absorbed by any given cultural pattern, or—in parti-
cular relation to our own economic development--the question
of whether we should adopt an evolutionary or revolutionary
approach in pursuing our objectives. Already we have noted
the existence of a desire for change, but we have also seen
that attempts to introduce changes too divergent from the
established pattern are inevitably met with a negative, even
hostile, reaction. Invariably the more firmly a culture is
integrated the stronger will be the resistance to such
changes. Acceptance of modifications in a cultural pattern
is more likely if those changes can be, without undue diffi-
culty, coordinated with the existing institutions. On this15
basis it may be contended that a policy of gradualism, an
evolutionary policy, would be the most effective for intro-
ducing into our social structure those elements of economic
development.
On the other hand, however, it must be asked whether
such small and gradual changes will be enough to overcome
the difficulties we face within the framework of the old
social structure in Indonesia. If we adopt a policy of evo-
lution the innovations introduced would no doubt be absorbed
in consequence of the desire for change that does exist.
But with this desire fulfilled—and it must not be forgotten
that the extent of this desire is only determined within the
confines of the village—it is then probable that the vil-
lages would revert to the previous traditionalism, or, more
precisely, would display a new attitude of conservatism in
rejecting any further changes for which there would no
longer be felt any pressing need. For example, it is vir-
tually certain that the establishment of a handicraft enter-
prise in any village would be welcomed by the inhabitants;
but this does not in any way imply that these same villagers
would be prepared to work in an industrial undertaking which
was not directly linked with the village, but which would be
ultimately of far greater importance in raising the standard
of living over an area more extensive than the village.
Thus, if the establishment of cottage industries provides no
solution to the problem of reconstruction in the villages
and does not meet the requirements for industrial progress,
it would seem only reasonable to discard the idea of an evo-
lutionary policy and adopt revolutionary methods, making an
immediate step to large-scale industry. In this case it
might be said by those who agree that the difficultues of
readjustment will be more acute but the transitional period
of hardship will no doubt be shortened. This is an abstract
formulation, not without interest; but, after all, in Indo-
nesia the problem will not be resolved on the level of
abstraction. Rather, assessing the situation and the possi-
bilities realistically, we see that we will have to follow
both courses simultaneously. It is, at the same time, to be
borne in mind, that the possibilities for industrialization
in Indonesia are, to a very large extent, dependent on fac-
tors which are, for the time being, beyond our control.
Even so, by analyzing the question of approach, we will be
able to dispel any delusions or misconceptions concerning
the effectiveness of either of the two methods outlined
above. As regards the fundamental issue it is seen that
there are in each cultural pattern and in each social struc-
ture certain purposive trends integrated within the prevail-
ing way of life and pursued consciously or unconsciously by16
all those included within the given cultural pattern and
social structure. Economic development means changing those
cultural orientations and the establishment of new purposes.
If we are to assure the success of our efforts to bring
about economic development we must endeavor to have these new
and different orientations wholly absorbed into the cultural
pattern. This adjustment constitutes in fact a personal re-
integration based on the development of the individual rela-
tion of the worker, or any other member of the community,
with the new purposive trends.
It is obvious then that, if we are to bring about eco-
nomic development at the rate the situation demands and
proportionate to the magnitude of this problem in all its
implications, a purely economic or purely bureaucratic
approach will not suffice. Measures for effecting our eco-
nomic development must be based on, or, more precisely, must
each be an embodiment of a consciously directed process of
social and cultural change. The process of change must en-
compass the entirety of the political-administrative appara-
tus, from the village level to the national level, and must
extend also to juridical institutions and precepts, to con-
sumer habits, and to the standards and the nature of the
requirements of every member of the population. We must
resolve the various questions arising as regards the motiva-
tion to work, work incentives, and the ethics of work in-
volved. We must come to grips with the problem of the mean-
ing of existence, and we must set ourselves to achieve the
subjugation of nature for the service of man. We must estab-
lish our values and choice of occupation in accordance with
the requirements of economic development at the present
stage of our historical evolution. Finally, we must attain
a proficiency in the sciences and in the utilization of
science for the interests of humanity. Thus, besides the
diverse technical and economic aspects, there is also the
human dimension to economic development.
