BWorld 199, Charity and giving should not be legislated

* This is my column in BusinessWorld on March 22, 2018.

“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.”

— Adam Smith, 

The Theory Of Moral Sentiments (1759),

Part I, Section I, Chapter I

Among a plethora of so many global comparative indices — competitiveness index, economic freedom index, corruption index, energy security index, happiness index and so on — there is an interesting one called the World Giving Index (WGI).

It is produced by the Charities Aid Foundation (CAF), a UK-based international NGO. WGI 2017 is based on data from Gallup’s World View World Poll research project covering 139 countries in 2016. Some 1,000 questionnaires are completed by a representative sample of individuals living across a country. Bigger countries have bigger samples collected, like 4,373 interviews in China.

Overall, more than 146,000 people were interviewed by Gallup in 2016 and samples are probability-based. Surveys are carried out by telephone or face-to-face depending on the country’s telephone coverage (see table).

The result seems plausible except that Japan’s ranking only 111th out of 139 countries might raise one’s eyebrows in disbelief. Japan’s prosperity is largely a result of its being a trustworthy nation and hence, giving-oriented. One can put big investments in time and money on something and trust that no one will confiscate, steal, or destroy that investments. Gallup and CAF may have to revisit their questionnaires or the individuals they have asked.

Nonetheless, it is worth noting that the top two world rank were secured by ASEAN countries Myanmar and Indonesia. The Philippines is 54th or within the upper half. Communist China is 2nd to the last, one notch before Yemen.

Now there is a bill in Congress known as the “Food Waste Reduction Act.” It is a lousy bill because (1) it does not believe that Filipinos have capacity for voluntary donation and thus, it wants to “make it mandatory to donate edible food surplus for charitable purposes.” And (2) it does not believe that there are already existing processes and organizations, global-regional-national, that accept and distribute food donations by companies and individuals.

One such global and regional organization is “Second Harvest Asia” also known as Food Banking in Asia. Its regional head is Charles McJilton and its Philippine representative is Bruce Hall, an American married to a Filipina academic and mainly residing in Iloilo City for two decades now.

Charles emphasized that “Companies / people donate because they trust their food will go to those in need and that they will not be harmed. Trust is a key factor. Mandating donations will not create the necessary trust that must be present.”

This bill may sound good to some but hidden in it are huge interventionist policies. It intends to cover nationwide all food manufacturers; all food establishments (restaurants, cafes, diners, fast food chains or hotels); all supermarkets with at least 500 square meters of selling space; and all culinary schools which offer culinary, baking, and pastry courses with at least 50 students.

The monitoring and inspecting agencies will be the Department of Social Welfare and Development (DSWD) in coordination with the Local Government Units (LGUs). Can one imagine the opportunities for abuse and extortion by some personnel of these agencies?

Among the troublesome provisions of the bill is “Section 9. Food related Business Waste Reduction Strategy — The owners of food-related businesses such as food manufacturers, supermarkets, restaurants, cafeterias, culinary schools and hotels are hereby required to: (a) Submit its report to DSWD and DENR containing data on the amount (in tons) of its edible and inedible food surplus, organized according to the manner of disposal, including donation, composting or discarding; (b) Enter into a contract with food banks to redistribute edible food surplus to the food insecure…”

In reaction to this, Charles asked several questions:

“1. Will companies release this type of information? Our discussion with food companies in the Philippines and Japan is that they do not want to release this information as it gives their competitors information about sale.

2. In France, they created a law requiring supermarkets to enter into a contract with food banks. What happened is that brokers started charging a finder’s fee to supermarkets to “assist” them in entering a contract with a food bank.

3. Entering into a contract does not mean the food bank can take all that is being offered or has the resources to pick up the food donations.”

Government and legislators should stay away from mandating and penalizing individuals’ and private enterprises’ voluntary giving. Government should focus its resources and manpower catching real criminals — thieves, murderers, rapists, kidnappers, land-grabbers, arsonists, terrorists, plunderers, protectors of criminals, both outside and within government itself.

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See also:
BWorld 196, Mining tax and TRAIN, March 20, 2018 
BWorld 197, Estimating electricity price hikes because of TRAIN, Part 2, March 22, 2018 
BWorld 198, Three levels of global disruption, March 24, 2018

Water and sanitation is not a human right, not an entitlement

Last February 04, 2018, Rotary International posted this,

"Clean water and sanitation is a human right. When people, especially children, have access to clean water, sanitation, and hygiene, they lead healthier and more successful lives."  http://on.rotary.org/2DYyVWT

·

A friend and an active Rotarian (I am an ex-Rotarian) Bruce Hall posted this in his fb wall:

Rotary is wrong. Water and sanitation is not a human right, thought it can be a civil right.

Human rights are those things that we have because we are human, that we are born with, that we have been endowed with by our Creator.

Human beings are born with the ability to communicate, to pray, to move, to think... human beings are born free. Someone must use violence or threaten to use violence (like an army or a police force) to take away those things. Those are human rights. When violence is used to take away those things from us, that is oppression. Our human rights are violated.

We are not born with a lifetime supply of water or sanitation.

We must work hard -- and we must work together -- to provide those things to ourselves and to others. If we don't have water and sanitation, that might be our fault, or the fault of others, or the fault of no one.

The lack of water is NOT ALWAYS the result of oppression. If we die of thirst in the desert or on a lifeboat at sea, who oppressed us?

The lack of human rights is ALWAYs the result of oppression, is always the result of someone's act or threat.

