Pol. Ideology 20: Liberalism and the Squatters

(This is my article today in thelobbyist.biz with original title, Squatters, land reform and liberalism)

Squatting or settling illegally on land that people do not own or lease, is violation of private property rights. Land reform and forced land redistribution without timetable, is another violation of private property rights. Liberalism is the philosophy that focuses on individual liberty, rule of law and private property rights.

Early last week, there was a news report, Aquino plans massive relocation of squatters. It reported that:

President Beigno Aquino III said late Saturday more than half a million squatter families in Metro Manila will be relocated and receive two hectares of farm land each under his administration’s program on illegal settlers.

He said the government had identified some 1.5 million hectares of farm land that could be distributed to an initial 560,000 squatter families in Metro Manila in a bid to decongest the capital and improve agricultural production nationwide.



 “The Department of Agriculture and the Department of Environment inventory shows we can lend, lease or give two hectares of land per indigent family provided they cultivate agricultural crops, develop, and earn from the land they will live on.

“If they fail to stick to these conditions, the land will be taken from them.”

If this plan will push through, there are several negative implications.

One, it pays to become an illegal settler. By living on other people’s private land, you will be rewarded with land up to two hectares that can become yours. Even ordinary employees cannot afford to buy such huge area of land.

Two, for agribusinessmen and women, the threat of forced land redistribution with no timetable will remain. From former President Cory Aquino’s CARP law of 1998 that was supposed to end in 1998, it was extended to 2008, and further extended to 2013. Looks like it will be re-extended to 2018, or longer. The number of squatters nationwide is rising, not declining. So more private lands will be subjected to forced land redistribution in the next few years to be given to the squatters.

Three, not all squatters are former farmers or have the heart in farming. What can happen is that upon getting the land title or similar proof of ownership or lease, some squatter beneficiaries can sell or transfer the right to use such land to other people, get the money and squat again in other cities, then hope that the existing and the next administrations will give them new subsidies and entitlements.

Four, the spend and spend, borrow and borrow and later, tax and tax policy will continue. Giving away land for free or at highly subsidized price, then provision of various farm and marketing support to land beneficiaries, is a costly and expensive program.

And five, liberalism and (classic) liberal philosophy that are supposed to be implemented by the President and his team who come from the Liberty Party, will be sidelined further, if not forgotten.

One of the big burdens and baggage of the Philippine economy and society is the lack of strict promulgation of the rule of law, of securing private property rights like land. Many people and businessmen will be hesitant to develop certain lands into long-term agribusiness projects because the “land reform with no timetable” will be haunting them for several years more to come.

Liberalism is supposed to be the main philosophy and guiding principle by the current administration that will help shape public policy. But as things unfold, real liberalism is being pushed to the margins while statism and near-socialist policies take center stage.

Let us hope that there will be awakening in the minds of key LP leaders. That LP stands for liberalism and individual liberty, not statism or socialism.
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On "No taxes, No Government"


This is among the common misconception, honest or deliberate. that some people, academics and consultants, NGO leaders included, would portray someone who advocates minimal and limited government. Personally, I have NEVER advocated that, and I do not believe in anarchy or zero government.

Government is necessary, I wrote several times, on certain functions. I believe in BIG government -- to run after killers, murderers, thieves, rapists, terrorists, bombers, kidnappers, carnappers, land-grabbers, other criminals, especially the organized and well-armed gangs.

Thus, we need taxes to finance government to perform such function, to promulgate the rule of law, to protect private property rights, and citizens' right to life against aggression. 


But we need no taxes for government to over-regulate entrepreneurship and job creation. We need no taxes to create and expand various bureaucracies that do nothing but make the life of job creators more difficult and more miserable.

"No taxes, no government, no subsidies" is a classic paranoid reply by many people who do not understand or appreciate the philosophy of more personal responsibility, more individual freedom, limited government and free markets.

