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Nov 16

India and the Philippines redux

This was the original e-mail inquiry, I received on September 24, from the Department of Foreign Affairs:

I am writing because someone suggested that i inquire from you, apparently because in one of your articles, you mentioned about social, cultural ties between the Philippines and India long before the establishment of our diplomatic relations in 1949.

Now, I’d like to ask if indeed you have the materials on the subject and if i can procure copies from you. We only want to show that the Philippines already had relations with India before the formal establishment of diplomatic relations.

We badly need it, in preparation for the President’s visit to India this coming first week of October.

Thank you so much for your cooperation.

[name of official]

South Asia DIvision

Office of Asian and Pacific Affairs

My response on September 30 was, as follows, making reference to Explainer Episode 56: The India Model:

Thank you for your inquiry. May I refer you to the script of my TV show, which tackled the points you raised.

The Philippine and Indian independence movements were aware of each other. The Nacionalista Party dominated the peaceful efforts to secure independence from the USA, in the same manner that the Congress Party did, in India.

A Russian Scholar quoted Gandhi’s praise for the Philippines achieving Commonwealth status and Gandhi said, he would have accepted a similar means to independence if it had been available to his people.

We achieved independence in ’46, India in ’47, we are contemporaries as among the first colonized peoples to recover our freedoms without the need to wage war.

In the 1950s under Nehru and here at home, we both followed the path of an inward-looking economy. The Philippines and India have both been seeking means to break out of the limits of what the Indians call the “License Raj.”

Note Octavio Paz’s comments on historical links, mangoes, chiles, between India and the Philippines, mention the Sepoys who settled in Cainta, mention Ninoy Aquino’s admiration for Gandhi, mention how GMA’s father, DM, opened the windows of Philippine diplomacy and governance to the lessons of the Indians and their democracy.

I hope this will be of help in an important endeavor for our country’s diplomacy and economic activities.

I followed this up with a second message five minutes later:

You may wish to add that even under the limits of colonial rule, in the meetings of Asian diplomats and officials taking place in Washington during WW2, future Philippine diplomats including Joaquin Elizalde, first Phil amb. To the USA and later SECFORAF, met with Indian counterparts and this included frank and open discussions on the challenges of future independence. These meetings took place in 1943 and were the basis of a confidential report written by Arturo Rotor, the noted writer, then acting as Executive Secretary for the Phil. Commonwealth [government-in-exile].

When Gandhi and Nehru were imprisoned during World War 2, President Quezon attempted to send an appeal for their release through the British Ambassador in Washington, Lord Halifax, but Halifax said any attempt by Filipino officials to communicate with Indian leaders would not be permitted (this is documented in the diaries of Francis Burton Harrison).

The two incidents mentioned above predates both Phil. and Indian independence and our formal diplomatic relations by several years.

Quezon and Gandhi also said nearly identical things which should strike an emotional chord.

As it turned out, the President decided to focus on something else, entirely, which is described in SEAArch – The Southeast Asian Archaeology Newsblog as,

It’s not so much and archaeological story as it is a political one. The Philippine president attempts to revive ancient “ties” with India by citing Indian cultural influence by way of Srivijaya and Majapahit. I find it quite funny that the basis for reviving ties is not so much because of any historic ties with India per se (whatever “India” was in the past), but by the fact that Indian “culture” was transmitted to the Philippines. Which doesn’t really say anything, does it?

But then again I’ve long argued that President Macapagal inflicted amnesia by trying to steal the thunder of the Left, and reclaim the Philippine Revolution for propaganda purposes; by so doing, he made the narrative of Philippine history senseless as the peaceful campaign for independence was ignored. But that is our actual link with India as it exists, today. Though no link in such things is ever as precise or as satisfactory as one would want.

As the Conclusion of what I’ve selected as Book of the Week puts it (giving an insight into the more prominent differences in opinion between Gandhi and Jinnah, or Jinnah and Nehru), taking the example of an Indian political leader,

The ways in which the institutional context worked to delimit potential expression is particularly well illustrated in the rather strange career of M. K. Dixit, the city’s leading political figure during the 1920s. Between 1919 and 1923 Dixit had been an extremely important noncooperator, committed to a Gandhian agenda. He rallied the population to boycott the legislative elections, he helped to sabotage local self-government in the city by insisting on the program of national education, he contributed to undermining the municipality’s scheme of universal and compulsory primary education, and he backed a pan-Islamic movement for the sake of securing Hindu-Muslim unity. By the late 1920s, however, he had become a member of the provincial legislature, a staunch advocate of urban reform on the municipal council, a man with close ties to the collector of the district, and a person partially identified with Surat’s most significant communal organization–the Hindu Mahasabha. A cynical perspective, of course, might see Dixit as a chameleon who had simply shown different colors at the time of noncooperation. No doubt, he, like most political figures, had opportunist tendencies; he was certainly aware of the audiences he would need to cultivate to maintain his political influence. But he was also consistently committed to fighting for the Indian nation and to representing his city. Pursuing these ends led him into the politics of local self-governing institutions. Once he attained a leading position in these structures, he faced increasing pressures to adhere to communal and liberal rhetorical and ritual paradigms. A close reading of his politics suggests that rather than making constant calculations in order to secure his immediate material advantage, Dixit had undergone a resocialization in which his conceptions of the political world had changed; otherwise he might have been easily able to return to a Gandhian idiom when the civil disobedience movement erupted in 1930. The range of possible ways that he felt he could present himself and his causes had seriously narrowed. In advocating and defending his roles as municipal president, provincial legislator, and spokesman for the people during the 1920s, Dixit came to redefine his values, even his self-identity.

As the author, Douglas E. Haynes, observes,

The tale of Dixit is a familiar one to Indian historians (and indeed to observers of the contemporary Indian scene), who are accustomed to seeing once-radical politicians seem to abandon their social commitments and tame their political rhetoric once inside municipal councils, parliamentary halls, and government ministries, and in positions of national leadership.[3] This systematic pattern in late colonial politics suggests that something more than a series of unconnected personal sellouts was taking place. Rather it testifies to the potent conditioning influence of the institutions and discourse of liberal imperialism tied almost inextricably to these institutions. In retrospect, it is now possible to recognize that the most successful colonialisms–the ones that exerted the most complete hegemony over the colonized elite, the ones that left their colonies voluntarily after peaceful negotiations rather than disruptive revolutions–were often those that had most completely established structures of political representation and self-government. For in these colonialisms elite figures often opted to bargain with and resist their rulers on a political and discursive terrain set by the colonizers’ institutions and culture. Independence for these societies often took a form that mid-twentieth century imperialists, whose views themselves reflected the impact of this bargaining with their subjects, would regard as safe, rational, and even legitimate.[4]

At which point, the comparison, not necessarily flattering, with the Philippine experience:

