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This study discusses the dispute between state and capitalist class. State consists of local government elite and central government elite. Local elite consists of 10 regents/mayors in Lake Toba region and Asahan River basin, while the central elite are President Susilo Bambang Yudhoyono, Coordinating Minister for the Economy Hatta Rajasa, Minister of State-Owned Enterprises Dahlan Iskan, Minister of Industry MS Hidayat as well as Leaders and Members of Commissions VI & IX of the House of Representatives Republic of Indonesia. Meanwhile the capitalist class is represented by Luhut Binsar Pandjaitan and Association for Mineral Entrepreneur Indonesia (APEMINDO). This research aims to clarify underlying factors of dispute between state and capitalist class in the nationalization of PT. Indonesian Asahan Aluminum (Inalum) which implies to conflict among elites. This study uses qualitative method by analyzing research findings with the Theory of State Autonomy proposed by Ralp Miliband and Nicos Poulantzas as the main perspective. While the theory of conflict and consensus by Maswadi Rauf, authority of elite theory by C. Wright Mills, theory of decentralization by Vedi R. Hadiz, theory of oligarch’s power by Jeffrey A. Winters, theory of patron-client by James C. Scott, and theory of rent seeking by Anne G. Krueger are applied as supporting perspectives. This research finds that conflict between central and local elites occurs due to struggle over economic resources, especially share ownership of PT. Inalum. Dispute over economic resources in governmental system has resulted in the country’s autonomy dysfunction, in this case North Sumatra Provincial Government. It is characterized by the government being instrument that cause rent seeking to grow. Conflict which arise among local elite interfere local governance consolidation. This occurs because the capitalist class is capable to influence policies run by North Sumatra Provincial Government. The dispute is impacted on the provincial government incapable of taking political decisions reasonably. While Central Government with the approval of Commission VI of the House of Representatives conducts political process to reduce capitalist class influence in the nationalization of PT. Inalum by unilaterally give North Sumatra Provincial Government 30% share only Theoretical implication of this research supports and strengthens Miliband Ralp’s theory on state as an instrument of capitalist class and Nicos Poulantzas’s theory of relative autonomy state. It especially regards to the state autonomy that is distorted by capitalist class interests i.e. Luhut Pandjaitan. Based on Miliband Ralp’s theory on state as an instrument of capitalist class in the context of local elite power in North Sumatra, then the Governor of North Sumatra, 10 regents/mayors in Lake Toba region and Asahan River basin, as well as several other political elites, represent the tool or instrument of the capitalist class, in this case Luhut Pandjaitan, to realize their ambition of enriching economic resources. While President Susilo Bambang Yudhoyono, along with related ministers and parliament, weaken the capitalist class influence in political decision making in order to create a relatively autonomous political decision-making, as it is explained in the theory of Nicos Poulantzas. One thing that has not been addressed by Nicos Poulantzas in state relative autonomy theory is how to cope with global capitalist class distortion or pressure.     Keywords: state autonomy, state relative autonomy, capitalist class, political dispute, political elite, oligarchy, rent seeking

Conflicts Between State and Business in the Nationalization of PT. Inalum