The process of economic development is obviously a
process which, although it encompasses virtually every sphere
of existence, can be controlled and directed providing we
first take cognizance of all the interrelating factors. It
is necessary for us to analyze the pattern of our culture so
that we can remove those obstacles deriving from our culture
which hinder our economic progress, and so that we will be
able to bring into play those elements in our culture which
can serve as stimuli toward economic development.17
It has also been pointed out that the process of eco-
nomic development does entail considerable hardship for any
people launching on this course. However, by correctly eval-
uating those cultural factors inherent in the human dimenr-
sion, we will be able not only to diminish such hardships,
but also to accelerate the process, attaining a rate of
development consistent with the maintenance of our interna-
tional position. With this evaluation it will also be
possible for us to eliminate, or at least appreciably dimin-
ish, the element of compulsion in implementing plans for
economic development. It will also be possible for us to
coordinate Governmental development programs with desires
for improvement and development on a local level. This
would mean, in effect, that the motive forces in our social
structure and the will and initiative of the people will be
directed toward the realization of national development
plans; and this is, of course, a prerequisite condition for
the success of our efforts.
Actually the problem that confronts us is not new, nor
is Indonesia the only country that faces it. Soviet Russia
succeeded in finding a solution to this problem by destroying
the old social structure by force and then evolving a new
pattern of social integration by methods based on a mixture
of compulsion and evocation of ideological enthusiasm, an
imposition of revolution from above. Subsequently, the sen-
timents of patriotism aroused in the course of the second
World War served to consolidate further the new social order.
In Japan the adjustment to modern progress and the process
of economic development were effected—up to the military
defeat of 1945--without any real modification of the pre-
viously existing internal relationship of forces and the
internal pattern of power. Japan presented, in fact, the
picture of a feudal state, with modern tools. The ideas of
Shintoism, that peculiarly Japanese mixture of ideology and
religion, were used as a motive force in the transformation
of the Japanese economy; and also the authoritarian character
of the Japanese family hierarchy was utilized for the devel-
opment of industries. However, the defeat of 1945 showed
the gravity of the social contradictions created by the
course Japan had followed for achieving economic development.
These contradictions are now in evidence more than ever and
it is still impossible to predict the consequences.
Nevertheless, the experience of Japan is of considerable
interest to us as evidence, subsequently also furnished by
other countries, that our own choice is not restricted
between the alternatives of capitalism or communism. The
social changes Yugoslavia has put into effect after breakingIS
free from the orbit and support of Russian power become sig-
nificant in this connection. Similarly, the kibbutzim of
Israel show that there is still a large degree of freedom
and human capacity to find new answers to the problem of re-
integrating a new society. Moreover, man has now more know-
ledge of how to defend human dignity against the machine.
India, China, and Burma are all at the moment confronted
with the problem of adjusting themselves to modern life.
Each is following a different course, and, internal factors
apart, the results in each case will largely be determined
by the scope and opportunities given by outside forces in
their search for individual solutions. The course of world
history will be markedly influenced by the question of
whether it will be India or China which will be the first to
provide a tenable solution.
The experience of the countries mentioned above shows
that there does exist for us the possibility of seeking a
solution for Indonesia in accordance with our own situation
and our own national character. To do this, however, we
must throw off the bonds of any dogma and entrust our destiny
to our own creative capacities. Accepting this condition,
we can see that there is then no need for the attempt to
make an a priori definition of the future pattern of Indo-
nesian culture before we launch ourselves on the road toward
economic development. For the subsequent form and content
of our culture will be evolved by a new Indonesia, by a
people no longer haunted by the threat of poverty, but imbued
with an awareness of its national individuality and self-
confidence, determined to be themselves the masters of their
destiny. Naturally the specifically Indonesian character of
our culture will be imprinted on the solution we find to the
problem of development, and thus it is pointless to insist
a priori on one or other specific pattern for the evolution
of our culture.
Nor is there any reason for hesitating to adopt innova-
tions only because these may be felt somehow to be un-Indo-
nesian. Only that cultural pattern will be meaningful to us
which can secure our place in this world and which at the
same time we can consider the expression of ourselves. In
dealing with the problem of building our new society we must
therefore have the courage to go about it in a practical way;
we must have the courage to try new ways, and if these prove
to be unsuitable or insufficient we must have the courage to
cast them aside and to try other ones. In all this the
regulating principle is a desire for development, for without
this desire and determination everything is meaningless. On19
the other hand an active desire for progress cannot arise
unless we fully understand the purpose of development, unless
we have firmly established the objectives we wish to reach,
unless we have a clear conception of the changes that will
take place in our ways of living, and unless we are honestly
convinced that the pursuit of economic development is a
legitimate and desirable purpose.
