I dug this info in pilipinas forum yahoogroups' message archive. Even professional and business groups, even big political parties, were registered as party-list of "marginalized sectors", what a crap of opportunism the party list system is. Anyway, here's the list of all accredited party-list groups in the May 2001 elections.
-----------
Accredited Political Parties/Sectoral Organizations/Coalitions for the Party-List System
(As of 28 March 2001)
Labor Sector Acronym
1) All Trade Union Congress of the Philippines ATUCP
2) All Workers Alliance Trade Unions AWATU
3) Democratic Workers Party DWP
4) One Way Printing Technical Foundation, Inc. ONEWAY PRINT
5) Partido ng Manggagawa PM
6) Pilipino Workers Party PWP
Peasant Sector
7) Alyansang Bayanihan ng mga Magsasaka Mangagawang-Bukid at Mangingisda ABA
8) Philippine Coconut Producers Federation, Inc. COCOFED
9) Federation of Land Reform Farmers of the Philippines, Inc. FLRF
10) Luzon Farmers Party BUTIL
11) National Confederation of Irrigators Association NCIA
12) National Federation of Small Coconut Farmers Organization, Inc. SCFO
Fisherfolk Sector
13) Alyansa ng mga Mamamayan at Magdaragat sa Lawa ng Laguna, Inc. ALYANSA
14) People Power Party People Power
Urban Poor Sector
15) Adhikain at Kilusan ng Ordinaryong-Tao para sa Lupa, Pabahay, Hanapbuhay At Kaunlaran
AKO
16) Alternative Approaches of Settlers Advocacy for the Holistic Advancement of the Nation Party AASAHAN
17) Kaloob-Kaisang Loob Para sa Marangal na Paninirahan KALOOB
18) National Urban Poor Assembly NUPA
19) Organisasyon Kaugnayan Nasyonal sa Pag-Unlad O.K.NAPU
21) Sandigan Maralita SM
22) Tapat Foundation, Inc. TAPAT
Indigenous Cultural Communities Sector
23) Development Foundation of the Philippines, Inc. DFP
24) Katribu-Mindanao, Inc. KAMI
25) Partido Katutubong Pilipino KATUTUBO
26) Tribal Communities Association of the Philippines, Inc. TRICAP
Elderly Sector
27) Alliance of Retired Postal Employees and Senior Citizens, Inc. ARPES
28) Senior Citizens/Elderly Sectoral Party of the Philippines ELDERLY
Handicapped Sector
29) Alyansa ng may Kapansanan sa Pilipinas AKAP
30) Pilipinong Maykapansanan Party PINOY MAY K
Women Sector
31) Abanse! Pinay ABANSE! PINAY
32) Womenpower, Inc. WPI
Youth Sector
33) Alliance for Youth Solidarity AYOS
34) Alyansa ng Nagkakaisang Kabataan ng Sambayanan para sa Kaunlaran ANAKBAYAN
35) Kabataan ng Masang Pilipino KAMPIL
36) Kilos Kabataang Pilipino KILOS
37) Philippine People's Parliament -Youth PPP-YOUTH
Veterans Sector
38) Federation of Sons & Daughters of Philippine Veterans, Inc. LAHING VETERANO
39) Veterans Care and Welfare Organization VETERANS CARE
40) Veterans Federation Party VFP
Overseas Workers Sector
41) Ang Bagong Bayani-OFW Labor Party OFW
42) Ang Lakas ng Overseas Contract Workers OCW
43) Gabay ng Manggagawang Pilipino Party GABAY OFW
44) Party for Overseas Workers' Empowerment and Reintegration POWER
45) Union of the Filipino Overseas Workers (Unifil), Inc. OCW-UNIFIL
Professionals Sector
46) Alay sa Bayan Para sa Kalayaan at Demokrasya ABAKADA
47) Alliance for Greater Achievements in Peace and Prosperity AGAP
48) Alliance to Alleviate the Socio-Economic and Social Order, Inc. AASENSO KA
49) Ang Ipaglaban Mo Foundation AIM
50) Asosasyon pasa sa Kaunlaran ng Industriya ng Aklat, Inc. AKLAT
51) Chamber of Real Estate and Builders Association, Inc. CREBA
52) Philippine Association of Detective and Protective Agency Operators, Inc. PADPAO
53) Philippine Dental Association PDA
54) Philippine Medical Association PMA
55) Philippine Society of Agricultural Engineers (Partido Unlad Agrikultura) PSAE
56) Philippine Technological Council PTC
57) Professional Criminologist Association of the Philippines PCAP
58) United Architects of the Philippines, Inc. UAP
Organizations/Coalitions
59) A Peaceful Organization Leadership, Friendship, Service Movement APO SERVICE
60) Aabante Ka Pilipinas Party (Sagip-Bayan Movement) APIL
61) Aalagahan ang ating Kalikasan Nationwide ALAS
62) Aarangkada ang mga Handa Oras-oras para sa Bayan AHOY
63) Abante Kilusang Kooperatiba sa Gitnang Luzon AKK
64) Abay Pamilya Foundation, Inc. ABAYPAMILYA
65) Agrarian Reform Beneficiaries Association, Inc. ARBA
66) Ahonbayan, Inc. (Formerly Alliance Foundation for Rural Dev, Inc.) AHONBAYAN
67) Alliance for Meritocracy AFM
68) Alliance for Alleviation of National Governance and Trust Party AKA
69) Aluhai Neighborhood Association, Inc. ALUHAI
70) Alyansa ng Kooperatibang Pangkabuhayan Party ANGKOP
71) Anak-Mindanao AMIN
72) Ang Lakas ng Bagong Kooperatiba, Inc. ALAB
73) ANGAT ANGAT
74) Aniban ng mga Magsasaka, Mangingisda at Manggagawa sa Agrikultura-Katipunan, Inc. AMMMA
75) Asa at Samahan ng Karaniwang Pilipino ASAKAPIL
76) Asosasyon ng mga taga Insurance sa Pilipinas, Inc. ATIP
77) Association of Builders, Consultants and Designers, Inc. ABCD
78) Association of Philippine Electric Cooperatives APEC
79) ATIN (Abante Bisaya) ATIN
80) Bagong Bayani Organization BAGONG BAYANI
81) Balikatan sa Kabuhayan Buhay Coalition BSK
82) Bantay Bayan Foundation Party, Inc. BANTAY-BAYAN
83) Bantay Dagat, Inc. BDI
84) Bayan na Nagtataguyod ng Demokratikong Ideologiya at Layunin, Inc. BANDILA
85) Bigkis Pinoy Foundation BIGKIS
86) Bonding Idealism for National Human Initiative BINHI
87) Businessmen and Entrepreneurs Association, Inc. BEA
88) Citizens Anti-Crime Assistant Group, Inc. CAAG
89) Citizen's Battle Against Corruption CIBAC
90) Citizens Drug Watch Foundation, Inc. DRUG WATCH
91) Citizens Foundation for the Prevention of Crimes and Injustices, Inc. CITIZEN
92) Citizens' Movement for Justice, Economy, Environment and Peace JEEP
93) Coalition for Consumer Protection and Welfare COALITION 349
94) Confederation of Homeowners' Association for Reforms in Governance, and Environment, Inc. HOMEOWNERS
95) Confederation of Non-Stock Savings and Loans Associations, Inc. CONSLA
96) Consumers Union of the Philippines CONSUMERS
97) Cooperative Natcco Network Party COOP-NATCO
98) Cooperative Union of the Philippines, Inc. CUP
99) Council of Agriculture Producers, Inc. CAP
100) Demokratikong Ugnayang Tapat sa Sambayanan DUGTUNGAN
101) Federation of Jeepney Operators and Drivers Assn of the Phils, Inc. FEJODAP
102) Go! Go! Philippines Movement Go Go Philippines
103) Green Philippines GREEN
104) Green Philippines Foundation, Inc. GREENPHIL
105) Kabalikat (ng Bayan Party) KABALIKAT
106) Katarungan sa Bayan Tagapagtanggol ng Sambayanan KABATAS
107) Katipunan ng mga Bantay-Bayan ng Pilipinas, Inc. KABAYAN
108) Kilusan Tungo sa Pambansang Tangkilikan, Inc. KATAPAT
109) Luzviminda Economic Development Foundation, Inc. LEDFI
110) Mamamayan Ayaw sa Droga MAD
111) Maritime Party MARITIME
112) Mindanao Federation of Small Coconut Farmers Organization, Inc. MSCFO
113) National Confederation of Tricycle Operators and Drivers' Association of the Philippines
NACTODAP
114) National Council of Community Organizers, Inc. NCCO
115) National Federation of Sugar Cane Planters NFSP
116) Nationwide Association of Consumers, Inc. NACI
117) Pambansang Samahang Lingkod ng Bayan, Inc. PASALBA
118) Pambansang Sangguniang Katipunan ng mga Bgy Kagawad ng Pil, Inc. KATIPUNAN
119) Partido ng Maralitang Pilipino- Pinatubo Party PMP-PINATUBO
120) Partido ng Maralitang Pilipino- Pinatubo Party PMP-PINATUBO
121) Philippine Association of Retired Persons PARP
122) Philippine Jury Movement JURY
123) Philippine Local Autonomy Movement, Inc. PLAM
124) Philippine Mine Safety and Environment Association PMSEA
125) Philippine Reformist Society PRS
126) Port Users Confederation, Inc. PUC
127) Prime Movers for Peace and Progress PRIMO
128) Progressive Alliance of Citizens for Democracy PACD
129) Rebolusyonaryong Alyansang Makabansa RAM
130) Sama-sama kaya natin 'to Foundation, Inc. KASAMA
131) Sanlakas SANLAKAS
132) Security United League on Nationwide Guards, Inc. SULONG
133) Sports and Health Advancement Foundation, Inc. SHAF
134) True Marcos Loyalist (for God, Country and People) Association of the Philippines, Inc.