Thirst can be the result of oppression, or someone taking away our life, liberty and pursuit of happiness, but it could also be the result of something else. Therefore water cannot be a human right. 
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I agree with Bruce here. People can live on top of high hills and mountains far from natural water sources and government should bring pipe water to them because water is their "human right"? Bad proposition.

Re UN SDGs declaring that water is a human right, almost everything should be a "human right" for the UN actually. Free healthcare, free education until university, free books, free medicines, free condoms, etc. And soon free iPads, free flat tv, free cars for the poor?

Bruce added:

To take away human rights requires an act and therefore an actor. It requires oppression. To have human rights requires no action, no actor. We have human rights BECAUSE WE ARE HUMAN. Nothing more is required. A government isn't required, technically, for us to have our full human rights. However, there will always be people who may try to take away our human rights. Therefore we band together to defend ourselves, and we might call that government. Governments are instituted among men, as the saying goes.

Pol. Ideology 68, On factions and diversity in society, thoughts of James Madison

The fourth President of the USA (1809-1817), James Madison, was a political philosopher and stateman before he rose to Presidency. Below are some of his writings in The Federalist Papers in 1767, about factions in society:

" Liberty is to faction what air is to fire, an aliment without which it instantly expires. But it could not be less folly to abolish liberty, which is essential to political life, because it nourishes faction, than it would be to wish the annihilation of air, which is essential to animal life, because it imparts to fire its destructive agency.

"As long as the reason of man continues fallible, and he is at liberty to exercise it, different opinions will be formed.... The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors, ensues a division of the society into different interests and parties.

"But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government."

-- James Madison, The Federalist Papers, Federalist no. 10, November 1787.

Factions, diversity and inequality among people is natural and inevitable if society is free. Individual freedom allows people to choose their fate, to be lazy or hardworking, complacent or ambitious. So from such liberty, acquisition of private property (from cell phones to tv, cars and offices) is inevitable, and it is an important function of government to protect private property.

Since inequality and diverging economic interests is inevitable, a minimum degree of regulation, not zero regulation, is necessary to protect the people's right to property and right to liberty, without resorting to violence and heavy coercion resulting in property expropriation.

Good comments from an Iloilo-based American friend, Bruce Hall, 3 years ago when I posted the above points in my fb wall. Bruce wrote,

"Let me, the lecturer in history, put Madison's quote into context. To Madison and other 18th Century American political thinkers, factions were evil things. Factions, as opposed to interests, were permanent organizations of politicians who worked to increase their organizations power and wealth, bending the powers of the government to favor them. They were in short organized special interests, that continued issue across issue. Parties if you will (and the American Founders were adamantly against parties, structuring the Constitution as best they could to prevent the formation of parties). This needs to be contrasted with different positions on a particular issue. There will always be multiple sides on any single issue. But those sides are not permanent. They do not continue once the issue is resolved. Nonoy and I might be opponents on Issue A but on Issue B we are allies. Factions are always opposed to each other, across the issues.

Americans were opposed to factions -- or special interests -- and this was an argument against creating a federal government out of the 13 original states. Those arguing against federalism and in favor of separate or nearly separate countries -- those arguing against centralization -- argued that a central federal government will be used by factions (special interests) to favor themselves over the public good. Madison argued in the Federalist paper, in favor of a federal state, in favor of more centralization, that factions exist in human nature. Freedom and human nature creates factions. They will exist regardless of what the political structure is.

This is an important point. The main argument against freedom today -- made by the fascists, communists, social engineers and others -- is that human nature is malleable (by the advocates). That one can create a better world with a strong hand at the top controlling and shaping. That governments properly structure can bring about heaven on earth. Madision, I think, would argue that no human beings are flawed fallen creatures that governments must take our flaws into consideration. Factionalism is one of our flaws. Much as we may hate it, there is no way to get rid of it. We can suppress it artificially with violence but that will not last long Eventually human nature -- like the ocean eroding a cliff -- will win out.

By the way, in my experience, the only way to overcome division is to allow it full expression. Allow the sides to fight it out fairly, openly and honestly. Eventually one side wins and the other loses, and since nobody likes losing, they give up. When debate, argument, discussion the natural course towards resolution is stopped. The division festers. Eventually it explodes, a la Libya, Eqypt, Yugoslavia, the Sudan, Somalia, Iraq."

Good points by Bruce there. Meanwhile, more from Madison below.

"The two great points of difference between a democracy and a republic are: first, the delegation of the government, in the latter, to a small number of citizens elected by the rest; secondly, the greater number of citizens, and greater sphere of country, over which the latter may be extended.

"It is in vain to say that enlightened statesmen will be able to adjust these clashing interests, and render them all subservient to the public good. Enlightened statesmen will not always be at the helm. Nor, in many cases, can such an adjustment be made at all without taking into view indirect and remote considerations, which will rarely prevail over the immediate interest which one party may find in disregarding the rights of another or the good of the whole.

"The inference to which we are brought is, that the CAUSES of faction cannot be removed, and that relief is only to be sought in the means of controlling its EFFECTS." -- Madison.

There, enlightened/unselfish/non-compromised statesmen and leaders, will never be able to fix such clashing interests even if they wish to. And even if they can, they will not be around for long. If the structure for their central adjudication, central planning is created and made permanent, a greater danger of scoundrels taking the place of those enlightened statesmen will surface.