It has been shown that the process of economic develop-
ment can be controlled and directed. Thus will arise the
question of what position should be taken with regard to
personal freedom and whether the ideals of personal liberty
are at all in conflict with the necessities of planning.
This point will require a thorough study, but here it is
sufficient to point out that the full significance of this
human dimension—and indeed of all cultural factors—is ac-
knowledged only when human well-being and personal liberty
are regarded not merely as falling within the scope of an
ultimate objective, but as essential integral elements in
the organization of our efforts and choice of means to
achieve economic development. If human well-being and per-
sonal liberty are considered as items to be encompassed
solely by an ultimate objective, and not as issues that must
be considered in our choice of methods for effecting economic
development, then all that has been said in this article is
valueless.
Now we turn to those media which we must employ to
introduce the far-reaching changes that accompany economic
development. These media are the schools and other educa-
tional institutions, the political parties, trade unions,
and peasant organizations, the mass media of communications,
and the entire state administrative apparatus. In the elemen-
tary schools, efforts must be directed toward the development
and the molding of new attitudes whereby the child will be
brought to see his environment not as a fixed and immutable
order of things but as a pattern that can be rearranged and
improved. The child must be given the conviction that he
can better the conditions of his environment by a subsequent
contribution to the increase of production. It is also
essential that school children be made familiar with the use
of simple but modern technical devices, and, moreover, be
shown that life holds more than is offered within the narrow
confines of the village as the child now knows them.
In the secondary school the pupils must be guided toward
a choice of occupation conforming to the needs of the coun-
try and the requirements of economic development at the
stage reached at any given period. The sense of freedom is
imparted by the range of the possibilities from which a
choice can be made; and as the scope of choice is widened,20
so will the sense of freedom increase. In particular, the
secondary school pupils must be freed of the narrow concep-
tion of regarding the attainment of a degree as the only
acceptable aspiration. Encouragement must be given to the
pupils to seek new avenues, to see life as an adventure. It
is equally important that the secondary schools instill into
the minds of the younger generation a new attitude towards
work and a consciousness of the relation between the spirit
of progress and the spirit of patriotism. In this connection
it might be mentioned that the PGP* should be revised and
the wage scale applying to each particular occupation ad-
justed at regular intervals on the basis of the prevailing
needs of the society at that particular stage of its economic
development. Provision could be made, for example, for
granting to all those completing a lower secondary technical
schooling, and to all bookkeepers and accountants, a special
bonus, to be maintained over a ten-year period, which would,
if necessary, bring the salaries of these groups up to or
even over the rates of pay of those with academic qualifica-
tions. At the end of the ten-year period the allocation of
this subsidy could be reviewed and then accorded to the
other occupational categories assessed as more important to
the needs of development at that point.
It is also necessary that higher education be adjusted
to the demands of social progress and be made an instrument
of reconstruction and development. Besides furnishing spe-
cialized knowledge and conducting research in this connec-
tion, the institutions of higher learning must continuously
watch the social and cultural aspects of economic development
with the object of finding the best ways to neutralize
sources of cultural resistance and in order to further the
acceptance of new habits and customs. Thus, in addition to
giving the usual training, higher education must also serve
to educate those who will play a leading part in the process
of bringing about social and economic changes. In particular
the study of adat law** and of ethnology, both previously
used to maintain the social status quo of the colonial
regime, must be made to serve our present aims. The know-
ledge acquired from past research on adat law and ethnology
in Indonesia can be utilized to facilitate our development
and progress in furnishing means of counteracting resistance
to social change and in mobilizing those forces in the old
cultural pattern and social structure which can be brought
into play advantageously at the present stage. In applying
* GovernmentPay-scale.
