The Dutch East Indies (or Netherlands East Indies; Dutch: Nederlands-Indië; Indonesian: Hindia Belanda) was a Dutch colony that became modern Indonesia following World War II. It was formed from the nationalised colonies of the Dutch East India Company, which came under the administration of the Dutch government in 1800.
During the 19th century, Dutch possessions and hegemony were expanded, reaching their greatest territorial extent in the early 20th century. This colony which later formed modern-day Indonesia was one of the most valuable European colonies under the Dutch Empire’s rule, and contributed to Dutch global prominence in spice and cash crop trade in the 19th to early 20th century. The colonial social order was based on rigid racial and social structures with a Dutch elite living separate from but linked to their native subjects. The term Indonesia came into use for the geographical location after 1880. In the early 20th century, local intellectuals began developing the concept of Indonesia as a nation state, and set the stage for an independence movement.
Japan’s World War II occupation dismantled much of the Dutch colonial state and economy. Following the Japanese surrender in August 1945, Indonesian nationalists declared independence on Java and parts of Sumatra, which they desperately fought to secure during the subsequent Indonesian National Revolution. The Netherlands formally recognized Indonesian sovereignty at the 1949 Dutch–Indonesian Round Table Conference with the exception of the Netherlands New Guinea (Western New Guinea), which was ceded to Indonesia in 1963 under the provisions of the New York Agreement.
“A theory of capitalism that recognises the pluralist, multi-dimensional and internally conflicted nature of social systems restores politics to the central place it deserves, in contrast to efficiency theories in which politics is about no more than the instrumental problem of defining and implementing the most efficient institutions for the essentially technocratic task of coordination” (Wolfgang Streeck, 2010)
The financial crisis has called into question the capacity of national sovereign democratic states to reconcile the distributional tensions that emerge from capitalist market expansion. This problem has become particularly acute for countries of the Eurozone (De Grauwe, 2010, 2011). They cannot devalue their currencies and must adjust their economies through IMF-ECB induced structural reforms in labour, wage and fiscal policy. The problem of coordinating wage, fiscal and monetary policy in the interest of employment and economic performance, or capital accumulation, is not new. It was central to the construction of different variants of national incomes policies in European political economies during the neo-corporatist Keynesian era.
But how did domestic political actors respond to the adjustment constraints of globalised variants of capitalism during the neoliberal era, and what has been the trajectory of institutional change in European industrial relations and welfare regimes? This question guides the theoretical dimension of my PhD The Rise and Fall of Irish Social Partnership – The Political Economy of Institutional Change in European Varieties of Capitalism (2012) which is grounded on an argument that the politics of democratic capitalist change can be traced to the disorganisation and flexibilisation of institutions that enable labour to constrain capital. The decline in trade union strength and an increase in business power underpins the public policy paradigm shift from Keynesianism to neoliberalism across Europe. The role of the state in conditioning this pattern, and the diverse trajectory of change it invoked, is central to the study of comparative political economy. National labour market regulations have been flexibilised and the problem of employment resolved either through supply side reforms aimed at activation or low wage employment (Hall, 2011).