India thus ends up bearing some similarity to the Philippines, where imperialists with an even more extreme commitment to inculcating liberal democracy among their subjects assumed positions as colonial rulers at the turn of the twentieth century. In their Southeast Asian colony the Americans set up representative institutions at the local and provincial levels almost from the onset of colonial rule in the effort to coopt the ilustrado, the conservative landed and business elite. By 1907, a national legislature had been established. Thus emerged what Peter Stanley has termed the “Fil-American Empire,” an imperialism in which the ilustrado became virtual junior partners. Within this unusual colonial relationship, the elite made frequent recourse to the same American ideology of “benevolent assimilation” that had sanctioned imperial rule as it struggled to achieve its political interests, greater representative powers, and, eventually, independence. Liberal democracy achieved ascendancy in the islands’ central arenas of politics, isolating other potential philosophies and languages on the periphery.[5] The accommodation of the Filipino elite to the discourse of American imperialism sometimes took an exceptionally exaggerated, almost sycophantic, form that most Indian nationalists would surely have found pathetic and contemptible. For instance, at an event in 1938 commemorating the conquest of the islands, Manuel Quezon, the chief architect of Filipino independence and the first president of the Commonwealth of the Philippines, said of the first time he had seen the American flag raised over the Manila Harbor four decades earlier: “Little did I realize then that I was witnessing what in ultimate result may prove to be the greatest event of modern civilization in the Orient. Little did I know in my immaturity that I was beholding the birth of a new ideology in Asia–an ideology based upon what was then a strange, new conception in this part of the world–a conception that government is, ‘of the people, by the people, and for the people’–a conception based upon the magic words–liberty and freedom.”[6] But the language of liberal representative democracy became the chief ground of contending colonial policies as well as a means of expressing supplication. So successful was the colonial effort of “political education” that, for several decades after independence, Americans would point proudly to the Philippines as a “showcase for democracy,” hinting that their imperial venture (in contrast to those of the Europeans) may not have been such a bad idea after all.

In contrast to the Indian and Philippine experience, stands that of Vietnam:

Vietnam provides a striking counterexample to the Philippines and India. There the French gave only limited play to representative institutions, creating a colonial council and a handful of municipalities that gave voice only to a few among the emerging Vietnamese elite. Those who adhered to the Constitutionalist party–the most important organization espousing constitutional tactics–were never more than a tiny coterie of friends and associates. There was always a much larger number of the elite who perceived that they were excluded from council politics, that the political gains of the Constitutionalists were negligible, and that those whose voices were too loud would be subject to direct repression, no matter what language they were speaking. These figures turned increasingly to radical alternatives, most importantly, Marxism. Marxism provided a language of resistance against the French myth of mission civilisatrice; it insisted that European colonialism was a selfish, barbaric institution that had as its inevitable objective the plundering of the colonized.[7] But Marxism was also transformed in the process of becoming Vietnamese. Free from the discursive constraints of working within colonial structures. Ho Chi Minh and his comrades fashioned a syncretic rhetoric that evoked sentiment deeply rooted in Vietnamese culture. The use of family metaphors in referring to the relationship of revolutionaries to the people, the conscious evocation of the rich Vietnamese tradition of resistance to foreign oppression, the value placed on folk songs and peasant culture, and the shaping of a revolutionary moral code grounded in a Confucian value system all offered a possibility for creating strong bonds with the peasantry.[8] Marxist revolutionary rhetoric seems to have achieved in Vietnam a success that Gandhism never accomplished, in part because the liberal alternative was so thoroughly discredited by its obvious inapplicability to French colonial rule. Radicals inspired by this indigenous form of Marxism led the Vietnamese peasantry in a violent revolution that compelled the French to leave after the decisive defeat at Dienbienphu, and ultimately produced a communist state closely aligned with the Soviet Union.-

The author then suggests this might provide the stimulus for further research:

Such a brief comparative sketch can hardly capture the full range of factors that contributed to the development of political culture within these three societies. It sets aside such complex issues as the relationship between material interest and cultural production, the role of resistance from below, and patterns of individual variation among the elite, all issues that have figured in this study of Surat. Most important, in its sketchiness, it obscures the everyday processes of struggle and negotiation by which men and women among the colonized gave shape to their cultures. But it does suggest a broad hypothesis that might prove worth testing in other studies. To return to the typology developed in the first chapter of this book, liberal imperialism encouraged cultural accommodations to colonialism that were within hegemonic limits, it discouraged the production and spread of fully counterhegemonic languages that could inspire confrontation with colonial power, and often it successfully left its mark on postcolonial society in the form of representative institutions and an elite committed to constitutionalism and evolutionary progress. By contrast, in colonies that had experienced more repressive imperial regimes, where elite figures felt that their political mobility and access to power were blocked, the psychic and institutional legacies of imperialism were often more easily challenged and dismantled.[9]

As I pointed out on my show, there’s something remarkable about gigantic India facing off with the Philippines as one of its main rivals in the call center industry; but even a superficial look-see at India’s and the Philippines’ paths to independence and their democracies, suggests to anyone, I think, the potential not only for greater mutual understanding but for problem-solving, too. As Re-constructing Colonial Philippines: 1900-1910 by Patricio Abinales points out,

The U.S. Congress approved the colonization of the Philippines but refused to provide sustained financial support for the undertaking. In fact, the Congress allotted only $3 million for the Philippines in the entire period from 1903 to the formation of the Philippine Commonwealth. One economist called it colonial administration “accomplished ‘on the cheap.’ “Financial constraints were also complicated by the difficulty of attracting Americans to govern the colony. The solution to these problems was found in generating revenues from the colony’s own resources, particularly the existing crops that the colony was exporting abroad later years of Spanish rule. Enhancing this export economy, however, was not easy. American legislators, especially those coming from the agricultural regions of the U.S., vigorously opposed proposals that Philippine products enter the country tariff-free. As a consequence, the so-called “free trade” that introduced under American rule was not so free. The U.S. was very selective in the choice of Philippine products that could be exported to the American mainland. Only sugar, hemp and coconut were allowed open access to the U.S. market; and even these products would later be taxed in American ports. Selective entry of these goods however was enough to resurrect the export economy, and by the end of the decade much of it was re-energized because of the American market.

The second issue–putting people into the administrative and political structure–proved more successful because the Americans early on opened up the structure to Filipino participation. It is general knowledge that even as the war against Aguinaldo was raging, the Americans were already able to recruit prominent Filipinos to their side. These collaborators became the backbone of the Federalista Party, a party committed to full American control as well as the medium for introducing the party system to the Philippines. The Federalistas were also supposed to become the dominant Filipino party in the soon-to-be formed Philippine Assembly and American backing initially helped them to mobilize Filipino support.

And as he then adds,

By the end of the first decade, “regular provinces” comprised half of the Philippines. These provinces had elected and appointive Filipino officials, many of whom owed their positions to Quezon, Osmeña and the Nacionalistas. Combining their local political experiences learned from the last years of Spanish rule, with the “political education” they were getting from the Americans, the Filipinos proved within a short period of time that they had the ability to be equally adept at governing the colony. In its first year at work, the Philippine Assembly had already shown a marked adeptness in introducing additional provisions or new amendments to existing colonial laws, and in negotiating with the Philippine Commission and the Governor General over matters of policy formulation, funding and government personnel changes. Quezon and Osmeña were at the top of all these processes. They were fast becoming astute leaders of the political party they helped build, of the Assembly that they presided over, and of the colonial regime they co-governed with the Americans. If Rizal was credited for having conceived of the “Filipino,” and if Bonifacio and Aguinaldo were the leaders who gave this imagination a reality with the Revolution, to Quezon and Osmeña must be given the distinction of helping construct the political and administrative structure that would be associated with the term “Filipino.” The Americans may have created the colonial state, but it was these two leaders who gave flesh to it and putting the foundations that the future Republic would stand on.