** Indonesian customary law.21
the principles outlined above, we will have solved the ques-
tion of what does in effect constitute a "national education"
for we will have a system of education that is really Indo-
nesian and national, not by reason of the rejection of ele-
ments considered alien, but because of the orientation toward
fulfillment of Indonesian requirements at this stage of our
history. With these readjustments in the basis of education,
in consequence there will be produced a new outlook among
the personnel of the state administrative apparatus; the
official will no longer be obsessed with the status of his
position, but will see himself as an instrument contributing
toward realization of our aims of development.
The role of the press in influencing public opinion
need not be discussed at any length here, for we feel that
if the political conditions in Indonesia change for the
better, in that a sense of direction will become apparent
again in our political and economic life, then the press
will certainly reflect and give further impetus to this
trend. This assumption is fully justified by the fact that
Indonesian journalists on the whole consider it the function
of the press not only to report events but also to orientate
the public mind, toward the question of social progress.
Among the media which can influence the evolution of
social change in the direction of economic development, the
political parties, the trade unions, and the peasant organi-
zations, are of the greatest importance. Although the ulti-
mate results of current political propaganda in Indonesia
will become evident only in the future, it is the political
parties which will, in the meantime largely determine the
degree of success and the rate of change toward the direction
of development. An analysis of the role of the various
political parties and of the labor and peasant organizations
in the formulation of a development policy is beyond the
scope of this article, but it may be noted in passing that
these groups can and must also play an important part—in
addition to their political activities--in the broader fields
of social and cultural change. The existence of political
parties, trade unions, and peasant organizations does in
itself constitute a development toward change in our social
structure, and these groupings are the vanguard of such
changes. As was already pointed out, the rise of these mass
organizations represents one of our modern responses engen-
dered by the penetration of foreign influences into Indonesia
As modern tools of politics, the political parties in Indo-
nesia are by no means faultless. In its organizational
structure, in the nature of the ties which hold together a
political party, a trade union or peasant organization, and22
also in the dynamics of power in general can still be found
elements with certain features not usually found in the poli-
tical pattern of those countries which have had a longer ex-
perience with national independence. Nevertheless, the
political parties in Indonesia are a dominant factor in re-
molding and re-integrating our social structure. Various
problems, such as those we have touched on and which are not
directly political in character, will have to be faced by
the political parties in the course of their activities; and
the effectiveness of any party and of any trade union or
peasant organization is finally to be measured by the stand
taken with regard to economic development and the related
social changes. However, if the political parties in Indo-
nesia are to fulfill the role that the situation demands,
their current conception of political functions will have to
undergo a drastic revision. The various parties must under-
stand that the scope of political affairs is not confined to
efforts to secure power, that on the contrary political
action implies, in particular, activating and directing
social forces toward a specific objective.
From the observations we have made we can now set down
some conclusions. Economic development constitutes a process
of change effecting the total life of a nation. With eco-
nomic development the disintegration of the hitherto existing
social structure is accelerated and the need to achieve a
re-integration of that society becomes more urgent.
In bringing about economic development in Indonesia we
must necessarily pass through a stage of stress as a result
of the collapse of the former concepts and certainties of
existence which have at that point still to be replaced by
new ideas and new values.
It is nevertheless essential that we pass through the
stage of economic development, since the assurance of our
complete autonomy and the development of our economy are
interrelated fundamental requirements to our existence as an
independent nation.
To guarantee the success of our efforts in developing
our economy we must, in the first place, have a greater
awareness of the urgency of this issue fchah we have at
present. Furthermore, we must realize that the process of
economic development is not exclusively economic in charac-
ter, but is a pattern created by social and cultural changes
encompassing the nation as a whole.23
It is rather apparent that this article does not go
beyond a cursory examination of this many-sided problem, and
only a few of the related factors have been commented on.
There has not, for example, been any mention of the role of
religion, Moslem as well as Christian. These religions are
invoked and will be brought into play in both a positive or
negative sense in relation to the question of economic devel-
opment. Various other elements in our cultural heritage
have also been omitted from this survey. The question of
planning, and the problem of personal freedom in relation to
planning must similarly be made the subject of a thorough
examination. It was, however, only intended with this out-
line to raise some of the issues connected with the pressing
problem of development with the object of stimulating further
examination of the whole question and further discussion
which will bring a crystallization of opinion on the tasks
before us. Awareness of the need for urgent action and
clarification of opinion are, after all, essential conditions
for guiding and reinforcing our will to achieve progress.