Indonesia, which in the past fired the imagination of fortune-hunters
and adventurers as the fabled East Indies, was long regarded as "the
richest colonial prize in the world." Harking back to such times, Richard
Nixon described Indonesia in 1967 as "the greatest prize in the
Southeast Asian area."
Not too many years earlier, however, the prize had been thought all but
lost to the fiery nationalist, Peking-oriented Sukarno and the three
million-strong Indonesia Communist Party waiting in the wings.
Then in October 1965 an unsuccessful coup and a swift move
by Indonesia's generals immobilized the leader and precipitated the
largest massacre in modern history, in which from 500,000 to a million unarmed
communists and their peasant sympathizers were killed.
When the bloodletting was over, the immense nationalist spirit of a
decade had vanished, and the Indies' vast natural treasures were opened by
the new regime to U.S. oil companies and corporations.
To cut the ribbon on the Indonesian side was an extraordinary team of
economic ministers known to insiders as "the Berkeley
Mafia." Sporting PhDs from
the University of California and acting as a closely-knit
clique in the councils of power, these men shaped the post-nationalist policies
of the new regime.
Behind their rise to eminence and power lay a saga of international
intellectual intrigue, of philanthropoids and university projects, of
student Generals and political Deans, and a sophisticated imperial design
beyond Cecil Rhodes's wildest dreams.
A Dean is Born
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| Dr. Sumitro Djojohadikusumo. |
By 1949 the Americans had persuaded the Dutch that if they took action
before the Indonesian revolution went the way of China, they could learn
to live with nationalism and like it.
And sure enough, in that year the Indonesians accepted an independence
agreement, drafted with the help of friendly American diplomats. It maintained
the severely war-weakened Dutch economic presence, while swinging wide the Open
Door to U.S. cultural and economic influences as well.
Among those who handled the diplomatic maneuvers in those years were two
young Indonesian aristocrats: Soedjatmoko,* called "Koko" by his
American friends, and an economist and diplomat
named Sumitro Djojohadikusumo.
Both were members of the upper-class, nominally socialist PSI (Partai Sosialis Indonesia),
one of the smaller and more Western-oriented of Indonesia's myriad
political parties.
In New York the two were lionized by a group closely linked to
the notorious Vietnam lobby which shortly there-after launched
Ngo Dinh Diem on his meteoric career in U.S.-Vietnamese politics.
The group, which included Norman Thomas, was composed of members of the
Committee for Independence of Vietnam and the India League. It occupied something
of a vanguard position among socialist anti-communists.
"We were concerned that the United States not be caught
flatfooted in the post-war necessity to create non-communist governments
in Asia," explains League member, Park Avenue attorney and legal
counsel for Indonesia in the U.S. Robert Delson.
Delson squired Sumitro and "Koko" around town,
introducing them to his friends in the Americans for Democratic Action (ADA)
and to top anti-communist labor leaders.
They also circulated in Establishment circles, particularly among
members of the foundation-funded Council on Foreign Relations, the most
influential elite policy-formulating group in the United States.
Distressed Indonesia's peppery nationalist leader
Sukarno and the strong left wing of the Independence forces, the
Americans found that, as with Diem in Vietnam, the rather bland
nationalism of "Koko" and Sumitro offered a most palatable
alternative.
In Council on Foreign Relations parlance, they were interested in
"modernizing" Indonesia, not revolutionizing it.
When independence came later that year, Sumitro returned
to Djakarta to become Minister of Trade and Industry in the coalition
government and then, in two later cabinets, Minister of Finance.
As Minister through the early '50s, Sumitro defended an
economic "stability" that favored Dutch investments. Carefully
eschewing radicalism, he appointed as advisor the
German Hjalmar Schacht, economic architect of the Third Reich.
Sumitro was supported by the PSI and their numerically stronger
"modernist" ally, the Masjumi Party, a vehicle
of Indonesia's commercial and landowning santri Moslems.
But he was clearly swimming against the tide.
The Communist PKI, Sukarno's PNI, the Army, the orthodox Moslem NU
—everybody, in fact, but the PSI and Masjumi were riding the wave of
post-war nationalism. In the 1955 national elections - Indonesia's first
and last - the PSI polled a miniscule fifth place. It did worse in the local
balloting of 1957, in which the Communist PKI emerged the strongest party.
