Pilipinas Forum 15: Debate on Edsa 2

Enjoy this 13-pages long exchanges and debate among members of pilipinasforum yahoogroups about the "Edsa 2 People Power Revolution" that occurred in January 2001. Being the co-founder and co-moderator of PF, also editor of the PF exchanges that I submitted to www.inq7.net (that site is now gone), I really learned a lot from the almost daily exchange of ideas from many members of the list then.
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Debate on Edsa 2

February 2001

Edsa II was the successful transfer of presidential power from one section of the elite to another by the direct political action of a broad section of the population. Edsa II was by no means radical or revolutionary. Like Edsa I, Edsa II never threatened to overhaul the fundamental socio-economic hierarchies of Philippine society and never threatened to remove control of the Philippine state from the same dominant social strata.

Still Edsa II was a political moment with profound historical significance. What Edsa II evicted was a presidency supported by political dinosaurs, schooled in the comfortable cradle of martial law, accustomed to an uninformed, powerless and malleable citizenry, and given to governance which allowed a robust renaissance of the cronyism, patronage, and demagoguery. a presidency which failed to grasp the nature of its own obsolescence, and which continued to dabble in desperate conspiracies and maneuverings even as the forces of modernization were already literally closing in on it.

-- Raffy Aquino

My reservations about the world "people" and "broad section of the population" is that it is liberally construed to mean each and every Filipino (or even a majority of Filipinos). without being determined by Constitutionally sanctioned means to determine the world "people" (like referendum and general elections). I believe the danger lies in reducing representative democracy to participants in Edsa 2 and in other urban areas.

The logic behind the impeachment court is that since the Constitution will be removing a nationally-elected person out of his office, it should take a nationally-elected body to do it, and this is the reason why the Lower House cannot act as judges before the court, the Senate was the duly constituted authority to handle such cases. But the "people" went out of the streets and said that the Senate cannot do its job. How are we sure that Edsa 2 was the "sovereignty"? We thought it was, but what if it wasn't?

Institutions become weak when they fail to serve their purpose... in the crisis, their purpose was to determine the guilt of the president according to the articles of impeachment... and they were not able to execute this, ergo, institutional failure. The right to assembly is a Constitutional right, but it didn't say that we remove and replace Presidents with assemblies... so the senate compromised the process... okay, so who determines the "truth" now?

-- Poch Bermudez

As for the perception of the international community, I think, with the exception of a few, they have a positive perception with the installation of a new president. Why would representatives of different countries express their support to the administration of GMArroyo if they do not see the legitimacy of the new administration?

-- Jojo delos Reyes

They say history is written by the victors. Gloria Macapagal is in power, and I have no doubt that the best legal minds will be harnessed to give her Presidency every cloak of legitimacy possible. But here is the thing, if something were truly right is it so because of legal statutes and precedents. Is it so because of the ruling of one judge or even a hundred judges - or is something right because it is right, it is self-evident to any and the virtue of the act speaks for itself?

-- Victor Limlingan Jr.

What we have is only a partial victory, victory in a battle -- but not yet the war.

Already, some players of EDSA are acting like spoiled brats or deprived street kids grabbing for the goodies. Too much expectations on gov't give politicians and bureaucrats the reason to raise taxes, transform them into "development funds", line their pockets and just have the left-overs and crumbs trickle down to the masses -- whose leaders, in turn, cry about graft and corruption.

-- Roy Picart

Pilipinas Forum 14: Math, Infinity and Limit

Here is another mind-twisting thread in pilipinasforum yahoogroups made in early December 2001. There was no political discourse here. And that's my point in posting these exchanges in this blog: We need little or no politics (and government) if we wish to expand our individual imagination and knowledge of math, logic and their applications. So, enjoy the 10-pages long exchanges on the subject.

Related articles in this blog are (1) An ever-expanding universe, June 25, 2011. It's about a lecture by an American cosmologist in UP about the "Accelerated History of the Universe". Also, (2) Pilipinas Forum 12: Origin of Zero, Nothingness, Big Bang..., September 25, 2011
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I was able to meet an old friend and a new friend - both Math professors in UP. My old friend, Fidel Nemenzo got his PhD in Sophia U. in Japan, and his specialization is "number theory", reputedly the purest of all math subjects.

Fidel's friend, Ernie, is really fantastic, academically i.e.: Monbusho scholar (like Fidel), finished MS and PhD Math in 5 years with "A" grades equivalent. At Sohia U, he was among the "wonder kids" by solving difficult math problems whle his Japanese classmates could only shake their heads. Undergrad, he finished BS Math in UP - Summa cum laude, in 3 years! High school, he came from Phil. Science HS; elem. he came from an obscure elem. school in an obscure town in Iloilo province. They're so poor that their house has no floor, that PSHS has to pay for his bus to Iloilo, his plane fare to manila. Yet this guy has no self-pity, nor hatred of the rich. He doesn't even see himself joining the corporate world, just a plain academic for the rest of his career. At 27, he's among the youngest professors in UP Math dept.

