On Oil Deregulation and E-VAT

49 Responses to “On Oil Deregulation and E-VAT”

1. benign0 on July 8th, 2008 8:37 am

   Honestly, what is the Catholic Church really up to? What is its agenda? Is it suffering from some kind of bizarre 1000-year-old crisis of relevance?

   The Catholic Church is an institution whose awesome power is INVERSELY PROPORTIONAL to the collective intellect and ethical maturity of the society that hosts it. So go figure folks.

   Before we DELEGATE our “god-given” thinking faculties hook line and sinker to an institution that monumentally struggles to achieve internal philosophical (much less logical) consistency in the belief system it continuously shoves down our throats, we should CRITICALLY EVALUATE exactly what it is we as a people have been lapping up for the last 400 years.

   On one hand they enshrine in dogma that humans should go out and multiply like vermin, AND THEN preach about prudence and grandstand about the evils of “forces” that continue to imporverish their flock.

   It takes a bit of brain to see the contradictions that pepper the dogmatic framework of these bozos and the verbal diarrhea that they subject us with on a daily basis.

   Unforunately Pinoy society has time and again demonstrated this lack of bit of brain in most of its past endeavours. Which is why bozos like “catholic bishops” more than obligingly step in to fill this void.

2. Lee Angelo on July 8th, 2008 10:28 am

   Scrapping the Oil Deregulation Law will not work even if the CBCP thinks it’s the way to go. I share the same belief of Filipino scientists as well as experts that we are already in the phase of Peak Oil; there is just not much crude oil left. Even Saudi Arabia can’t produce that much.

   E-Vat. I’m not really sure about this one because I don’t know where would the government still get the money. I mean, the tax exemption for minimum wage earners has just been passed, its Php14 billion if I’m not mistaken every year. What would the government do to raise money, sell GOCCs again like Transco? We’re very aware that the collections made by BIR and Bureau of Customs is not enough to propel our economy. The target balanced budget has been moved from the end of 2008 to 2009, then to 2010.

   Instead of thinking of band-aid solutions, think of a longterm solution even if it seems to be a “long-shot.” For one, GMA should increase the budget for science and technology. I agree with Sir Cocoy when he said “Lawmakers start drafting better bills to encourage manufacturers and consumers to use alternative fuels and fast track their deployment. The executive department should get fraking serious for a change! Get traffic to be managed so we can at least reduce some of that wasted energy!” Indeed, government should create laws for it. And the traffic..look at EDSA..this is very reflective of our economy..slow and being left-out.

3. DJB Rizalist on July 8th, 2008 11:33 am

   Bravo, Big Mango! Great post here.

   Just to add my own thoughts. I think the Men in Skirts are pushing their weight around as usual which is of course their right. But there is one issue that they ought to be called on the carpet for and that is population policy.

   Over the weekend the priest at Quiapo church got a dead foetus in a bottle of chiz whiz. Though grotesque I think the prank calls attention to an issue upon which the Bishops really do have power and influence.

   I think it’s time to get rowdy with them on this because ANY measures the country now takes on oil food and the rest has to deal with the sheer numbers of people that are now involved.

   The tragic thing is there is no easy solution to this one. But all the more reason to make some major effort to expose their role in dragging the country down to the pits.

   Here is an issue, which I have come to realize is THE lynchpin of their whole existence and domination in this country. Their position upon it is theological (infallibility!) and so the whole basis of the power of the Catholic Church is at stake.

   I for one intend to pull on the threads at the seams of their skirts. If there is any unfinished revolution it is this one.

4. benign0 on July 8th, 2008 2:12 pm

   People also need to know that cheap oil has always been just an illusion. We are burning within centuries energy that took millions of years for the Earth to store.

   We are also releasing within a matter of centuries CO2 that took millions of years for the earth to trap within these fossil fuels.

   The last two centuries and maybe the next century and a half will probably be known in the bigger scheme of human history as the small blip where rapid progress was fueled by a wanton and shortsighted burning of a million-year-old resource.

   Maybe the Western powers have a lot to answer for for our current addiction to oil. But at least they also, in the process of burning all that oil, built up and now possess the intellectual might to make things right.

   Compare that to intellectually bankrupt (but equally oil-addicted) societies like ours, all we may eventually end up doing is laying down to die when the oil supply eventually dries up.

   As we intend to continue believing: Bahala na! Pwede na yan.

5. cvj on July 8th, 2008 7:10 pm

   How do you reconcile your aversion for ‘dole-outs’ when Open Source Computing (which you advocate) is based on that concept?

6. cocoy on July 8th, 2008 8:14 pm

   djb, thanks.

   lee angelo yeah: EDSA is a reflection of the Philippines.

   cvj, open source is not dole-out. it never has been. The definition is here: http://opensource.org/docs/osd

   one aspect of open source (derivative work) is that you get to stand on the shoulder of giants. ideally (and not limited to it), open source allows you to innovate and not have to “Reinvent the wheel” every single time. iphone os is built on open source (bsd). the mac os x is built on open source (bsd). millions of people worldwide uses open source without knowing it every time they run google, yahoo. this blog, which uses wordpress is built on open source. but to do that, to innovate, to add– you got to pull your own weight. you still have to set the software for wordpress for example.

   linux is a great example of open source principle— anybody can just download linux and install it on their business computers, sure. people can even write a version of linux to run on a phone. of course, you have to maintain it yourself. you have to rebuild the kernel to run on that platform. so it isn’t really “free as in free beer”. you still have to do a lot of work to get exactly what you want and to make it work right.

   Fuel or mass transit subsidies — a dole-out only hides the real truth. it isn’t facing the problem— which is, we need better alternatives to oil. we need to reduce that overhead. oil is too costly. we need alternatives and we need ‘em deployed faster.

   do i hurt for people having to shell out more for transport fare, for gasoline– yeah. and you know what? i hurt too. so are Europeans. So do the Japanese. So do the Thais. And no, i don’t buy the crap that they’re “rich”. everything’s relative: they’re people too with mortgages and kids to feed. The only people probably not hurting, I suppose with high cost of fuel are those in Forbes’ top 100.

   back in the 70s there was a global oil crisis and we know how that turned out. why didn’t the world come up with something sooner? if we were to put blame on why no one has come up with alternatives faster— we’d never get anything done. besides, this is a global problem, not just in the philippines. but we’ve got to focus on our needs, figure out how to run things better. right now.

   Subsidizing cost is popular because on the surface it “eases” seemingly the people’s burden but it doesn’t solve the problem. Oil is going to go up, more than it is going to go down and it’ll be years, if ever, for it to go way below 100. the faster we face that truth, the faster we can get over ourselves, the faster we can find better energy sources.

   Our focus— not just government btw, is to find alternatives to oil and fast. Our focus should be to find ways to reduce our cost. in a world where expenses are on the rise, we can’t meet raising wages or transport fees. there will come a point when you simply can’t. too high wages will force businesses to close. too high transport fees and no one can afford food. too high taxes and no one can afford to pay or do business. it then becomes a chicken and an egg problem.

   i for one would rather we all face the problem head on. none of this “pupuwede na” attitude. none of this political bullshit crap that sounds great when you hear it but when you think about it— doesn’t have substance. only sound and fury, signifying nothing. go right into the problem, we expend energy once to solve it and we move on to the next challenge.

7. DJB Rizalist on July 8th, 2008 8:47 pm

   benign0,
   I don’t think that Western addiction to oil per se can be blamed for the current global crisis. The consensus is that this is a demand-driven price inflation putting pressure on oil and food supplies that could simply not keep up with the sudden emergence of large new middle classes in China and India. To me it is as if population suddenly exploded by an amount equal to this increase in human societies suddenly capable of competing for the available resources that we just can’t pull out of the ground fast enough to meet satisfy it.
   But you bring up a very good point about “intellectual might to make things right” which resides not only with West as such, but in the thing we call Science.

   And I think that is a crucial point. Human beings do not have the luxury to get this wrong because the Law of Supply and Demand really is a kind of natural law, like those of physics. This means that our decisions on how to fuel our societies and feed our populations must be technologically and scientifically sound if we are to avoid disastrous conflicts, war and famine.