Nevertheless, when Sukarno started nationalizing Dutch holdings in
1957, Sumitro joined Masjumi leaders and dissident Army
commanders in the Outer Islands Rebellion, supported briefly by the CIA.
It was spectacularly unsuccessful. From this failure
in Sumatra and the Celebes, Sumitro fled to an exile
career as government and business consultant in Singapore. The PSI and
the Masjumi were banned.
America's Indonesian allies had colluded with an imperialist power to
overthrow a popularly elected nationalist government, headed by a man regarded
as the George Washington of his country - and they had lost. So ruinously were
they discredited that nothing short of a miracle could ever restore them to
power.
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| Ford Foundation HQ Building in New York City. |
The "modernist" restoration was not imposed by American
troops. The secular arm of American imperium reached into Indonesian
politics, often under the cloak of the CIA. But it was the hallowed private
institutions of academia and philanthropy that worked the greatest wonders.
For Sumitro had not simply been a minority politician and
cabinet minister, but since 1951 Dean of the Faculty of Economics at the
University in Djakarta. There he marshalled the young men
with whom he planned to implement his program for Indonesia; there the
Ford Foundation made common cause with him to do so.
Institution Building
"One of Sukarno's few lasting achievements was the
creation of a university system (a rare instance in which foreign aid was put to good use)." —Fortune, June
1, 1968
Ford's interest in Indonesian education began in the early '50s, but it
was the Rockefeller Foundation that had pioneered the area. Just before he left
the Far East section of the State Department in 1952 to become the
Rockefeller Foundation's president, Dean Rusk explained the purpose behind the
program.
"Communist aggression" required not only that Americans be
trained for work in the Far East, but that "we must open our training
facilities for increasing numbers of our friends from across the Pacific."
The head of the Ford Foundation, Paul Hoffman, who launched Ford's
program in educational internationalism, was no stranger to
the Indonesia situation. As head of the Marshall Plan in Europe,
he had cut off Marshall Plan funds, which were vital to the Dutch
counter-insurgency effort, and thus assisted the birth of the first pro-U.S.
Indonesian government.
The Dutch themselves had practiced "indirect rule" in
the Indies by simply adding their own administrators to the top of
the existing aristocratic-administrative hierarchy (from
which Sumitro's PSI was derived).
As America supplanted the Dutch, Hoffman's Ford team laid the
basis of a post-independence national bureaucracy trained to function under the
new indirect rule of America - in Ford's words, to train a
"modernizing elite."
"You can't have a modernizing country without a modernizing
elite," explains the deputy vice president of Ford's international
division, Frank Sutton. "That's one of the reasons we've given a lot of
attention to university education."
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| Paul Hoffman and Henry Ford II (front-centers) with Ford Foundation Directors (1953). |
With the services it purchased from America's top universities,
Ford managed to create a tough, sophisticated infrastructure that reached into
every major power institution of Indonesian society.
Students selected and molded by the Americans, trained in essential
disciplines and skills, became in effect a para-government, representing
the old PSI-Masjumi parties, but in reality far stronger than they.
Ford launched its efforts to make Indonesia a
"modernizing country" in 1954 with field projects out of MIT and
Cornell. The scholars produced by these two projects - one in economics, the
other in political development - have since effectively dominated the field of
Indonesian studies in the United States.
Compared to what they eventually produced in Indonesia, however,
this was a fairly modest achievement. Working through the Center for
International Studies (the CIA-sponsored brainchild of Max Millikan and Walt
W. Rostow), Ford put together an MIT team to discover "the causes of
economic stagnation in Indonesia."
An interesting example of the effort was Guy Pauker's study of
"political obstacles" to economic development, such as armed
insurgency. Domination of natural and cultural resources by foreign
institutions like Ford would be somewhat outside the theoretical frame-work
of Pauker's Harvard training.
In the course of his field work, Pauker - an urbane and
egocentric man - got to know the high-ranking officers of the Indonesian Army
rather well. He found them "much more impressive" than the
politicians. "I was the first who got interested in the role of the
military in economic development," Pauper says.