But this also resulted in a problem that would continue, post-independence, though unacknowledged in terms of its origins:

A major reason for the American success was the cooperation extended by Muslim and Cordilleran leaders to the Americans. They regarded colonial rule as a means of protecting themselves against Christians and “lowlanders.” American military officials reciprocated this cooperation by resisting the efforts of Filipinos to extend their power to the “special provinces.” A working relationship eventually developed between these community leaders and the Americans whereby the former were given minor posts in the provincial government (“tribal wards” in the case of the Muslims) in exchange for agreeing to recognize American sovereignty. U.S. army officers who administered these areas also became their protectors against Filipino leaders, doing everything they can to limit the presence of Manila and the Nacionalista party in the Cordilleras and “Moro Mindanao.”

The only major resistance came from the Muslims at the hills of Bud Dajo and Bud Bagsak, when the army declared a ban on weapons and raised head taxes. American military superiority prevailed and over a hundred Muslim men, women and children were killed. Politically, however, these actions eroded the army’s standing and opened up an opportunity for Quezon to attack military rule in Mindanao. After the massacres, the army was forced slowly to concede authority to Manila and the Filipinos. The army’s powers were also clipped once the U.S. Congress authorized its partial demobilization, and once the American president ordered its withdrawal from the special provinces and its replacement by Philippine Constabulary units. Many American officers also preferred to continue their military careers in the U.S. mainland, seeing very little prospects in just limiting themselves to the Philippines. All these problems emboldened the Filipinos to assert their political presence in these special provinces. This was something that a weakened military government could not repulse anymore. In 1913, the army conceded its power to the Department of Mindanao and Sulu, a body controlled from Manila and by Filipinos. The Cordilleras’ status as a special province was also terminated and the Nacionalista Party began recruiting its first “Cordillerans” to join the organization.

Two major features therefore characterized the first decade of colonial rule. First was the full and effective unification of Las Islas Filipinas under American rule, and second was the division of colony into two major zones of administration reflecting the histories of their respective populations. These two zones were eventually unified under the Filipinization policy, but the distinctiveness upon which they were based continued to affect overall colonial development. Muslims and Cordillerans remained staunchly pro-American and anti-Filipino, while Christian “lowlanders” continued to mistrust and maintain a low regard for these “wild tribes.”

The result were rebellions in Mindanao and the Cordilleras in the 1970s and 1980s onwards.

And on an entirely unrelated note, this is clever and amusing:

95 comments

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  1. hvrds

    Correction: China’s stock market is 2% of the world’s stock markets while the U.S. share is 42%. 70-80% of China’s exports are exports done by foreign companies in China predominantly U.S. Japan and European corporations.

    So the supply chains or the economic division of labor is pretty much owned and operated by the G-7 group.

    That is why Big Mike and GMA used to park their savings in the U.S. prior to their ascendancy to power. Today their private bankers have kept it safe in mostly German banks which are more liberal to foreign deposits no questions asked. The Swiss have lost their luster as a laundry because of the notoriety of numerous dictators using their dry cleaning facilities.

  2. Proud to be Tsinoy

    Abe,

    I like the treatise you wrote as it basically confronts the different problems in the Philippine political economy. I have been saying all along that the Filipino has been too family centered in its attitude and thinking, whether rich or poor. Like you said, the attitude or mindset is not subordinate to the idea of a nation state. Even if say, they are able to go beyond that mindset, you then have to contend with the racial and regional attitude instead of the nation state. Thanks for the great analysis

  3. Proud to be Tsinoy

    Haven’t they tried this during the ramos period?

    The design could be something like operating under a Bayanihan Pact, an entrepreneurial arrangement where the oligarchs emerge as national business elites in partnership with the State, a representative group from the private sector, and the bureaucracy (hence, there’s no need for a bloody confrontation) in the nature of a Philippine, Inc., just as a Japan, Inc., a Korean, Inc. or a China, Inc., of recent time or the French, Inc. the British, Inc. or the American, Inc. of the old. Voluntary seed money for the venture from the 300 wealthiest elites will be welcome.

  4. qwert

    “Voluntary seed money for the venture from the 300 wealthiest elites will be welcome.”-tsinoy
    ______________________

    Tsinoy,
    I think this approach is very utopian, the elite will never volunteer seed money unless there is a clear and present danger to their business interest.

  5. cvj

    To make it feasible, the leader have to take pre-emptive military option, so the military is cut from the elite and put the entire country under military rule, implement 1 through 4 by the barrel of the gun. – d0d0ng

    I agree. It might have to come to that. In my blog, i called that scenario a “soldier’s rebellion” leading to a “populist dictatorship”.

    Reason I ask the question is because of what you’re proposing. They are certainly hallmarks of what a dictator would ostensibly do to get the masses to fall in line…Proud to be Tsinoy

    Yes.Even a dictator would need the support of the masses.

    …it contradicts everything I thought democracy would be about. – Proud to be Tsinoy

    Yes, that’s unfortunate, i personally prefer Abe’s Bayanihan pact scenario. However, you’re the one who said we’re not ready for a democracy, and i agree that it may very well be that wealth redistribution may not be feasible under a democratic framework. So if it has to be a dictatorship, we might as well make the most out of it.

  6. levi

    Abe M,

    how about the oligarchy on the Spanish line? have they been effectively stunted like cojuangco’s subjugation of the soriano’s?

    i suggest we publish the names of these 60 or so families so the people will be enlightened that the Lopezes for example are just making them idiots and pacifying them with Big Brother and Wowowie hypnotism.

  7. cvj

    Levi, for starters, here’s Forbes Asia’s list of 40 richest Filipinos:

    http://www.mukamo.com/forbes-asia-40-richest-filipinos/

  8. levi

    thanks cvj, i’m reposting it here in light of your, and Abe’s excellent dissertation.

    maybe other bloggers could add who’s missing in this list so we can have a complete picture of our irresponsible oligarchy.

    Forbes Asia 40 Richest Filipinos

    1. Henry Sy – $4.0 billion
    2. Lucio Tan – $2.3 billion
    3. Jaime Zobel de Ayala – $2.0 billion
    4. Eduardo Cojuangco – $840 million
    5. George Ty – $830 million

    6. John Gokongwei – $700 million
    7. Tony Tan Caktiong – $575 million
    8. Andrew Tan – $480 million
    9. Emilio Yap – $350 million
    10. Oscar Lopez – $315 million
    11. Enrique Razon Jr. – $285 million
    12. Andrew Gotianun – $280 million
    13. Enrique Aboitiz – $275 million
    14. Alfonso Yuchengco – $225 million
    15. Menardo Jimenez – $210 million
    15. Gilberto Duavit Jr. – $210 million
    17. Ramon del Rosario – $205 million
    18. Felipe Gozon – $180 million
    19. Beatrice Campos – $160 million
    20. Luis J. L. Virata – $150 million
    21. David M. Consunji – $145 million
    22. Bienvenido Tantoco Sr. $140 million
    23. Betty Ang – $115 million
    24. Manuel Villar – $110 million
    25. Mariano Tan – $100 million
    26. Rolando and Rosalinda Hortaleza – $90 million
    27. Oscar Hilado – $85 million
    28. Vivian Que Azcona – $80 million
    29. Manuel Zamora – $75 million
    30. Magdaleno Albarracin – $73 million
    31. Jesus Tambunting – $70 million
    32. Frederick Dy – $65 million
    33. Tomas Alcantara – $60 million
    34. Lourdes Montinola – $50 million
    35. Salvador Zamorra – $45 million
    36. Antonio Roxas – $40 million
    37. Wilfred Steven Uytengsu Sr. – $38 million
    38. Philip T. Ang – $35 million
    39. Marixi Prieto – $30 million
    40. Manuel Pangilinan – $25 million

