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