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See also:

Pol. Ideology 65, Liberals and liberty, positive and negative freedom, January 06, 2016 

Pol. Ideology 66, On institutions, constitutional monarchy and liberal parliamentary democracy, May 10, 2016 

Pol. Ideology 67, Socialism and Venezuela, June 08, 2016

Lion Rock 8: On Opposition, Factions and James Madison

* This is my article yesterday in thelobbyist.biz.
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When people are free, diversity and spontaneity among them is to be expected. Some will have very high ambition and would employ the most efficient ways to achieve things and accomplish more. Others will be less ambitious or less efficient and would settle for lesser economic and social accomplishment, in exchange for a less stressful, less complicated life. Social inequality is a natural result and it is not to be feared nor demonized by free people.

Certain sectors of society though would not look kindly at this situation and would device ways via government coercion to limit if not control such diversity and inequality in society. Political groups and factions are created and their size and influence will grow in direct proportion to the degree of coercion and intervention to be exercised by government.

Democracy and the philosophy of majority rule is supposed to address animosities among competing factions and political groups in society. How should it be done?

This question will be explored by participants of the Reading Club Salon 2013, in a round table discussion this coming October 19, 2013 in Hong Kong. The event is sponsored by the Lion Rock Institute, Hong Kong’s first and only free market think tank. I will be one of the foreign participants of that discussion.

Among the materials that participants must read are The Federalist Papers, essays promoting the ratification of the US Constitution and were published between 1787-1788.

James Madison, among the fathers of the US Constitution and also served as the 4^th US President  (1809-1817) wrote Federalist No. 10 (November 23, 1787), particularly on political factions. He said,  

… two methods of removing the causes of faction: the one, by destroying the liberty which is essential to its existence; the other, by giving to every citizen the same opinions, the same passions, and the same interests.

It could never be more truly said than of the first remedy, that it was worse than the disease. Liberty is to faction what air is to fire, an aliment without which it instantly expires. But it could not be less folly to abolish liberty, which is essential to political life, because it nourishes faction, than it would be to wish the annihilation of air, which is essential to animal life…

The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors, ensues a division of the society into different interests and parties.

This is true. Factions, diversity and inequality among people is natural and inevitable if society is free. Individual freedom allows people to choose their fate, to be lazy or hardworking, complacent or ambitious. So from such liberty, acquisition of private property (from cell phones to tv, cars, houses, shops and offices) is inevitable, and it is an important function of government to protect private property. Madison continued,

But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government.

Again, this is true. Since inequality and diverging economic interests is inevitable, a minimum degree of regulation, not zero regulation, is necessary to protect the people's right to property and right to liberty, without resorting to violence and heavy coercion resulting in property expropriation.

My American academic friend who teaches part-time at UP Visayas, Bruce Hall, made this important clarification. He wrote,

Let me, the lecturer in history, put Madison's quote into context. To Madison and other 18th Century American political thinkers, factions were evil things. Factions, as opposed to interests, were permanent organizations of politicians who worked to increase their organizations power and wealth, bending the powers of the government to favor them. They were in short organized special interests, that continued issue across issue… This needs to be contrasted with different positions on a particular issue. There will always be multiple sides on any single issue. But those sides are not permanent. They do not continue once the issue is resolved. Nonoy and I might be opponents on Issue A but on Issue B we are allies. Factions are always opposed to each other, across the issues.

Americans were opposed to factions -- or special interests -- and this was an argument against creating a federal government out of the 13 original states. Those arguing against federalism and in favor of separate or nearly separate countries -- those arguing against centralization -- argued that a central federal government will be used by factions (special interests) to favor themselves over the public good. Madison argued in the Federalist paper, in favor of a federal state, in favor of more centralization, that factions exist in human nature. Freedom and human nature creates factions. They will exist regardless of what the political structure is.

Spontaneous Market 6: Removing Pork Barrel

More than three years ago, we were discussing in MG yahoogroups the crafting of a statement about removing pork barrel. Here are our raw exchanges then. This is 8 pages long.
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Removing Pork Barrel

September 2004

Guys, see the draft that I made below:

Why Legislators' Pork Barrel Should be Cut, Eliminated over the Long-Term

The job of governments is to improve their citizens' and taxpayers' well-being, not the politicians and bureaucrats' well-being. If governments can help the citizens with efficient delivery of social and economic services through efficient taxation, so be it. If governments can help the citizens with lower taxes because of inefficient and corruption-tainted services, so be it.

Philippine legislators and politicians, including presidents, past and present, are largely to blame for those perennial budget deficits and ballooning of the public debt. Even when taxpayers were unwilling to part with their hard-earned money because of perceived malfeasance in governance, politicians' spending spree continued. Even when tax collectors were diverting many collections into their pockets and padrinos, politicians' unsustainable subsidy policies continued. Even when interest rates were going up because of the expanding public debt, politicians' penchant for endless borrowing continued.

Thus, legislators should not call the proposed cuts in their pork barrel as "sacrifice". It simply is the right thing to do. Legislators are called as such because their main task is to legislate and craft laws, not to execute and implement local projects. Their task is to talk and debate how to cut expenditures when these are no longer supported by projected revenues for the year, not to further bloat expenditures with their pork barrel and justify irresponsible borrowing spree by the President and the DOF.

The real "sacrifice" that legislators can proudly boast to the citizens is when they will enact legislations giving relief to taxpayers, like cutting income tax so salaried and fixed income earners will have more take-home pay to bring to their families. The real "sacrifice" that legislators can give to taxpayers is when they slash agencies and programs that abet inefficiency and corruption in government, not expand budget for corruption-tainted
agencies and programs.

Those moves are considered "sacrifices" because many of their peers in the Legislative branch will frown upon them when they would seriously push for those reforms. Sacrifices because the President and his/her Cabinet officials will be deprived of further extending political "pogi points" at the expense of taxpayers. Sacrifices because some citizens who prefer to beg for political favors and rely on dole-outs by politicians and state bureaucrats than working hard will begin to oppose them.

