Thursday, December 6, 2012

Berkeley Mafia and Indonesia’s 1965 Genocide – Part 1

“Indonesia is the best thing that's happened to Uncle Sam since World War." -- A World Bank official

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

Dr. Sumitro Djojohadikusumo.
Following Japan's defeat in World War II, wars of national liberation raged in China and Vietnam. Meanwhile, far away in Washington offices and New York living rooms, Indonesian independence was being sensibly arranged.

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.

At the Ford-funded School of Advanced International Studies in Washington in early 1949, Sumitro explained that his kind of socialism included "free access" to Indonesian resources and "sufficient" incentives for foreign corporate investment.

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.

Ford Foundation HQ Building in New York City.
That miracle took a decade to perform, but now Sumitro has risen once again. He serves as Minister of Trade in a new Indonesian government. And he is no longer odd man out: today he is regarded as the number two man in Indonesia, and he and his comrades are firmly in control.

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."

Paul Hoffman and Henry Ford II (front-centers) with
Ford Foundation Directors (1953).
Sutton adds that there's no better place to find such an elite than among "those who stand somewhere in social structures where prestige, leadership, and vested interests matter, as they always do."

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.

While many Indonesians have charged the professor with having CIA connections, Pauker denies that he was intimate with the CIA until 1958, after he joined the RAND Corporation.

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.
MIT and Cornell made contacts, collected data, built up expertise. It was left to Berkeley actually to train most of the key Indonesians who would seize government power to put their pro-American lessons into practice. 

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 objected. At an annual lecture to the Faculty, team member Bruce Glassburner recalls, Sukarno complained that "all those men can say to me is 'Schumpeter and Keynes.' When I was young I read Marx."

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."

Berkeley phased its people out of Djakarta in 1961-62, The running battle between the Ford representative and the Berkeley chairman as to who would run the project had some part in hastening its end.

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.