Lion Rock 4: Leftism and Populism by Intellectuals

* This is my article yesterday in the online magazine,
http://thelobbyist.biz/index.php/perspectives/less-government/item/120-big-government-and-populism
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Hong Kong – The Reading Club Salon on Populism ended today at the Harbour Plaza Resort City, a hotel in the Northern Territories of this big free trade city. It was sponsored by Hong Kong’s first and only free market think tank, the Lion Rock Institute (LRI), and I was one of the few foreign participants that they have invited.

There were two sessions held yesterday, on Anti-Capitalism Mentality and on Fanaticism. Among the books that we read in preparation for this roundtable discussion was Ludwig von Mises, The Anti-Capitalistic Mentality (1956). Mises noted,  

“Wealth can be acquired only by serving the consumers. The capitalists lose their funds as soon as they fail to invest them in those lines in which they satisfy best the demands of the public. In a daily repeated plebiscite in which every penny gives a right to vote, the consumers determine who should own and run the plants, shops and farms.

This is what the modern concept of freedom means. Every adult is free to fashion his life according to his own plans. He is not forced to live according to the plan of a planning authority enforcing its unique plan by the police, i.e., the social apparatus of compulsion and coercion.”

Google, Facebook, youtube, twitter and many other social media, websites and blogs that have greatly improved the people’s communication with one another across the globe, are all products of capitalism, innovation and competition. Yet we hear so many anti-capitalist or even outright socialist sentiments and public policy proposals.

Milton Friedman in his short essay, Business Community’s Suicidal Impulse (1998) observed,

“There’s a common misconception that people who are in favor of a free market are also in favor of everything that big business does. Nothing could be further from the truth.

As a believer in the pursuit of self-interest in a competitive capitalist system, I can’t blame a businessman who goes to Washington and tries to get special privileges for his company. He has been hired by the stockholders to make as much money for them as he can within the rules of the game. And if the rules of the game are that you go to Washington to get a special privilege, I can’t blame him for doing that. Blame the rest of us for being so foolish as to let him get away with it.”

During the free wheeling discussion moderated by LRI’s co-founder Simon Lee, I expressed that many intellectuals display intolerance when they advocate more government regulations and coercion to address (a) inequality and huge diversity of income and asset ownership among the people, and (b) wide spontaneity of action by the people. The regulators and many intellectuals want things to be relatively anticipated and foreseen, ordered and regulated, so they are suspicious of high social spontaneity. One  consolation though, is that their intolerance does not call for violence like the various riots and wars that we see in other countries.

The new fanaticism in the world, I shared with fellow participants, is freedom of expression. In the Philippines for instance, many groups want the government to provide just almost anything to the poor in the name of welfare, including pills and condoms. The debate on the Reproductive Health (RH) bill in Congress was relatively intense when out of nowhere, there was a cybercrime prevention law that was signed by the President just two months ago. The reaction by the netizens was widespread and spontaneous. A group of hackers attacked several government websites and defaced them. Several groups went to the Supreme Court to strike down the law as unconstitutional. Facebook and other social media was flooded by angry reactions by millions of users. And several groups went to Congress and the SC to rally and lobby for the new law’s revision or abolition.

This law in effect, has made many people to suddenly hate BIG and intrusive government. It was a miscalculation by the state that  has awaken millions of Filipino here and abroad, to dislike big government.

This morning, two sessions were discussed, on The New Left (NL) and on Propaganda. The NL was a 60s to 70s brand of activism that was generally statist and also advocated more government intervention in more sectors of society. But unlike the old left or communist movement, the NL did not call for state ownership of the means production or highlighted class struggle.

An NL thinker, Saul Alinsky, wrote in his book Rules for Radicals (1971),

“Today's generation is desperately trying to make some sense out of their lives and out of the world. Most of them are products of the middle class. They have rejected their materialistic backgrounds, the goal of a well-paid job, suburban home, automobile, country club membership… . They have had it. They watched it lead their parents to tranquilizers, alcohol, long-term-endurance marriages, or divorces … They have seen the almost unbelievable idiocy of our political leadership—in the past political leaders, ranging from the mayors to governors to the White House, were regarded with respect and almost reverence; today they are viewed with contempt. This negativism now extends to all institutions, from the police and the courts to "the system" itself. We are living in a world of mass media which daily exposes society's innate hypocrisy, its contradictions and the apparent failure of almost every facet of our social and political life.”

A participant from Beijing noted how the China government has used the mainstream media in announcing that state operated enterprises (SOEs) have paid more taxes than private enterprises, with no hard studies to cite, only a quote from one communist party official. And this propaganda news  was repeated in many if not all media outlets in China.

I added that twitter, along with facebook, youtube, blogger, other social networking, are banned in China. But there is a twitter-like microblogging site, Sina, a private enterprise that also attracts millions of users. Sina though, has about 1,000 personnel to monitor postings and take out those that can be threatening to the communist party in power. In addition, the China communist government has about 10,000 cyber spies and police as double “firewall” to Sina’s self-censorship.