   That is why I think my latent sentiments and disdain for the superstitions and falsehoods of organized religion and delusional spirituality has been welling up lately (what MLQ3 called a bee in my bonnet).

   I think we’ve given the benefit of the doubt to the Catholic Church in the Philippines for far too long and it’s time to call them out when they say and do things that are simply imbecilic and ignorant. Population policy is foremost in my mind, but perhaps even more important to get rid of is their stranglehold on education and media. I’m sick and tired of their goddess-worshipping, miracle-mongering hocus-pocus which is often reflected in inanities in environment, economics and technology policies that they support. They are leading this country straight to hell, and democracy suits them just fine because they can have their cake and eat it too. It was more obvious that they were at fault when we had a theocratic Catholic Taliban running the place. Now they can wag their fingers and tsk-tsk without taking any responsibility at all.

8. cvj on July 8th, 2008 10:16 pm

   Cocoy, anyone who uses Open Source code is a recipient of a gift. In the same sense, anyone who receives a subsidy is likewise a recipient of a gift. The former helps build code, while the latter helps save lives. (For all we know, one of the lives that are saved by subsidies might be the future inventor of the replacement for petroleum.)

   One key difference between the ’suffering’ Europeans/Japanese with their Filipino counterparts is that the latter do not have a social safety net so the threat of going hungry is more real.

9. DJB Rizalist on July 8th, 2008 10:59 pm

   cvj,
   but “the bigger they are, the harder they fall”. the european and japanese safety nets aren’t as secure as they think, given that they weren’t designed for the threatening new world that has suddenly arisen as china and india, the world’s largest populations, have suddenly begun to compete for its resources, and are even now its biggest carbon polluters (though suddenly such high rankings are hardly ever mentioned with the resentful malevolence of just a year or two ago when it was the Great Satan smoking up the stratosphere.)

   what we really need now are our friends and allies, whom we ought not to treat with Constitutional Myanmarism.

10. cvj on July 9th, 2008 12:25 am

    DJB, re: the safety nets, i think you’re arguing to the wrong point. Whether Japan or Europe’s safety nets eventually collapse remains to be seen. By contrast, even today, we Filipinos have next to none.

    BTW, China and India are also our friends and allies. (I’m talking about ‘us’ Filipinos of course.)

11. cocoy on July 9th, 2008 6:14 am

    cvj, if you think open source is a “gift” in the same vein as scientific papers are published for everyone to see and build upon is a “gift”, then yes. if you think open source is a “gift” because it gives you a headstart in the same way a “pre-fabricated building-block” is, then yes. if you think open source is a “gift” in the same way that it is play dough for the big boys, then yes.

    as for safety nets, why do you have to insist on comparing the philippines to say Europeans? in the same way none of us care about the concerns of the people we run into while walking down a street, our situation is entirely in our hands. they’ve got their own set of problems. they’ve been paying more than four dollars a gallon for gasoline for months now (they too got vat). they got mortgages to pay and kids to feed. they have the same problems every normal person does. their income is greater but so is the challenges of their lives. it seems to me we should be focusing on our own set of challenges rather than peaking at other people to see if they’re bleeding or not.

    i don’t mean to sound cruel and cold— as for people going hungry– that’s the inevitable fact of the current situation. it isn’t the first time in history people starve because of economic storms. and like i said before, if we started to go the name blame route all the time, we’d never get /those people you worry about going hungry/ out of poverty and into lives befitting humans.

    as nickleback song goes, “if everyone cared and nobody cried, if everyone loved and nobody lied, if everyone shared and swallowed their pride, then we’d see the day when nobody died, and as we lie beneath the stars, we realize how small we are… imagine what the world could be”. youtube reference: http://www.youtube.com/watch?v=rPbLrs1fQg4

    Want to get people out of poverty? want to make a country where nobody starved? first, let’s stop the name blame and the envy and all the negativity, then lets help get everyone— leaders and people to get our act together and into the same page.

12. cocoy on July 9th, 2008 7:01 am

    benign0, djb:

    to quote you:
    “I think we’ve given the benefit of the doubt to the Catholic Church in the Philippines for far too long and it’s time to call them out when they say and do things that are simply imbecilic and ignorant. Population policy is foremost in my mind, but perhaps even more important to get rid of is their stranglehold on education and media. I’m sick and tired of their goddess-worshipping, miracle-mongering hocus-pocus which is often reflected in inanities in environment, economics and technology policies that they support. They are leading this country straight to hell, and democracy suits them just fine because they can have their cake and eat it too. It was more obvious that they were at fault when we had a theocratic Catholic Taliban running the place. Now they can wag their fingers and tsk-tsk without taking any responsibility at all.”

    in many ways, i quite agree. made me remember a quote (i think it was Ghandi, not sure who said it): “I like your Christ. I do not like your Christians. They are so unlike your Christ.”

13. cvj on July 9th, 2008 9:21 am

    cocoy, subsidies are similarly a gift in the sense that it helps the poor survive by staving off hunger. same pattern applied to different things.

    On the comparison with Europe and Japan, weren’t you the one who brought it up first (at July 8th, 2008 8:14 pm)? Since you did, i had to respond.

    The Philippines is not [yet] Silicon Valley so shutting out the injustice outside (arising from inequality) via vicarious displays of concern and with feel good mantras is worth even less than the subsidies.

14. DJB Rizalist on July 9th, 2008 10:22 am

    cvj,
    sure they are our friends? well they didn’t offer us a $1 million a day aircraft carrier did they? no, but they did offer us a National Broadband Network through ZTE. And they claim they own not only the Spratleys but a big island call Son-lu.

    on topic though, rather than safety nets we need a bold trapeze act on energy and food. first the high cost of electricity can only be lowered by making our production plant modern and efficient to get rid of the thermodynamic system loss. we need to get rid of those insane royalties on natural gas which of course you do need for safety nets.

    so the options are stark and the discussion over safety nets or investments in efficient plant is not moot. if we spend what we do have on safety nets they wont be available for investment to modernize.

    But vice versa we do have a chance to later on put in safety nets, called jobs, productivity and lower electricity costs.

    Except both the administration and the Left would rather have safety nets that can’t prevent free fall anyway.

15. DJB Rizalist on July 9th, 2008 10:29 am

    It’s the old feed a man fish for a day or teach him to fish idea. Lookit, the govt admits to spending P10 billion pesos on rice subsidies.

    That’a lot of money that could’ve been better spent on testing underwater rice varieties, pest-resistant GMOs, R&D for wind, solar, and clean burning coal plants etc., or in mini and micro hydro. Or at P50k each, ten billion could’ve converted 200,000 jeepneys to LPG burning vehicles!

    The Catholic Church does have it right on this one. Subsidies only teach mendicancy, even though they themselves will take Pagcor money anytime.

16. cvj on July 9th, 2008 10:43 am

    DJB, subsidies for hunger relief do not preclude investments in cheaper energy. First things first, we need as many of our people healthy so that can deploy their capabilities to solve our problems. I believe the trade off to consider is not between spending on people versus spending on equipment (or R&D). Rather, the trade off is between spending on the above (both people and equipment) versus spending on debt service.

17. sparks on July 9th, 2008 4:09 pm

    Scrapping the Oil Deregulation Law and EVAT on oil and using dole outs is exactly the opposite of teaching a man to fish.

    I read the article twice, and nowhere does it say that the CBCP is calling for the scrapping of either the ODL or EVAT. I believe the key word is review.

    I too am (somewhat) incensed by the regular pronouncements of church figures in matters political and economic. Reading the article though, they are expressing their opinion (or making their appeal) based on moral grounds. If we view the church as institution in civil society - then they are entitled to voice their concerns.

    I suppose the problematic lies in the ‘militantisation’ of the church, like the armed forces. To my mind, this is a symptom of not only the worsening crisis in the country but also of the lack of faith in strictly secular and political processes.

    With regard to charity, I have mentioned elsewhere that there should be no place for ‘dole outs’ in a just society.

    In this case ‘dole outs’ are payments for two forms of patronage - souls for the sacred, votes for the profane.