Someone redefined the excise tax as a tax on goods where "the source is scarce or expensive". This is wrong. If this is correct, then the government should also slap medicines, medical equipment, construction and housing materials, others with excise tax. These are "necessary product/s, but we do not produce it out of thin air."
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See also
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

Pol. Ideology 19: What is the Role of Government?, March 08, 2011

Inequality 5: Comments to Why Inequality is Good

My earlier paper, Why inequality is good as originally posted in www.thelobbyist.biz , was reposted by some friends. At least two in facebook, by friends Ronald White and Joshua Lipana. It was also posted by the New Asia Republic (Singapore-based online paper) and as of this writing, attracted 10 comments there including my own comments.

Let me enumerate again my arguments “Why inequality is good”.

1. Because it respects and rewards hard work, efficiency and ambition.

2. There are people who have little or zero ambition in life. To drink and party everyday, to rely on some outside support for their continued existence are their joys and complacency.

3. Between the two, inequality is sure to happen in the short term, and such inequality will widen over the long term.

4. “The rapid economic advance that we have come to expect seems in a large measure to be the result of this inequality and to be impossible without it.”

5. Government welfare and entitlement programs that are meant to reduce inequality and improve equality among the people are mostly unproductive.

6. “All obstacles to the rise of some are, in the long run, obstacles to the rise of all… To prevent progress at the top would soon prevent it all the way down.”

7. Government policies of institutionalizing forced equality penalizes hard work, performance and being ambitious.

8. When the poor and initially less ambitious see that there are less entitlements coming, they will become more self-driven and independent, and society can progress faster.

(Note: #s 4 and 6 above are quotes from Friedrich Hayek)

Here are two long comments:

(1) from Excuse me?? -- If the author’s polemic holds true, then the elites of society should let their children fend for themselves in the third world, is this not the best way to learn??

Showing Compassion to our fellow men “are incentives to remain poor” really?

Please read, Milton Friedman and the Social Responsibility of Businesss. 

Look what pure capitalism and minimal Gov did to Chile and Argentina in the 70/80s?

This is Darwinian economics nightmare come to life
http://www.thedailybanter.com/tdb/latin-america/

And the naughty title “Why inequality is good”. Try telling it to the 3 billion human beings without clean water!

I replied to him/her that the elites of society, the middle class of society, work hard to give their kids a good future. They don’t over-drink, over-smoke, over-fight, have horrible life and leave their kids to fend for themselves. The desire to give their kids a good future is an incentive for them to excel, to work long hours, to be efficient.

Look at N. Korea, Myanmar, Zimbabwe, Congo, etc. They want to have an equal society, they got it. People are equal, equally poor, except the top officials of the Communist Party and the dictatorial governments. The pursuit of forced equality created unintended, totally opposite results.

Here is a much longer comment.

(2) from Alex Ang -- The common citizens in Communist and dictatorial governments are probably as you claim, “equally poor”. However they are certainly not politically equal to their “masters”. The inequality is thus a result of political structure coupled with entrenched corruption within the economy.

Furthermore, your analogy of a Communist country as an equal but failed society falls far from the argument for inequality. Infact Ludwig Von Mises term the issue as a “calculation problem”. The problem with Communism’s planned economy does not lie in the advocation of equality, but the ineptness of central planners to rationally allocate resources when compared to the price mechanism.

In your essay, you claim that a welfare state promotes a more equal society but leads to sloth among its dependents. However you use a dictatorial government as an example in your comment. It is a general fact that dictatorial countries does not have a coherent welfare system- it is a cause of the poverty you mentioned earlier among citizens. Here is the point where logic contradicts: if dictatorial governments does not advocate welfare for its citizens, wouldn’t the society be better off as your essay argues? Why are many there so many poor counries with dictatotrial rule then? In a word of fairness, it could be because they implemented a central planning system along side a lack of welfare. But suely the lack of welfare will have spurred its citizens to work and produce more illustriously- as your logic claims – leading to a much higher overall level of GDP?