Populism and the Big Government that accompanies it, is a threat to expanding individual freedom. People can be lured into believing that they will be entitled to various rights, subsidies and welfare, even if they contribute little or nothing to such huge public spending. An entitlement mentality can replace hard work mentality and the government and its huge phalanx of politicians and bureaucracies will tax and coerce more productive people just to pander populism. This is not the way to develop an economy and to raise responsible citizens. 

(Photos below, thanks to Wilson Li of LRI)

And here's what I wrote last Friday, November 02, 2012:

Tomorrow, I am going to Hong Kong to participate in the "Reading Club Salon" sponsored by the Lion Rock Institute. It's a read-read-read thing before going to Hong Kong, then listen-analyze-speak at the venue, the Harbour Plaza Resort City, a big hotel in the Northern Territories.

Pol. Ideology 27: Why do Many Intellectuals Oppose Capitalism?

I have written two short papers in the past on this question, "Why do Many Intellectuals Oppose Capitalism?" I will post them here first before jotting my current thoughts on the subject.

(1) November 25, 2009

My former Prof. in UP about 26 years ago, basic philosophy subject, also a friend in facebook, Dr. Zosimo Lee, posted in his wall status that some academic leaders are shallow and mediocre.

I also notice that, a number of academics have shallow research work, often driven by funding rackets. This reminds me of the article, "why do intellectuals oppose capitalism?" by Robert Nozick. I wrote a discussion paper about it, along with 2 other articles, by Karl Popper and Isabel Paterson. It's available at www.minimalgovernment.net, entitled "Intellectuals, capitalism, self-enslavement and limits to humanitarianism."

Sir Zos Lee noted that while Nozick's concept of the State is interesting, the concept of welfare state is stronger because "market forces alone cannot bring about public good."

I argued that this is not true. If we notice, there is NOT a single government restaurant, govt. carinderia, govt. fastfood chain, govt. supermarket -- and yet people are eating. Compare that in education and healthcare, where there are thousands of govt. schools, govt. hospitals and rural health units, drug price control, govt. health insurance, etc., and problems seem to be expanding. Where there is govt. intervention and heavy regulation, distortions and corruption happen heavily too.

A lady friend of Sir Zos argued that the reason why fastfood chains make big profit is because the Philippine government subsidizes rice imports from a country with strong state, Vietnam. And bottled water, now a commercial commodity.

Her statements are wrong. One, the Philippine government does not subsidize rice imports. It taxes rice imports. Two, I do not suggest totally removing subsidies to public health care, even public education. I believe there is role for govt. health care for pediatric and infectious diseases (malaria, dengue, etc.). Three, the reason why food business survives even with zero govt. resto or govt. carinderia, is capitalist competition. If people think jollibbee meals are expensive, then there are cheap carinderia food alternatives. And four, people have the option to buy bottled water or not, there is zero coercion there, unlike taxes and govt subsidies to favored firms and sectors which are pure coercion.

The lady further argued that the "reason why free markets alone is not enough to bring about a just, fair and FREE society is because enterprises' purpose for being is PROFIT alone. Business will downsize, cut costs, layoff workers, move from pt a to b to c with only one goal in mind: to keep cost down and increase the bottomline."

Yes, profit is good. Facebook will not do this free online networking if it does not make a profit. Mcdo and Chowking and Aling Caringderia won't put up their foodshop if they do not make profit. Because they desire profit, they hire workers, they produce and sell food, they open up their store 24 hrs a day, etc.

The opposite of capitalism and profit motive is socialism. The opposite of deregulation is monopolism and heavy government regulation. Giving politicians and government bureaucrats heavy power to say who can do business and who cannot, and how they should do their business, is inviting abuse and corruption.

Meanwhile, yahoo, google and facebook capitalism are among the best things that capitalism and capitalist competition has brought to mankind.


(2) March 08, 2011


Ok, let us divide the intellectuals into two broad categories: the numbersmith and the wordsmith. The former would include engineers, natural scientists, inventors, and related fields. The latter would include those in media, academe (especially in the economics and social sciences), NGOs, government, foreign aid and multilateral bodies, and related fields. 

Prof. Robert Nozick made that category. He also wrote the essay, Why do intellectuals oppose capitalism?, it's 7 pages long, plus I made a 1-page intro and summary of his essay. 

Prof. Nozick is saying that most wordsmith intellectuals, in contrast to numbersmith intellectuals, are opposed to capitalism for the following reasons.

One, intellectuals expect that they are the most highly valued people in society, they expect they are entitled to great rewards. But a capitalist society does not honor its intellectuals this way, not distribution "to each according to his merit or value." The market distributes to those who satisfy the perceived market-expressed demands of others, and intellectuals resent this.