18. cocoy on July 9th, 2008 8:11 pm

    cvj, subsidies may look like it is a gift— but the long term implication isn’t good. it isn’t a gift. Sparks hit it right when she said “there is no place for dole outs in a just society” and that it only leads to form of patronage. djb’s got it right as well cvj, all that dole out money could be used to invest in ourselves, in research and development. we need leap-ahead ideas!

    cvj, i think we need feel good mantras. if only to set the tone of how we live, how we interact with others and how we do business. it is like dressing up. we dress up differently for the office, we dress up differently for sports. Bruce Wayne can’t frighten criminals dressed in a tux, but he does when he wears a bat cape and cowl. it sets a tone.

    and in this country, life is too depressing sometimes. evening news is all about rape and crime and dirt and graft. we need positive ideas. new ways of dealing with problems, and upbeat way of facing the challenges of today and tomorrow.

    i’d rather that those people who are starving and hungry be given jobs or be given the opportunity to have jobs. it not only gives them the strength to feed themselves but more importantly— self-respect. imho, no dole out can raise a man’s spirit the way a hard-earned wage does.

    sparks, i agree that the language used is “review”. my second sentence, first paragraph i wrote specifically “review” (was very careful with that).

    Anyway moving on… reading between the lines of this “call”, “scrapping” is being considered by the mere mention of “review”. Why in the 1st place would you “review” this particular law, at this particular time other than if you are also not considering it be scrapped?

    what i’m more incensed with this “Call for a review” is they shouldn’t be calling for it at all. if they want to express their opinion beyond anything moral or ethical, i hope it is an opinion that changes the game. i hope that it is an idea that improves the lives of people. solve problems in a new and vibrant way!

    again— we need new and leap ahead ideas.

19. cvj on July 9th, 2008 11:52 pm

    Cocoy, you’ve moved from denying that Open Source Software is a gift (at July 8th, 2008 8:14 pm) to denying that a Subsidy is a gift (at July 9th, 2008 8:11 pm). Both are gifts in the sense that the person on the receiving end has not paid anything in exchange. We might disagree on the urgency and long term effects, i.e. whether one or the other develops capabilities or masks the ‘true’ costs, but the fundamental similarity is there. Feel good mantras may make you feel good but it cannot mask the reality of people’s hunger.

20. benign0 on July 10th, 2008 6:01 am

    cvj, again your smallmindedness is getting the better of you in this whole Open Source and Subsidy as Gifts business.

    Rather than regarding the proverbial ballbearing you are quibbling about how nano-scale irregularities at its molecular level cause its radius to vary (also at nano-scales) along its surface and therefore invalidate its spherical nature.

    I suggest you step back and give your nano-mind a bit more perspective dude as you have a tendency to unnecessarily lengthen discussions over nano-matters.

21. cocoy on July 10th, 2008 6:04 am

    cvj, calling open source a gift is simply too simplistic of what it is. it is more akin to rights, as in a bill of rights for software development. it is not a gift simply because it isn’t a product to give out. it is an idea that basically says, there should be a level playing field. it doesn’t become yours. nor is it a license for a free ride. read the 10 commandments of open source, i.e. its definition here: http://opensource.org/docs/osd

    Subsidies on the other hand— you may think it is free because somebody hands it to you, but as sparks pointed-out, entitles you to whomever is giving the dole out. it is simply a “feel good measure” that we don’t need. And for me, more than what sparks said, i think it blinds you to the real deal of facing the problem. it says, someone is going to bail us out every time and that someone is big government. subsidies does not give every man and woman the human dignity they deserve but jobs do.

    jobs over subsidies is a much better proposition.

    first off in international relations— there are no friends. just look at London and Washington, the closest friends you could see in the worldstage but they’ll screw each other constantly. Same goes for Washington and Israel. the only constant is that, if they do help— it’ll profit them.

    take aid programs and grants. they’ll give you money but more often than not, the contract will say if it is an American package— that an american company must be chosen. If it is Chinese, then a chinese company will be in on it. The money goes back into their economy.

    My point being there are no free rides and there is nothing called “friendship” in international relations. So we shouldn’t really look to the sky for help.

    “sariling sikap” is the point.

22. cvj on July 10th, 2008 9:47 am

    Cocoy, the Open Source movement (along with philantrophy) is an example of the Gift Economy.

    As for job creation vs. subsidies, the success of Roosvelt’s New Deal shows that welfare and job creation are not necessarily opposing concepts. Even Linus Torvalds, who initiated the development of Linux credits the socialized University system of Finland for helping him do so. Surely, that socialized system deserves some credit for the jobs that have been created as a result.

23. sparks on July 10th, 2008 10:31 am

    This might be off-topic, but speaking of subsidies…

    They exist in poor countries such as ours, and in rich countries in Europe and North America.

    Cocoy, you’re a self-proclaimed neoliberal. Ideally I see its merits. When it comes to economic development though, no country on earth has successfully industrialised and gotten rich practicing neoliberal economics. Zero. Nada. Zip.

    I don’t know if you read American libertarians. But even the United States subsidises its farmers. So does the European Union.

    Which is worse? Subsidising the poorest in the poor countries or subsidising the rich farmers in rich countries?

24. MG on July 10th, 2008 2:07 pm

    Why do we need EVAT?

    Simple,
    1)The government itself is corrupt. Billions of pesos are pocketed by these politicians in power. Government projects are either overpriced or of “poor quality” or perhaps even non-existent.

    2) BIR failed to go after tax evaders and tax cheaters.

    3) BOC failed to taxed the right amount on all imported items. If you know someone in Custom, you can easily get away with it or you can work your way out by bribing these crooked officials.

    4) Smuggling. Billion of pesos loss from possible tax revenues on smuggled goods from cars to spare parts to even “oil”.

    And because this Government failed miserably in its function to collect taxes/revenues, the aggrieved people were now taxed thru EVAT at a whopping 12%.

    Whatever tax that was collected when it was first implemented, it is now more than doubled because of the continuing oil price increase, which many believed will reach at $200/barrel.

    And what about the salary of the common “manggagawa”? Surely, it is NEVER near double from two years ago.

    These people in the government not only abused us with their greed, they are now making us to fund their GREED through EVAT.

    Improve tax collections, address corruption in the government, improve governance, observe fiscal discipline across all government institutions, cut back from expenses and unnecessary foreign trips, if the government can do this, we do not need EVAT and people will have some relief from growing inflation.

    Oil price is HIGH at this time. EVAT made it 12% HIGHER.

    Good riddance, people… do the math…
    .
    .

25. cocoy on July 10th, 2008 7:46 pm

    sparks: i don’t think yours is out of topic.

    i am not at all in favor of subsidies anywhere. i know America subsidies their farmers. i am not American— i don’t know the political implications of it or what strings are attached.

    doesn’t our government have rice subsidies? has it helped? in the last 20 years, we’ve fallen behind Thailand. if i’m not mistaken, Thailand for crying out loud produces more rice than we do. why?

    i am in favor of government building infrastructure— farm to market roads, irrigation to help our farmers for instance. if you travel out in the country, people still dry rice on public highways! Seriously.

    how can we turn farms in to real live enterprises? if everybody eats rice— how can farms go bankrupt? what’s wrong in the way we do things?

    i can name Thatcher’s Britain and Regan’s Presidency as successful implementation of neoliberal policies. Stagflation occurred in the 1970s (an era where oil was also high)— the era preceding both Thatcher’s Premiership and Reagan’s Presidency.

    Thatcher was strong on entrepreneurism, reduced state intervention. she believed in free markets. She sold off British government owned companies and other economic controls. she left the premiership with positive public opinion.

    Reagan’s policies is often credited with what helped start the boom America experienced in the 1990s and an end to the cold war. He favored less government intervention in markets. he was also the guy who hired Greenspan. During Clinton’s years, Greenspan was a champion of an economy that was largely low unemployment and low inflation.

    Since the collapse of communism, free enterprise has largely transformed the world.

    “neoliberal” is a catch phrase for strong on individualism, and private enterprise. neoliberals are in favor of good fiscal discipline, of deregulation. of trade liberalization, of redirecting government spending away from “subsidies” into areas where it can be of use— healtcare, infrastructure development and education.