MARCOS LOYALIST
135) Tindog Para Han Kabubuwason Para Han Waraynon TINDOG! WARAY
136) Volunteers Against Crime and Corruption, Inc. VACC
Political Party
137) ABAG PROMDI PROMDI
138) Akbayan! Citizens' Action Party AKBAYAN
139) Aksyon Demokratiko AKSYON
140) Alternative Action AA
141) Bayan Muna BAYAN
142) Bicol Saro Party BSP
143) Buhay Hayaan Yumabong BUHAY
144) Democratic Alliance DA
145) Gabaybayan GAD
146) Laban ng Demokratikong Pilipino LDP
147) Laban para sa Kapayapaan, Katarungan, at Kaunlaran KKK
148) Lakas NUCD-UMDP Lakas NUCD-UMDP
149) Liberal Party LP
150) Nacionalista Party NP
151) National Alliance for Democracy Party NAD
152) Nationalist Peoples' Coalition NPC
153) Organized Support for the Movement to Enhance the National Agenda OSMENA
154) Partido Demokratiko Pilipino-Lakas ng Bayan PDP-LABAN
155) Partido Demokratiko Sosyalista ng Pilipinas PDSP
156) Partido ng Masang Pilipino PMP
157) Partido para sa Demokratikong Reporma PDR
158) People's Progressive Alliance for Peace and Good Govt Towards Alleviation of Poverty and Social Advancement PAG-ASA
159) People's Reform Party PRP
160) Pusyon (Bisaya) Pilipino PUSYON
161) Rizalist Party RP
162) Social Justice Society SJS
Monday, November 28, 2005
Thursday, November 17, 2005
Welfarism 2: France Riots, Taxes in Welfare States
From my readings of the 3-weeks riots in France, the usually-mentioned culprit for the anger by the rioters are: (a) the police's racism, arrogance and brutality to immigrants of African and Arab/North African origin; (b) high unemployment among immigrants, up to 40% or 4x the national average of 10% (and France has this 10% average unemployment rate for the last 30 years or more!), and (c) bad social conditions (housing, discrimination in work if ever employed, and so on).
The problem with the French police is an issue that can be addressed by Interior Minister Sarkozy and the police chiefs. The problem on unemployment and social discrimination I think, can be rooted to a "crisis of welfarism", of high expectations of welfare, and continuing disappointment of high taxes and over-regulation of business to maintain welfarism. This is a problem that has finally caught up with France, could spread to other European welfare states. Though France's situation is more unique and pronounce by virtue of its being a strong colonial power in the past.
France colonized dozens of countries in Africa; it even had colonies in Asia before -- Vietnam, Laos, Cambodia. When colonization officially ended, tens, hundreds of thousands from each of its former colonies went to France (especially the fallen rulers?). The migrants settled in France, produced offsprings who are France-born, expecting that they be entitled to the same welfare benefits as the "real" French, them white people with blue eyes, unlike them darker skin with black eyes and kinky hair.
But France's welfarism is already overstretched. Its budget deficit always exceeds 3% of GDP every year, a problem it shares with Germany and Italy and which angers many smaller countries in the EU who struggle hard to keep their budget deficit below 3% of GDP. France's public debt comprises 66% (or 2/3) of its GDP as of 2004 (data from IMF, World Economic Outlook 2005). And the unfunded liabilities of the social security system is estimated to be around 200 percent of GDP. The expenditures for public welfare, farm subsidies and other services always exceed tax collections and other revenues. And rightly so since France's taxes are among the highest in the world. Top marginal income tax rate is 48 percent, add in payroll taxes and productive citizens pay as much as 65 percent of their income in taxes. Who's happy surrendering 2/3 of his/her monthly income to the government? The top corporate tax rate is 34 percent and value-added tax (VAT) is around 20 percent.
A Frenchman friend told me that while many productive French people are leaving France, went to UK, US, Eastern Europe, other smaller-taxes economies (well, at least compared to those in continental European countries), the population of its welfare-dependent citizens and migrants continue.
Another problem of welfarism is over-regulation of labor laws, business and entrepreneurship. To hire employees means: (a) lots of additional fees to pay (workers' health insurance, unemployment insurance, etc.); (b) workweek is only 35 hours; (c) mandatory paid vacation leave is 5 weeks; (d) family and maternity leave is 36 weeks; and (e) it's very difficult and bureaucratic to lay off or fire employees. If you are an entrepreneur and faced with such rigid labor laws, while business and personal taxes are high, why hire more people? Better do it yourself, or move your shop or factory to Eastern Europe or Asia or the US where taxes are smaller and labor laws are less rigid. This largely explains for the high unemployment in France, Germany, Belgium, Spain, Italy, other European countries.
So, the cycle of high expectations of welfare and disappointment with high and multiple taxes and rigid labor laws is a trap that sustains discrimination and high unemployment. Now, if my hypothesis (ie, being a hypothesis, subject to test by facts and counter hypothesis and theories) that this is a "crisis of welfarism", then the current riots is one slam-dunk proof against socialism-inspired policies of the French government. The free-market system of less government intervention, less bureaucracy, less taxes, more entrepreneurship and more individual responsibility, is an old idea that continues to elude the political leadership of France and many welfarist countries.
The upcoming WTO Ministerial meeting in Hong Kong could be one opportunity for the high welfare, high agricultural protectionism countries, to slowly go back to the free market system. Simply slashing high farm subsidies, and slashing the high taxes that finance such huge farm subsidies, would provide justice not only to the over-taxed citizens of rich countries, but also to the farmers and agri-business enterprises in poorer countries.
From someone in a poorer country (the Philippines) writing about these things, some people in rich countries might train the gun back and say, "now, look who's talking!" But precisely the main reason why our country is poor, is because of the same high government interventionism, high and multiple taxation, over-regulation of labor laws and entrepreneurship, that many of our people are poor and unemployed.
Taxes in Welfare States
Many people, ordinary citizens and government leaders alike, in the poorer countries, envy the "free education, free hospitalization, long paid vacations, generous unemployment benefits,..." of many welfare states of Europe and other rich economies. I don't know if they also realize that maintaining a welfare state is very expensive for the taxpayers. After all, government has nothing to give to people except what it takes from other people.
Below are some data I got from the IMF's Government Finance Statistics (GFS) Yearbook 2004. Revenue = taxes + social contributions + other revenues (fees, charges) and grants. The taxes (various forms of income and consumption taxes) comprise between 1/2 to 2/3 of government revenues. Many of these fees and charges are not called as taxes because they are only created by administrative orders, not by the legislature or the Parliament. Nevertheless, whether they are called taxes or non-taxes fees and charges, they have one thing in common: they are mandatory and compulsory payment to the government.
General Government Revenue as % of Gross Domestic Product (GDP), 2003 (unless specified):
1. Denmark, 59.3% (of which taxes, 47.1%)
2. Sweden, 58% (taxes 35.2%)
3. Norway, 57.3%
4. Finland, 52.9%
5. Austria, 50.8% (2002)
6. Belgium, 50.5%
7. France, 50.4%
8. Luxembourg, 46.6%
9. Italy, 46.1% (2000)
10. Netherlands, 45.7%
11. Germany, 45.0%
12. Iceland, 44.8% (2002)
13. Portugal, 41.7% (2001)
14. Canada, 40.8%
15. United Kingdom, 40.1%
16. Spain, 39.9% (2002)
17. Switzerland, 37.5% (2001)
18, Australia, 36.8%
19. United States, 31.8% (taxes 18.7%)
Some Asian economies:
1. Hong Kong, 15.3% (2002)
2. Thailand, 20.9%
3. Malaysia, 26.3%
Note from the above numbers that the US' welfare system is less taxing than those in Europe. In fact, the US' government revenues as % of GDP is nearly 1/2 of those in Denmark, Sweden and Norway. This partly explains why the US attracts more entrepreneurial people from many parts of the world, than Europe. But many Asian and Eastern European countries with smaller taxes and lesser government regulations are attracting more and more professionals and investors from both North America and Western Europe.
* See also: Welfarism 1: Dependence vs. Individual Responsibility, October 17, 2005
The problem with the French police is an issue that can be addressed by Interior Minister Sarkozy and the police chiefs. The problem on unemployment and social discrimination I think, can be rooted to a "crisis of welfarism", of high expectations of welfare, and continuing disappointment of high taxes and over-regulation of business to maintain welfarism. This is a problem that has finally caught up with France, could spread to other European welfare states. Though France's situation is more unique and pronounce by virtue of its being a strong colonial power in the past.
France colonized dozens of countries in Africa; it even had colonies in Asia before -- Vietnam, Laos, Cambodia. When colonization officially ended, tens, hundreds of thousands from each of its former colonies went to France (especially the fallen rulers?). The migrants settled in France, produced offsprings who are France-born, expecting that they be entitled to the same welfare benefits as the "real" French, them white people with blue eyes, unlike them darker skin with black eyes and kinky hair.
But France's welfarism is already overstretched. Its budget deficit always exceeds 3% of GDP every year, a problem it shares with Germany and Italy and which angers many smaller countries in the EU who struggle hard to keep their budget deficit below 3% of GDP. France's public debt comprises 66% (or 2/3) of its GDP as of 2004 (data from IMF, World Economic Outlook 2005). And the unfunded liabilities of the social security system is estimated to be around 200 percent of GDP. The expenditures for public welfare, farm subsidies and other services always exceed tax collections and other revenues. And rightly so since France's taxes are among the highest in the world. Top marginal income tax rate is 48 percent, add in payroll taxes and productive citizens pay as much as 65 percent of their income in taxes. Who's happy surrendering 2/3 of his/her monthly income to the government? The top corporate tax rate is 34 percent and value-added tax (VAT) is around 20 percent.
A Frenchman friend told me that while many productive French people are leaving France, went to UK, US, Eastern Europe, other smaller-taxes economies (well, at least compared to those in continental European countries), the population of its welfare-dependent citizens and migrants continue.