In addition, if it is true that legislators can identify the needs of their constituencies better than those agencies of the Executive branch, then we better shrink those agencies by demoting them from line departments to bureau-level offices, just implementing the wishes of the legislators and the President. Us taxpayers can save money with the abolition of many
Secretaries, Undersecretaries, Assistant Secretaries, planning and related departments of those agencies.

- Nonoy


"SCRAP THE PROK BARREL UNCONDITIONALLY"

Legislators are supposed to formulate laws; laws that are designed to improve the quality of life -- physical, mental, moral, cultural -- of our people.

For so long, this has not been the case. A vast majority of our national legislators (and in many respects even local ones) aspire for office because of the political and financial benefits that are available as booty when one is a member of the house of congress or the senate.

The single most indecent reality of philippine politics is the fact that candidates spend millions of pesos in campaigning for a seat that pays officially less than a million pesos a year in salaries.

That by itself is the single betraying fact of the hunting-gathering instincts of legislators. And the embodiment of that booty mentality is the so-called "pork barrel".

To heap injury upon insult upon injury, the proposal to cut and/or abolish the countrywide development fund (cdf) is being labelled as a "sacrifice".

We believe that it is about time our country's political leaders show some semblance of decency by scrapping the "pork barrel" altogether, and across the board. "pork barrel", intelligence funds, and discretionary funds are all the same -- they have no accountability. And when a government has no
accountability, it has no business collecting taxes, much more increasing them.

Scrap the "pork barrel"!
No to increase in tax rates!
Yes to stopping corruption in the revenue agencies (bir and boc)!
Yes to minimal government!

- Citizen Kori


Dear Sir Kori, Noy,

Although I don't really like what Sen. Pimentel and Sen. Joker Arroyo stand for these days, I think their points are valid when they dissented the scrapping of the pork because then the President will have the sole discretion and therefore the sole privelege to corrupt and neknok certain percentages of the funds. It will be like transferring the loot from Congress to OP. In a sense, you're making the OP responsible for a bigger portion of the expenditure pie.

There is reason to doubt the accountability and credibility of Pres. Arroyo to manage the funds. It is going to be a frenzy of finger-pointing and mudslinging unless we qualify our position. Make the Executive Department accountable by alligning the scrapped pork solely for interest payments and retirement of the principal.

Dapat hindi mapunta sa infra or social ekek kasi siguradong neneknokin. I mean we know exactly how much our debts are (unless may porsyentohan din sa bayaran ng utang?). We can easily predict when exactly we'll be able to pay off our debts because these are exact amounts.

When were we're able to pay off our debts and the economy stabilizes, let's begin the dismantling of unnecessary government agencies. Now the supposed-to-be pork barrel should be used to fund early retirement claims. Dapat hindi na utangin ang early retirement kasi babalik na naman tayo sa pagbabayad ng utang.

If the President wants to increase her social and development expenditure, kunin nya sa PAGCOR or similar entities.

Eventually, the size of the expenditure pie should shrink. No pork barrel, no utang, ergo, no need for too much tax.

I think, and I've been meaning to post this, the minimal government position should be tempered by the sensitivity for macro-economic stability. The UP Professors are speaking with wisdom when they said that phasing is very important if we're serious about averting a fiscal crisis and moving the economy forward. For instance, we can't possibly retire government employees now because early retirement claims will further widen the deficit; we can't fire them either and scare away investments with social unrest.

Let's pepper the minimal government position with the appropriate number crunching.

- Ellen


Hi Noy,

I agree with the principle you laid down about the pork barrel-- that the legislator's primary purpose is to establish the laws/policies for their constituents. It would be nice if someone can trace the history of the largesse. Has it always been around, or did it evolve due to some failure by the executive branch at one time or another.

Strictly speaking, legislators only "earn" from the pork barrel if contractors who bag the project will give them a %. If procurement in this regard is made more transparent and less discretionary, maybe it won't be a source of leakage.

Remember also that congressmen have to hire political officers and not just technical people. Why? To handle all those requests for assistance in funerals, hospitalizations and other "calamities" from their constituents. Joker Arroyo can afford not to accommodate those requests when he was still congressman of Makati because the local government is affluent. But what about the poorer municipalities in regions, where the congressman is the only source of grasya. It is patronage pure and simple, but it is the reality there. The congressman then becomes the last resort for situations where SSS, Philhealth, DSWD and even the church and civil society fail. Maybe that is part of the reason why they are hesitant to part with pork. Of course, that is a big MAYBE. But think, only the congressman has the incentive to really help because he can expect loyalty in the next election.

- Chichi B.


Hi chi,

Chicken and egg story yang "pork barrel to finance personal requests by constituents to buy their loyalty to get reelected to get more pork barrel to finance requests by constituents..."

A break from this cycle is impossible in the short-term, even in the medium-term.
long-term engagement talaga. kaya nga sa MG philosophy, highlighted ang

greater individual freedom,
greater individual responsibility,
lesser individual dependence from the state and the politicians,
lesser power by the state and politicians to raid our pockets.

As i discussed in my powerpoint presentation, The range is between the "collective/state" on the left, and the "individual" on the right. The extreme left is socialism (practically everything owned by the collective through the state). The extreme right is ultra-libertarianism, zero government (practically the state is unnecessary). The MG advocacies are in-between the current govt's programs and interventions, and the zero govt. philosophy.

the pork barrel politics is pulling the public, the citizens, to embrace the statist, forced collectivism, philosophy. citizens to depend on the politicians in exchange for the politicians' right to raid the citizens' pockets and political beliefs.

so i think, the call remains valid: cut pork barrel in the short-term, abolish it in the long-term.