    On that note, cvj— let’s talk open source and gift economies. you mentioned Finland’s education system. first off, Open Source is not Linux, but it is the best example of a successful open source project. I believe Open Source is a right, not a gift nor a privilege. i believe it is a right in the same vein as Freedom of Speech and Expression are rights.

    As for Linus being a product of a state-run education system— i am unfamiliar with how Finland runs their education system, but hypothetically, wouldn’t it be awesome if all that money government is spending on rice subsidies be funneled into state run universities for example?

    But funds are finite and nothing is free. how else to fund the next generation of students? so shouldn’t the students who graduated from a state run university give back— instead of a gift, it should be a loan. otherwise, government again will lose money. Are Filipinos loyal and honorable enough to honor their obligation to the state? if this should come to pass because that’s the only way for a gift economy to work– if people are honorable and loyal.

    MG, i don’t like high taxes too. i think current tax levels are ridiculous. i think government is reckless in their misappropriations/spending— which from your words is where the root cause of your anger comes from. i think government gives too much priority to frivolousness and waste.

    i would love to see a study comparing a cut of income taxes entirely— that means no more monthly reductions on your salary and if raising indirect taxes (evat) to 15% will cover whatever loss government will take from the lost of income via income tax. so if anybody got that data… what was the conclusion? how does this affect inflation?

    i think a cut of income tax entirely will be most favorable especially for low income families— the question is, will it be useful to the economy and to the future as a whole? hence, i’m quite interested in knowing if someone has done a study.

    i believe funds are finite and government should be focusing on things where those funds can do the most impact for the greater good. subsidies on oil and food, i believe is not one of those things.

    i’ll end with something Thatcher said, which I believe is most appropriate especially i think for Filipinos:

    “I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbour and life is a reciprocal business and people have got the entitlements too much in mind without the obligations…”

26. benign0 on July 10th, 2008 8:37 pm

    Same thing afflicts the mind of the religious.

    When times are good, it’s “by God’s grace”.

    When times are bad, it’s “God’s will”.

    Walang lusot kung baga. And I think it is this simple aspect of our belief system that imprison’s our society’s collective mind and limits the scope of our aspirations.

27. cvj on July 10th, 2008 9:20 pm

    Cocoy, Britain and the United States were already industrialized countries long before Thatcher and Reagan. You have to look further back through history to determine whether it was neoliberal policies that got these countries to develop in the first place.

    I’m not sure what you mean by Open Source being a ‘right’. Since all rights have corresponding duties (e.g. the right to life comes with the duty not to kill), are you saying that all software should be Open Source or that software developers have a duty to make their output Open Source?

    I see that you favor school subsidies. That’s something i can agree with, but as far as priorities are concerned, i think the number one priority is to eliminate hunger especially among the youth. By doing so, we can ensure that their minds are in a condition healthy enough to receive an education.

28. cocoy on July 10th, 2008 10:07 pm

    cvj, i am always long on ideas that work or are effective. education is always a good place to start, a good investment— especially if you want people to get to think. glad we have that common ground.

    yes, i think all software source code should be open and that the world needs to rethink how patents, especially patents and copyrights are vis-a-vis ideas/software/content— but i’m not a zealot nor a purist. i don’t believe all non-believers should go to hell. so far, i actually lean more towards bsd-style, which imho, seems to deliver better innovation, thus far.

    i like new ideas that break the mold. just because neoliberalism is a recent phenomena— doesn’t mean it isn’t going to work. i prefer to believe that if you don’t become a backseat driver, and just let people work— they will.

    Hong Kong for example is a free economy. Nobel laureate and Hoover fellow Milton Friedman wrote something about it: http://www.hoover.org/publications/digest/3532186.html

    to quote him:

    The real lesson of Hong Kong for the United States is that we’re using our resources inefficiently. Our government is spending our money to subsidize tobacco and to penalize smoking; to subsidize childbearing and to discourage childbearing; to build new housing and to tear down housing; to subsidize agriculture and to penalize agriculture; and on and on—not to mention converting square miles of forests into billions of paper forms and spending many man-years of labor filling them out and then filing them.

    In the process, government tends to neglect its basic functions: as I once put it, “to protect our freedom both from the enemies outside our gates and from our fellow citizens: to preserve law and order, to enforce private contracts, to foster competitive markets.’’

    decentralize. de-emphasize government. let people work. i believe you’ll find people will surprise you.

29. cvj on July 10th, 2008 11:03 pm

    Cocoy, yes i’m glad as well, and from the sound of it, I think we also have common ground as far as the evils of patents and intellectual property is concerned. I take it that you agree with Lawrence Lessig’s take on the above (as well as Net Neutrality). If so, then we have a lot of common ground to work with. For one thing, in this blog entry, Lessig describes on aspect of the internet as belonging to the sharing [aka ‘gift’] economy working alongside the commercial economy:

    http://lessig.org/blog/2006/09/on_the_economies_of_culture.html

    A large part of his advocacy is devoted to preserving this ’sharing economy’ aspect of the Internet.

    On Hong Kong, it has been touted as an example of the success of the free market and free trade, but as economist Alice Amsden narrates:

    …Hong Kong was not as purely free market. Land was Hong Kong’s most scarce resource, and the government owned and controlled all land. The government leased unused land in small quantities each year partly for purposes of earning public revenue. Owing to land ownerhsip, the government never had a real budget deficit, and built Hong Kong’s highly competitive infrastructure, including housing. Worker’s housing typically received a 50 percent state subsidy… - Alice H. Amsden

    Even in ‘free market’ Hongkong, subsidies have played a crucial role.

30. cvj on July 11th, 2008 12:19 am

    Speaking of Open Source, here’s an interesting discussion over at Crookedtimber on why Big Corporations don’t seem to be buying into the idea as much.

31. sparks on July 11th, 2008 6:55 am

    Oh. The politics of international development. Here it goes…

    On farm subsidies…

    In the US, farm subsidies are a testament to the strength of the farm lobby. Food security is also discussed in terms of national security. In the EU, the Common Agricultural Policy (which eats up something like half of the EU Commission’s budget) serves many functions - social welfare, a tribute to history, redistribution of resources to new members, etc.

    That said, these subsidies act as a protectionist measure against third country agri exports. They are hardly ‘efficient’ in that food is produced expensively and then exported for cheap! This becomes even more problematic given that many poor countries have agricultural products as their ONLY comparative advantage.

    Ok, back to capitalist take off. The instances you mentioned apply to late-industrialising countries. They were already rich to begin with.

    Britain in the early 19th century. The rest of Europe in the mid 19th century. US, Germany, Japan in the late 19th century. The Asian NICs in the 1960s. China and India, late 1970s onwards. The formula seems to be, create viable local industries, protect them from all-out global competition, then export.

    Crucial for this formula to work is a developmental state that will be able to put available resources together and make magic.

    Market forces have their limits. Government has to make the market exist first.

    Now, the question is, who will make the government work?

32. cocoy on July 11th, 2008 7:58 am

    cvj, i think i should write a post specifically on open source.

    sparks— i agree that is how history has played out but who says, we should follow that formula? who says there should be a protectionist attitude? who says no one can buck convention? who says we need to follow a line?

    can we not make our own way?

    Chile. Estonia. Iceland all subscribe to Friedman’s.

    who says, government is the creator of the market? people have been trading long before there was a central government. example: anybody can trade. i used to trade with my friends, my cousins on toys. barter. our rules were simple: honesty.

    what’s happening in the local economy? more and more people are trading outside normal businesses. you got an underground economy running. and government has for years been trying to get at this. i don’t subscribe to big government. more and more people are just ignoring government because it is becoming irrelevant to them with all these insanity, all this crap.

    how many people buy and sell goods from everything from psps to cars and have no business permits, etc?

    Yesterday, someone had a tv open and it was tuned into wowwowee. the only one i heard was this lady who apparently was being sent to school by her sister. her sister was working so that her sibling could go to school. my point being, people find ways out of their circumstance. when life throws them hurdles they fight back. they fight tooth and nail for life!