Another problem of welfarism is over-regulation of labor laws, business and entrepreneurship. To hire employees means: (a) lots of additional fees to pay (workers' health insurance, unemployment insurance, etc.); (b) workweek is only 35 hours; (c) mandatory paid vacation leave is 5 weeks; (d) family and maternity leave is 36 weeks; and (e) it's very difficult and bureaucratic to lay off or fire employees. If you are an entrepreneur and faced with such rigid labor laws, while business and personal taxes are high, why hire more people? Better do it yourself, or move your shop or factory to Eastern Europe or Asia or the US where taxes are smaller and labor laws are less rigid. This largely explains for the high unemployment in France, Germany, Belgium, Spain, Italy, other European countries.
So, the cycle of high expectations of welfare and disappointment with high and multiple taxes and rigid labor laws is a trap that sustains discrimination and high unemployment. Now, if my hypothesis (ie, being a hypothesis, subject to test by facts and counter hypothesis and theories) that this is a "crisis of welfarism", then the current riots is one slam-dunk proof against socialism-inspired policies of the French government. The free-market system of less government intervention, less bureaucracy, less taxes, more entrepreneurship and more individual responsibility, is an old idea that continues to elude the political leadership of France and many welfarist countries.
The upcoming WTO Ministerial meeting in Hong Kong could be one opportunity for the high welfare, high agricultural protectionism countries, to slowly go back to the free market system. Simply slashing high farm subsidies, and slashing the high taxes that finance such huge farm subsidies, would provide justice not only to the over-taxed citizens of rich countries, but also to the farmers and agri-business enterprises in poorer countries.
From someone in a poorer country (the Philippines) writing about these things, some people in rich countries might train the gun back and say, "now, look who's talking!" But precisely the main reason why our country is poor, is because of the same high government interventionism, high and multiple taxation, over-regulation of labor laws and entrepreneurship, that many of our people are poor and unemployed.
Taxes in Welfare States
Many people, ordinary citizens and government leaders alike, in the poorer countries, envy the "free education, free hospitalization, long paid vacations, generous unemployment benefits,..." of many welfare states of Europe and other rich economies. I don't know if they also realize that maintaining a welfare state is very expensive for the taxpayers. After all, government has nothing to give to people except what it takes from other people.
Below are some data I got from the IMF's Government Finance Statistics (GFS) Yearbook 2004. Revenue = taxes + social contributions + other revenues (fees, charges) and grants. The taxes (various forms of income and consumption taxes) comprise between 1/2 to 2/3 of government revenues. Many of these fees and charges are not called as taxes because they are only created by administrative orders, not by the legislature or the Parliament. Nevertheless, whether they are called taxes or non-taxes fees and charges, they have one thing in common: they are mandatory and compulsory payment to the government.
General Government Revenue as % of Gross Domestic Product (GDP), 2003 (unless specified):
1. Denmark, 59.3% (of which taxes, 47.1%)
2. Sweden, 58% (taxes 35.2%)
3. Norway, 57.3%
4. Finland, 52.9%
5. Austria, 50.8% (2002)
6. Belgium, 50.5%
7. France, 50.4%
8. Luxembourg, 46.6%
9. Italy, 46.1% (2000)
10. Netherlands, 45.7%
11. Germany, 45.0%
12. Iceland, 44.8% (2002)
13. Portugal, 41.7% (2001)
14. Canada, 40.8%
15. United Kingdom, 40.1%
16. Spain, 39.9% (2002)
17. Switzerland, 37.5% (2001)
18, Australia, 36.8%
19. United States, 31.8% (taxes 18.7%)
Some Asian economies:
1. Hong Kong, 15.3% (2002)
2. Thailand, 20.9%
3. Malaysia, 26.3%
Note from the above numbers that the US' welfare system is less taxing than those in Europe. In fact, the US' government revenues as % of GDP is nearly 1/2 of those in Denmark, Sweden and Norway. This partly explains why the US attracts more entrepreneurial people from many parts of the world, than Europe. But many Asian and Eastern European countries with smaller taxes and lesser government regulations are attracting more and more professionals and investors from both North America and Western Europe.
* See also: Welfarism 1: Dependence vs. Individual Responsibility, October 17, 2005
Thursday, November 10, 2005
Foreign Aid 3: Bob Geldoff and More Aid
July this year, Presidents and Prime Minsters from the US, UK, France, Germany, Japan, Italy, Canada and Russia held a G8 summit meeting in Scotland, UK, to discuss more foreign aid, global warming, etc. Bob Geldoff (and Bono and other rock stars) organized the "Live8" series of rock concerts in major cities of the said 8 countries. Their mission: pressure the G8 leaders to commit "more aid", "debt write-offs", to many African countries, to "make poverty history".
One free-market group in London, the International Policy Network (IPN), organized the "Global Development Summit" (GDS) on June 28. I was one of the panel speakers then, it was my first time to see London and UK, thanks IPN :-).
A day before the conference, I revised a famous song (IPN Exec. Director Julian Morris helped me) by Bob Geldoff in the 80s, "I don't like Mondays", and here's what we produced, below. We sang it on stage before the formal conference started.
Original song:
I don't like Mondays
(by Bob Geldoff, Boomtown Rats band)
The silicon chips inside her head
that switched to overload
and nobody's gonna go to school today
she's gonna make them stay at home
and daddy doesn't understand it
he said she was as good as gold
and he can see no reasons
cause there are no reasons
what reasons do you need to be shown
oh-woh-woh-woh
Tell me why -- I dont like Mondays
Tell me why -- I dont like Mondays
Tell me why -- I dont like Mondays
I wanna shoooooot, the whole day down!
Our revised song:
I don't like more aid
The G8 leaders are planning more aid
and that would mean, more taxes
and nobody's gonna go to shops today
they're gonna slash your take home pay
and Blair doesn't understand it
he said he'd wipe out poverty
and he can see no reasons
cause there are no reasons
what alibi you need to be shown
oh-woh-woh-woh
Tell me why -- i dont like more aid
Tell me why -- i dont like debt relief
Tell me why -- i hate protectionism
I wanna shoo-oooooot
The monopolists! :-)
(Chords pattern: C-G-F-G// Am-G, F-G)
-----
See also:
Foreign Aid 1: MDG Goals = More Debt Addiction, October 26, 2005
The Circuitous and Leaky Process of Foreign Aid, November 03, 2005
One free-market group in London, the International Policy Network (IPN), organized the "Global Development Summit" (GDS) on June 28. I was one of the panel speakers then, it was my first time to see London and UK, thanks IPN :-).
A day before the conference, I revised a famous song (IPN Exec. Director Julian Morris helped me) by Bob Geldoff in the 80s, "I don't like Mondays", and here's what we produced, below. We sang it on stage before the formal conference started.
Original song:
I don't like Mondays
(by Bob Geldoff, Boomtown Rats band)
The silicon chips inside her head
that switched to overload
and nobody's gonna go to school today
she's gonna make them stay at home
and daddy doesn't understand it
he said she was as good as gold
and he can see no reasons
cause there are no reasons
what reasons do you need to be shown
oh-woh-woh-woh
Tell me why -- I dont like Mondays
Tell me why -- I dont like Mondays
Tell me why -- I dont like Mondays
I wanna shoooooot, the whole day down!
Our revised song:
I don't like more aid
The G8 leaders are planning more aid
and that would mean, more taxes
and nobody's gonna go to shops today
they're gonna slash your take home pay
and Blair doesn't understand it
he said he'd wipe out poverty
and he can see no reasons
cause there are no reasons
what alibi you need to be shown
oh-woh-woh-woh
Tell me why -- i dont like more aid
Tell me why -- i dont like debt relief
Tell me why -- i hate protectionism
I wanna shoo-oooooot
The monopolists! :-)
(Chords pattern: C-G-F-G// Am-G, F-G)
-----
See also:
Foreign Aid 1: MDG Goals = More Debt Addiction, October 26, 2005
The Circuitous and Leaky Process of Foreign Aid, November 03, 2005
Sunday, November 06, 2005
Pol. Ideology 3: Liberal vs. Libertarian
This is a short exchange we have in MG yahoogroups sometime in July 2004:
-------
Liberal vs. Libertarian
During the MG's QC meeting 3 weeks ago at QC we bumped into Chito Gasco (former UP USC chairman, 1987 Con-Com member, now DepEd UnderSec. He's also a member of the Liberal Party), he has also a meeting in another table. I gave him a copy of the MG Manifesto, he read it.
After his meeting, he approached us, said, "Pare, ikaw ba 'to? Malayo sa UP image mo noon a!... Pare, we are liberal but not libertarian. Kasi sabi nyo dito, 'education, health, etc. should be mainly parental responsibility, not state responsibility'. Paano, iyan ang hinihingi ng mga tao". I countered, "Kasi pare, iyan din pinapangako ng mga pulitiko". Tawanan na lang kami.
A person or politician can be liberal with doling out welfare -- education, health care, housing, basketballs, trophies, financing a kasal-binyag-libing (KBL), etc. But the same politician can be liberal in taking away -- partly of fully -- your earnings, your income, your wealth, your inheritance. A government that is big enough to give everything you want is also big enough to get everything you've got. Right? So, liberal with welfare, liberal with more or higher taxation.
A libertarian, on the other hand, emphasizes individual liberty, coupled with individual responsibility. I included this philosophy in the opening paragraphs of The MG Manifesto, minus the label.
So you work hard, you keep your earnings and income. You pay those goods and services that give you, your family, your friends, happiness and comfort. You don't expect that other guys will pay for your child's education, for your spouse's hospitalization, etc. Government practically has no role here. That's an ultra-libertarian view.
The Minimal (or limited, small) Government movement is not ultra-libertarian. Otherwise it will be a Zero Government movement. We're liberal with economic policies because we advocate freer markets, foreign trade and investment liberalization, free mobility of people/technology/ culture across countries. But we're not that liberal with welfare and taxation.