He also got to know most of the key civilians: "With the exception
of a very small group," Pauker says, they were "almost
totally oblivious" to what he called modern development. Not surprisingly,
the "very small, group" was composed of PSI aristocrat-intellectuals,
particularly Sumitro and his students.
Sumitro, in fact, had participated in the MIT team's briefings
in Cambridge. Some of Sumitro's students were also known by the
MIT team, having attended a CIA-funded annual seminar run each summer at
Harvard by Henry Kissinger, now President Nixon's top foreign policy
strategist.
One of them was Mohamed Sadli, son of a well-to-do santri trader,
with whom Pauker became good friends.
In Djakarta, Pauker had struck up friendships with members of
the PSI clan and had formed a political study group among them, whose members
included the head of Indonesia's National Planning Bureau,
Ali Budiardjo, and his wife Miriam, "Koko's" sister.
Rumanian by birth, Pauker had helped found a group called
"Friends of the United States" in Bucharest just after
the Second World War. He then came to Harvard, where he got his degree.
Since then, it is no secret that he briefs and is briefed by the CIA,
the Pentagon and the State Department. Highly-placedWashington sources say
he is "directly involved in decision-making."
In 1954 Ford grubstaked a Cornell Modern Indonesia Project with
$224,000. With that money and subsequent Ford funds, program chairman
George Kahin has built the social science wing of the Indonesian
studies establishment in the United States.
In Indonesia, Cornell's elite-oriented studies are what the
universities use to teach post-Independence politics and history.
Among the several Indonesians brought to Cornell on Ford and Rockefeller
grants, perhaps the most influential is
sociologist-politician Selosoemardjan. Selosoemardjan is right-hand
man to the Sultan of Jogjakarta, one of the strong-men of the present
Indonesian regime.
Kahin's political science group worked closely
with Sumitro's Faculty of Economics in Djakarta. "Most of
the people at the university came from essentially bourgeois or bureaucratic
families," recalls Kahin. "They knew precious little of their
society."
In a "victory" which speaks poignantly of the illusions of
well-meaning liberals out of their depth, Kahin succeeded in prodding
them to "get their feet dirty" for three months in a
village. Many were to spend four years in the United States.
Together
with Widjojo Nitisastro, Sumitro's leading protege, Kahin set
up an Institute to publish the village studies. It has never amounted to much,
except that its American advisors helped Ford maintain its contact in the most
difficult of the Sukarno days.
Kahin still thinks Cornell's affair with Ford
in Indonesia "was a fairly happy marriage" - less for the
funding than for the political cover it afforded. "AID funds are
relatively easy to get," he explains. "But certainly
in Indonesia, any-body working on political problems with [U.S.]
government money during this period would have found their problem much more
difficult."
Kahin, one of the leading academic Vietnam doves, has
irritated the State Department on occasion, and many of his students are far
more radical than he. Yet for most Indonesians, Kahn's work was really not that
much different from Pauker's. One man went on to teach-ins, the other to
RAND and the CIA. But the consequences of their nation-building efforts
in Indonesia were much the same.
Berkeley East
 |
| University of California at Berkeley. |
Dean Sumitro's Faculty of Economics provided a perfect academic boot camp for these political shock troops.
To oversee the project, Ford President Paul Hoffman tapped his old
friend Michael Harris, a one-time CIO organizer who had headed Marshall Plan
programs under him in France, Sweden and Germany.
In the words of one Berkeley professor and close acquaintance,
Harris was "a typical Lovestone kind of guy -
the labor leader who makes a career out of anti-communist activities working
with the government."
Harris had been on a Marshall Plan survey in Indonesia in
1951, knew Sumitro, and before going out was extensively briefed
by Sumitro's New York promoter, the Indonesian
counsel, Delson.
Harris reached Djakarta in 1955 and set out to build
Dean Sumitro a brand new Ford-funded graduate program in economics.
This time the professional touch and academic respectability were to be
provided by Berkeley. The Berkeley team's first task was to
replace the Dutch professors whom Sukarno was phasing out and to
relieve Sumitro's Indonesian junior faculty so that Ford could send
them back to Berkeley for advanced credentials.
Already at Berkeley was Sadli, who shared a duplex with
MIT's Pauker. Pauker had come to head the new Center for South
and Southeast Asian Studies on his way to RAND and the
CIA. Sumitro's protege Widjojo led the first crew out
to Berkeley.