- Nonoy


Hi Nonoy,
For the administration/executive, legislative, and judicial branches of government, I suggest that the group create a list of two types of areas of concern: (A) areas that the particular branch should be primarily responsible for; and (B) areas that it should stay out of. For example, the judiciary should render constitutional and legal judgments but should do its best to stay out of technical/engineering/accounting/financial/commercial issues that are best handled by the executive branch and also out of certain primarily political topics that have no juridical or legislative significance.

I know that this will be quite difficult and take a long-time to finish but if someone can start working on a basic framework or table for the various topics listed in the MinGovt position paper, the rest of us can just download it, work on it at his/her convenience, and then upload it to a volunteer compiler. This work in progress can then be posted in our website for others to look over and give comments on. Once the framework is done, we can designate sub-areas that we all fully agree on (e.g., that legislators should stick to law-making 90% of the time) versus more controversial sub-areas (e.g., that legislators should minimize or avoid showboat-style exposes “in aid of legislation” which don’t really accomplish much except put their names in the newspapers).

I guess such a checklist should look like the following, more or less:

BRANCH        REGULAR FUNCTION/S                             UNDESIRED ACTIVITIES

Executive:     Administer and execute policies                     Creating unbudgeted projects or institutions

Negotiate international treaties                       Discontinuing successful projects of   predecessor/s

Collect and disburse funds                             Executing projects willy-nilly and without transparency

Legislative:      Debate proposed policies                              Prioritizing and assigning

                                                                                                expenditures in/of LGUs

Create and amend laws                                  Initiating investigations without resolving them

Judiciary        Determine constitutionality of laws                 Issuance of unnecessary TROs

                        Render legal judgments                                  Intrusion into technical or political

                                                                                                decision-making

The purpose of this exercise is to develop an easy-to-read checklist for each of the three major branches of government so everyone can see whether it is fulfilling its responsibilities or straying away from its main mission (as defined by the constitution and by agreement of the majority). Later on, we can add more specific branches of government such as the police forces, the armed forces, the local government units, the presidency, the different government bureaus, the constitutional bodies, etc. With a fully evolved checklist (it could take weeks to over a year to finish), it will become easier to delineate whether or not a particular agency or branch of government is doing its job or usurping another agency’s function. With a job-function checklist in hand, we can point to individual legislators or courts or agencies that are wasting people’s time and money by not doing their job and also doing some other agency’s job (and messing it up), or preventing another branch of government from doing its job.

The country’s political scientists and lawyers would be the major participants and contributors (if they are interested) but I also see a place for specialists in operations research, knowledge engineering, and other professionals to provide their expertise.

Can some others please help flesh out the list and trim/edit it nicely? I’m sure there are a lot more that can be added to the initial framework.

- Selwyn A.


Pareng Noy, Just want to share what i know on this issue. on your question on the history of the pork barrel, i believe it has been in existence for quite a while now, although the amount of the allotment for each legislators have ballooned by so many folds (largely by their own effort and to their sole benefits) and the ways and means by which it can be disbursed have been short-cutted.

pork barrel came from the counrty wide development funds. during pre martial law, each congressman has different percentages of allotment based on the economic status of their district and province. these funds were meant for infrastructure as well as other social projects given to legislators on the assumption that they have a better understanding of their constituents' and districts' needs.

they are, however, obliged to file a bill for a particular project with the corresponding amount to fund the bill. this will be subjected to the natural process in congress wherein fellow legislators will debate on the merit of the bill and the funds requested for it's purposes until seconded and referred to the proper committee. kung local di na to aakyat sa senate.

at present, this is another reason why alot laws passed are useless or do not have enabling laws due to lack the funds for their enactment. Ngayon kasi wala ng bills-bills pa. identify mo na lang ng ghost project bigyan ng pondo 50% and kick back.

- Raymond A.


Noy, Mayroon lang akong kaunting additions on abolishing pork barrel. According to some US papers, pork barrel is coming from the national budget and therefore is to fund national priorities. since we already have the IRA for the local governments, there is no longer any need for the pork barrel. on this note, cutting the IRA must not be across the board and should be prorated by type of municipality.

since most of our apprehension on pork barrel is that it is a major source of corruption, the best way to disprove it, is to have each representative list the details of his/her pork barrel representative and how the money is spent. similarly, other funds that are "discretionary" in nature can be allowed as long as there is regular reporting of how it was used.

abolishing the pork and their similar natured funds will break a lot of the chains that have enslaved philippine society for decades. studied thoroughly and operated carefully, the cutting of these funds will release ultimately efficiency.

- Alvin


Dear Nonoy,

You may want to rephrase the last sentence of the first paragraph under the "Role of Government" section. The point should be made that the government should help its citizens with lower taxes and efficient and corruption-free services. Helping its citizens with inefficient and corruption-tainted services should not be accepted nor tolerated.

I suggest to rephrase the first paragraph under the "Abolishing the Pork Barrel" section like the following:

Thus, Legislators should focus their time and energy on finding ways to prevent the slippage of the economy to a possible debt-default crisis. This may require cutting the Executive Branch's excess fat and expeditures, raising power rates to control the financial bleeding of NAPOCOR, scrapping the President's and legislators' pork barrel, and reducing the LGU's Internal Revenue Allotment(IRA) for at least two years.