Fidel is moving to his friend's house, that of Mark Encarnacion, who took a temporary leave from UP for some stints in the US. Mark is another interesting kid. He got a PhD in "Computer Algebra" (!) from an Austrian university. The last time I talked to Mark in UP, about 4 years ago, he said he's the "only person in this country" who has that degree. Mark's father is UPSE's long-time dean, our dean that time, Dr. Jose Encarnacion. The Dean passed away about 3 years ago; his major works are often published in foreign academic journals, enough to be nominated for a possible Nobel prize in Economics.

OK, why am I sharing this? To show that there are such wonderful people in this country but our media and political and business leaders don't seem to notice. Every year we know who are the topnotchers in the bar exams, who are the valedictorians and salutatorians of the PMA, courtesy of the front page stories in our broadsheets and tabloids. But never has it occurred as far as I can remember, that Phil. broadsheets have given front page treatment to returning Filipino scientist or engineer or mathematician with distinguished PhD degree or astonishing research abroad. Which reflects the values and biases of Philippine media: future Filipino politicians and generals are hoorraayy! Future Filipino Einsteins are nobodies.

Of course I hope I'm wrong in this impression.

-- Nonoy Oplas

Inspired by Nonoy's post a few days back on our very own mathematicians in PilipinasForum, I decided to pick up a book, for leisurely reading, entitled, "A Tour of the Calculus" by David Berlinski. I wanted to be reminded as to why I fell in love with Math at one time in my life...

Math & life... the math of life...

From the book, "Some things were Greek to the Greeks. In the fifth century B.C., Zeno the Eleatic argued that a man could never cross a room to bump his nose into the wall...in order to reach the wall he would have first to cross half the room and then half the remaining distance again, and then half the distance that yet remains...this process...can always be continued and can never be ended..."

In the elevator, I always bump into the chief of another investment bank whose offices are in the same building as ours. He once asked me, "Gina, when do you think we can see the light at the end of the tunnel? You know, that one which is not from another train?" I answered, "Tomorrow!". Everytime I see him, we would look and smile at each other and we would, in perfect duet (seemingly practiced), say, "Tomorrow!"

In another instance, an analyst queried me, "Have we reached the bottom yet? How low can the market get?" Armed with calculus, I said, "We can never reach the bottom. The bottom will be forever unknown."

"...The plain fact is that we are capable of compressing those infinite steps..." and actually bump our noses into the wall. The truth is, for some businesses in the country today, tomorrow may not come. And I, a Trekkie, will uncharacteristically pass, on this voyage of discovery to the bottom of the Philippine markets. So much for infinity and continuity and the harsh concept of the limit.*

In case you have not noticed yet :-), this post has nothing to do with serious Math. I am just having fun with the concepts. May I end with this:

"The integral enables you
To do what you need not do. [ :-) ]
The theorem that will make this plain
Is one designed to spare you pain..."

- Mathematicians' Doggerel (quoted from the same book; the smiley, mine)

-- Gina L.

Econ for statists 4: Supply curve of a monopolist

(I posted this last January this year, 3-parts short series. Now merged them in a single paper)

A monopolist does not have the usual upward-sloping supply curve as a perfectily competitive firm has. It's profit-maximizing supply curve is one point on the demand curve where its MR=MC=Q*. It does not pick just "any" point on the demand curve at will. It would depend on the monopolist's costs, etc.

While it is true that the MC curve is also the monopolist's supply curve, it will not produce at just any point of that curve, otherwise it will not be making or maximizing profit. A monopolist chooses that single point where MC meets MR, not above or below the MR curve.

Application: Tricycle monopoly of certain routes.

Tricycles are given monopoly routes on certain areas by the LGUs. Thus, jeepeneys, fx or buses cannot enter their route and pose any competition with them. The tricycle drivers set their fares, say P30 to P40 per trip depending on distance and the number of passengers. They cannot charge beyond P40 per trip, otherwise passengers would take the taxi and enjoy air-conditioned, comfortable ride than their bumpy, smoke-belcher and possibly dilapidated tricycles.

So a monopolist in this case still provides concrete service to the public, and they have to play with the purchasing power of the passengers, as well as the presence of the only (more expensive) competitor, the taxi.

A friend commented, "saying that a monopolist's supply curve is just a point (dot) on the demand curve is rather silly."

I think he is wrong. I have earlier explicitly and categorically qualified that it's the behavior of a "profit maximizing" monopolist to seek only ONE point on the demand curve, and only ONE point on the MC curve too, to maximize profit.