Two, the schools impressed upon the intellectuals that they are better than the rest, so they deserve higher rewards and entitlement based on intellectual merit. The wider market society, however, taught a different lesson.

Three, there is central authority by the teachers who distribute the relevant rewards, in contrast to decentralized and spontaneous distribution of rewards by peers and schoolmates in the schoolyards outside the classroom. Those successful by the norms of a school system resent a society which does not grant the same success.

Four, the school system imparts and rewards only some skills relevant to later
success so its reward system will differ from that of the wider society. Some, in
moving to the wider society, will experience downward social mobility and its attendant consequences.

It's a good philosophical and sociological analysis of the wordsmith intellectuals around the world. It is also not difficult to find proof that most of such intellectuals indeed hate unbridled, laissez faire capitalism. The guys who populate the UN and the various foreign aid and/or multilateral bodies like the IMF, WB, WTO, ADB, OECD, etc., those with PhDs, MS, etc., favor different types of government regulations, intervention and taxation of capitalism and the capitalist enterprises.

So perhaps it has something to do with vested or personal interests of many wordsmith intellectuals, to disallow laissez faire type of capitalism to prosper. There are a dozen justifications and alibi to cite why capitalism should be over-regulated by governments: "save the poor", "save the world economy", "save the planet", etc.

By granting themselves and the political class lots of perks and huge tax-free earnings, as well as the political force and coercion to regulate anything and everything that they wish to regulate, it does not serve the vested interests of many intellectuals to allow real free market economy to prosper and blossom.

(3) March 01, 2012

Capitalism and the free market economy leads to a rather weird situation of "spontaneous order". Spontaneity of action by the various players and actors in society -- consumers and producers, buyers and sellers, entrepreneurs and workers, industrious and the lazy, men and women, young and old -- and absence of a huge and monster body that does central planning for the rest of society makes the market creative and innovative. Business Innovation and creativity compel people to be on their toes all the time, to avoid complacency and mediocrity. 


The guys next door or in a nearby city are going to produce a new gadget, a new appliance, a new seed variety, a new software, etc., that will revolutionize existing technologies and processes, and the public's attention will move towards them. In each process and stage of innovation, some upheaval and disorder is created as the corporate status quo is always challenged if not changed and overhauled. 


Such spontaneity creates its own social and economic order. People are used to seeing or hearing new products, new services, new crops, new songs, new books, being introduced to them. If they don't see such, they seek them somewhere else. The search for something new, something more useful, more efficient, more life-saving, more job-creating, that's the social order that spontaneity and stiff capitalist competition provides.

Planners and bleeding heart activists who dislike inequality and economic upheavals hate this. That is why they enter government (local and national, executive-legislative-judiciary) and inter-governmental or multilateral institutions. Various forms of regulations, restrictions and taxation were invented to limit and reduce more spontaneity, more diversity and more social inequality.


The anti-spontaneity, anti-competitive capitalism forces are not limited to government bodies alone. They are also often found in most civil society organizations (CSOs) like NGOs, people's organizations (POs) and associations, and mainstream media. The academe and universities, both government and private, especially in the colleges or departments of social sciences, communications, economics and law, are more often than not, the nests of this type of intellectuals.


I am not saying that they are "anti-intellectual", they are not. Since their main business is the production and reproduction of ideas, then they can be considered as part of the "intellectual class." 


My beef is that the kind of ideas that they advocate and propagate -- to restrict more business spontaneity and social diversity, to force and coerce homogeneity and uniformity in society, to have social engineering and forcibly redistribute income and assets to have more social equality -- ultimately leads to restriction of individual freedom. 


The collective, the nation, as administered, centrally planned and heavily regulated by the government and its multilateral partners, must have precedence over the individual. Thus, an individual's income cannot be his and his alone. The collective and the nation through the government, must confiscate a portion of it, usually from 15 to 50 percent. Whatever is left of the after-tax income, those that are set aside for household consumption or savings or investments, the collective via the government must get additional tax and fees. All to "ensure" social harmony and uniformity.

Where coercion has become the rule rather than the exception, most of the stated social and economic goals to promote social and economic equality, to expand rights and entitlements, are often missed and violated, if not in the short-term, over the long-term. 


We need to develop a new type of intellectual class that will continuously challenge the dominant and mainstream type outlined above. More than the generalized goals of "good governance", "anti-corruption", "social accountability" and related concepts that will further justify big and expansive governments and coercion, we need to push forward the idea that respecting individual freedom -- like the freedom to be industrious or lazy, the freedom to be responsible or irresponsible -- is an end in itself, subject to limitations that such freedom should not be used to harm other people. One can be rich, be very very rich, via entrepreneurship and innovation, not via robbery and stealing, whether in the private or government sector.

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See also:
Pol, Ideology 24: Democratism and Coercion, December 16, 2011

Pol. Ideology 25: On Governance and Rule of Law, February 20, 2012 
Pol. Ideology 26: Socialists in a Liberal Government, February 21, 2012

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).
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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