Still, as I mentioned earlier, we shall have that "Vaporize Government" section in our MG website. It will accommodate the ultra-libertarian views and papers. Submit to me such papers, other documents,
-- Nonoy
mang nonoy:
as a recent article in Tech Central Station said, the trouble with libertarianism is that there is no single libertarianism but many libertarianisms. so i cannot really say if the animal you are referring to is "ultra libertarian".
if MG is not liberal on taxation, then philosophically, MG supports theft. taxation is extortion. under the threat of force by the "state", an individual is asked to "pay" taxes. for one's own protection, one has to pay tong/taxes (walang pinagkaiba sa mafia). if an individual is not free to use his/her income the way he/she wants it (because he has to surrender a large part of it to the tong collector), then essentially, he is a slave of the tong collector. an individual works for the tong collector/MG. in essence MG is no different from a regular "government". an individual still has to pay the mafia to leave him alone. what will MG do if an individual does not give the MG the tong? aber?
-- ariel
Dear Ariel,
The problem with us, people in a modern day society is that we are defined basically by our proprietary rights. For instance, we have an official name that we need to tag ourselves with in order to deal about anything in the society. That alone needs government. Secondly, we need to own things, basic as they may be. We need clothes, shelter and food. When we buy clothing or a roof over our heads, we want to be sure we can keep it, meaning, we can "own" it. Otherwise what would stop your 6-foot four neighbour from barging into your house and throwing you out and keep all your clothes and including perhaps your children and wife for himself. We need government to uphold that, don't we. Becuase if you start owning a gun to keep the cro-magnon away, then he starts owning a bazooka. We need government to keep those simply things working, eh? But let's say cro-magnon elects to uphold your property ownership rights, you'll have to pay him don't you? And in the way of the world, cro-magnon becomes the leviathan we now call government.
We pay him, by way of taxes, and going back to the olden situation, we are actually paying him by choice. Because we need him now as much as we need the basic stuff like clothing, shelter and popcorn, este, food.
The mafia you don't need. The government, you do. I mean we can split hairs here until we all turn blue, of course.
I am in this MG thingy because consistent with what the MG manifesto advocates, i believe in max. efficiency in governance, and the need to increase self-dependency. I believe that there are excess fat somewhere that we can do without in the bureaucracy. We can merge, we can cut, we can dissolve some parts. But we have to support our claim with detailed analysis on where the excess fats are. Anyone can easily claim that we should streamline the leviathan, but what others can not do, that we can do, is start looking in specific dark corners of the bureaucracy. We have enough libertarian philosophies and collection of motherhoods e.g. just in the MTPDP of NEDA alone. MG has to be different by going the extra mile of detail.
GMA is slashing OP of 16 attached agencies, but on the other hand, is also creating 2 new offices to suit her "needs". MG can be aligned in these moves by presenting papers that zero in on the excesses, and coming up with workable methods to minimize the collateral damage to those who will lose their jobs, in order to make a step realistic, not only for thinkers like us, but also for the real people out there who will be in the cross-fire of the change we want to happen.
Oh. and as to the MG general philosophy/equation of Minimal Government = Minimal Bureaucracy = Minimal Taxes, somehow it gives the semblance that the final objective of MG is minimal taxes. I was made to believe that this is about individual freedom and increase in self-dependency and responsibility. Maybe the equation requires to be extended up to that point.
By the way, re: this liberal vs. libertarian thing, I think MG is closer to Ayn Rand's objectivism than anything else. At least objectivism might not have as many shades of grey than libertarianism.
-- Ozone
Yeah, Ariel, MG supports consumption tax, not income tax. We need tax bec. we still need a small govt. We still need a Supreme Court and lower courts. We still need a foreign affairs ministry or dept. and an Armed Forces. We still need a public works ministry where private road construction firms still feel they can't absorb into revenues the benefits that a particular road will bring. We still need a President or Prime Minister as head of the country, even for just symbolic function.
If you accept that we need a small government (say, only 5 departments + the Judiciary), then we need small taxes. If you accept that we need no govt., then we need no taxes and fees.
But if you believe that absolutely we dont need taxes, no government, go ahead! Start a Zero Government (ZG) organization or movement. No problem, man. I'm sure there are other individuals who believe in the same philosophy.
-- nonoy
believers in zero government do not need any movement. they just do their thing, produce, enrich themselves, trade with other free market believers, etc. and evade as much as possible the claws of the terrocrats. that's their main difference with the libertarians. The libertarians (like the libertarian party in the US), they still run for government positions. zero gov't believers just enjoy life without further complicating it. they don't impose on others, either their views or taxes.
– Ariel
Noy, I must express similar apprehensions about ultra-liberatarianism because I don't feel comfortable with its extreme utilitarian leanings. While stressing the principles of individualism (private choice and individual rights as well as individual responsibility) and limited government, we should also stress the rule of law, the natural harmony of interests, and the common good (and NOT the greatest good for the greatest number) which consists of both the principles of solidarity and subsidiarity.
The question of whether the State should provide for education, health care and the like will depend on, I think, whether state intervention will generate greater positive externalities compared to leaving it to the private sector. Even Adam Smith thinks there should be some role of government in these sectors. The term "Vaporize Government" suggest we want to do away government, when it fact we just want to the State to promote the public interest without sacrificing private good. I think the State infringes on individual preferences when some fool of a congressman proposes that the government should mandate a 2-child policy!!! I guess that's why we need to discuss these core ideas in our first workshop this Tuesday. cheers,
-- John
Allow me to inject a cautionary remark. I think we are all agreed on the basic principle, that we are trying to achieve minimal government. My understanding of this group effort is to form opinions, formulate strategies and wield them in such manner as to achieve changes in the present scheme of things. From where I sit, mingovt is not -nor do we want to be- a rant and
rave group. Even as we may get long winded, in the process we must be resolute, seeing as we have to work within a system rather than having to nfight the multi-headed monster on all fronts.
John makes an excellent point: The term "Vaporize Government" suggest we want to do away government, when it fact we just want to the State to promote the public interest without
sacrificing private good
It's good for us to blow off steam, but if to achieve our objectives effectively, it is best for the group to sit down and discuss core issues, devise strategies, divide work, and proceed in an organized fashion.
Having said that, I realize the movement (if I may call it that) is in its birth Wehen...
and I am pleased to be part of it.
-- Rica
* See also: Minimal Government Manifesto
-------
Liberal vs. Libertarian
During the MG's QC meeting 3 weeks ago at QC we bumped into Chito Gasco (former UP USC chairman, 1987 Con-Com member, now DepEd UnderSec. He's also a member of the Liberal Party), he has also a meeting in another table. I gave him a copy of the MG Manifesto, he read it.
After his meeting, he approached us, said, "Pare, ikaw ba 'to? Malayo sa UP image mo noon a!... Pare, we are liberal but not libertarian. Kasi sabi nyo dito, 'education, health, etc. should be mainly parental responsibility, not state responsibility'. Paano, iyan ang hinihingi ng mga tao". I countered, "Kasi pare, iyan din pinapangako ng mga pulitiko". Tawanan na lang kami.
A person or politician can be liberal with doling out welfare -- education, health care, housing, basketballs, trophies, financing a kasal-binyag-libing (KBL), etc. But the same politician can be liberal in taking away -- partly of fully -- your earnings, your income, your wealth, your inheritance. A government that is big enough to give everything you want is also big enough to get everything you've got. Right? So, liberal with welfare, liberal with more or higher taxation.
A libertarian, on the other hand, emphasizes individual liberty, coupled with individual responsibility. I included this philosophy in the opening paragraphs of The MG Manifesto, minus the label.
So you work hard, you keep your earnings and income. You pay those goods and services that give you, your family, your friends, happiness and comfort. You don't expect that other guys will pay for your child's education, for your spouse's hospitalization, etc. Government practically has no role here. That's an ultra-libertarian view.
The Minimal (or limited, small) Government movement is not ultra-libertarian. Otherwise it will be a Zero Government movement. We're liberal with economic policies because we advocate freer markets, foreign trade and investment liberalization, free mobility of people/technology/ culture across countries. But we're not that liberal with welfare and taxation.
Still, as I mentioned earlier, we shall have that "Vaporize Government" section in our MG website. It will accommodate the ultra-libertarian views and papers. Submit to me such papers, other documents,
-- Nonoy
mang nonoy:
as a recent article in Tech Central Station said, the trouble with libertarianism is that there is no single libertarianism but many libertarianisms. so i cannot really say if the animal you are referring to is "ultra libertarian".
if MG is not liberal on taxation, then philosophically, MG supports theft. taxation is extortion. under the threat of force by the "state", an individual is asked to "pay" taxes. for one's own protection, one has to pay tong/taxes (walang pinagkaiba sa mafia). if an individual is not free to use his/her income the way he/she wants it (because he has to surrender a large part of it to the tong collector), then essentially, he is a slave of the tong collector. an individual works for the tong collector/MG. in essence MG is no different from a regular "government". an individual still has to pay the mafia to leave him alone. what will MG do if an individual does not give the MG the tong? aber?
-- ariel
Dear Ariel,
The problem with us, people in a modern day society is that we are defined basically by our proprietary rights. For instance, we have an official name that we need to tag ourselves with in order to deal about anything in the society. That alone needs government. Secondly, we need to own things, basic as they may be. We need clothes, shelter and food. When we buy clothing or a roof over our heads, we want to be sure we can keep it, meaning, we can "own" it. Otherwise what would stop your 6-foot four neighbour from barging into your house and throwing you out and keep all your clothes and including perhaps your children and wife for himself. We need government to uphold that, don't we. Becuase if you start owning a gun to keep the cro-magnon away, then he starts owning a bazooka. We need government to keep those simply things working, eh? But let's say cro-magnon elects to uphold your property ownership rights, you'll have to pay him don't you? And in the way of the world, cro-magnon becomes the leviathan we now call government.