  9. jemy

    that’s a hard question cvj and for which the answer is: i don’t know. the thing is that: nobody does either. study after study and experience piled on experience has shown that a select group of people, whether it be the government or a committee, are never ever good at picking industry winners. while on this subject, take a look at the book ‘the wisdom of crowds’ by surowiecki. that is why reliance is made instead, although this would raise the hackles of some, on the market. essentially, what the market is is a bunch of people voting with their wallets. the market is obviously and clearly imperfect and that is why you need a good government to safeguard people’s interests when it goes awry (as it will do from time to time).

    note that to open up your economy, taking just the common sense meaning and without relying on cut and paste definitions so as to shorten this post, having a smoother flow of goods and services across borders (finance is another issue altogether which i will not get into) will not on its own solve problems of inequality within borders. hence my suggestions on education and the estate tax (along, of course, with governance, etc.). other people working on trade, like stiglitz, sachs, wolf, habito, etc. would have their own prescriptions.

    note that to allow the entry of imports doesn’t mean that the filipinos have to buy them. don’t buy bally or jimmy choo, buy marikina! i’m all for protecting industries starting out, the problem is that our history is full of decades old infant industries.

    also, in all my years of trade work, i have yet to see a company that asked for protection from imports who actually suffered losses because of the said imports. case after case i have worked on shows that such companies suffered from bad management or simple bad business practices, which is what inevitably happens when you protect the so-called ‘winners’ chosen by governments and their cronies. simple justice dictates that between consumers (most of whom are ordinary folks, some under poverty) and these decades old infants, support should go to the consumers.

    finally, did anybody notice anything in common between india, china, and the us? they are all big big countries with a domestic market that could support the business of its local industries and such that competition could exist so that consumers are benefited. there is indeed a case that could be made for tariff protection for these big countries but that justification diminishes with smaller countries. however, neither am suggesting we follow singapore. as i kept saying, there is no correct model for these things. a plan should be made for the philippines that takes into consideration its culture, sociology, history and other characteristics, as well as its idea of what kind of society it wants to have.

    i am not dogmatic about these things and i suggest everybody else do the same. i’ve always tried to avoid hyper academic languages and labeling such as ‘neo-liberals’, neoclassical’, ‘washington consensus’, or ‘anti-developmental framework’. labels and definitions have never been good in international law practice and policy because they are limiting and, worse, sometimes misleading.

    instead, objectively and coolly speaking, if anybody could come up with a plan based on evidence and past history whereby our local industries could do good business exclusively with just local demand but with the condition that the filipino consumer gets good value for its money as compared to other more economically prosperous countries even without foreign competition, plus the assurance that local business practices will follow the transparency and other such standards of the said successful economies, then i’m all for supporting that.

    however, nobody has come up with that plan. and right now, the evidence is on the side of the hated free traders. the problem with the philippines is that we are the opposite of malaysia: malaysia mouths nationalistic slogans but ends up being one of the world’s most open economies, the philippines proclaims free trade but (and you can verify this with easy available data) ends up with overall protectionist slant (with the effect that if the economy gets screwed, liberalization gets the blame instead of the real culprit: protectionism and lack of consistency)

    for me, in the end, i’ll support whatever gets the philippines going. a respected philippines, with strong institutions and equal opportunity for all, with welfare in any reasonable form for the less fortunate. (speaking of welfare, guess who consistently have the best welfare systems in the world? denmark and norway. coincidentally, they are also among the most open economies in the world. which is common sense, you need income to spend on welfare. how do you get more income? trade.)

    apologies for this long entry. anyway, thank you all.

  10. DevilsAdvc8

    jemy, very erudite post. nice site as well. my only problem with free trade advocates is this: they can’t control G7, who obviously pays lips service to the movement but are more protectionist than even the most protectionists states.

    simply put, free trade cannot function properly and eliminate poverty as you theorized simply bec the powers that be do not practice it. double standards have proven free-trade to be a dead end.

    how can markets compete equally when developed countries unfairly subsidized their own industries so as to dominate the industries of smaller economic nations? that is simply ruthless economic invasion and bullying. of course no small industry will be able to compete with a developed one, no matter how good its products are bec the bigger industries will just flood the nation with very cheap imports.

    of course protectionism has its own monster. mainly stagnation of industries bec protectionism promotes mediocrity and gives no incentive to drive for excellence since companies are safely entrenched and “protected.”

    the only way to break this is to attach conditions on protecting such industries such as growth requirements, job creation, as well as product excellence. any failure in these categories should lead to the cancellation of subsidies and protection.

    free trade it is – but only if G7 practice it first.

  11. DevilsAdvc8

    levi, nice list. now if we can only include their heirs and relatives, we’ll be set for the revolution. 😀

    of course, not all of them needs to be eliminated. only those who refuse to “share the wealth.” either by being pure rent-seekers, or greedy monopolists like what Razon is trying to do.

  12. qwert

    I wonder if all of this Forbes Asia’s 40 Richest Filipinos pay their correct taxes. How many of them have properties abroad that the moment their business interests are threatened they would take the first flight out of the country and take their money with them.

    cvj,Abe and the rest
    If I may add:

    – lower the taxes of the capitalist but increase proportionately the salary/income of the labor force. In doing so, tax collection will be more efficient by way of the witholding tax.

  13. cvj

    Jemy, thanks – much appreciated! Among the neoclassical economists, i believe Dani Rodrik (who is blogging at rodrik.typepad.com) has (imho) sensible views on trade as well as industrial policy. On trade policy, Rodrik listed a number of side conditions for trade liberalization to be good for economic performance:

    The liberalization must be complete or else the reduction in import restrictions must take into account the potentially quite complicated structure of substitutability and complementarity across restricted commodities.
    There must be no microeconomic market imperfections other than the trade restrictions in question, or if there are some, the second-best interactions that are entailed must not be adverse.
    The home economy must be “small” in world markets, or else the liberalization must not put the economy on the wrong side of the “optimum tariff.”
    The economy must be in reasonably full employment, or if not, the monetary and fiscal authorities must have effective tools of demand management at their disposal.
    The income redistributive effects of the liberalization should not be judged undesirable by society at large, or if they are, there must be compensatory tax-transfer schemes with low enough excess burden.
    There must be no adverse effects on the fiscal balance, or if there are, there must be alternative and expedient ways of making up for the lost fiscal revenues.
    The liberalization must be politically sustainable and hence credible so that economic agents do not fear or anticipate a reversal.
    – Growth Strategies, Dani Rodrik, Harvard University, 2004

    On the latter, Rodrik believes that there is no way to avoid industrial policy, in his words, we are doomed to choose*. In order to get around the difficulty of picking winners, he suggests that to approach industrial policy as a discovery process** which would involve some degree of trial and error:

    The right model for industrial policy is not that of an autonomous government applying Pigovian taxes or subsidies, but of strategic collaboration between the private sector and the government with the aim of uncovering where the most significant obstacles to restructuring lie and what type of interventions are most likely to remove them. Correspondingly, the analysis of industrial policy needs to focus not on the policy outcomes—which are inherently unknowable ex ante—but on getting the policy process right.

