Tuesday, March 08, 2011

Pol. Ideology 19: What is the Role of Government?

A friend in facebook, wrote me today. She asked,

Hi Noy, Been reading your blog, carefully weighing your arguments against Big Government for a couple of months now. While I do agree with a lot of your arguments, I am left to wonder, in your framework, where should government be?

In a minimal government, what roles does it play?

I thanked my friend for asking that question. It allowed me to re-articulate my ideas and advocacies in the most spontaneous manner. Here they go.

What is the role of Government?

I think it boils down to only one important function: Promulgate the rule of law.

Government has laws against killing, against stealing, against kidnapping, against corruption, against plunder, against carnapping, etc. Let government implement ALL of them, ZERO EXCEPTION. No one is exempted from the law, and no one can grant excemption from the law. The law applies equally to unequal people.

I think most people will easily see that logic. Next questions will be: what about the very poor? Who will take care of them? What about big businesses, who will regulate them if they abuse their power and exploit the consumers, exploit their workers?

Well, if the poor will put up a vulcanizing shop, a barbeque stand, a barber shop, or plant kamote and pechay in vacant lots, or buy those farm products and sell in a corner stall, government should get out. Do NOT require these small and micro entrepreneurs to secure costly and bureaucractic business permit, barangay permit, sanitation permit, location permit, various other permits and pay lots of taxes and fees.

In short, if the poor will become industrious and would want to stand on their own, government should step back. If the poor will become lazy and steal, government should arrest them and put them behind bars. The rule of law says NO STEALING. It does not matter if the theft is the President of the country or a Congressman or the poorest man on earth. No one should steal, period. No ifs, no buts, no preconditions, no exceptions.

If the poor will become half-lazy and become irresponsible entrepreneurs, say they sell expired food and adulterated drinks in their carinderia and food stalls for quickie profit, resulting to food poisoning of their customers, then government comes in to haul them to prison bars as well. The rule of law says NO HARMING other people. It does not matter if the seller of adulterated food and drinks or counterfeit drugs is the biggest restaurant or hotel or pharma company in the planet, or the poorest man on earth, they should be accountable for their action, and they should be penalized for violating the law against harming the health of other people.

The big businesses and super rich people. If some other rich guys and companies will put up a competing corporation, government should step back, Do NOT require congressional franchise, NTC franchise, local government franchise, and other forms of govt-imposed monopolies and oligopolies. Let there be fierce and ruthless competition among businesses in all sectors and sub-sectors of the economy. Let there be a "perfectly contestable market" in most or all sectors of the economy.

When there is ruthless competition among players, businessmen will not exploit their workers like paying low wages. Workers and managers can quickly move to another competing company who will offer them good benefits. Or they can quit being ordinary employees and become employers and job creators themselves. They know the trade more or less, there is little or zero govt bureaucracy that will hamper them, so why not try their luck of being entrepreneurs?

What about price collusion by some companies in a particular industry? It is a possibility, but sticking to collusion for long is more cumbersome than going it their way.

Suppose all beer manufacturers will collude among themselves and set an agreed upon price even if they are competing with each other. Overall prices of beer will rise. No problem. Some beer drinkers will simply move to wine or gin or whisky or lambanog. Or they will patronize smuggled imported beer. Or they will simply reduce their drinking, or just stop taking any alcoholic drinks. Collusion will ultimately fail.

Free trade will further expand competition. That is why many vested business interests always run to government to demand protectionism. Protectionism is always a hypocrisy. Even the most protectionist producers (say, farmers) are also staunch advocate of free trade and more competition when they need hand tractors and spare parts for their farms , clothing, shoes and toys for their children, construction materials, tv and other appliances for their house, etc.

If we are to extend the "rule of law = no exception" principle, then if there should be protectionism in agricultural products, there should also be protectionism in all other commodities and services. Which means no imported shoes, clothes, cell phones, tv, computer, hand tractors, etc. Everyone should buy only what are locally produced, autarky or zero international trade.

I do not think anyone would love to live in an autarkic economy. But if they wish to try it, they can go to North Korea perhaps and while there, they should also resist the temptation of buying goods made from China or Russia.

Meanwhile, incorporating a short paper here...

Marcos and the Liberal Challenge

In one of his papers in the Philippine Star, columnist William "Billy" Esposo wrote last March 01, No way, Sen. Ferdinand R. Marcos Jr., no way!, he wrote:

If it isn’t bad enough that the late unlamented Dictator Ferdinand E. Marcos brought us through a dark and bitter chapter of our history — now here comes his son, Senator Ferdinand R. Marcos Jr., attempting to rewrite that story. No way, Sen. Marcos, absolutely no way!

When the young Marcos asserted with a straight face last week that our country would have been a Singapore by now if his father was not ousted by People Power in 1986 — thank God that I wasn’t seated as the impact of his wild imagination could have compelled me to wreck another chair. If there is anything I have consistently deplored about the sad state of affairs in our country, it is our very shallow appreciation of our real history....
I think the Senator is only doing what is "right" for him and his family -- to continue the lies and destruction that his family has slammed upon the country. It is safe to assume that the Senator will even gun for the Presidency in the 2016 or future elections. Thus, they need to start large-scale lying as early as possible.

It is our job in the civil society sector, especially the liberal -- not socialist, not nationalist and protectionist -- civil society, to help educate the public that subsuming individual liberty under forced, collective liberty is not acceptable. When Marcos declared Martial Law and similar measures, certain individual rights like freedom of expression, freedom of setting up business in a fair environment, were killed in the name of the collective, in the name of the so-called "national interest".

It is too tempting that many groups that were once trained in the liberal philosophy, would forget what liberalism really is. The Friedrich Naumann Foundation (FNF) was even re-titled as FNF fur die FREIHEIT, with huge and bold emphasis on FREIHEIT or LIBERTY. And Liberty here as defined by the Friedrich Naumann, Theodor Heusse and other liberal German thinkers, referred to individual liberty.

There is too much emphasis on anti-corruption, good governance, etc., to the point of embracing BIG government and widespread collectivism, of trampling individual liberty (like the liberty to keep more of one's earnings and savings) in favor of the collective (high and multiple taxes).

See also:
Pol. Ideology 13: Liberty and Liberty Forum, the LP, March 19, 2009 
Pol. Ideology 14: Liberalism, Democratism and Coercion, January 18, 2010
Pol. Ideology 15: Socialism, Conservatism and Liberalism, March 08, 2010
Pol. Ideology 16: Liberalism and Social Opportunity, July 29, 2010
Pol. Ideology 17: The LP and the Philippine President, November 03, 2010
Pol. Ideology 18: John Lennon and Liberty, Purpose of the Law, December 15, 2010

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