    Government is suppose to ensure that contracts are adhered to, that people can come to it for judgement to settle dispute but even the law is too slow. it becomes more expensive to go to court. believe me. i know. In fact, government is one of the first to break contracts!

    My point being, government exists to provide order, to ensure everyone plays on a level playing field. that’s about it. that’s what you call “development state,” which you say is crucial and i agree on that premise. but ours isn’t doing that at all.

    Everything else should be ours to make or create or destroy. “sariling sikap”— that’s at the core of neoliberalism. market forces is a sustainable way to create wealth. Communist china is capitalist.

    it seems to me our current mixed system doesn’t work. when something doesn’t work— people should try a different approach. history tells us a lot of how the world is today. it is a good barometer of events. today is largely different from when those countries started out. there wasn’t an internet back then— and believe me the internet is such a force multiplier.

    We can learn a lot from our past but there comes a point when we have to throw the book out the door and start writing a new one. problem is, i don’t think our people got the balls of it or sees it just yet. i think people are slowly getting it.

33. cvj on July 11th, 2008 6:11 pm

    Cocoy, re: ‘creating markets’, there is such a thing as Industrial Policy where government works together with the business sector to create markets. That’s how South Korea was able to move into heavy industry and electronics where before they were only into textiles and wigs. Same goes with Taiwan which was able to take the lead in semiconductors. In both countries, the private sector alone could not have succeeded in creating these markets without the conscious efforts from their respective governments.

    Even in Chile, the poster boy for free market policies had its share of industrial policy and government participation in the economy:

    It was the Chilean government that in the mid-1980s began developing the technology for salmon cultivation for wide-scale commercial use. When the project became commercially viable, the government’s nonprofit research arm, the Chile Foundation, sold its stake to Japanese investors in 1989. Today, salmon is Chile’s second-largest export after copper, bringing annual revenue of nearly $1 billion and providing jobs for more than 100,000 people.

    While many Latin American countries have whittled government’s role in business affairs, Chile has gone largely in the other direction. Not only has it wielded influence in getting to market its key exports, from table grapes to goat cheese to sofas, but it also has used more legislation, regulation and taxes to tame a feral free-market system that failed to deliver in the 1970s and ’80s. - Read the whole thing here.

    Regarding Estonia, even in 1990 when it was still part of the communist USSR, it already had a per capita GDP higher than that of Taiwan and South Korea and more than three times that of the Philippines. A more faithful comparison with the Estonian experiences would mean that we must first industrialize under a communist system and only after doing so, institute market reforms.

    As for Iceland, it has about the same population as Tawi-Tawi (around 300 Thousand inhabitants) so by necessity, it has to be an open economy. I did suggest before that we should declare Tawi-Tawi (and other similar remote islands) a free port.

34. cocoy on July 12th, 2008 7:10 am

    cvj,

    South Korea is a family business hehe. that system works for them, perfectly.

    all those places did what was unique for them. they were creative in solving their own situation. they took what they got and ran with it. Whether it is Chile or Estonia or Iceland or whatnut. We’ve got many rags to riches stories not just in the nation-state level, but in business.

    Steve Jobs borrowed money when he and Woz was starting out Apple. Ask any businessman how it is to start a business.

    again— the problem with the Philippines is that we insist too much on entitlements, that government solve our problems for us. cab prices too high? take a jeep. jeep too high? walk.

    is the neolibreral way a good way to build a nation? yes! i absolutely believe it is.

    has any nation on earth started out that way? they don’t call it “neo” for nothing. and i have this thing that when people— even myself start saying “it can’t be done”, chances are it can.

    just yesterday, we solved a particular design problem. we couldn’t get the details right on stuff we were working on. good thing an expert from out of town was in because our stuff broke. i was able to fix it but we asked him to come in anyway to give it a thumbs up or down. we also asked him for suggestions on improving our design.

    when he left, i took the system offline. i sampled it out. one turned out really nice— but took more time. we’re time conscious. we’ve got backlogs a month long. so we had to revert to the old way. i sampled it out on another design— it took a minute longer to produce, but it was nicer and consumed less material.

    believe me— i chide myself that when trying to solve problems, the more i say “it can’t be done”, i force myself to go back and rework the problem from a different point of view and i open myself to new ideas and new ways of thinking. and— it works.

    that has been my point. the Philippines needs to think out of the box. the more people say it’ll hurt, or it can’t be done. Chances are it can be done and that the hurt is a birth pain.

35. benign0 on July 12th, 2008 3:41 pm

    I think over-reliance on shrink wrapped, textbook, and googled solutions never really got anyone anywhere. The biggest success stories on the planet did not have precedents.

    When the it-cant-be-done hurdle is encountered, the problem just needs to be approached from a different angle.

    As Einstein said: Problems cannot be solved by the same thinking that created them.

36. cvj on July 12th, 2008 3:49 pm

    Cocoy, when we build systems, we normally start with a reference model, or at a lower level, we make use of design patterns. It goes without saying that we have to suit these models and patterns to the current context because not every situation is the same. However, this does not take away the importance of thinking through which reference model or design pattern is applicable in the first place.

    The discussion about neoliberalism and its alternatives above is in the nature of trying to identify which reference model or design pattern is suitable for solving our economic problems given our present context. Sure you can argue that the Philippines can try neoliberalism even if that model has failed in other countries. That, however, would no different from someone saying that we should try communism even that model has failed in other countries.

    Yes, there is a lot of things the private sector can do even with a dysfunctional government. This is a lesson learned by most of us. In fact, here in the Philippines, you will find most of our entrepreneurs among the ranks of the poor (Eonomic Class D and E). However, those countries that have succeeded economically did so because the institutions of the nation-state became positive agents by (1) addressing the problem of inequality, (2) pursuing an industrial policy that encourages local production, and (3) by establishing institutions that ensure the rule of law. Unfortunately, neoliberalism only emphasizes the third aspect which makes such a framework an inadequate one for our purposes.

37. sparks on July 12th, 2008 4:10 pm

    who says, government is the creator of the market? people have been trading long before there was a central government. example: anybody can trade.

    I was going to do my research on Chile, Estonia and Iceland, but cvj beat me to it!

    I think we need to make a differentiation between the physical market - and the ‘market’ in capitalism.

    The ‘Market’ is essentially the supply-demand-price mechanism. This has only been in existence since the birth of capitalism in Britain - which economic historians date back to the 16th century or so.

    For capitalism to work, government has to commodify the factors of production and make them work in the supply-demand-price mechanism. The factors of production being capital-labour-land. The commodification of these factors takes an enourmous exercise of political power. It is questionable whether land in the Philippines have been completely submitted to the ‘market’. A testament to the remnants of a (still) feudal system.

    For business ventures to work anywhere, there needs to be ‘rule of law.’ What we mean by this is that all business contracts are honoured by buyers and sellers in the market. The rule of law can only be exercised by a truly functioning government. In our case, you are right, it is the government - which is supposed to safeguard that everyone plays by the rules - is the first to break/bend the law.

    I too believe in sariling sikap. No argument there. But again neoliberalism takes for granted an already existing strong, autonomous (free-from-parochial-interests) government.

    Yes, China began its transition to capitalism under Deng Xiao Ping’s reforms of the late 1970s. Now they’re calling their dual system “Market Socialism.” Again, a system initiated and safeguarded by a strong, technocratic state. Rest assured there is plenty of corruption in China. I did a paper on their banking system. Largely, their banks - swimming in 1,000,000,000,000 USD, are still state owned.

    I agree with you that we do not necessarily copy other countries’ formula. But it would help to see what others have done right (and what they have done wrong as well).

    You see neoliberalism in a completely value-free light. I don’t. In the politics of international development, this was the model forced onto many developing countries after the debt crisis of the 1980s. The package of reforms has also been called the Washington Consensus. It is questionable whether these policies were crafted for the development of these countries or whether IFIs simply wanted to make sure that the debt gets paid.

    In the 1980s Third World debt stood at $900 billion. It now stands at $2.3 trillion.

    The World Bank has itself admitted the failure of neoliberalism. Neoliberalism failed to trigger development. It also failed to make sure the debts are paid.