We pay him, by way of taxes, and going back to the olden situation, we are actually paying him by choice. Because we need him now as much as we need the basic stuff like clothing, shelter and popcorn, este, food.
The mafia you don't need. The government, you do. I mean we can split hairs here until we all turn blue, of course.
I am in this MG thingy because consistent with what the MG manifesto advocates, i believe in max. efficiency in governance, and the need to increase self-dependency. I believe that there are excess fat somewhere that we can do without in the bureaucracy. We can merge, we can cut, we can dissolve some parts. But we have to support our claim with detailed analysis on where the excess fats are. Anyone can easily claim that we should streamline the leviathan, but what others can not do, that we can do, is start looking in specific dark corners of the bureaucracy. We have enough libertarian philosophies and collection of motherhoods e.g. just in the MTPDP of NEDA alone. MG has to be different by going the extra mile of detail.
GMA is slashing OP of 16 attached agencies, but on the other hand, is also creating 2 new offices to suit her "needs". MG can be aligned in these moves by presenting papers that zero in on the excesses, and coming up with workable methods to minimize the collateral damage to those who will lose their jobs, in order to make a step realistic, not only for thinkers like us, but also for the real people out there who will be in the cross-fire of the change we want to happen.
Oh. and as to the MG general philosophy/equation of Minimal Government = Minimal Bureaucracy = Minimal Taxes, somehow it gives the semblance that the final objective of MG is minimal taxes. I was made to believe that this is about individual freedom and increase in self-dependency and responsibility. Maybe the equation requires to be extended up to that point.
By the way, re: this liberal vs. libertarian thing, I think MG is closer to Ayn Rand's objectivism than anything else. At least objectivism might not have as many shades of grey than libertarianism.
-- Ozone
Yeah, Ariel, MG supports consumption tax, not income tax. We need tax bec. we still need a small govt. We still need a Supreme Court and lower courts. We still need a foreign affairs ministry or dept. and an Armed Forces. We still need a public works ministry where private road construction firms still feel they can't absorb into revenues the benefits that a particular road will bring. We still need a President or Prime Minister as head of the country, even for just symbolic function.
If you accept that we need a small government (say, only 5 departments + the Judiciary), then we need small taxes. If you accept that we need no govt., then we need no taxes and fees.
But if you believe that absolutely we dont need taxes, no government, go ahead! Start a Zero Government (ZG) organization or movement. No problem, man. I'm sure there are other individuals who believe in the same philosophy.
-- nonoy
believers in zero government do not need any movement. they just do their thing, produce, enrich themselves, trade with other free market believers, etc. and evade as much as possible the claws of the terrocrats. that's their main difference with the libertarians. The libertarians (like the libertarian party in the US), they still run for government positions. zero gov't believers just enjoy life without further complicating it. they don't impose on others, either their views or taxes.
– Ariel
Noy, I must express similar apprehensions about ultra-liberatarianism because I don't feel comfortable with its extreme utilitarian leanings. While stressing the principles of individualism (private choice and individual rights as well as individual responsibility) and limited government, we should also stress the rule of law, the natural harmony of interests, and the common good (and NOT the greatest good for the greatest number) which consists of both the principles of solidarity and subsidiarity.
The question of whether the State should provide for education, health care and the like will depend on, I think, whether state intervention will generate greater positive externalities compared to leaving it to the private sector. Even Adam Smith thinks there should be some role of government in these sectors. The term "Vaporize Government" suggest we want to do away government, when it fact we just want to the State to promote the public interest without sacrificing private good. I think the State infringes on individual preferences when some fool of a congressman proposes that the government should mandate a 2-child policy!!! I guess that's why we need to discuss these core ideas in our first workshop this Tuesday. cheers,
-- John
Allow me to inject a cautionary remark. I think we are all agreed on the basic principle, that we are trying to achieve minimal government. My understanding of this group effort is to form opinions, formulate strategies and wield them in such manner as to achieve changes in the present scheme of things. From where I sit, mingovt is not -nor do we want to be- a rant and
rave group. Even as we may get long winded, in the process we must be resolute, seeing as we have to work within a system rather than having to nfight the multi-headed monster on all fronts.
John makes an excellent point: The term "Vaporize Government" suggest we want to do away government, when it fact we just want to the State to promote the public interest without
sacrificing private good
It's good for us to blow off steam, but if to achieve our objectives effectively, it is best for the group to sit down and discuss core issues, devise strategies, divide work, and proceed in an organized fashion.
Having said that, I realize the movement (if I may call it that) is in its birth Wehen...
and I am pleased to be part of it.
-- Rica
* See also: Minimal Government Manifesto
Thursday, November 03, 2005
Foreign Aid 2: Circuitous and Leaky Process
Official Development Assistance (ODA), or more popularly known as "foreign aid", is government to government; more specifically, resource transfer from rich country governments to poor country governments. The aid or assistance is in the forms of technical assistance, grants and loans. The first two forms of aid are small compared to foreign loans.
The biggest aid-giving bodies are the multilateral institutions -- the United Nations (UN) through its various agencies (UNDP, FAO, UNICEF, WHO,...), the World Bank (WB), the International Monetary Fund (IMF), and the regional development banks like the Asian Development Bank (ADB), European and African Development Banks. Some bilateral institutions like the US Agency for International Development (USAID) and Japan Bank for International Cooperation (JBIC) are also big lenders to many poor country governments. Except for the IMF which gives out loans to countries experiencing balance of payment crisis like hemorrhaging foreign debt and downward spiralling currency depreciation, the above foreign aid banks and institutions are mainly engaged in project financing, mostly in physical and social infrastructure projects.
Citizens of rich countries finance those foreign aid institutions in the form of high taxes. The target beneficiaries are supposedly the citizens of poor countries. This does not happen all the time. Before foreign aid money reaches the poor in the developing countries, the money passes through several layers of bureaucracies first. These are (a) the legislators and Foreign Affairs Ministry of donor countries, (b) the personnel and consultants of multilateral and bilateral aid institutions, (c) the presidents and legislators of poor country governments who prepare and appropriate budgets, and (d) the local politicians and national bureaucrats of poor country governments who implement the projects.
This circuitous process often results in a number of wastes, if not outright theft by corrupt and irresponsible government leaders, and high spending on salaries and perks of consultants, from economists to engineers, from physicians to agriculturists, and so on. So that while American taxpayers shoulder some $16 billion per year of foreign aid to many governments around the world through the UN, WB, IMF, ADB and other regional development banks, and its own US Agency for International Development (USAID), only a fraction (often a small fraction) of this money really reach the poor in developing countries in the form of roads and medicines for malaria.
What is noticeable in these foreign aid institutions is that while their existence, including the salaries and perks of their personnel and consultants, are 100% financed by taxes, said people are not subject to income taxes; their importations like vehicles are not subject to import tax and possibly, other consumption taxes like or excise tax and value-added tax.
Foreign loans almost always require counterpart funds. Hence, taxes by citizens of rich countries should be matched by taxes of citizens of poor countries. Often, the ratio of foreign loans to counterpart funds is 50-50. This partly explains why leaders and consultants of foreign aid institutions and banks are either silent if not outrightly supporting tax hikes in poor countries. The case of expanded and hike in value added tax (VAT) in the Philippines is one example. The WB's country director is very vocal in supporting the VAT expansion and hike, along with a number of local consultants who have regular consulting work with foreign aid institutions and government agencies.
If foreign aid is circuitous and leaky, what are the alternatives?
Cut taxes in both rich and poor countries, let the citizens spend their own money on things and services they deem important. If citizens of rich countries experience income tax cuts, they will not burn the savings. They will use the money to buy more products and services from other countries, including poor countries, from mangos and bananas to hiring more nurses and food shop waiters. Or they will use the money to visit more tropical beaches and mountain resorts in the poor countries, which expands employment opportunities in the developing world. The money transfer here is more direct from rich country citizens to poor country citizens. The middlemen under "more foreign aid" framework -- the politicians and bureaucrats in both donor and borrowing countries, the consultants and bureaucrats in foreign aid institutions -- will not go hungry because many of them are talented enough to find other jobs, to shift to entrepreneurship under a regime of low taxes, small bureaucracy economy.
The biggest aid-giving bodies are the multilateral institutions -- the United Nations (UN) through its various agencies (UNDP, FAO, UNICEF, WHO,...), the World Bank (WB), the International Monetary Fund (IMF), and the regional development banks like the Asian Development Bank (ADB), European and African Development Banks. Some bilateral institutions like the US Agency for International Development (USAID) and Japan Bank for International Cooperation (JBIC) are also big lenders to many poor country governments. Except for the IMF which gives out loans to countries experiencing balance of payment crisis like hemorrhaging foreign debt and downward spiralling currency depreciation, the above foreign aid banks and institutions are mainly engaged in project financing, mostly in physical and social infrastructure projects.
Citizens of rich countries finance those foreign aid institutions in the form of high taxes. The target beneficiaries are supposedly the citizens of poor countries. This does not happen all the time. Before foreign aid money reaches the poor in the developing countries, the money passes through several layers of bureaucracies first. These are (a) the legislators and Foreign Affairs Ministry of donor countries, (b) the personnel and consultants of multilateral and bilateral aid institutions, (c) the presidents and legislators of poor country governments who prepare and appropriate budgets, and (d) the local politicians and national bureaucrats of poor country governments who implement the projects.
This circuitous process often results in a number of wastes, if not outright theft by corrupt and irresponsible government leaders, and high spending on salaries and perks of consultants, from economists to engineers, from physicians to agriculturists, and so on. So that while American taxpayers shoulder some $16 billion per year of foreign aid to many governments around the world through the UN, WB, IMF, ADB and other regional development banks, and its own US Agency for International Development (USAID), only a fraction (often a small fraction) of this money really reach the poor in developing countries in the form of roads and medicines for malaria.
