Economists with Guns

By Bradley R. Simpson;

Stanford University Press, 2008, 376 pp.

In 1965, following a coup by General Suharto, the Indonesian military massacred upwards of 800,000 people and imprisoned an estimated million more in an attempt to liquidate the Communist Party (PKI). The United States government gave both moral encouragement and logistical support to the mass killings, including weaponry and lists of suspected PKI members to be targeted for assassination. Mainstream newspapers like the New York Times wrote laudatory pieces in praise of the genocidal Suharto government, referring to it as a "gleaming light in Asia" because of its fervent anticommunism and openness towards foreign investment and free trade. C.L Sulzberger added, in the crude racism of the day, that "the killing had attained a volume impressive even in violent Asia, where life is cheap."

Bradley R. Simpson’s outstanding new book Economists with Guns provides chilling new evidence of U.S. complicity with what the CIA referred to as "the worst mass killings" since Hitler and Stalin. He comments that the United States "viewed the wholesale annihilation of the PKI and its civilian backers as an indispensable prerequisite to Indonesia’s reintegration into the global political economy and the ascendance of a military modernizing regime." Building off of George and Audrey Kahin’s invaluable study, "Subversion as Foreign Policy: The Secret Eisenhower-Dulles Debacle in Indonesia," Simpson details how the U.S. support for the 1965 coup and genocide was part of a much longer destabilization campaign directed against Achmed Sukarno—Indonesia’s first post-independence president whom Washington opposed because of his socialist leanings and leadership of the non-aligned movement of Third World states. Simpson explores in considerable depth, furthermore, the ideology of U.S. policy elites and the symbiotic relationship that they developed with U.S.-trained Indonesian economists who served as key advisers to the Suharto government. They promoted a mix of privatization, authoritarian development, and "free market" capitalism. These policies served as a precursor to the structural adjustment paradigm promoted by the World Bank during the 1980s and 1990s and yielded similarly deleterious effects for the working-class and poor. They could only be imposed, accordingly, by fiat rather than popular consent.

Challenging the romanticized views of the Kennedy administration pervading popular culture and in the Obama campaign, one of Simpson’s major contributions is to show its continuity from Eisenhower in seeking to illegally subvert Indonesian politics and undermine Sukarno. Through the CIA, the Eisenhower administration had funneled arms to dissident generals mounting a series of regional rebellions. Its cover was blown when an Air America pilot, Allen Pope, was captured after shelling an Indonesian village. During the Kennedy era, the special group on counter-insurgency, headed by Robert Kennedy, was influential in trying to build up the paramilitary capabilities of the Indonesian police, who were seen as pro-western.

The counter-insurgency lay the groundwork for the 1965 military coup, which the Johnson administration supported. These policies were developed by prominent intellectuals of the period and RAND Corporation analysts, such as Guy Pauker, an expert on Indonesia. They believed that through the imposition of order and stability, the military could be the most effective instrument in serving U.S. Cold War interests and promoting economic development and growth. This idea lay behind the United States alliance with Suharto and also shaped its involvement in an assortment of right-wing coups in Latin America and elsewhere during the 1960s and early 1970s.

Going beyond previous scholarship on modernization and the Kennedy administration, which often focuses solely on ideology, Simpson advances a political economy analysis, showing how intellectual ideas of modernization were consistent with the promotion of Western economic interests. Indonesia was particularly valued by policy elites. As a result of its mineral and oil wealth, it provided a bonanza to oil corporations like Caltex following the 1965 coup. This was true of many other firms, including General Motors and Morris and Knudsen (precursor to Halliburton) who had been threatened by Sukarno’s movement towards nationalization and feared the strength of the PKI.

General Suharto was ultimately far more amenable to U.S. interests, resulting in his being embraced in spite of his atrocious human rights record. The long shadow of McCarthyism, furthermore, made his anti-communist pogroms highly appealing to many in the State and Defense Departments who expressed no outspoken criticism of the rising toll of bloodshed. As Howard Federspiel, a State Department staffer, commented, "No one cared as long as they were communists that were being butchered."

Simpson’s last chapter focuses on the title of his book—the economists who worked as a technocratic elite under Suharto in ushering in the new order. He traces how they were influenced by their training at Berkeley and other Ivy League institutions in opening the country to foreign investors. As Simpson makes clear, their policy influence stemmed not from any popular consent, but rather the violence and repression of dissent on which Suharto’s power was based. In an arrogant manner, furthermore, they believed that their specialized technical knowledge of economic theory made them supremely qualified to dictate public policy. Ultimately, while Indonesia did experience striking growth levels in its GDP under Suharto, a large majority of the population remained mired in poverty and destitution, lacking in basic social services. Their political freedoms, meanwhile, had since been eroded.

Simpson’s book provides an important case study for U.S. foreign policy in the Cold War. It demonstrates how Washington was able to use foreign aid and training programs to effectively promote its interests through native clients who were swayed by Western ideals and their own power interests. It shows the cold-hearted calculations of U.S. policy-makers who were willing to support murderous violence and genocide in order to advance their objectives.

Simpson’s book is significant in one other respect: it shows the perils of authoritarian models of economic development and the fallaciousness of the military modernization theories promoted by Kennedy-era intellectuals, which continue to hold credence among policy elites today. The catastrophes that befell Indonesia in the late 20th century should serve as a forewarning as to what can happen again if people continue to think that the end justifies the means.


Jeremy Kuzmarov is assistant professor of history at Bucknell. His book, The Myth of the Addicted Army: Vietnam and the Modern War on Drugs, will be published by the University of Massachusetts Press.