Collectivism versus individualism

Collectivism versus individualism

By Ari A. Perdana

JAKARTA (JP): The process of amending article 33 of the 1945
Constitution is currently deadlocked. Some members of the task
force are proposing the principal of individualism to replace the
current principal of collectivism (azas kekeluargaan). Others are
defending the original principal.

The pro-individualists argue that collectivism is not the
foundation of a market economy. Conversely, the pro-collectivists
argue that individualism leads to aggressive liberalism, which
does not fit the collective nature of Indonesian society.

It appears that the nature of the arguments is more than
political. Rather, it is more a debate between different schools
of thought. The outcome will determine the economic foundations
of Indonesia's future.

Individual liberty is the basic philosophy of the
individualism principal. In individualist-based societies,
individual liberties are given the highest supremacy, even over
the state. The role of state is to serve individual rights.
Therefore, any regulation based on the constitution should
guarantee individual liberties.

Collectivism, on the other hand, views individuals as elements
of the universal set, called society. Individual liberties and
rights are acknowledged as derivatives of society's rights.
Consequently, according to the collectivism principal, individual
interests have to give priority to "social interests".

But how do we define "social interests" in practice? Suppose I
prefer to watch a football game on television and my neighbor
prefers Ally McBeal. On what basis should we claim that football
represents the social interest better than the other?
Accordingly, how do we justify the claim that society prefers
having a national airplane, automotive or whatever industry,
rather than a strong agricultural industry?

This problem has been addressed by Nobel laureate Kenneth
Arrow (1962) in his famous "impossibility theorem". Arrow argued
that, in practice, the "social interests" -- or "social choice"
in his terminology -- could not be defined given the plurality of
individuals, unless there is an individual whose preference could
be claimed to be representative of society's preference.

Ironically, such a situation requires a dictatorship, in which
the ruler (or state) decides what is bad or good for society.
This leaves room for authoritarianism.

Dictatorial and authoritarian rule do not necessarily mean the
leaders are wicked. In The Republic, Plato argued for a
philosopher-led state. The philosopher leaders act as benevolent
dictators, using their power to solve society's economic and
social problems. However, that is a utopian ideal.

When the state intervenes, it never has perfect information
about what is best for society. It is more likely that the state
is the most uninformed agent.

Meanwhile, we have been all too familiar with rulers'
interests, which are claimed to be social (or national)
interests. For the sake of national development people have been
expelled from their villages. In the name of national stability,
newspapers have been banned, students have been depoliticized,
and so forth.

The pro-collectivism proponents argue against individualism.
They argue that it will lead Indonesia toward economic liberalism
and aggressive open competition. The argument is partially
justifiable, however, while it is true that economic liberalism
allows every individual to compete for individual welfare, there
is something missing in the logic.

Free competition is not unrestrained competition. Instead,
someone's freedom to maximize welfare is constrained by other
people's freedom and rights. When an individual harms another
within business activities, he or she is violating the basic rule
of economic liberalism and, as a consequence, will
be subject to legal action. Therefore, a "social" equilibrium
will be attained if everyone is free to maximize their own
interests while respecting other people's freedom.

The market economy is the practical form of economic
liberalism. If competition in the market is perfect, no one has
excess profits or earnings.

Hence, the role of government is to maintain fair and perfect
competition. It is a condition for every individual to have equal
access to economic resources and equal opportunities to improve
their own quality of living. It means that the market economy
does not countenance monopolistic, collusive, nepotistic or any
other unfair business practices -- something the opponents of
market economies fail to notice.

So the only responsibility of the state is to guarantee
individual rights. We do not need the state to claim itself as a
representative of our individual preferences. Neither do we need
it to decide what is good and what is bad for the people.

The writer is a researcher at the Centre for Strategic and
International Studies in Jakarta and a lecturer at the Faculty of
Economics, University of Indonesia