While the Indonesian junior faculty learned American economics
in Berkeley classrooms, the professors from Berkeley set to
turning the Faculty in Djakarta into an American-style school of
economics, statistics and business administration.
 |
| Sukarno, First President of Indonesia. |
Sukarno might grumble and complain, but if he wanted any education at
all he would have to take what he got. "When Sukarno threatened to put an
end to Western economics," says John Howard, long-time director of Ford's
International Training and Research Program, "Ford threatened to cut off
all programs, and that changed Sukarno's direction."
The Berkeley staff also
joined Sumitro's proteges in the effort to prevent
the Faculty's being brought more in line with Sukarno's
"socialism" and Indonesian national policy. "We got a lot of
pressure through 1958-1959 for 'retooling' the
curriculum,"Glassburner recalls.
"We did some dummying up, you know - we put 'socialism' into
as many course titles as we could - but really tried to preserve the academic
integrity of the place." A very academic integrity, indeed.
The project, which continued for six years at a cost of $2.5 million,
had a clear, if not always stated, purpose. John Howard explains the purpose
quite simply: "Ford felt it was training the guys who would be leading the
country when Sukarno got out."
There was little chance, of course, that Sumitro's miniscule
PSI would outdistance Sukarno at the polls. But "Sumitro felt the PSI
group could have influence far out of proportion to their voting strength by
putting men in key positions in government," recalls the first project
chairman, a feisty Irish business prof named Len Doyle.
When Sumitro went into exile, his university carried
on. His students visited him surreptitiously on their way to and from the
U.S. Powerful Americans like Harry Goldberg, a lieutenant of labor boss and
CIA-coordinator Jay Love-stone, kept in close contact and saw
that Sumitro's messages got through to his Indonesian friends. No
dean was appointed to replace him; he was the "chairman in absentia."
All of the unacademic intrigue caused hardly a ripple of
disquiet among the scrupulous professors. A notable exception was the
essentially conservative business professor, Doyle. "I feel
that much of the trouble that I had probably stemmed from the fact that I was
not as convinced of Sumitro's position as the Ford Foundation
representative was, and, in retrospect, probably the CIA," recalls Doyle.
Harris tried to get Doyle to hire "two or three Americans who were
close to Sumitro." One was Sumitro's friend from
the MIT team, William Hollinger. Doyle refused. "It was clear
that Sumitro was going to continue to run the Faculty
from Singapore."
But it was a game Doyle didn't want to play. "I felt," Doyle
explains, "that the University should not be involved in what essentially
was becoming a rebellion against the government - whatever sympathy you might
have with the rebel cause and the rebel objectives."
Back home, Doyle's lonely defense of academic integrity against the
political pressures exerted through Ford was not appreciated. Sent there for
two years, Berkeley recalled him after one.
"He tried to run things," University officials say politely.
"We had no choice but to ship him home." In fact, Harris had him
bounced. "In my judgment," Harris recalls, "there was a real
problem between Doyle and the Faculty."
Ralph Anspach, a Berkeley team member now teaching
at San Francisco State. got so fed up with what he saw
in Djakarta that he will no longer work in applied economics. "I
had the feeling that in the last analysis I was supposed to be a part of this
American policy of empire," he says, "bringing in
American science, and attitudes, and culture . . . winning over countries -
doing this with an awful lot of cocktails and high pay. I just got out of the
whole thing."
Doyle and Anspach were the exceptions. Most of the academic
professionals found the project - as Ford meant it to be - the beginning of a
career. "This was a tremendous break for me,"
explains Glassburner.
"Those three years over there gave me an opportunity to become a
certain kind of economist. I had a category - I became a development economist
- and I got to know Indonesia. This made a tremendous difference in my
career."
More important, the professors were no longer necessary; in fact, they
were probably an increasing political liability. Sumitro's first
string had re-turned with their degrees and resumed control of the school.
The Berkeley team had done its job, "kept the thing
alive," Glassburner recalls proudly. "We plugged a
hole .. . and with the Ford Foundation's money we trained them
40 or so economists." What did the University get out of it? "Well,
some overhead money, you know." And the satisfaction of a job
well done.