38. cocoy on July 12th, 2008 8:55 pm

    sparks… we don’t need government to do business.

    let’s simplify:

    for example, i need a hair cut and you can cut hair. i come to you for hair cut. in exchange for your service, we agree that i am to give you four pieces of corn that i planted.

    you cut my hair, and the four pieces of corn is yours.

    there are two things that could happen.

    1) i pay you the corn
    2) i ran away after you’ve cut my hair, in which case you either hit me with your scissors or i get away— but you’d have the option for retribution later either you get others to hurt me or you spread that i didn’t pay you and hence no one will do business with me anymore since i’m not trustworthy.

    that’s classic economics. there is a demand— i need a hair cut and you need corn. there is supply, i got corn and you got talent.

    no third party need to exist.

39. cocoy on July 12th, 2008 9:44 pm

    sparks, cvj,

    what exactly do you not agree with neoliberals?

    neoliberals are in favor of fiscal discipline. why should government or any entity for that matter spend more than their income? eventually people or government will do two things with that mentality: borrow money to cover cost or go bankrupt. so does it make sense to have a government that year-in, year-out overspend?

    isn’t it logical and damn responsible for ANY government, corporation or person to have fiscal discipline?

    i am not even expecting a government to be ran as a corporation BUT it should at least make enough to keep itself going, shouldn’t it?

    neoliberals like Thatcher and Reagan sold off government assets. Why do governments need to be in business when THEY’re the referee?

    it is like saying in a game of boxing even the referee is allowed to throw a punch. It is like saying in a game of basketball, the referee is allow to shoot hoops.

    Look at all our government owned corporations— all ran inefficiently. businesses are there to make money. they are responsible first to their shareholders, then their employees and least of all to their customers/clients.

    in a government they are first responsible to the people— the shareholders, next to their employees and lastly to everybody else. WHEN has a Philippine administration been first responsible to the people?

    Government exist to protect people from external strife and from internal dispute. correct? but what happens when government FAILS in that primary duty?

    sparks you said it,

    “For business ventures to work anywhere, there needs to be ‘rule of law.’ What we mean by this is that all business contracts are honoured by buyers and sellers in the market. The rule of law can only be exercised by a truly functioning government. In our case, you are right, it is the government - which is supposed to safeguard that everyone plays by the rules - is the first to break/bend the law.”

    that is exactly one of many problems in the philippines. is it not?

    i do not doubt that there is corruption in china. Corruption is given in any system, public and private. Anybody who says they’ll get rid of corruption is lying. And China has a lot of state-owned institutions— so it isn’t really neoliberal in the sense that they do not practice laissez-faire economics nor do they practice small government. They’re a mixed economy.

    in the Philippines, we are a mixed economy. government micromanages everything.

    neoliberals are pro-small government and some neoliberals believe in no government at all. In other words, Laissez-faire. Look at the Philippines’ national government… it is a huge mess. i can certainly understand where they are coming from.

    neoliberals advocate that every person be given economic freedom and thus political freedom. we want people to be emancipated! let people take and craft their own destiny as they see fit. if the road to such is that they trade with a Chinese guy, why not? if the road to trade is with an American, why not?

    Look at the last election, people are starting to shun elections. People our age! The apathy is SO thick. They may not call themselves neoliberals (no one actually does) but they are ignoring government.

    This government and many of our politicians are conservatives. PGMA is a conservative. Erap is a self-proclaimed pro-poor but that’s just a mask. He’s a conservative. The closest to a liberal was Ramos but he too is a conservative. There are a few social democrats like Madrigal (some self-proclaimed and who aren’t really).

    So, let me ask you— what exactly are YOU in favor of? What kind of government are you For and Why?

40. cvj on July 12th, 2008 11:50 pm

    Cocoy (at 8:55 pm), in your example, where did Sparks get the scissors? Either the scissors where made by a local company using steel that was smelted in the Philippines, or it was imported (one of the best quality scissors come from Solingen, Germany) or a mix of both (steel from abroad, scissors made in the Philippines etc). Wouldn’t it be great if the scissors were made locally by Filipinos, using Philippine steel to keep jobs within country and save in foreign exchange? Whether or not that happens is the role of Industrial Policy which is led by the government working with the private sector. The reason why South Korea is known for consumer electronics and Taiwan is known for its semiconductors is because its government had an industrial policy. The absence of one here is the reason why (apart from the economic zones) we are largely confined to selling either raw materials or services.

    As for the corn that you used to pay Sparks, most likely the money you paid to buy it would have gone mostly to the hacendero and the middle man. The farmer who actually planted and harvested the corn,just like millions of his counterparts, would have gotten the least and is most likely living a hand to mouth existence. Again, it is the role of government (supported by the conscience of its citizens) to address such inequity, if only for the practical reason of expanding the consumer base.

    Regarding what you say about ‘fiscal discipline’ (at 9:44 pm), do you know that the current capitalist system survived the Great Depression (in the 1930’s) because President Roosevelt abandoned the conventional wisdom on fiscal discipline? Nobody wants a wasteful government but neither would we want to have a dogmatic conception of the inherent value of fiscal discipline since that would mean forgetting the valuable lessons of the 1930’s.

    It is foolish for people of your age to ignore government because even if you ignore it, it will not go away. The neoliberal panacea of a small government is a dead-end because, as commenter Marius said in this thread over at Dani Rodrik’s blog:

    “It is important to realize that even the most minimalistic nightwatch state imaginable is already by definition the most powerful organization in its reach, with the potential to hurt freedoms in almost anyway possible. So, when one is trying to increase freedom, the first step is not to minimalize the power of the state, but to make sure the state itself is under control.

    Modern democracies are very much the result of this process: they have big, strong states that influence every part of life. Still their people might be the most free around. This is partially because their systems give people influence, forcing the state to keep a benevolent ethic. But the freedom also lies just as much in the laws that forbid the state to act arbitrarely. The fact that 51% of the people cannot do everything they want to the rest is just as much part of the system.

    This seems to me the error in the ‘moral’ arguments of libertarians who claim that a smaller state means more freedom. They ignore that most freedom is derived from power over the state itself. The mere fact they can imagine ways to make the state smaller is because they can imagine influencing it.”

    The key is not to push for a ’smaller’ government, but to make the existing government responsive.

41. cocoy on July 13th, 2008 6:30 am

    cvj, i will make even simpler.

    You hunted a mammoth and want to cook said mammoth but you don’t know how to set a fire.

    Sparks knows the secret of starting a fire because one day she just discovered it while goofing off. she is getting hungry. sparks may know how to light a fire, but doesn’t know how to hunt.

    you visit Sparks. in exchange for her lighting the fire, you will share a piece of meat with her.

    boom! you just traded.

    is there a middleman, i.e. government in the mix? did you need say, Cocoy, to tell you what to do in how to do it?

    my point being you don’t need government to do business, you just got to have the will to do business.

    nobody wants a wasteful state— but that is exactly what is happening. Government spending on infrastructure is fine and all but when government spends and spends needlessly and ends up with massive amounts of debt— is exactly what every nation on earth has. We all know what the full extent of National Debt is, don’t we? Look at what is happening the Philippines: it is drowning in needless debt.

    brief overspending to catch up to stabilize things isn’t bad. the problem is that it is done, year in, year out. a country becomes addicted to debt. we all know what happens when a person doesn’t pay his credit card, blow it up to the grand scale and boom! good fiscal discipline.

    with respect to a comment made on a blog, versus the thoughts of a nobel laureate, i think i’ll stick with Milton Friedman who in 1962 wrote about the importance of Free Markets and how it correlates to solving social and political problems.

    In the Philippines in the last 20 years, we have had an Agrarian Reform Program. It is a law mandated (i.e. you got no choice to say no) by the government to seed control of private lands to farmers.