- Prof. Patalinghug


Kori, Ellen,

How about these compromised formula:

(1) Phase out pork barrel in 3 years time, zero on the 4th year, instead of outright abolition now.
Say 75% in 2005, 50% in 2006, 25% in 2007, zero in 2008 onwards. So, legislators running for the 2007 elections would know that they'll have zero pork barrel starting 2008 should they win.

(2)Phase out also the President's pork barrel at the same rate as phasing out of legislators' pork barrel; ie, 75%-50%-25%-zero in 4 years time. The president to take her social fund and "neknok" funds from Pagcor.

(3) Use the scrapped pork funds of legislators and the President to retire some local debts.
For every P10 billion of domestic debt retired at 8.5% interest rates (upper range of the 91-day T-bills), that's P850 million savings from interest payment per year, a big amount already.

(4) On shrinking government, a 1 paragraph statement in this pork-barrel position paper would go something like this:

"We need to make the government bureaucracy do more for less costs. Currently, about 70% of total budget net of IRA and debt service payment goes to salaries/personnel services alone. Early retirement for redundant personnel should be started soon, starting from agencies with functions that can better be left to the markets. It will be painful for some affected personnel, but maintaining said bureaucracy is even more painful for the taxpayers because of wastes and perceived uselessness of those agencies and/or personnel."

(5) On privatization of govt. corporations, the process takes about 4-6 years/corporation to be completed.
the process should be started this year or next year. So that by 2011, we'll be rid of many of those losing corporations, in particular: Napocor, NFA, PNOC, LRTA, NEA, NHMFC.

- Nonoy


(1) Phase out pork barrel in 3 years time, zero on the 4th year, instead of outright abolition now.

Say 75% in 2005, 50% in 2006, 25% in 2007, zero in 2008 onwards.

So, legislators running for the 2007 elections would know that they'll have zero pork barrel starting 2008 should they win.

Are government programs ever phased out? It seems to me that if you leave anything left then the politicians will just increase funding when the pressure is off.

Two examples from my own experience in the US -- taxes and farm subsidies.

1) In Massachusetts, the raised the state income tax from 5% to 5.95% during a "fiscal crisis". The outrage over the increase was extensive so they promised to make it "temporary": when the crisis passed and budget deficits disappeared, the tax would be lowered. Lo and behold, the crisis passed, surpluses returned, and the money was spent. The tax was not lowered. Eventually, through an initiative petition for a ballot question the tax was returned to the original level, but it took years and the politicians put up a fight all along the way.

2) When the Republicans took over Congress following the 1994 elections, they moved to severely cut if not eliminate farm subsidies, called the Freedom to Farm Act. Unfortunately they did not, in fact, end them. When the farm market soured, Bush promised in the farm state of Iowa, while running for president in 2000, that he would boost funding, and that is what he did. It would have been better to have killed the entire program and dismantle the bureaucracy. Instead, a program was left for Bush to increase.

When given a chance, end a program entirely. Shut down its offices and sell its furniture. Kill it, completely, without mercy, at its roots. It is much harder then for politicians to come back, when no one is looking, and refund the program. They need to start all over again, rebuilding the program, passing enabling legislation. They cannot just quietly add more money to an existing program, a la farm subsidies.

We better end this "pork barrel" now. If any of it survives, it will come back stronger and healthier and it will be much, much harder to kill off.

- Bruce H.
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See also:
Spontaneous Market 1: Profit, Trade and Personal Responsibility, May 22, 2006
Spontaneous Market 2: Market Failure vs. Government Failure, June 07, 2006
Spontaneous Market 3: No Nurses' Brain Drain, June 21, 2006
Spontaneous Market 4: Entrepreneurship, Community and Property Rights, October 23, 2007
Spontaneous Market 5: Limits to Free Market? November 16, 2007

Pol. Ideology 8: Ideas on Liberty

Three years ago, I attended my second international conference about free market, the 1st Asian Resource Bank Meeting in Hong Kong, September 15, 2004. It was jointly sponsored by the Atlas Economic Research Foundation (USA), Unirule Institute of Economics (China) and the Friedrich Naumann Foundation (Germany).

Below are some papers discussed there.
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(1) Lunch Speaker, Dr. James Dorn, the China specialist of Cato Institute (www.cato.org). He talked about "Why Freedom Matters". In his presentation, he showed graphs, charts, tables, showing that stronger property rights enforcement and greater economic freedom results in greater wealth and faster poverty alleviation. Also the pattern of China's economic liberalization and growth. Below are the 5 Lessons/summary of his presentation. Also a quote from Havel...

Five Lessons

1. Private property, freedom, and justice are inseparable.

2. Justice requires limiting government to the protection of persons and property.

3. Minimizing the use of force to defend life, liberty, and property will maximize freedom and create a spontaneous market-liberal order.

4. Private free markets are not only moral; they create wealth by providing incentives to discover new ways of doing things and increase the range of alternatives.

5. Governments rule best when they follow the rule of law and the principle of non-interference (wu wei).

The market economy is "the only natural economy, the only kind that makes sense, the only one that can lead to prosperity, because it is the only one that reflects the nature of life itself."

-- Vaclav Havel

"Summer Meditations"

(2) Speech by Joe Lehman, Executive VP of the Mackinac Center for Public Policy in Midlands, Michigan, USA. April 2004, I attended the Mackinac Leadership Conference in their office, I have met Joe there, as well as Mackinac President Larry Reed.