What is noticeable in these foreign aid institutions is that while their existence, including the salaries and perks of their personnel and consultants, are 100% financed by taxes, said people are not subject to income taxes; their importations like vehicles are not subject to import tax and possibly, other consumption taxes like or excise tax and value-added tax.
Foreign loans almost always require counterpart funds. Hence, taxes by citizens of rich countries should be matched by taxes of citizens of poor countries. Often, the ratio of foreign loans to counterpart funds is 50-50. This partly explains why leaders and consultants of foreign aid institutions and banks are either silent if not outrightly supporting tax hikes in poor countries. The case of expanded and hike in value added tax (VAT) in the Philippines is one example. The WB's country director is very vocal in supporting the VAT expansion and hike, along with a number of local consultants who have regular consulting work with foreign aid institutions and government agencies.
If foreign aid is circuitous and leaky, what are the alternatives?
Cut taxes in both rich and poor countries, let the citizens spend their own money on things and services they deem important. If citizens of rich countries experience income tax cuts, they will not burn the savings. They will use the money to buy more products and services from other countries, including poor countries, from mangos and bananas to hiring more nurses and food shop waiters. Or they will use the money to visit more tropical beaches and mountain resorts in the poor countries, which expands employment opportunities in the developing world. The money transfer here is more direct from rich country citizens to poor country citizens. The middlemen under "more foreign aid" framework -- the politicians and bureaucrats in both donor and borrowing countries, the consultants and bureaucrats in foreign aid institutions -- will not go hungry because many of them are talented enough to find other jobs, to shift to entrepreneurship under a regime of low taxes, small bureaucracy economy.
Wednesday, October 26, 2005
Foreign Aid 1: MDG Goals = More Debt Addiction
July this year, leaders of G8 countries promised debt forgiveness or debt write off for some of the world’s highly-indebted countries, mostly in Africa, during the G8 summit in Scotland. September this year, many world leaders gathered in New York for the UN World Summit, and one of the talking points was debt reduction for other indebted poor countries. Some proposals that received considerable support by other leaders of developing countries were “debt for equity” and “debt for Millenium Development Goals (MDG)”. The Philippine’s Speaker of the House of Representatives was among the key campaigners of such proposals.
Such new schemes are similar to debt write-off for highly-indebted poor countries. Other indebted poor countries will also not pay a big portion of their foreign debt to both multilateral/bilateral foreign aid institutions, and private bondholders. Instead, the money to be allocated for some foreign debt service (principal amortization plus interest payment) will be used for lender countries’ institutions, corporations and banks’ investment in some earning assets in poor countries ("debt for equity" scheme). Or use the money to expand the budget for social services to help meet the UN’s MDGs of cutting world poverty in 2015 by half compared to their 1990 levels.
While the goal of such new schemes -- poverty alleviation around the world – is laudable, the means are not. Debt forgiveness and reduction can inspire dictators and corrupt leaders to further rape their countries’ economy since the poorer a country is, the bigger is its chance for debt write off, or debt reduction at least. Hence, a “race to the bottom” can happen and it will condemn poor people of those countries into perpetual poverty and dependence on government for dole-outs.
Past loans for public education, public health care, infrastructure, environmental protection, and other social and economic services in poorer countries should have improved the skills, productivity and health of the people of recipient governments. In turn, these people should have become more productive and entrepreneurial, and they pay various taxes and fees to their governments, and the latter can pay back those loans contracted in the past.
Since many poor countries keep on borrowing purportedly for the same social and economic services, this means that the money from past loans were wasted and/or stolen. If this is so, then the solution to high public debt is not large-scale debt forgiveness or more foreign borrowings to be administered by the same sets of institutions and bureaucracies. Instead, poor countries should engage in large-scale privatization of state enterprises and remove some agencies and bureaucracies to save on annual expenditures. Proceeds from privatization and savings from agency consolidation should be used to retire a big portion of the public debt, and to finance continuing social and economic services to the public.
The Philippines and many other poorer economies have plenty of government corporations, banks and financial institutions, including their respective subsidiaries, that more often than not, distort the business environment since they operate as government monopolies, or siphon off public resources for their capitalization or for their bail out as they keep on losing money. Many if not all of these state enterprises can be privatized, not once but piecemeal. While it is true that privatization proceeds are one-time and non-recurring, savings from interest payment of the retired debt or from further contracting new debts, are recurring.
There are no “market failures” being addressed by these state enterprises as many private enterprises can and do provide the services which the former provide. For instance, in the Philippines, there is no justification why government is into real estate, like Clark Economic Zone, Subic Bay, and National Development Company’s subsidiaries (Batangas Land Co., First Cavite Industrial Estate, Kamayan Realty Corp., and so on). Or why government is into trucking and shipping, like NDC subsidiaries National Trucking and Forwarding Corp., Tacoma Bay Shipping Corp.
Non-payment of debts is a bad practice that encourages "moral hazards" problem of being irresponsible borrowers and being addicted to more debts. If poor country politicians, top bureaucrats and consultants can waste or steal their own people's tax money, how much more with rich Japanese or European or American taxpayers’ money. Non-payment of past loans for whatever social goals will only prolong the malady of debt addiction and the economic distortions of government enterprises that need to be disposed to help correct past mistakes and fund mismanagement.
Such new schemes are similar to debt write-off for highly-indebted poor countries. Other indebted poor countries will also not pay a big portion of their foreign debt to both multilateral/bilateral foreign aid institutions, and private bondholders. Instead, the money to be allocated for some foreign debt service (principal amortization plus interest payment) will be used for lender countries’ institutions, corporations and banks’ investment in some earning assets in poor countries ("debt for equity" scheme). Or use the money to expand the budget for social services to help meet the UN’s MDGs of cutting world poverty in 2015 by half compared to their 1990 levels.
While the goal of such new schemes -- poverty alleviation around the world – is laudable, the means are not. Debt forgiveness and reduction can inspire dictators and corrupt leaders to further rape their countries’ economy since the poorer a country is, the bigger is its chance for debt write off, or debt reduction at least. Hence, a “race to the bottom” can happen and it will condemn poor people of those countries into perpetual poverty and dependence on government for dole-outs.
Past loans for public education, public health care, infrastructure, environmental protection, and other social and economic services in poorer countries should have improved the skills, productivity and health of the people of recipient governments. In turn, these people should have become more productive and entrepreneurial, and they pay various taxes and fees to their governments, and the latter can pay back those loans contracted in the past.
Since many poor countries keep on borrowing purportedly for the same social and economic services, this means that the money from past loans were wasted and/or stolen. If this is so, then the solution to high public debt is not large-scale debt forgiveness or more foreign borrowings to be administered by the same sets of institutions and bureaucracies. Instead, poor countries should engage in large-scale privatization of state enterprises and remove some agencies and bureaucracies to save on annual expenditures. Proceeds from privatization and savings from agency consolidation should be used to retire a big portion of the public debt, and to finance continuing social and economic services to the public.
The Philippines and many other poorer economies have plenty of government corporations, banks and financial institutions, including their respective subsidiaries, that more often than not, distort the business environment since they operate as government monopolies, or siphon off public resources for their capitalization or for their bail out as they keep on losing money. Many if not all of these state enterprises can be privatized, not once but piecemeal. While it is true that privatization proceeds are one-time and non-recurring, savings from interest payment of the retired debt or from further contracting new debts, are recurring.
There are no “market failures” being addressed by these state enterprises as many private enterprises can and do provide the services which the former provide. For instance, in the Philippines, there is no justification why government is into real estate, like Clark Economic Zone, Subic Bay, and National Development Company’s subsidiaries (Batangas Land Co., First Cavite Industrial Estate, Kamayan Realty Corp., and so on). Or why government is into trucking and shipping, like NDC subsidiaries National Trucking and Forwarding Corp., Tacoma Bay Shipping Corp.
Non-payment of debts is a bad practice that encourages "moral hazards" problem of being irresponsible borrowers and being addicted to more debts. If poor country politicians, top bureaucrats and consultants can waste or steal their own people's tax money, how much more with rich Japanese or European or American taxpayers’ money. Non-payment of past loans for whatever social goals will only prolong the malady of debt addiction and the economic distortions of government enterprises that need to be disposed to help correct past mistakes and fund mismanagement.
Tuesday, October 25, 2005
Pol. Ideology 2: Evolution of Market and State
At the beginning of human civilization, in primitive hunting societies when resources were generally unlimited for a small population, there was no need for skills “specialization”. And so people were food hunters, home builders, warriors and self-administrators, all rolled into one. As population and human wants began to expand, some degree of skills specialization developed and so men learned to trade with each other. The animal and fish hunters traded their excess catch with craftsmen for the latter’s carpentry, hunting weapons, musical instruments and other artistic services. They traded with farmers who practiced the early technologies of agriculture.
Thus, the MARKET for the exchange of goods and services spontaneously arose, naturally invented. There were not too many varieties of each goods and services and hence, there was general homogeneity in product types and qualities. Hence, the presence of money as mode of voluntary exchange was not necessary; barter – goods for goods or services – was possible. The aggregate social surplus was small and communities could not afford, nor was there a need for it, to have a government made up of full-time administrators and enforcers of rules, whether collectively-agreed upon, or imposed from the top.
Later, as population and economic activities expanded, various forms of MARKET IMPERFECTIONS arose, like monopolies and oligopolies. This is natural because under unrestricted market exchange, consumers reward the efficient producers with continued patronage, assuring the latter’s business growth and expansion. Consumers also punish the inefficient producers, those who sell bad quality commodities and services at bad prices, with non-patronage resulting in the latter’s business stagnancy if not bankruptcy. Other sources of market imperfections are “negative externalities” associated with production such as pollution and noise, as well as “positive externalities” wherein potential producers of “public goods” like traffic lights in busy intersections, and peace and order in communities, are not inclined to produce the services because there will be many “free-riders” who will only enjoy the benefits but will not pay or contribute to shoulder the full cost of such “public goods”.