    *Doomed to Choose: Industrial Policy as Predicament (with Ricardo Hausmann), September 2006.
    **Industrial Policy for the Twenty-first Century, Harvard University, September 2004.

  14. jemy

    i agree with you totally DevilsAdvc8. that is what i’ve been saying and what a lot of our trade negotiators (believe it or not and of which has to be differentiated from the present leadership) have been fighting for: that the developed countries practice what they preach. the international policy is sound and has to be differentiated from those who constitute it. you do not condemn the catholic faith just because some priests turn out to be pedophiles. to rid the world of developed country subsidies and ensure developing countries get a fair shake is what we are fighting for in the present doha round. that is why i cannot understand it when some people cheer the fact that it is in trouble. as one magazine put, ‘what are these people smoking?’!

    thank you cvj. yep, been reading on rodrik and he indeed poses sensible – and more importantly, unhysterical – points on the matter. may i also suggest ‘international political economy zone’ (www.ipezone.blogspot.com). try to avoid chomsky and naomi klein, they’ll just give you gas.

    anyway, again, thank you all and happy weekend.

  15. Proud to be Tsinoy

    Jemy

    Thanks for the insight. They certainly provide a lot more information.

    Cvj…thanks for the site reference. Will check it out. To some extent, it seems like we’re converging on a certain idea on how the country should be run….

  16. cvj

    Jemy, thanks for the pointer to ipezone.

    Proud to be Tsinoy, thanks for your patience as well.

  17. Karlo

    Really note worthy discussion here! 🙂 Regarding the following comment:

    That alternative history where the Hukbalahap would have won (just like their Viet Cong or Mao’s guerillas) is interesting. Who knows, if the Huks had destroyed the oligarchic elite at that time, we may be growing like China or Vietnam right now.

    I wouldn’t discount such a possibility. That should make for an interesting alternative history. But there were many stumbling blocks to such a development.

    For one, the political clout of the Huks was limited to Central Luzon and Southern Tagalog (which means less ground for doing battle).

    Meanwhile, the consciousness of their constituents did not really go beyond calls for giving land to the tiller and agitation for hatred against the landlords.

    According to the blog Global Guerrillas, an insurgency’s victory is basically premised on the ability of the revolutionaries to grow in size while simultaneously creating a moral crisis of sufficient magnitude to incapacitate the government in power, gain sufficient support for their political alternative, and finally replace the government with the movement’s own functional hierarchy.

    Repeating myself, the Huks did not expand their operations to a national scale (unlike the CPP-NPA of today).

    Unable to project issues apart from those concerning land reform (unlike today where every conceivable issue is chanced upon by the underground movement and sympathetic organizations), they could not generate a crisis of sufficient scale or gain support for pro-Moscow communism.

    Based primarily in Luzon, the Huks did not have the capacity to govern the entire country if ever they seized the national capital from their bases in the Sierra Madre.

  18. cvj

    Karlo, you make a good point on the stumbling blocks that would have been faced by the victorious Huks. Based on your analysis, there would have been a Socialist ‘North Philippines’ (Luzon) and a capitalist (not necessarily democratic) ‘South Philippines’ (Visayas and Mindanao).

    The other stumbling block would be the presence of the US Bases which would, at the very least, be kept by the Americans like they did Guantanamo. It is also possible that the US would fund either an outright Bay of Pigs-style invasion or Nicaraguan style contra-movement to undermine the revolutionaries. On the other hand, it’s also possible that with the support of the newly empowered peasants (and with the help of Soviet or Red Chinese assistance), the revolution could survive and spread south.

    There’s also a possibility that the surviving oligarchs in ‘South Philippines’ would, like their counterparts in Taiwan, have granted land reform on their own volition to prevent a similar peasant uprising that drove them from Luzon. If, after this genuine land reform, the Recto-style nationalists then got control of economic policy, there would have been honest to goodness industrialization and we could have a situation where the South becomes like Taiwan while the North ends up like the present People’s Republic of China, both prospering under different systems.

  19. Karlo

    Hehehehe :D, a socialist “North Philippines” would have been possible if the Huks did win considering their own movement’s weaknesses – a waffling leadership that led to their inability to generate a crisis enough to destabilize the Manila-based government and present themselves as a credible alternative to it. But that sure would make a good alternative history, Sir CVJ.

  20. ronin

    karlo: a successful entity has to reinvent itself to remain relevant. the huks may have been too parochial at the time, but if one of their leaders only had this idea of expanding their ‘vision/mission’ earlier in the game, they might indeed have gained the upper hand. as it happened, nobody in their leadership at the time did.

  21. mlq3

    all this romanticizing of the huks reminds me of this article i wrote:

    http://archive.inquirer.net/view.php?db=0&story_id=74232

    wehere the huk chieftains did a post-mortem on why they lost, circa 1985.

  22. hvrds

    How can one discuss trade without delving into the discussions that has bedeviled the planet for most of the 19th and 20th century and is now again threatening to blow up the world. Who will control the supply and demand of the international medium of exchange. In most of the 19th century the world, the more developed world was on the gold exchange standard. This was the era of free banking systems. The era of free trade. This was before the onset of the carbon based economy and national monetary systems.

    Fast forward to today there are three major multilateral institutions that were created to regulate the integrations of national economies; the movement of goods and services across national boundaries, WTO, the IMF-WB to police and monitor fiscal and monetary systems of the differing national systems and to a degree the ILO which is meant to oversee labor mobility across national boundaries.

    After all economic integration across national boundaries relate to the movement of goods and services, capital and labor.

    Narrowing discussions to WTO that delves almost entirely on tariff lines is useless unless one takes the entire fiscal and monetary policy framework that a particular country is utilizing and relate it to the differing frames of other countries. The state of country’s financial conditions thus plays a strategic role in a countries ability to participate in the so called world economy. That financial condition is a more accurate picture that will mirror the state of development of economic, political and cultural institutions. How can one talk of interventionists state which presupposes strong state institutions to promote industrial policy. That would make the particular state no longer underdeveloped. The first solution to any problem is to define the correct problem.

    The struggle for dominance over the medium of exchange for international trade is the center of todays trade disputes just like it was in the early part of the 20th century till the end of the Second World War that saw the creation of the U.N., GATT and off course the Breton Woods twins.

    “This line of thinking has vast implications for the design of appropriate global economic arrangements. Hirschman would be aghast at the extent of intrusion into domestic policymaking that the World Trade Organization or the International Monetary Fund engage in nowadays. As international bureaucracies with a penchant for “best practices” and common standards, these institutions are woefully unsuited to the task of seeking innovative, unique pathways suited to each country’s particular circumstances.”

    “But Hirschman also would no doubt chide developing country governments for not living up to their responsibilities and for passing on the buck so freely to these external agencies. For, ultimately, it is up to each country to say, “Thanks, but no, thanks; we’ll do it our way.” Dani Rodrik

    http://www.project-syndicate.org/commentary/rodrik16
    http://www.project-syndicate.org/commentary/frydman16

  23. tonio

    nice discussion. a nice refreshing break from the usual bile and venom that gets passed around over on this blog. 🙂

    there’s a very big “if” attached to the prescriptions in this thread.

    it’ll only work if the elite agree.

    they won’t.

