
overcome  these  difficulties,  a  compulsory labor
system is implemented, and only a small portion of
the  work  is  completed  by  wage  labor.  The
establishment of sugar cane processing factories and
the transport of plants from fields to factories can no
longer  be  carried  out  by  forced  labor,  because  of
compulsory  workloads  are  already  burdensome.
Kartodirdjo  (1987)  asserted  that  if  the  “gugur
gunung” or mutual cooperation of road construction
work was built, then the planting and processing was
done by compulsory labor, thus making it impossible
for them to carry out transportation and processing
work at the factory. On such circumstances, the wage
labor is known, even with relatively small wage rates.
In subsequent years, the production is increasing and
the demand for wage labor is higher. The composition
of the compulsory labor begins to displaced by the
position  of  the  wage  labor  who  is  working  with  a
mutually  agreed  wage  system.  The  number  of
compulsory  labor  or  forced  work  gradually
diminished,  and  was  finally banned along  with the
gradual implementation of the Cultivation System at
the  pressure  of  the  Humanist  group  in  the
Netherlands.  According  to  Burger  (1954),  the
abolition of Cultivation System became the beginning
of the de-feudalization process in Javanese the social
life of Javanese society, and after 1870 there was a
condition  in  which  people  were  dragged  into  the
capitalist  mode  of  production  by  the  power
mechanism over labor and land.
If Cultivation System has utilized the traditional
or  feudal  system,  and  it  is  strongly  disliked  by
liberals,  then  to  build  a  new  political  economic
policy, it is necessary to establish a system that gives
constitutional  authority  to  private  entrepreneurs  to
develop their investment in Indonesia. The growing
power  of  Dutch  private  entrepreneurs  and
industrialization  led  to  the  growth  of  financial
capitalism  that  focused  on  the  necessity  of  the
colonial state as an investment region. So since 1870,
the need for capital investment to seek distribution in
Indonesia directed to plantation companies. For these
specifics of interest the Agrarian Law was issued in
1870 (Kartodirdjo and Surjo, 1991:80).
The enactment of the Agrarian Law 1870 means
that  land  liberalization  as  the  main  factor  of
production  and  the  policy  has  an  impact  on  other
equally important factors of production namely labor.
The  private  plantation  system  has  encouraged  the
increasing demand for labor and land, as well as an
increase  in  the  need  for  money  so  that  indirectly
began  to  develop  habits  in  society  providing
compensation  for any  work in  the form of  money.
Thus, according to Heilbroner (1994:6), the condition
becomes an indicator of optimizing the mobilization
of labor as a dynamiter factor in the forming of market
society, in other words, the emergence of free wage
labor,  according  to  Sartono  (1987)  is  a  logical
consequence  of  the  forming  process  of  market
society. The complete abolition of compulsory labor
after  1882, there  is  no  alternative  for plantation
entrepreneurs to look for wage labor in the free labor
market.
At  first,  labor  issue  is  not  formally  regulated
because  there  is  a  presumption  that  in  Java  with
higher  population  density  than  other  regions  in
Indonesia, the assurance of labor availability will be
fulfilled  by  itself. A labor  policy  since  1830-1870
contained  in  the  rules  of  implementing  Cultivation
System which is often identified with the exploitation
of  labor  in  Java  (Mubyarto,1992:107).  The
government  policy  on  labor  after  1870  is  more  an
anticipation of various issues that arise from capital
penetration  of  private  plantation  entrepreneurs.  In
1872  the  government  reintroduced  the  Police
Punishment  Regulations  that  impose  sanctions  on
termination of labor contracts (Kartodirdjo, 87: 332).
Another  rule  was  issued  in  1880  known as  “Koeli
Ordonantie”, which was followed by gradual changes
in 1889, 1911 and 1915 (Tauchid, 1952:93).
The emergence of free wage labor in Java actually
began  to  grow  since  the  implementation  of
Cultivation System. This circumstance is more due to
the  government's  inability  to  manage  the
transportation  and  production  sector  in  sugar
factories.  And  to  overcome  these  issues,  the
government has no choice but to employ the wage
labor  provision  (Breman,  1983).  So  as  with  the
increase  in  export  production,  that  would  also
increase  the  need  for  wage  labor  until the  end  of
Cultivation  System  implementation.  Likewise,  the
needs of private plantations in Java and in the newly
opened East Sumatra also experienced difficulties in
the provision of the work force, and for that reason,
they recruited  wage labor  which  largely  from Java
(Day,1972).
The  free  labor  group  that  worked  with  wage
system in Java in the 19th - century, in sociologically-
historically can not be separated from the pattern of
social life of the society at that time. The reason to
become  free  wage  labor  is  certainly  not  a
generalizable reason, because of the social conditions
of  society  that  also  different. However,  it  can
generally be categorized into  wage labor groups as
forced  by circumstances, and  volunteer  wage labor
groups.
The free labor group that forced by circumstances,
come from landowners who are inadequate because
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