So men invented GOVERNMENT, and hired administrators, regulators and policy-makers to correct many of those market imperfections. The latter of course invented TAXES and various fees to finance the effort of dealing with these complications. Initially it went well. Many disputes among the citizens were peacefully settled; some monopolies were regulated from further inflicting non-competitive behavior. The “externalities”, both negative and positive, were addressed.
Later, governments introduced GOVERNMENT FAILURES and inefficiencies – bureaucratic red tape, corruption, exorbitant tax rates, multiple taxes and fees, excessive trade barriers, state-sponsored monopolies, and so on. The state was used by certain factions of capitalists and businessmen to protect themselves from other factions or batches of capitalists and entrepreneurs, both local and foreign, both existing and emerging. Among such barriers to entry of new competitors are government-legislated franchises and monopolies.
Government also institutionalized PROTECTIONISM of many local businessmen and producers in the form of high import tariffs, import quantitative restrictions, other forms of trade barriers to protect themselves from foreign capitalists and producers. Local businessmen erected barriers (either mandated in the Constitution or through Parliament-enacted laws) against entry of too many foreign inventors that will compete with their monopolistic and oligopolistic market structure. Or government bureaucrats, either by themselves or upon the prodding of the protected businessmen, create a maze of regulatory restrictions that effectively discourage the emergence of too many entrepreneurs, especially from ordinary employees, farmers, or managers. The existence of (a) high unemployment and underemployment rates, (b) high informal or underground economy, are among the major proofs of the success of bureaucratic nightmare.
So men invented non-profit organizations – more commonly referred to as non-government organizations (NGOs), people’s organizations (POs) and other civil society organizations (CSOs) – to reform government and state failures. Initially, it dampened state bureaucrats’ and policy makers’ appetite for more corruption and inefficiencies. But since many non-profit organizations are themselves “allergic” of the market and hate the concept of profit, much less huge profits, they can only demand governance reforms but not governance exit in many areas and sectors that government has already intervened. A “small and limited government” is not within their political horizon because they themselves are advocates of big government (aka “statists”), they themselves want to run the state and its interventionist agencies and corporations someday.
Thus, it became evident that “reforming government” by statist reformers, or by non-competitive capitalists, had become an oxymoron. Bureaucracies and interventions, once created, seldom decline, let alone die. And governments later invented habitual BUDGET DEFICITS (ie, revenues lower than expenditures). Many politicians run for government positions not to rein in government intervention, but to maintain, if not expand and worsen, those state failures.
Early in the last century, some groups went extreme and invented communist parties and socialist parties to turn an already super-imposing state into a “Big Brother” interventionist socialist state, supposedly to “centrally plan” the basic needs of its people. Later, many socialist states could not even plan and produce how many tons of rice and bread, how many million liters of premium gasoline and diesel, how many pairs of jeans and shoes, what varieties of oranges and bananas, will be needed by their people in a month, in a year. Scarcity led to political instability, which later led to the collapse of many socialist governments, from the Soviet Union to Eastern Europe. The remaining socialist states (China, Vietnam, Cambodia, etc.) survive because they have allowed the market system to exist in the economic sphere while maintaining political monopoly.
So now, many former socialist states are back to allowing private and voluntary exchange of goods and services by their citizens. Once the central-planning, chief-allocating, all-encompassing state shrinks, the market and the price system would know where, when, how much, and for whom goods and services will be allocated.
--------
Not all Market Failures Need Government Intervention
Not all “market failures”, like the absence of exchange by people who supply and demand a particular good or service, or the presence of negative externalities such as resource depletion, will need government intervention. There will always be “market failure” in all sub-sectors or sub-industries given the changing preferences of people who demand ever newer products and services. Or such “market failure” can occur when demand temporarily does not respond to a sudden availability of a new product or service as result of technological innovation, weather and natural events, other factors.
Case 1. Market Failure due to Absence of Supply
Some beautiful waterfalls in a country which have big potential for eco-tourism are not developed. Market failure here springs because while there is big demand by visitors to see beautiful waterfalls, there is no entity that will build the roads to make the place accessible, construct hand rails in dangerous areas, develop picnic grounds and cottages, and so on. Some politicians and anti-market groups can declare this as “market failure” and will move to establish a new government agency called “Waterfalls Development Authority (or Corporation)”, hire personnel, consultants, and politicians-appointed administrators. To do so, government will have to find financing through new tax measures, or raise existing taxes and fees.
There will be many groups of entrepreneurs who will be interested to develop the area, pour their own private resources, to earn money someday. But certain problems exist, like bad peace and order situation due to the presence of rebels and extortionists; problem with neighboring private landowners that will affect the access road to the area. It is also possible that intimidation and extortion is done by the local politicians and police themselves, or by the government's environment ministry or agency in the form of a maze of rules, regulations, and fees to pay, so that the cost of complying with these regulations alone would already cost a big amount of money.
If these problems (especially bureaucracy-created ones) are minimized if not removed, then private entities will compete to develop the area using their own resources, and no burdensome tax hikes or new tax measures will be needed. Applying user-fee principle removes the negative externalities of taxation, where even people who will not get to see those waterfalls are taxed.
There are millions of cases where supply is absent despite existence of demand by other people. There is absence of supply of a mango variety that produces 10 metric tons per tree per year, that is resistant to 95% of all known anthracnose and other mango pests in the world. Demand for this kind of mango variety will be very, very high, so there is another market failure there. But this does not mean that government should come in and put up a Mango Research and Development Authority, pouring vast amounts of money to be taken from the pockets of taxpayers. Time and market dynamics between suppliers and consumers will determine when, where, how and how much such commodity or service will be made available.
Case 2. Market Failure due to Absence of Demand
There are thousands, even millions, of scientific and technical papers languishing in academic libraries around the world, many of which have great engineering, health, agricultural, and other economic applications and potentials. But there are not enough takers from businessmen and entrepreneurs at the moment. Government need not put up a research and development institute, extend huge amounts of credit, set up a government corporation, or other forms of intervention to each and every promising research proposal. For every intervention that government can think and implement, there is corresponding expropriation from taxpayers’ pockets and income; there is corresponding new batch of bureaucracy created that need to be maintained; there is corresponding new batch of rules and regulations that will complicate otherwise simple situations.
During the rainy season, there is absence of enough supply of tomatoes, so that average price in the Philippines can jump from off-season price of P2/kilo to P40 to P50/kilo. D during summer, with bumper harvest, there is absence of enough demand so that average price can slump to P2-P5/kilo. Some tomatoes are unsold and left to rot by farmers because the cost of harvesting and transporting them to public markets are higher than both wholesale and retail prices. In this situation, government need not create a Tomato Regulatory Authority or Tomato Development Corporation to stabilize prices and protect tomato farmers during summer, and protect consumers during rainy season. Such will entail additional taxes and fees, bureaucracies, and political intervention in price-setting.
Case 3. Market Failure due to Negative Externalities
Land clearing and conversion, from forest use to agricultural use, creates negative externalities (or side-effects). Soil erosion is exacerbated, streams and rivers are covered with eroded soil and rocks, and marine life is affected. But such land conversion is a natural reaction of people based on emerging prices of agricultural vs. forest products. As population expands, demand for more food production increases, so will the price of agricultural crops, from grains to vegetables and fruits. If people, especially those living in the affected area, do not value highly the forests, then more land conversion will happen, until it reaches a point that people’s valuation of forest vegetation is deemed higher than more ricefields, banana and mango plantation, sugarcane and coconut plantation.
But the usual reaction of statist individuals -- those who believe in more government intervention, subsidies and taxation -- is for more government regulation, retain state ownership of vast public forest land. This thinking prevents the emergence and establishment of clear property rights to citizens as individuals, cooperatives, people’s organizations, or corporate entities. They gloss over the natural tendency of people that those resources that belong to no one or everyone tend to fall in disrepair, while resources that belong to you, you tend to take care of.
Case 4: Market Failure due to Positive Externalities
Among the so-called “public goods”, or commodities and services that benefit the majority if not everyone, are traffic lights, peace and order, justice administration, and clean air. When these services are provided, "free-riders" or people who enjoy the benefits of certain services but are not willing to voluntarily contribute for the maintenance of such services. Hesitance of private enterprises to provide such services stems from the fact that once provided and supplied, it is difficult to collect revenues from the free-riders, and it is almost impossible to exclude other people who benefit from the services but are not willing to pay the costs of such services.
But it is shown by many private residential villages that many of those considered “public goods” can be privately-provided, and they are able to discourage or eliminate the free-riders. In private villages, subdivisions and residential buildings, the homeowners’ associations act as small government. They administer the provision of basic infrastructure and social services functions that are thought to be the “turf” or domain of government – road and drainage construction and maintenance, garbage collection, street lighting, security and protection of lives and properties, and even occasional immunization and other health care services. They are clear examples that provision of many so-called public goods can be privatized. And the private enterprises are able to collect sufficient revenues to make the service provision sustainable and continuing.
Bottomline: Not all market failures are worth solving, curing, or intervening by government. Buyers and sellers adjust themselves through time given changing patterns in supply and demand conditions. Government “cures” in non-core functions, whether waterfalls development or tomato regulation or tertiary education, often do more harm than good. There is wisdom in this quote, “if market imperfections arise, government can help by doing nothing.” This is because government interventions very often (a) are financed too far and widespread (raising taxes, reducing citizens’ take-home pay), and (b) are done too long (the agency and the bureaucracy stays on even after private players have adjusted to changes in supply-demand situations).
Thus, the MARKET for the exchange of goods and services spontaneously arose, naturally invented. There were not too many varieties of each goods and services and hence, there was general homogeneity in product types and qualities. Hence, the presence of money as mode of voluntary exchange was not necessary; barter – goods for goods or services – was possible. The aggregate social surplus was small and communities could not afford, nor was there a need for it, to have a government made up of full-time administrators and enforcers of rules, whether collectively-agreed upon, or imposed from the top.