  24. DevilsAdvc8

    “it’ll only work if the elite agree.

    they won’t.”

    who says we’ll ask them nicely? 😀

  25. tonio

    devils:

    that’s why you’re the devils. heheheh!

  26. levi

    or make them an offer they can’t refuse.:-)

  27. Bencard

    tonio, i think the bottom line is that these people are advocating bloodshed, a violent revolution, that has for its objective the elimination by force of the present ruling class, and what they call the “elite/middle class” that sustains the current socio/political order. in sum, it is the same tired, repudiated, and ineffectual leftist/communist dogma that these people are promoting using the “miseries of the masses” to advance their failed ideology.

    the oft-repeated cliche still rings true. you cannot “throw away the baby with the bathwater”. change whatever needs changing but let it not be done by forcibly eliminating everything that stands in the way.

    there was a reason marcos had the nation in his grip for over twenty years. the filipinos generally hate violence although, contrary to some foreign perception, they are not cowards by any means. the huks and the maoists, the latter even in the worst days of marcos one-man rule, never gained a substantial foothold in the hearts and minds of the filipino people, and were virtually reduced for the most part to plain banditry.

    as i see it, marcos recognized the filipino’s faith and adherence to the rule of law and the constitution. that’s why he had to use the constitutional imperfections to his advantage, invoking the very principle of “constitutional authoritarianism” as basis for his reign. by doing so, he preempted the forces of violence, and thus prevented the latter’s possible rise to power from the ashes of a fratricidal confrontation. otherwise, the consequence would have been too horrible to contemplate, and the supplanting authority would have made marcosian governance a veritable gift from heaven.

    personally, i see a meaningful change in our future politics and governance within the framework of our established democracy. the “revolution” would consist of a drastic change in attitude, values, character, and basic beliefs of a controlling majority of the filipinos.

  28. d0d0ng

    jemy on, “the philippines proclaims free trade but (and you can verify this with easy available data) ends up with overall protectionist slant (with the effect that if the economy gets screwed, liberalization gets the blame instead of the real culprit: protectionism and lack of consistency)”

    Such sweeping conclusion of Philippines as protectionist needs backup data from you. Please support your claim, Jemy. Because if I pickup agriculture industry, the Philippines is an importer, not exporter, for over the years lacking protectionist government policy. It is easier for this government to import foreign subsidized crops than to support prices of our farmers produce.

  29. d0d0ng

    bencard on ,”the bottom line is that these people are advocating bloodshed, a violent revolution, that has for its objective the elimination by force of the present ruling class, and what they call the “elite/middle class” that sustains the current socio/political order. in sum, it is the same tired, repudiated, and ineffectual leftist/communist dogma that these people are promoting using the “miseries of the masses” to advance their failed ideology.”

    It is for this reason that foreign powers, the influential Church, the rich business elite, and the well-fed military have found common enemy in bloody revolution advocates.

  30. cvj

    It is for this reason that foreign powers, the influential Church, the rich business elite, and the well-fed military have found common enemy in bloody revolution advocates. – dOdOng November 20th, 2007 at 7:01 am

    Taken in the context of your comment on the other thread…

    We can get an answer by asking, who will be the predominant drivers of change? Special interests by politicos, business elite, the church and military have effectively drive the people to the bottom. – dOdOng at November 20th, 2007 7:32 am

    …i agree with your analysis.

  31. Bencard

    dodong, i’m disappointed that you did not include ordinary folks like me, and i’m certain several million others not beholden to “foreign powers, influential church, the rich business elite, and the well-fed military”, among those who regard advocates of bloody revolution and/or forcible power grab, as enemies.

    i still think what the country needs is a revolution of the mind and ideas of the individual citizens rather than deadly designs that would transform our land into our very own version of “the killing fields”. such a kind of revolution may take a long, long time to bear fruit but it’s worth the wait, maybe not for this generation but for the future ones.

  32. d0d0ng

    Bencard on, “i’m disappointed that you did not include ordinary folks like me, and i’m certain several million others not beholden to”.

    You are correct. The exclusion is for singular reason, the people have never demonstrated to have their collective interest prevail over special interest group. When the fog is over, Filipinos were unfortunately in the same position over and over again against the politicos secured by special interest group.

  33. jemy

    dodong, there are several studies you can look up that will tell you how protected the philippine agri sector is. habito, romy bautista, rosario manasan, oecd,ustr studies, or pids studies will show you the same information.

    competitiveness in agri has declined and this has been pinpointed due to a few factors. The poor performance in the productivity sector has not be held much as the culprit but rather the policy decisions made in the past few years. overvaluation of the peso in certain years is one of those that have hurt agri. failures in the area of incentives and investments are another.

    however, it is in the degree of protection that agri has been really hurt in terms of quantitative restrictions and tariffs (in certain instances going to the level of “dirty tariffication,” whereby applied tariffs are significantly higher than the nominal protection rates applied on the quantitative restrictions. note that, interestingly enough, the relative rates of protection enjoyed by the agricultural and industrial sectors have reversed. whereas before manufacturing used be more protected than agri, now agri is estimated to receive around 25% rate of effective protection, manufacturing is 15%.

    one other area of protection is on government sanctioned monopolies in the area of agri productions, exercised through the nfa, for rice and corn. note also the high bound rates for sugar and the mav available for rice.

    if indeed we are becoming more import dependent on some agri products, you could point to the failure to raise competitiveness by the agri sector due to the trade protection (habito calls it “disprotection”) as i’ve described.

    finally, though I would caution pointing comparatively to other countries because, simply, we are not other countries, nevertheless, it is to be noted that in terms of protection for agri, specifically rice, indeed Japan and Korea do top our level of protectiveness. but then again, Japanese, Korean, and Filipinos pay more for their rice than most other Asian countries.

    thanks. hope it helps.

  34. jemy

    dodong, just to add, if agri importations are indeed rising in level its not because we are less protectionist but because our government is forced to import due to the fact that local agri production can’t meet local demand. people simply have to eat. and the reason why local production can’t meet local demand is due to lack of competitiveness, the reasons for which have been described above.

    thanks again.

  35. d0d0ng

    Jemy, your claim of Philippines as protectionist state is the bone of contention. I don’t go third sources like Habito, Romy Bautista, etc. I address the issue squarely based on WTO Chairperson findings and its third Trade Policy Review of the Philippines, disclosed that “average applied tariff (Philippine) rate is relatively low among developing countries”.

    I don’t believe WTO is in the best interest for the Filipinos either. WTO is the tool used by rich countries to unload their wares. This is best illustrated in the Chairperson statement regarding Philippines, “(WTO)Members were concerned about the existence of a (Filipino) strong preference for domestic goods and services.” I cringed on the thought of WTO for dumping foreign goods killing local production which is the backbone of economic growth.

  36. d0d0ng

    jemy on, “the reason why local production can’t meet local demand is due to lack of competitiveness”

    This is another sweeping statement that local production cannot compete with imports. This can be looked at who determine the price of rice sold by the farmers. Obviously, not the farmers but the millers or retailers who buy the rice at low price, mill the rice into grains and sold the grains at high price.

    The low selling farm price to millers/retailers pose no incentive for farmers increase production, hence, local production cannot meet demand. The demand drives the retailers price high (middlemen are pocketing the profit). The country step in through NFA by importing more rice to fill the gap in demand. And this has been going on and on for years. We are always, the importer despite the following basic facts (1) 47% of land area is agricultural, (2) we have the premier rice research institute in Asia, IRRI.