Translating Ideas Into Success

(On Sept. 15 in Hong Kong, Joseph Lehman delivered the following speech to open the inaugural Asian Resource Bank, a meeting of Asian free-market think tank leaders sponsored by the Virginia-based Atlas Economic Research Foundation and the Beijing-based Unirule Institute of Economics. The remarks are a condensation of ideas presented at the Mackinac Center’s semiannual Leadership Conference, which has trained more than 300 national and international think tank executives in management, communications and fundraising. Contact Kendra Shrode for information on the next Leadership Conference.)

It’s a great privilege to address the very first Asian Resource Bank meeting this morning, make new friends, and reunite with familiar ones. Mackinac Center President Larry Reed asked me to express his warmest greetings to you. He told me he was so grateful that I could stand in for him today that he doesn’t mind if I borrow liberally from his material!

If you’ve been around think tank people very long, you’ve probably realized that not many of us can tell a good joke. In a lot of professions, that would be a real setback, but it doesn’t hold us back. We don’t have to come up with our own funny stories: We’ve got the whole government doing ridiculous things all the time for us to talk about.

We can even retell other people’s jokes; Will Rogers told that one more than 70 years ago. Telling jokes about the government helped make Will Rogers the best-known American humorist of his time. But government is not just funny – it’s a deadly serious enterprise. Some of you doubtless can testify first-hand to government abuse of the ugliest sort. Figuring out how to limit government – to make it the servant of the people and not the other way around – is a necessary work and a noble calling.

So how do we translate our ideas into success? How can we actually shape public policy with a mere notion – that freedom and free markets are the best way to organize society?

The Power of Ideas

We start by realizing that ideas are the most powerful force in the world. Power can be found in politicians, armies, activists and institutions. But the reason for their power is ideas, because ideas explain why people do the things they do.

What people believe determines how they behave, for whom they vote, the laws and rules they accept or reject and what kind of society they will work to adopt. Ideas determine whether a culture embraces free markets or socialism, democracy or dictatorship. Change ideas, and you change the world.

Political leaders may enact public policy, but they seldom generate the ideas that drive policy. Politicians usually act within a fairly narrow range of politically acceptable options. And they cannot operate outside that range without jeopardizing their political standing.

The range of credible ideas circulating in the intellectual marketplace determines the range of politically acceptable options. So if you have a think tank that changes the intellectual landscape, that think tank actually shifts the range of politically acceptable ideas. And that’s how think tank ideas have impact.

To take a simple example, if the generally acceptable income tax rate is 60 percent, it is very hard for a politician to say it should be 15 percent. A 15 percent tax is outside the window of political possibility. But if the tax is at 60 percent already, then 50 percent is easy to propose. Forty percent may be easy to propose if think tanks or others have done the research and shifted the intellectual climate of opinion. The 40 percent tax rate may not be enacted right away, but a politician can propose it without seeming crazy if intellectuals have paved the way.

Milton Friedman has said think tanks are at their best when they change what is politically possible.

We must remember we are engaged in a battle of ideas. In spite of political obstacles, we are not battling against personalities or people. We can win by promoting ideas that shift the very ground of battle.

Optimism

But even the very best ideas are apt to go nowhere without optimism. I have the privilege of working for probably the world’s most optimistic man. Larry Reed likes to tell the story of how he once lost control of his car on an icy road. As he was rolling over and over down an embankment, he swears the thought going through his head was this one: "At least I’m going to get a new car out of this!" Now that’s optimism!

Well, we don’t have to be pathological optimists to have every reason for optimism ourselves. We are winning the war of ideas.

We have watched the ideas of Soviet communism become discredited around the globe. The world’s most aggressive exporter of communism has crumbled. Liberalism is taking hold and gaining respect in dozens of former socialist strongholds. In my own country, about the only place you can find someone who still believes Marx was right is on college campuses!

Another reason for optimism is that the drift of ideas is in our direction. I don’t know about you, but I run into a lot more former socialists than former free-marketers. I can’t remember the last time someone said to me, "You know, I used to believe in free markets and individual liberty, but I’ve looked at the evidence, and now I think central planning is the way to go."

The final reason to be optimistic is simply that pessimism is self-fulfilling. What band of revolutionaries ever said, "It’s hopeless; we’re fighting a lost cause; but let’s spill our blood anyway?" An optimist is not blind to obstacles and setbacks, but he views them as momentary and finds ways to overcome them.

Entrepreneurship

The next ingredient for translating ideas into success is entrepreneurship. I don’t mean just talking and writing about it. I mean being an entrepreneur.

To really shift the window of political possibility, we have to get out of the purely academic mindset, where the goal is writing reports and studies. Our success is not measured by how much paper we push out the door. We succeed only if we actually shift policy in the right direction, and to do so requires an entrepreneurial approach.

Successful entrepreneurs are focused. They have lots of ideas, but they figure out their comparative advantage and spend their energy there. They don’t run in all directions trying anything that seems interesting.

This means that entrepreneurs are planners, but not in the sense of stifling creativity and flexibility. A good entrepreneur makes plans that avoid both rigid bureaucracy and unfocused, free-wheeling frenzies of activity.

Entrepreneurs are problem-solvers. They don’t just try to copy what works in other countries — they become the experts at applying freedom ideas and overcoming obstacles in their own countries.

Studies and seminars will always be staple products for a think tank. But sometimes you have to get creative.

The most powerful labor union of teachers in my state — the Michigan Education Association — routinely thwarted schools that wanted to save money by privatizing nonteaching jobs such as food, janitorial and bus services. Taking union dues from all the teachers was not enough. The teachers union wanted to force the school to hire only dues-paying cooks, janitors and bus drivers, too.

At the Mackinac Center, we had already published studies showing how much money the schools could save by privatizing, but the union was too powerful. We had to do something to weaken the union’s influence.

