Islamic Economics and State Hegemony: Gramscian Analysis of Co-optation and Legitimacy in Indonesia’s New Order (1966–1998)
DOI:
https://doi.org/10.35891/yfzmcj49Keywords:
Islamic Political Economy, State Hegemony, Co Ordination, New Order, LegitimacyAbstract
Purpose: This study aims to analyze the dynamic relationship between the state and Islamic economic development during Indonesia's New Order period (1966–1998) through the lens of Antonio Gramsci’s hegemony theory. It critically examines how Islamic economic aspirations shifted from ideological opposition into state-sanctioned institutional frameworks.
Design/Methodology/Approach: Operating within a critical-qualitative paradigm, this study employs historical and conceptual analysis. It scrutinizes the structural mechanisms through which the New Order regime accommodated, negotiated, and regulated Islamic economic expressions to maintain political equilibrium.
Findings: The findings reveal that Islamic economics did not develop in direct opposition to the regime, but rather through a sophisticated process of state-managed co-optation and negotiation. The New Order state utilized a hegemonic strategy, granting controlled concessions to Islamic economics to reinforce its own political legitimacy and maintain stability. This was manifested through the establishment of the Indonesian Association of Muslim Intellectuals (ICMI), Bank Muamalat Indonesia (BMI), and the empowerment of the Indonesian Ulema Council (MUI), which successfully integrated Muslim elites into the ruling power structure. Concurrently, Muslim actors engaged in "counter-hegemonic" negotiations, leveraging these state-sponsored spaces to inject Islamic values of justice, ethics, and morality into the national economic fabric.
Practical/Social Implications: This study provides historical insights for contemporary policymakers and Islamic financial authorities on how state intervention and political bargaining shape the resilience and institutional trajectory of faith-based economic systems.
Originality/Value: This research bridges macro-political sociology and Islamic economics by applying Gramscian hegemony to the New Order's political economy. It challenges the binary view of state-religion conflict, demonstrating that the rise of Islamic finance was a product of complex ideological negotiation and mutual co-optation between authoritarian rulers and religious elites.
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