  37. d0d0ng

    jemy on, “one other area of protection is on government sanctioned monopolies in the area of agri productions, exercised through the nfa”

    This statement greatly misunderstood protectionism and the goal of WTO to dismantle protectionism for entry of foreign goods. NFA is importer of rice which is conducive to the goals of WTO.

  38. d0d0ng

    jemy on, “also, in all my years of trade work, i have yet to see a company that asked for protection from imports who actually suffered losses because of the said imports.”

    That is why the rich WTO members are very creative and crafty to protect their local production. Take the best example of Australian known protectionism of its banana industry which prohibit importation (of Philippine bananas) in the guise of quality issue or diseased bananas. Our gullible trade officials just swallowed the diseased Philippine banana statement.

  39. jemy

    dodong, thanks for your comments. the reason why i pointed to the studies by habito, et al. is to satisfy your need for information. this is merely after all a comment section in a blog. interesting that you abhor going to “third sources” but instead go to the trp review of the philippines, which actually, if you know the method in making the tpr, is based on submissions by the philippine government from self-made or collated studies! also, please note that protectionism doesn’t stop with tariffs. there are also things like sps, tbt, and ntb’s, which any commentator now will tell you are more pervasive. i suggest readers indeed to go to the studies directly instead and read it as a whole and not selectively. the tpr actually concludes that the philippines should be more consistent and work on opening its economy.

    regarding the other information such as agri competitiveness, that was based on collective and accumulated readings. obviously, you have your own info and i have my own info. that is fine by me and and it sets critical analysis of the issues. like you, i try to get my info directly and that is the people who work in agri and agri policy.

    regarding the goal of the wto, please note that the organization is really a forum for countries to gather and agree on a set of rules. it does not dictate the rules. the members make the rules. obviously some people will take a different line and refuse to believe otherwise but that’s the wto rules.

    the objective of the wto to dismantle protectionism for “foreign goods”? well, please consider that somewhere in many places in the world, philippine exports are “foreign goods” for which the wto helps in opening up through the protectionist barriers it faces there. and besides, and this is something that protectionism has never countered or argued against: protectionism increases prices and decreases the choice for consumers.

    the nfa conducive to goals of the wto? please note that state trading enterprises are specially regulated under the wto precisely because they serve as exceptions to wto rules. these enterprises are sanctioned monopolies and allowed qr’s.

    regarding companies that seek protection, that is still indeed true, mismanagement is the cause of their sufferings. regarding australia and bananas, please note that if there were no wto around, we’d have no venue and course of action to pursue against australia. the wto did not create these sanitary protectionist regulations, in the same way that the wto did not create the us and eu subsidies. that is why the wto is good, because it serves as an avenue to make better rules for developing countries, where otherwise there would be no other avenue. if there is, please share with us.

    in any event, really, if the australian government wants their citizens to pay more for their fruits that is their concern, in the same way as i said that if the japanese and korean governments, as well as philippines, wants their citizens to pay more for their rice then that is that.

    our trade officials are not naive. they are highly intelligent and sophisticated people doing a difficult job under difficult circumstances. i may not agree with them always but they have my respect. i know for a fact because i worked on that case that our trade officials did not “swallow the diseased banana statement”. the da, particularly usec serrano, fought energetically in geneva for us.

    bottomline is, evidence supporting greater and freer trade is there that it helps poorer countries like the philippines. going directly again to the source, as you say, the world bank in fact just released a study that said trade liberalization helps combat climate change!

    thank you all.

  40. Abe N. Margallo

    for me, in the end, i’ll support whatever gets the philippines going. a respected philippines, with strong institutions and equal opportunity for all, with welfare in any reasonable form for the less fortunate. (speaking of welfare, guess who consistently have the best welfare systems in the world? denmark and norway. coincidentally, they are also among the most open economies in the world. which is common sense, you need income to spend on welfare. how do you get more income? trade.) jemy

    i think the bottom line is that these people are advocating bloodshed, a violent revolution, that has for its objective the elimination by force of the present ruling class, and what they call the “elite/middle class” that sustains the current socio/political order. in sum, it is the same tired, repudiated, and ineffectual leftist/communist dogma that these people are promoting using the “miseries of the masses” to advance their failed ideology.bencard

    Hillblogger has called my attention re my post above to Judge Richard Posner’s blog about the IMF’s report on the effect of globalization on inequality.

    This question by Posner in his blog has particularly bothered me: “Everyone is better off, and why should the fact that the rich are better off by a larger percentage concern anyone?”

    That the economy works best when regulated least is a fundamental tenet of classical economics (of free trade and free market) Scottish economist Adam Smith fathered in 1776. That may be fine but were we to realize our unrestrained actions (or for that matter unfettered self-interest, our natural insularity) may have dire consequences to others than ourselves, a society would need more than a “night watchman” state to allocate boundaries or alter existing ones. Some people (like Jose Rizal or our valiant Overseas Filipino Workers) will always be bothered too by the claims of this system that not the wealthy but the poor themselves, or their laziness in particular, is responsible for the latter’s misfortunes.

    Among the early supporters of classical economics were the utilitarians who believed that if the greatest happiness of the greatest number is advanced, then the resulting suffering of the rest would be excusable. Judge Richard Posner question above is exactly utilitarian.

    Herbert Spencer (1748-18320) was another intellectual who reinforced the classical view by extending Charles Darwin’s theory of biological evolution to the economic sphere: the fittest would advance and survive but the lower kind would be left behind or possibly perish, a natural inevitability that ought not to strike the conscience of the fortunate ones.

    Thus, if religious pretensions or sheer moral arrogance of the older era had been relied on as the excuse for the deadly doctrine of “discovery and conquest,” permitting the extermination of an entire race by supposedly civilized and moral people, “social Darwinism” was drawn upon to assuage the scruples of more recent colonizers, settlers/frontiersmen and imperialists as well as racial supremacists who would cause parallel untold misery to “lesser” peoples.

    But the poor were just poor. They weren’t dumb. They always understood the system was nothing but an institutional premise that protected powerful economic interests and promoted a culture of indifference and impunity for brutal and rank exploitation.

    Fortunately there were also men of probity who were considered turncoats to their class because of beliefs that human beings were entitled to certain basic measure of dignity. Activism, then as now, either by these radical humanists and or on the part of the exploited themselves, has been the only means of rectifying institutional injustices such as the dreadful plight of workers during the early phase of the Industrial Revolution in the areas for instance of child labor, safety in workplaces and security against disabilities and old age. Among these humanists was Karl Marx who also predicted that the capitalistic system would self-destruct given that the flaws of the system would drive the workers to rise up and overthrew it in a violent revolution.

    I do not buy the Marxian inevitability of the proletariats’ violent revolution because I strongly subscribe to the view that there are alternatives to bloody confrontation in order to transform in a revolutionary way, such as the alternative of discourse. I do believe that it is through discourse for example that institutional vocabularies like “market” and “democracy” could be exposed as less than God-terms in the same manner that the Divine Rights of Kings was proved as not all but God-willed.