    On paper it sounds good, isn’t it? let’s give farmers the land right? i’d agree with you— but what has happened: land owners simply usurped the law and sold ‘em off or turned ‘em to subdivisions. ergo, losing farm lands has in fact contributed to the our food problem.

    this is the kind of government intervention that didn’t serve anybody. first off— farmers know how to farm they didn’t know or couldn’t know how to manage their own business. hence, they’re still in poverty.

    common wisdom these days is to let the markets run itself. Government intervention is frowned upon, not just abroad but also here in the Philippines.

    some think debt had some contribution to the Great Depression. Look at the current fiscal problem— financial institutions leveraged debt. it is a good thing the Federal Reserved intervened a few months back when it did because that is also one of the questions of the Great Depression— was it cause by lack of government intervention when it was needed to intervene?

    yes, i quite agree it is foolish to ignore government but when government is utterly useless in delivering the most basic of services— acting as a referee when it is needed and instead wastes so much energy, i see the appeal of some “neoliberals” in advocating for NO government at all.

    other than you are for “a more responsive government”, again, i have to ask— what exactly are you FOR and what exactly are you AGAINST?

42. sparks on July 13th, 2008 8:10 am

    Cocoy, your salon example might work for a small town - where everyone knows everyone. It cannot work for a bigger population.

    Simply sullying your reputation is not a strong enough sanction. In “small” ways, the policing function of a political power - the government - is done through:

    1. registering my salon (so the government knows me). you probably had to register too. not to mention we have to pay taxes for every transaction
    2. enforcing the agreement that the service rendered is worth four pieces of corn
    3. the threat of punishment (jail) or a fine should the contract not be honoured.
    4. making sure there are standards - and the enforcement of the standards - so no one salon will have unfair advantage, and also to safeguard consumers. safety standards, labour standards
    5. making sure monopolies don’t form

    This system will not work without government.

    Do try to read the critique of Post-keynesians with regard to Neoliberals. Also think of a developing country (ours) as a context.

    i see the appeal of some “neoliberals” in advocating for NO government at all.

    Wouldn’t this be great? I too would like to live without having to pay taxes. I too would like to be “free.” Until of course I become prey to some other individual who had it in his head he could make away with either my meager possessions or my very own person.

    As evolution has shown, my survival instincts would kick in. Then I would have to band with like-minded people. There is, after all, safety in numbers.

    Then, human nature would kick in. As more people join our group, we would delegate who is the leader. As the group gets larger, the political organisation would get more complex. Rules have to created and enforced to protect everyone’s safety and interests. Alas! You’re back to having a government.

    For as long as we are human - we will always live in one political form or another. It is inevitable Cocoy. Humans are social that way.

    As for neoliberalism - we already tried this path. Deregulation, privatisation and liberalisation. While undoubtedly there are some benefits, would you say these have outweighed the costs?

    Maybe we should just abolish government altogether eh? Are you a closet hippie?

    The smaller the government, the most powerful it must be. I tend to think of it in terms of people not daring to commit crimes even in absence of any police officers on hand. That’s certainly how I felt in Oz.

    It has been shown that in times of crisis, the more rich, democratic countries spend. This is something we poor countries do not have the luxury of.

    Oh, and I absolutely love how the Financial Times are now accusing the United States of being a closet socialist! On Freddie Mac and Fannie Mae.

    From all these years of my useless education, I know I am FOR a democratic government. I don’t care how large or small, as long as it reflects the will of those who live in it. If we choose to live in squalor - well, we deserve what we get then.

    I am AGAINST neoliberals having blinders on when it comes to politics. I am against the whole economic orthodoxy that has contributed to the misery of billions of people. I am against the philosophy that humans are by nature atomistic, that humans are closer to being robots - rational machines. I am against the assumption that “There is no society” (as per Margaret Thatcher). I am against the assumption that its every person for herself - that its a dog-eat-dog world. That its survival of the fittest (damn this sounds close to Nazism now - you’re not a Nazi are you Cocoy?).

43. caffeine_sparks on July 13th, 2008 8:13 am

    Oops. Forgot to close the tag. Sorry!

44. PSI on July 13th, 2008 11:19 am

    To be strict about it, a country cannot exist or be recognized as a State without some form of government in control. Otherwise, it is a just a territory with people, or people occupying a territory, which other nations would readily absorb. It is part of civilization: from city-states, to empires, to the modern nation-states.

    Shall we say a government is a necessary evil? Either by/for/of the people or denying political pluralism ,i.e. democratic or authoritarian.

45. cvj on July 13th, 2008 2:26 pm

    PSI, the Market and the State are alternative and complementary ways by which we can coordinate the allocation of resources at a national level. The advantage of a Market is that, under a specific set of underlying conditions, it is very good in using price signals to achieve this coordination with minimal administrative overhead. We know, however, that these underlying conditions do not always hold, which is why you have monopolies, oligopolies or monopsonies, like what you have in the Energy and Transport sectors.

    We also know from experience (as explained by Sparks and me above) that beyond a certain scale of technological and organizational complexity, specific Markets [aka Industry Sectors] cannot create themselves. That’s why the State has to come in to implement wealth redistribution (to fix the Demand Side) and industrial policy (to fix the Supply Side).

    Both the State and the Market are in turn shaped by advocacy politics [aka the ‘Public Sphere’ inhabited by NGO’s and other cause-oriented groups] and everyday politics [aka you and me in our day to day activities].

    All of the above elements (i.e. the Market, the State, Advocacy Politics and Everyday Politics) ultimately increase or decrease our level of Social Capital which some say is the most important form of ‘capital’. The relationship goes both ways as the quality of Social Capital also affects how these elements (State, Market, Advocacy Politics and Everyday Politics) work.

    So given the above framework, i’m at a lost on how to answer your question on whether the State can be considered a necessary evil. If you can also consider the other components (i.e. the Market, Advocacy Politics, Everyday Politics) as somehow being necessary evils, then i suppose the answer would be ‘yes’.

46. PSI on July 13th, 2008 2:58 pm

    The government as necessary evil? Precisely as something that you do not like but must exist. The other components cvj mentioned e.g.advocacy politics and everyday politics could be treated as extras, i.e. supplementary public good.

47. cvj on July 13th, 2008 3:52 pm

    PSI, my point is precisely that advocacy politics and everyday politics are not extras. They are essential components to prevent the deterioration of the State and make it more responsive. Remember our discussion over at Manolo’s where i narrated how everyday politics of the Vietnamese succeeded in convincing their Communist Party leadership to abandon Collective farming in favor of Household farming?

    In a similar fashion, advocacy politics is what led to People Power in 1986 and, even now, is what somehow helps identify and, to a certain extent, restrain the abuses of the present Administration. By contrast, it is the “Let’s move on” attitude that has allowed Gloria Arroyo to get away with as much as she has done.

48. cocoy on July 13th, 2008 9:40 pm

    interesting sparks.

    lol! i am not a closet hippie. nor am i a nazi. those are new terms since the most common terms my own flesh and blood associate with me are, “cold”, “heartless”, “evil” and “evil overlord”.

    i was hoping you or cvj would post the correct word for what i was describing..

    moving on… i beg to differ— we have not tried deregulation, not entirely. not to the extent where it should be. not to the extent a free market should be. as i’ve said this is a mixed economy that caters to many and often— those interests are at cross purposes.

    let’s take the stock and forex markets— government mostly takes its hands off. RARE is it these days when Central Banks act.

    on the other hand, Government still has its hands on the Energy Sector. For years people have been trying to sell of government holdings on Napocor and Transco. It even has holdings with Petron. The government wants greater control of the energy sector. It has not passed adequate laws nor leaned on getting new technologies out the door. How can free enterprise prosper from your version of what economic policy should be?