To help us on this, check this graph, from Cliffs Notes. To simplify the discussion, ignore the average total cost (ATC) curve, just look at the MR, MC and demand curves.

A monopolist can supply at output 1, 2, ... 15.

If it chooses to produce at outputs 1 or 2, it will be a "some profit making" monopolist as MR > MC.

If it chooses to produce at outputs 4, 5,... 15, it will be a "loss making" monopolist as MC > MR.

If it chooses to produce only at output 3, then it will be a "profit-maximizing" monopolist as MR = MC = Q* where Q3 = 3 units in that graph.

So to say that "a profit-maximizing monopolist chooses only one point on the demand curve" is correct. Now if a monopolist that chooses to supply at various points of the demand curve other than Q* = 3 and still hopes to maximize profit, that to me is silly.


Guest post by Joey Sescon

Joey is my friend and classmate from UPSE's Program in Development Economics (PDE) SY 1997-98.

1. Before anything else, a firm's Revenue/Total Revenue (TR) = Price x Output, assuming all output produced was sold. Marginal Revenue (MR) is the additional revenue by each additional unit of output sold. MR is decreasing with each additional unit of output sold because demand is downward sloping, meaning price is lowered with each additional output sold, although it brings in additional revenue = 1 x Price.

Complication: Take note that the demand curve above is the total demand curve by all consumers in the market, as if one firm's output affects the price by lowering it with every additional output sold. But usually, the firm is a price taker just like other firms, then its demand curve is flat, equal to Price which is also its MR, which makes MR flat and not decreasing.

Now you know why most people hate microeconomics, there is always a confusing display of complex assumptions.

In Nonoy's first post 2nd paragraph regarding downward sloping Marginal Revenue (MR) curve, he pointed out that each additional input (capital/labor) brings in declining additional revenue. This is a mistake, but totally understandable maybe because these 'boring technical details' are easily forgotten. Additional input is additional cost thus increasing cost and reduces Profit (not revenue) = TR-TC. Maybe he meant additional or increasing input such as labor and capital will bring diminishing return (too many cooks in a fixed kitchen spoil the broth) in production or decreasing marginal product (not marginal revenue). With diminishing return (decreasing MP) so MC increases.

2. Now regarding Supply Curves: A firm's Total Cost (TC) is total cost of inputs (usually wage + rental/opportunity cost of capital). Marginal Cost is the additional cost for each additional output produced. The Supply Curve of one Firm is the MC curve or the portion of the MC curve above where it is cut by the Average Cost (firm is not willing to sell at a price (point in MC) that is below AC). Why is it the MC (also its) supply curve? Because the firm is willing to produce additional supply of output with a price (a point in MC) that reflects the additional cost with each additional unit produced.

Now, if we will add all MCs of all firms producing a product then it is the total supply curve that will meet total demand curve that will 'fixed' the price at some point. But what if the there is only one firm or one MC? Then we have a monopolist who will face singly the total demand curve with just its own lone MC. But rather than rely just on its MC in supplying, it is wise to look at the total demand first and decide what amount to produce, anyway no other firm exists.

So both of them are right: the Monopolist looks for one point in the demand curve seeking both the equivalent output and price to produce and sell. The way to do this is to equate MC = MR because it is at this point where profit is maximized. Intuitively, it is where the additional cost of producing additional output is equal to the additional revenue of that additional output sold. Wisely, you stop producing or selling additional output (you are monopolist remember) when these two equalize.

Regarding Nonoy's statement that a monopolist supply curve is also a point in the MC. Well yes, because a monopolist seeks the point in the demand curve by tracing MC = MR. But oddly anyone can point also that it is also a point at MR. So it is actually beside the point. The correct point to clarify is that there is no such thing as supply curve for a monopolist because it does not rely on his firm's MC (the only MC which is supposedly the supply curve) because his output decision will rely also on the market demand (shape) curve. A point on the demand curve that shifts from time to time depending on the factors of demand is hardly a "supply curve or a supply point", it is just a point where MR = MC.

3. On the third paragraph of Part 2, "If it chooses to produce at outputs 4, 5,... 15, it will be a "loss making" monopolist as MC > MR."

It is a mistake to say that a monopolist is "loss making" if it produces at MC > MR because it is still making profit as long as Price > Average Cost. Remember, marginal means we are referring to the 'last' additional output produce and sold, not the entire output produced and sold, therefore 'marginals' do not decide on profit loss and profit gain.

It is just not as big as the profit when MR = MC, but nonetheless it is not losing. Just a play of words like it is 'losing profits' relative to the maximum that it can make, but nevertheless it is still making a profit but not absolutely losing where cost is more than revenue or negative profits.