    Similarly, the literature is now plenty about how to re-imagine “entrepreneurship,” another institutional buzzword. To author and MIT professor of political economy Alice Amsden, the “defining characteristic of entrepreneurship is planning, or deciding what, when, and how much to produce.” And by historical standards, when it comes to milestone decisions in big business, Amsden argued, “the entrepreneurial function of planning has primarily fallen to the state,” curtailing in the process the role of the private entrepreneur. Thus, in South Korea according to Amsden, “every major shift in industrial diversification in the decades of 1960s and 1970s was instigated by the state.” The role of professional managers because of their expertise was relegated to implementing those investment decisions. It is only in small firm situation, she further pointed out, that the entrepreneurial function of planning or the initiative to investment in minor project still lies with the private entrepreneur, now “a pale reflection of the heroic figure of the past.”

    On the other hand, economist Dani Rodrik, re-conceptualizing the standard literature on “industrial policies,” has called for “the softening of convictions on both sides” in order “to fashion an agenda for economic policies that takes an intelligent intermediate stand between the two extremes” where “Market forces and private entrepreneurship would be in the driving seat of this agenda, but governments would also perform a strategic and coordinating role in the productive sphere beyond simply ensuring property rights, contract enforcement, and macroeconomic stability.”

    As thus conceived, the Korean strategy for economic take off, for example, was not as simple as protecting “the so-called ‘winners’ chosen by governments and their cronies,” as our free trader friend jemy would suspect. “Industrial policy is a state of mind more than anything else,” Rodrick has concluded.

    So, why a Bayanihan Pact (a people-powered town effort) as the suggested appellation for a new entrepreneurial arrangement that may allow the Philippines to catch up or ultimately propel its economy to take off? Because, to begin with, even the text itself evinces discourse, negotiation, inclusion and collaborative enactment; it also serves to challenge the institutional text of hierarchy, elitism and patrimonialism as well as the sociology of exploitation and impunity or general apathy to the appalling predicament of the less fortunate, our poor or theirs.

    When 60 million or so Filipinos are under constant threat of daily terrorism because they live on less than two dollars a day, indeed all possible propositions should be explored. I have then pointed out one barrier-breaking alternative available to Filipinos and perhaps others similarly situated, which does not seem to directly contradict jemy’s post excerpted above:

    “Whether the gateway to equitable accumulation and ultimately national development could also be accessed by way of the power of consensus of people power democracy that’s willing to learn from the best practices that work and, based on ongoing experience and rising above ideologies, eschew things that don’t, or change even established notions and practices when concrete realities and the complex necessities for change in the service of the common good require.”

  41. jemy

    thank you abe. it is interesting, however that i get labeled a “free trader”, like by some ngo’s, while some government economists friends of mine believe i veer on the other side.

    the truth is something that should have been clear by now, as has been consistently and continuously stated in my blog and my comments in this blog, and that it is my belief to eschew ideologies and essentially go with what works. like rodrik, i have long ago already commented and which i think i commented above … again … that markets can and does on occasion fail and thus the need for a good government to ensure protection in such instances. that is why i have pointed out in previous entries on the insistence by even free trade supporters of a competition policy, in recognition that markets do fail. rodrik called it a softening of convictions, i years ago called it the finding another way in developing economic and trade policy from the restrictive protectionist/free trade paradigm. hence, the context of “for me, in the end, i’ll support whatever gets the philippines going” remark. nevertheless, it is just that so far, evidence seems to point towards the usefulness of trade liberalization but, and i keep pointing this out, any evidence of an alternative would be very much appreciated.

    one clear point, however, is that i do not and will not advocate violent revolutions or anything else that undermines our legal institutions. and that is the reason i strongly and urgently encourage economic reform and policies towards equality to precisely avoid the possibility of violent change. please note that questions on equality between states and equality within borders are two separate questions, the latter not really being dealt with trade liberalization but more a question of a country’s internal policies.

    again, note that i stopped myself on trade policy and the reason here is that i humbly admit that i do not sufficiently comprehend the complexity of the international financial system, which leaves even the best trade people baffled. i leave comment on that to more, to truly qualified, people. there is a complex and symbiotic relationship between the spheres and while it is exaggeration to suggest that one is useless with the other, nevertheless the connection is there for which its true and complete implications are still trying to be grappled with by the best of minds. rather than view websites or links, i suggest people go read more thoughtful works such as greenspan’s age of turbulence, mallaby’s (on wolfensohn) world’s banker , or sachs and stiglitz’ recent books on globalization for ideas. another area that is also really complex is the area of trade in services and immigration. but that’s another long discussion.

    abe, i appreciate your post and yes there really is no contradiction on a general sense. as i said, its just that right now the information i have on hand points me to believe that more and consistent economic liberalization, refinement and strong implementation of the estate tax, and a developed educational system would go a long way as a first step. the bayanihan pact, if upon further examination is a pragmatic, workable, and sustainable framework, then you’d find me a supporter.

    i have long long written that the present world is too complex and too fluid for ideologies to govern. that is why i have kept insisting that, although mindful of other countries’ practices and evidences of what works, we go back to our history, examine our own experiences, make our own studies and analysis, and implement our own plan that is specifically suited to our own circumstances, culture, psychology, and environment.

    anyway, thanks again.

  42. jemy

    just a correction: the sentence should read “there is a complex and symbiotic relationship between the spheres and while it is exaggeration to suggest, as others did, that one is useless without the other, nevertheless the connection is there.”

    also, just to add, another area is the implications and extent of technology on industry and labor competitiveness, survival, makeup, and patterns. hence, the importance of a developed educational system.

    thank you all.

  43. Bencard

    in the philippines where about 60 million inhabitants classify themselves as “poor”, or belong to a “poor family”, everyone is a potential “middle class”, at least,or “elite” subject only to accepted rules of civilized society, no one is forbidden to become educated, wealthy, or have, at least, the basic essentials for an independent, self-sufficient and meaningful life. each person has a right to raise himself up by his own bootstraps, to create his own wealth, to think for himself. the goal of our society should be to increase the number of middle class and/or elites and reduce the “masses”.

    men may have been created “equal” (we are all born bringing nothing into this world), but “mother nature” is all but fair in terms of individual ability and opportunity, among other “accidents” of fate.

    since personal wealth and wisdom cannot be legislated or decreed, the government’s role is limited to trying to provide equal opportunity for employment, private ownership, education, peace and order, and safeguarding basic human rights. more than esoteric economic theories and principles, the ultimate catalyst for the betterment of society is the individual’s willingness to take personal responsibility for his own welfare.

    in every society, there will always be a core group of permanently “poor” individuals that will need constant care and protection by the government and the rest of the public. included among these are the mentally and physically disabled because of illness, aged, and their minor dependents. this is where permanent or long term charity makes sense. a strong society should have no problem taking care of such a group.

  44. Bencard

    erratum: there’s supposed to be a period after “elite” on 1st par., 3rd line.

  45. Hopeless_BD

    this is one hell of an intellectual discussion great guys! why did you stop? from the depth of your posts i can tell that some of you are well-known people in your respective fields. i can sense that we have an ex-up president participating. guess who?

    well all i can say is that our country(carriage) is being pulled by too many horses. we will have to kill the other horses so that we can move forward.

    to solve the problem an Alexander should be born from the provinces raise an army suppress/conquer other provinces eventually the entire country. destroy the military of the elite through his sheer intellignce and charisma. then raise a new order and give that sense of feeling that all of a sudden that the entire country given its vast geograpical politico social differences can be ruled by just one man—just one man.

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