THE CONCEPT OF PEOPLE’S ECONOMY – Draft people’s economy What was developed through the proclamation of independence on August 17, 1945 was to free the people from the shackles of global capitalism in the 19th and 20th centuries. Therefore, the resistance to globalization and liberalization in the late 20th and early 21st centuries which again threatened the economic life of the people could only be carried out through strengthening an economic system with a populist spirit. also.

Bung Hatta paid attention to the people’s economic system, he argued that Indonesia’s economic development was essentially a people’s economic development. So what needs to be done is to change the general economic structure from a colonial economy or the like to a people’s national economy.

Definition people’s economy and people’s economy, more macro-sociologically, I can say that it is an economic notion that prefers economic growth along with equity, even though the notion of people’s economy is a relatively new term at that time, which was popularized to replace the people’s economy itself.

Formally, juridically and politically, the concept of people’s economy began to be discussed in the general assembly of the MPR in 1992 and was successfully incorporated into the GBHN in 1993, the economic concept that emerged in the discussion was around the role of cooperatives and small businesses which were described in the form of counseling and training, provision of special credit schemes, capital assistance from state-owned enterprises and large conglomerates as well as calls for the development of partnership programs.

Compared to the colonial economy which was in the middle layer, the concept of Indonesian people’s economy at that time was very poor and left behind. Bung Hatta was so deeply angry that in 1934 he again wrote an article with a similar tone, the title this time was “The People’s Economy in Danger”.

Salim Siagian along with Brother Hatta stated that the people’s economy is the economic activity of the people in a country or region which is generally lagging behind when compared to the economy of the country or region concerned on average.

Therefore. The understanding of the concept of populist economy is the economy or economic development of community groups that develop relatively slowly, in accordance with the conditions inherent in these community groups. While the people’s economic system is an economic system that includes all levels of society into the development process.

The basic ideology of the concept of a populist economy is an economic system based on the economic power of the people in accordance with article 33 paragraph 1 and the fourth principle of Pancasila.

The constitutional basis of a populist economic system is Article 33 of the 1945 Constitution, especially the explanation section which contains an economic basis where production is carried out by all for all under the leadership or ownership of community members, therefore the economy is structured as a joint effort based on the principle of kinship, which eventually emerged. then along with it is a cooperative.

Its objective is to ensure that the prosperity of the people always takes precedence over individual prosperity and that the reins of production do not fall into the hands of individuals who allow the common people to be oppressed by a handful of powerful people.

Therefore, it would be completely unwise to say that the people’s economic system and the people’s economy ignore efficiency and are anti-market. This is because the political economy of the people and the people’s economy are not based on equity, growth and stability, but on the participation of justice and sustainability.

People's Economy Concept
People’s Economy Concept

In this regard, there are at least five main agendas of the people’s economy or the agenda of democratizing the control of production factors, including the following;

  1. Decentralization of rights over the management of state revenue sources to the regions. Limitation of control and redistribution of agricultural land ownership to smallholders (Landreform).
  2. Cooperative reform and the establishment of true cooperatives.
  3. Development of a competition mechanism that ensures fair business competition takes place.
  4. The application of a progressive income and wealth tax as an effort to maintain democracy in the control of capital or production factors in the midst of society, besides that the application of a progressive income and wealth tax is also needed as an effort to continuously form a social safety net fund for vulnerable communities.
Draft people’s economy based on a just market mechanism, involving all levels of society in the development process and being fair to all people. So that the ultimate goal to be achieved and aspired to by Bung Hatta in a people’s economic system is to increase overall economic welfare or the majority of the community.

Reference :

  1. Putong.Iskandar, Introduction to Micro and Macroeconomics:Ghalia Indonesia, 2003
  2. Rahardja, Prathama, Introduction to Microeconomic Theory, University of Indonesia, 1999
  3. http://myilmu Lintas Hukum.blogspot.co.id/2015/12/sistem-ekonomi-kerakyatan.html

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