Another country over which the free market reigns supreme is Indonesia. Its public sector has been whittled down to almost nothing while its unregulated and untaxed private sector waxes ever grander. As in so many other countries, Indonesia’s free market society did not arise by natural growth but by force and violence.
Under President Sukarno’s earlier progressive government, Indonesia seemed to be developing a viable public sector replete with social programs, public libraries, schools, and health clinics, many of them tended by the PKI, the Indonesian Communist Party. But in 1965–1966, the Indonesian military—armed, advised, and financed by the US Pentagon and CIA—overthrew the Sukarno government and, with the help of militant Islamic groups, massacred upwards of a million people (some Indonesian generals involved in the massacres brag of as many as three million victims), including trade unionists, PKI members, ethnic Chinese, and community organizers in what amounted to the greatest political mass slaughter since the Holocaust.13
In some parts of the country up to 40 percent of the teachers were killed, with many others imprisoned. Reading rooms and libraries were destroyed; books were burned; film studios and theaters were shut down; intellectuals were either murdered, incarcerated, or driven into hiding. Cultural life all but disappeared. After decades of military dictatorship, Indonesia ended up with one of the most under-funded and dismal educational systems in the world.14
Looming over the bloodletting was General Suharto, who had served with Japanese fascist forces during World War II. For more than three decades, Suharto’s régime enjoyed the support of the United States, Australia, and most of the governments of Southeast Asia and Europe, along with the international business community. The mass atrocities he perpetrated went largely unnoticed and uncriticized by the US government and mainstream media.
In 1975, Suharto launched an invasion of East Timor, causing the death of at least 100,000 people and wreaking vast destruction upon that country in an effort to prevent the East Timorese from taking an independent and revolutionary path. President Gerald Ford and Secretary of State Henry Kissinger had given Suharto the go-ahead on the invasion on 6 December 1975 and secretly provided him with the arms and logistical back-up he needed.15
The Indonesian occupation of East Timor continued for twenty-five blood-drenched years. “The terrorizing and plundering” of East Timor and recalcitrant provinces like Aceh and Papua “were not opposed by major Western powers as long as their companies had direct access to Indonesia’s natural resources,” reported Andre Vltchek, a leading authority on that region.16
Suharto presided over what was hailed in the western press as an Indonesian “success story,” specifically the total privatization of the nation’s rich natural resources, bringing great profits to foreign mining and oil companies and to Suharto himself, who amassed an estimated $35 billion by the time he died in 2008. Corruption extended to other officials and family members as well.17
With every encouragement from his western patrons, Suharto turned Indonesia into a supplier of raw materials and assembly-line cheap labor for multinational companies. The economy was not only privatized but thoroughly deregulated. Indonesia now has one of the “purest” free market economies in the world, much to the pleasure of US investors and policymakers.