Although Austrian and Chicago schools tirelessly advocate the free market, they forget one simple fact: free markets never exist in reality. That is why externalities and free rider problems are taught in basic economics. They act as warnings and safeguards against the seduction and captivity to beautiful and attractive theories. I am not against the free market. In fact the Austrian and Chicago ideas are good models to start with in building our understanding of how real life economics works. However when economists stop refining the models to match reality, it becomes as dangerous as it is intellectually dishonest...

We need to rethink what encompasses a “market” and model it after reality rather than to defend and propogate models as the defining solution to our economic conundrums. We need to an economics grounded in reality.

Before lambasting welfare using abstract theorem, we need to sort out a fundamental question: Are the poor really as slothful as alleged? More enquiry needs to be taken on this matter.

In order to reply to Mr. Ang's comments point-by-point, I selected five important quotes from him:

1. “The problem with Communism’s planned economy does not lie in the advocation of equality, but the ineptness of central planners to rationally allocate resources.”

2. "if dictatorial governments does not advocate welfare for its citizens, wouldn’t the society be better off as your essay argues?"

3. “so many poor countries with dictatorial rule … because they implemented a central planning system along side a lack of welfare. But surely the lack of welfare will have spurred its citizens to work and produce more…”

4. “free markets never exist in reality. That is why externalities and free rider problems are taught in basic economics.”

5. “Are the poor really as slothful as alleged? More enquiry needs to be taken on this matter.”

Here now are my counter-comments to him:

On #1. Check again ALL communist revolutions, both successful, failed and on-going. They are ALL advocating social equality , (1) like land redistribution -- confiscate the land of the rich landlords, give to the poor landless farmers. Like social or collective or communal ownership of the means of production – expropriate ownership of the rich of manufacturing plants, power plants, banks, etc., and give ownership to the workers, the farmers, the urban poor, the upland dwellers, etc.

On #2, ALL dictatorial governments advocate welfare for its citizens, at least in words and promises. The Philippines for instance, has its experience of dictatorship under the Marcos government (1965 to 1985). Within those 20 years in power, Marcos programs include (a) land reform or forced land redistribution, (b) monopolization of sugar trading, coconut trading, etc. to protect workers in the sugar and coconut industries, (c) created many new bureaucracies to provide more market regulations, more welfare to the poor, and (d) declared Martial Law, imprisoning and killing many political dissenters who criticize his programs.

On #3, The purpose of having central planning is to have central ownership by the state, central taxation by the state, central welfare and subsidy programs by the state. So ALL dictatorial and central planning governments have welfare for the poor as their main reason or alibi. The poor who usually improve their lives are those who did not depend on state welfare, but those who become micro-entrepreneurs and capitalists. Those who work in the “informal or underground” economy.

On #4, Free markets exist. ALL markets are composed of individuals – buyers and sellers, producers and consumers, rich and poor, young and old, male and female. Someone looking for a haircut for only US$1, a barber shop provides the service at such price, a market equilibrium is created where demand meets supply. Facebook, google, youtube, yahoo, etc., they all exist and thrive because people demand social networking sites, search engines, for free. They provide the services at a price demanded by the people – zero cost – and the market for social networking and search engines is created.

On #5, I did NOT say, explicitly or implicitly, in my article above that the poor are slothful. On the contrary, I did say that the lazy, the complacent and irresponsible become poor. But the poor who “become hard-working and entrepreneurial, they will become more self-driven and independent, less dependent on politicians and the state. And society can progress even faster.”
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See also:
Inequality 1: Rich Getting Richer is Good, August 29, 2009
Inequality 2: To Each According to his Needs... September 01, 2010
Inequality 3: Freedom, Free Market and Inequality, February 14, 2011
Inequality 4: Why Inequality is Good, May 10, 2011

Provincial notes 1: Negros Occidental

(Note: I wrote this in my now inactive travel blog, http:travelpinoy.blogspot.com, last August 8, 2006. The photos I just added today)

Negros Occidental is the Philippines' 3rd or 4th most populous province outside of Metro Manila. And while many of the 80 provinces in the country do not have a single city yet, Negros Occ. has 13 cities.