    SO i submit that the Philippines is NOT neoliberal. it never has been. it is a mixed economy. it chooses when to favor free enterprise and when it chooses to take control.

    neoliberals are FOR democracy— the right of every single individual to chart their own destiny. advocates of free enterprise posit that with greater economic wealth translates to greater political freedom.

    that said, you are thinking of the absence of a police force? don’t we have an absent police force right now? how much petty crime is happening on our street without our ability to file more than a complaint? everyone is SO concerned about cellphones beinig stolen or worst– ipods.

    court cases translate to wasted energy— so much so that the price of justice is so high. look at our prisons— crowded by so many people and often, they’re locked in jail while their cases are still on going and the sad part is— even though they haven’t been convicted, they’ve already spent the maximum sentence. where is the justice in that sparks?

    our society is SO lawless! take the recent Sulpicio event— toxic cargo was shipped onboard a passenger ship. i know something about shipping dangerous goods. radioactive material in the philippines for example is SO strictly monitored that no one cut corners. but people will cut corners whenever the opportunity suits them as what is seem likely happened aboard princess of the stars. that happens day in and day out.

    i see where you are getting at. we BOTH hold democracy dear. flat out— i am neither hippie nor a Nazi. where we differ is the ROAD to get there.

    from my point of view, you adhere to decades of policy. you feel we need to control things strictly because you feel that free enterprise has not successfully given Filipinos the economic freedom our countrymen so richly deserve.

    you are also a social democrat, pretty much the status quo in the Philippines.

    my posit is that we haven’t TRIED free enterprise, laizie-fare economics to its fullest. why do i want to try it? because our current practices fall short. they’re either not working entirely— agrarian reform for example or they’re working too slowly.

    cvj for example is still perplexed about why most Filipinos, in spite of such massive distrust with pgma, continues to allow her to rule. why is there such apathy these days for government? why is there such distaste for protesters in the street? why for a lot of Filipinos they lump everyone in the same box?

    it comes from being frustrated at government and at the constant protest for falling short of even the most basic of expectations. it comes from our people’s heartbreak at the knowledge that the people by the helm of this ship of state have for years, simply take advantage of them. it comes every time a tragedy happens only to find out had we not cut corners, we may have done ourselves a favor.

    what i wrote in my previous comment is best described as border-line anarchy. breaking it all apart would be nice in an ideal world. you know start fresh and all that but that’s foolish talk and utter stupidity.

    When a problem is SO big, the best possible way to un knot the Gordian Knot that is the Philippines is to take it one small bite at a time.

    that is why i am in favor of small governments because individual provinces know what they need. trim the fat, so to speak and address issues directly via people who are actually involved.

    how much waste do we have having a national police that is “strong in number” in some places yet oddly enough is weak in others?

    how much waste do we have paying more than 200 lawmakers and their staff and facilities and we get mediocre performance at best?

    again, the anarchy jibe is my own brand of twisted humor.

    i know the long lines at PGH because i’ve spent years walking the halls. i know their pain. nothing is free in this world and even indigent cases there do pay, if only a small amount.

    but i can tell you this: for every indigent case there is, each of those families are fighting tooth and nail to live. even when government doesn’t help, even with the smallest help.

    we are a poor country. you keep emphasizing that. i submit that given our already limited resources, we are squandering it. that is where your pain is. that’s where my pain is. that’s where everyone’s pain is.

    it is why i often joke about people’s lament that, sometimes it is better without government at all. i mean if government doesn’t deliver the most basic service? they don’t deliver on their job. when you’ve got an employee like that, isn’t the most sane response is simply to fire that person? but what happens when it is both employee and the system that’s flawed?

    anarchy, i understand where it is coming from people and from extreme neoliberals. i do not adhere to it. in the same way, i understand where you are coming from. i don’t necessarily subscribe to your point of view, entirely.

    neoliberals are in favor of maximizing that limited resource to deliver the right “force” at the right moment.

    you think that we should have our hand at every pie because people are in pain. we need to “help” everybody. painful as it is— i think that’s a mistake. doctors know this. most people will find it evil because it is so against accepted norms: “triage” is the word that fits.

    governments, society, software, computers, lives etc i think is like a painting or a poem or building a car. the statesman, the painter, the poet, the engineer “sees” the shape of the material he is creating. have you ever felt that? have you ever known a thing before it is completed and you take pains in putting it together?

    i submit that there hasn’t been such a person in the Philippines who sees the shape of what it is. and if one day someone will come who does, i think we’ll crucify him or her.

    i don’t think people understand how to build this country. if you ask the man on the street, they won’t get it. partly because they’ve got other things to worry about. partly because it isn’t the focus of their lives.

    Some people like cvj can talk advocacy politics and mince words. it is like taking a ruler and measuring the length of a pillar.

    i think what the philippines is doing is like improvisation. constantly. we don’t know the shape of it.

    i admire your belief in that people are good at heart. that they’re not selfish and not out for their own sake. the idealist in me believes it. the practical side says i am wrong every time someone takes advantage of the kindness i extend. it is a dog-eat-dog world. and you wouldn’t believe how wrong i hope to be on that.

    i strongly believe that the credit crisis in America is because of too much greed and taking advantage. it is like a pyramid scheme. last person holding the bag is the loser because the bag was empty. the bag was empty the first time it was passed.

    Excessive greed is bad– exactly when governments should intervene.

    i praised the Fed’s move with Bear Stein. they acted to prevent a panic— exactly the right approach. that’s the kind of RARE action that should be done ONLY because not to act would have triggered a global panic.

    if you think the US is a free market entire, i don’t believe it. it is a mixed economy like ours. you raised the point on US Farm subsidies. in a world that is truly free market, there shouldn’t be subsidies.

    with freddie mac and fannie mae— my opinion is that the Fed should let that ship float or sink on its own accord and let the market decide and correct itself. i agree that to intervene means “socialist”.

    in the same vein that in my opinion, local transport groups should be deregulated and allowed to run on its own accord. let people decide if their price is too high to ride or not.

    for government to keep deciding on fare increases, should it go, or when it should and should not, is socialist. same for the price of oil. same for the price of goods. same for the price of rice.

    if people can’t afford pure foods corned beef, they should buy something else. if they can’t afford to take the jeep, then walk. i used to drive to church which is about 3 blocks away. spending gasoline when it is walking distance i think is a waste. i walk now. again, people find ways.

    in a truly free society, no one is forced to do anything. to intervene in that is being socialist. and you know what? people will find a way to make their lives work— even without government intervention.

    you may think it be cold and cruel but hey, maybe people will wake up and say, you know what, frak this— it’s time to get serious!

    i am not at all surprised given that most Filipinos are social democrats. to be fair— i know and understand where it is coming from. we’re a catholic nation and that’s what good catholics really ought to do— caring for people’s welfare for. i disagree with most people on how to go about it.

    i firmly believe that corporations should take care of their own. they take care of their shareholders and they take care of their employees. leaders from every shape and form got that responsibility. sadly ours seem to fail at that.

    if we worried too much about every detail, we become myopic. we’d all be in fetal positions from the weight of the world.

    and you will say how about the really hungry? who cares for them? if people cared so much, house one homeless person. send that homeless person’s kid to school.

    help.

    give ‘em jobs. give ‘em the ability to be free. that’s at the heart of every Catholic and Filipinos are Catholic, are we not? helping someone makes your argument that this world isn’t a dog-eat-dog world all the more real.

    in the last few comments, we’ve talked about the details on what i’m for. thank you for reading.

    when cvj starts with “Advocacy politics and his lack of understanding why let’s move on is the norm”, i think it is time to close this chapter until next time. i’ve enjoyed the intellectual stimulation this discussion has been. it pales in comparison to being at the heart of the storm. it isn’t as bloody or as effective as playing the insider’s game, sure. maybe one of these days,
    someone would bring up the mentality of local politics.

    if someone got a study if government cuts income taxes entirely off and turns vat up a notch to cover that “loss”, please feel free to leave a message.

    cvj, i owe you a post on open source. i haven’t forgotten it. i look forward to your thoughts on that.

    Sparks, thank you sharing your position on what you stand for. we are both for democracy, though our ideas on how it ought to work differ.

    Everyone, feel free to continue on, if you like. i may not respond to this post as it will be a long and rough week.

    thanks for the conversation.

49. Lee Angelo on July 15th, 2008 12:13 pm

    In recent news, GMA said that “she is not inclined to back proposals seeking to scrap VAT on oil.”-(Business World) I think that’s a good move considering the fact that oil prices in our country are not that high in comparison to other nations. In the global market the year-to-year change of oil price was 98% while in our country it is 22%. This is a sign that somehow, GMA’s government is able to minimize the price hike. VAT on oil means funds for the government to facilitate development,let’s just hope that they are put into right projects.

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