We brainstormed, and it occurred to us that the union had its own massive headquarters building with 500 employees. Surely the union did not employ their own unionized cooks, janitors and mail clerks. We decided to find out.

So, one of our policy analysts simply parked his car outside union headquarters and counted the various contractors’ trucks that entered the premises.

We learned that this union – the one that opposed it when schools privatized to save money – contracted with four outside firms for food service, custodial service, mail service and security. And in three of the four cases, the contract firms were nonunion!

We contacted the newspapers and state lawmakers and exposed the union’s hypocrisy. Schools were suddenly emboldened to oppose the union on privatization, and within a few months legislators gave schools explicit authority to privatize without the union’s approval.

If there were a think tank entrepreneur’s hall of fame, we would make that story our nomination!

Entrepreneurs are creative, but they build on the success of others. Don’t waste time comparing yourself to other think tanks or criticizing others in the movement. Learn what you can from them and apply it to your country’s unique marketplace of ideas.

Perseverance

The final ingredient is perseverance. Never giving up. Perseverance is the backstop of success.

Freedom is never won in an unbroken string of victories. It’s more like three steps forward and two steps back. We persevere by simply refusing to ever give up. There will be discouraging turns of events, unexpected setbacks and even seemingly overwhelming daily pressures.

But those are precisely the times to remember that we are on the front lines of a battle that is infinitely more important than any of our day-to-day struggles, disappointments, deadlines and duties. We can’t ever let those things distract us and divert our eyes from the prize.

In our office hangs a photograph that just screams "perseverance." I’m sure you’ve all seen the snapshot of a lone man in Tiananmen Square who is apparently stopping four Chinese tanks from advancing. That single image of perseverance has probably inspired more freedom fighting around the world than four tanks could ever hope to vanquish.

Let me close with the story of a man who personified perseverance. Some of you already know about William Wilberforce and the abolition of slavery.

Wilberforce was elected to the British Parliament in 1780. Seven years later, he decided to work to end British slavery.

At the time, slavery in the British Empire had broad political support and even intellectual defenders. People turned a blind eye to the cruelty of African slavery, which was considered essential to British military and economic success. Wilberforce was that rarest of politicians who stood virtually alone on principle.

He spoke against slavery in the House of Commons for the first time in 1789. Every single year for 18 years he introduced an abolition measure, and for 18 years they went nowhere.

He was ridiculed and called a traitor and a rabble-rouser. Once, even his friends deserted him when the opposition supplied his allies in Parliament with free theater tickets during a crucial vote. Through it all, Wilberforce worked tirelessly to turn the intellectual tide and public opinion against slavery.

Finally, on February 23, 1807, Parliament overwhelmingly approved a measure ending the slave trade in the empire.

This stunning achievement would have secured his place in history, but Wilberforce had not yet reached his ultimate goal of ending the practice, not just the trade, of slavery.

With his first victory taking 18 years to achieve, Wilberforce labored another 26 years, even after leaving Parliament, to end slavery. The prize was finally grasped on July 26, 1833, when Britain became the first major power to completely abolish the trade and practice of slavery everywhere in its dominion. Acclaimed as a victorious hero, Wilberforce died three days later.

We can transform policy with the power of ideas, optimism, entrepreneurship and perseverance. We must keep our eye on the prize – not better government, but less of it – and work with a persistence and passion worthy of our cause.

(3) A new friend then, Dr. Chatib "Dede" Basri, also presented a paper, I like the two quotes he used for his opening slides:

“People who intend only to seek their own benefit are led by invisible hand to serve public interest which was no part of their intention."

--Adam Smith


"People who intend only to serve public interest are led by invisible hand to serve private interest which was no part of their intention"

--Milton Friedman

Proof of Smith's statement are aplenty: the rice farmers, the carinderia owners, tiangge-tiangge operators, millions of other entrepreneurs and professionals...

Proof of Friedman's statement are also aplenty: hundreds of them in Malacanang, the Senate, House of Reps; thousands actually if you include many LGU leaders, the guys at the BIR, BOC, DPWH, DND, ...

A friend, Bruce Hall, made a commentary to my brief note above, he wrote:

I don't think that it is just the corrupt officials that are a problem. Even those who are uncorrupted end up serving private interests because there is no way they can ever see the entire big picture. Everyone has blinders on, has a particular perspective on events, that by necessity cuts out other people and perspective.


Do you remember the blackout that happened last year in huge chunks of the Northeast and Midwest US? All the coverage was about NYC while Ohio was basically ignored. Why? Because the journalists all live in NYC.


In the US a few years back, some Republican leaders tried to end funding for the Public Broadcasting System (the non-profit US network partially funded by government). It did not go very far largely because the Congressmenan and Senators were of the socio-economic group that watched PBS and therefore thought it valuable. Their votes on keeping the funding wasn't against the public spirit. They thought that EVERYONE supported PBS funding because EVERYONE that they knew did. Since they found PBS valuable, it must be objectively valuable to the entire public.


There are numerous other cases where good-hearted people make bad decisions because they take their necesarily limited particular experience and universalize it.


This is the problem with large bureaucracies, including large governments -- no matter how honest and dedicated the public servants, they are going to be biased towards their lifestyle and their lifestyle choices. At the very least, the first problems that they are going to address will be the problems they see in their daily lives. Problems where out in the boondocks will be unseen and unaddressed.

Thanks Bruce.

* See also:
Pol. Ideology 6: Quotes from Adam Smith, February 04, 2007
Pol. Ideology 7: Individualism, Entitlement and Freedom, April 30, 2007