The province is generally flat, but 2 huge mountains can be seen from a distance, especially from a plane preparing to land in Bacolod airport -- Mt. Silay on the left and Mt. Kanlaon on the right. Mt. Silay is an old volcanic formation that has remained inactive. It has a number of summits, which are bounded by many cities in the northern part of the province – the cities of Silay, Victorias, Manapla, Cadiz and Sagay. Mt. Kanlaon on the other hand, is an active volcano and communities and villages on its foot are occasionally threatened with forced evacuations whenever the volcano is rumbling. The mountain’s summit is bounded by a number of cities and municipalities of the 2 neighboring provinces of Negros Occidental and Negros Oriental.

(Photocredits: Mt. Silay, http://www.oocities.org/siba_ph/Silay2.html; Mt. Kanlaon, http://www.travelphilippinesnow.com/tag/mount-kanlaon)

Sugarcane plantations make the 2 provinces look green from above, especially from a plane. To unfamiliar eyes, those sugarcane plantations look like the wide rice plantations in Central Luzon and Cagayan Valley regions in mainland Luzon.

Until about 3 years ago, you will seldom see idle lands. Something like if you travel 70 kms. north of Bacolod, passing by the cities of Talisay, Silay, EB Magallona, Victorias, Manapla, Cadiz, and Sagay, the chances that you will see idle lands of at least half an hectare area for every 5 kms. was about 3%. That is, for every 5,000 meters say on the right side of the road, there are about 150 meters combined length of idle lands. Now, you'll see idle lands of about 5-7% for every 5kms. This might seem a near-doubling of idle lands, but compared to other provinces, in fact to all 79 other provinces, Negros Occidental still has the most optimal land use (or the least hectarage of idle lands).

Idle lands develop through a series of land conversion: originally from forest land to sugarcane land, to vegetable farms and fruit orchard, to temporarily idle lands, later to residential or commercial lands. With the on-going construction of an international airport in Silay City (about 16 kms. north of the current airport in Bacolod), plus the emergence of high-end real estate projects developed by Ayala Land in Talisay and Silay, speculation for more real estate projects in surrounding areas is higher.

Roads from Bacolod northwards are generally in bad shape. The main culprit are the hundreds of heavy trucks that carry sugarcane to various sugar milling companies. Among the biggest are Victorias Milling Co. (VMC) in Victorias City, and Philippine-Hawaiian Sugar Milling Co. in Silay City. A six-wheeler truck could be carrying around 12 metric tons (MT) of sugarcane + truck body weight of at least 2-3 tons. Ten-wheeler trucks could be carrying around 20+ MT sugarcane + their body weight, while haulers, those 18-wheeler long trucks could carry some 30 MT+ of sugarcane + their body weight.
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Addendum: April 25, 2011

I thought of re-posting this as a follow up to my earlier article, Back to our roots.

In relation to agrarian reform program in this country, or the forced land redistribution with no timetable, the sugar plantations in Negros and a few other provinces are perhaps the clear example that medium- to large-scale farming are often more preferable to micro- or small-scale farming of one hectare or less. Land cultivation and preparation for the next cropping are done by big tractors and machines, not carabaos (water buffalo) or hand tractors, increasing the pace of planting while reducing the cost of production.

I say "land redistribution with no timetable" because while forced land reform in Taiwan, Japan and S. Korea were successfully implemented in just 1 to 3 years many decades ago, agrarian or land reform in the Philippines is now almost 40 years, counting only from former President Marcos' PD 27 or land reform law in 1972, and no definite timetable yet of when it will finally be stopped and closed.