Later, as population and economic activities expanded, various forms of MARKET IMPERFECTIONS arose, like monopolies and oligopolies. This is natural because under unrestricted market exchange, consumers reward the efficient producers with continued patronage, assuring the latter’s business growth and expansion. Consumers also punish the inefficient producers, those who sell bad quality commodities and services at bad prices, with non-patronage resulting in the latter’s business stagnancy if not bankruptcy. Other sources of market imperfections are “negative externalities” associated with production such as pollution and noise, as well as “positive externalities” wherein potential producers of “public goods” like traffic lights in busy intersections, and peace and order in communities, are not inclined to produce the services because there will be many “free-riders” who will only enjoy the benefits but will not pay or contribute to shoulder the full cost of such “public goods”.
So men invented GOVERNMENT, and hired administrators, regulators and policy-makers to correct many of those market imperfections. The latter of course invented TAXES and various fees to finance the effort of dealing with these complications. Initially it went well. Many disputes among the citizens were peacefully settled; some monopolies were regulated from further inflicting non-competitive behavior. The “externalities”, both negative and positive, were addressed.
Later, governments introduced GOVERNMENT FAILURES and inefficiencies – bureaucratic red tape, corruption, exorbitant tax rates, multiple taxes and fees, excessive trade barriers, state-sponsored monopolies, and so on. The state was used by certain factions of capitalists and businessmen to protect themselves from other factions or batches of capitalists and entrepreneurs, both local and foreign, both existing and emerging. Among such barriers to entry of new competitors are government-legislated franchises and monopolies.
Government also institutionalized PROTECTIONISM of many local businessmen and producers in the form of high import tariffs, import quantitative restrictions, other forms of trade barriers to protect themselves from foreign capitalists and producers. Local businessmen erected barriers (either mandated in the Constitution or through Parliament-enacted laws) against entry of too many foreign inventors that will compete with their monopolistic and oligopolistic market structure. Or government bureaucrats, either by themselves or upon the prodding of the protected businessmen, create a maze of regulatory restrictions that effectively discourage the emergence of too many entrepreneurs, especially from ordinary employees, farmers, or managers. The existence of (a) high unemployment and underemployment rates, (b) high informal or underground economy, are among the major proofs of the success of bureaucratic nightmare.
So men invented non-profit organizations – more commonly referred to as non-government organizations (NGOs), people’s organizations (POs) and other civil society organizations (CSOs) – to reform government and state failures. Initially, it dampened state bureaucrats’ and policy makers’ appetite for more corruption and inefficiencies. But since many non-profit organizations are themselves “allergic” of the market and hate the concept of profit, much less huge profits, they can only demand governance reforms but not governance exit in many areas and sectors that government has already intervened. A “small and limited government” is not within their political horizon because they themselves are advocates of big government (aka “statists”), they themselves want to run the state and its interventionist agencies and corporations someday.
Thus, it became evident that “reforming government” by statist reformers, or by non-competitive capitalists, had become an oxymoron. Bureaucracies and interventions, once created, seldom decline, let alone die. And governments later invented habitual BUDGET DEFICITS (ie, revenues lower than expenditures). Many politicians run for government positions not to rein in government intervention, but to maintain, if not expand and worsen, those state failures.
Early in the last century, some groups went extreme and invented communist parties and socialist parties to turn an already super-imposing state into a “Big Brother” interventionist socialist state, supposedly to “centrally plan” the basic needs of its people. Later, many socialist states could not even plan and produce how many tons of rice and bread, how many million liters of premium gasoline and diesel, how many pairs of jeans and shoes, what varieties of oranges and bananas, will be needed by their people in a month, in a year. Scarcity led to political instability, which later led to the collapse of many socialist governments, from the Soviet Union to Eastern Europe. The remaining socialist states (China, Vietnam, Cambodia, etc.) survive because they have allowed the market system to exist in the economic sphere while maintaining political monopoly.
So now, many former socialist states are back to allowing private and voluntary exchange of goods and services by their citizens. Once the central-planning, chief-allocating, all-encompassing state shrinks, the market and the price system would know where, when, how much, and for whom goods and services will be allocated.
--------
Not all Market Failures Need Government Intervention
Not all “market failures”, like the absence of exchange by people who supply and demand a particular good or service, or the presence of negative externalities such as resource depletion, will need government intervention. There will always be “market failure” in all sub-sectors or sub-industries given the changing preferences of people who demand ever newer products and services. Or such “market failure” can occur when demand temporarily does not respond to a sudden availability of a new product or service as result of technological innovation, weather and natural events, other factors.
Case 1. Market Failure due to Absence of Supply
Some beautiful waterfalls in a country which have big potential for eco-tourism are not developed. Market failure here springs because while there is big demand by visitors to see beautiful waterfalls, there is no entity that will build the roads to make the place accessible, construct hand rails in dangerous areas, develop picnic grounds and cottages, and so on. Some politicians and anti-market groups can declare this as “market failure” and will move to establish a new government agency called “Waterfalls Development Authority (or Corporation)”, hire personnel, consultants, and politicians-appointed administrators. To do so, government will have to find financing through new tax measures, or raise existing taxes and fees.
There will be many groups of entrepreneurs who will be interested to develop the area, pour their own private resources, to earn money someday. But certain problems exist, like bad peace and order situation due to the presence of rebels and extortionists; problem with neighboring private landowners that will affect the access road to the area. It is also possible that intimidation and extortion is done by the local politicians and police themselves, or by the government's environment ministry or agency in the form of a maze of rules, regulations, and fees to pay, so that the cost of complying with these regulations alone would already cost a big amount of money.
If these problems (especially bureaucracy-created ones) are minimized if not removed, then private entities will compete to develop the area using their own resources, and no burdensome tax hikes or new tax measures will be needed. Applying user-fee principle removes the negative externalities of taxation, where even people who will not get to see those waterfalls are taxed.
There are millions of cases where supply is absent despite existence of demand by other people. There is absence of supply of a mango variety that produces 10 metric tons per tree per year, that is resistant to 95% of all known anthracnose and other mango pests in the world. Demand for this kind of mango variety will be very, very high, so there is another market failure there. But this does not mean that government should come in and put up a Mango Research and Development Authority, pouring vast amounts of money to be taken from the pockets of taxpayers. Time and market dynamics between suppliers and consumers will determine when, where, how and how much such commodity or service will be made available.
Case 2. Market Failure due to Absence of Demand
There are thousands, even millions, of scientific and technical papers languishing in academic libraries around the world, many of which have great engineering, health, agricultural, and other economic applications and potentials. But there are not enough takers from businessmen and entrepreneurs at the moment. Government need not put up a research and development institute, extend huge amounts of credit, set up a government corporation, or other forms of intervention to each and every promising research proposal. For every intervention that government can think and implement, there is corresponding expropriation from taxpayers’ pockets and income; there is corresponding new batch of bureaucracy created that need to be maintained; there is corresponding new batch of rules and regulations that will complicate otherwise simple situations.
During the rainy season, there is absence of enough supply of tomatoes, so that average price in the Philippines can jump from off-season price of P2/kilo to P40 to P50/kilo. D during summer, with bumper harvest, there is absence of enough demand so that average price can slump to P2-P5/kilo. Some tomatoes are unsold and left to rot by farmers because the cost of harvesting and transporting them to public markets are higher than both wholesale and retail prices. In this situation, government need not create a Tomato Regulatory Authority or Tomato Development Corporation to stabilize prices and protect tomato farmers during summer, and protect consumers during rainy season. Such will entail additional taxes and fees, bureaucracies, and political intervention in price-setting.
Case 3. Market Failure due to Negative Externalities
Land clearing and conversion, from forest use to agricultural use, creates negative externalities (or side-effects). Soil erosion is exacerbated, streams and rivers are covered with eroded soil and rocks, and marine life is affected. But such land conversion is a natural reaction of people based on emerging prices of agricultural vs. forest products. As population expands, demand for more food production increases, so will the price of agricultural crops, from grains to vegetables and fruits. If people, especially those living in the affected area, do not value highly the forests, then more land conversion will happen, until it reaches a point that people’s valuation of forest vegetation is deemed higher than more ricefields, banana and mango plantation, sugarcane and coconut plantation.
But the usual reaction of statist individuals -- those who believe in more government intervention, subsidies and taxation -- is for more government regulation, retain state ownership of vast public forest land. This thinking prevents the emergence and establishment of clear property rights to citizens as individuals, cooperatives, people’s organizations, or corporate entities. They gloss over the natural tendency of people that those resources that belong to no one or everyone tend to fall in disrepair, while resources that belong to you, you tend to take care of.
Case 4: Market Failure due to Positive Externalities
Among the so-called “public goods”, or commodities and services that benefit the majority if not everyone, are traffic lights, peace and order, justice administration, and clean air. When these services are provided, "free-riders" or people who enjoy the benefits of certain services but are not willing to voluntarily contribute for the maintenance of such services. Hesitance of private enterprises to provide such services stems from the fact that once provided and supplied, it is difficult to collect revenues from the free-riders, and it is almost impossible to exclude other people who benefit from the services but are not willing to pay the costs of such services.
But it is shown by many private residential villages that many of those considered “public goods” can be privately-provided, and they are able to discourage or eliminate the free-riders. In private villages, subdivisions and residential buildings, the homeowners’ associations act as small government. They administer the provision of basic infrastructure and social services functions that are thought to be the “turf” or domain of government – road and drainage construction and maintenance, garbage collection, street lighting, security and protection of lives and properties, and even occasional immunization and other health care services. They are clear examples that provision of many so-called public goods can be privatized. And the private enterprises are able to collect sufficient revenues to make the service provision sustainable and continuing.
Bottomline: Not all market failures are worth solving, curing, or intervening by government. Buyers and sellers adjust themselves through time given changing patterns in supply and demand conditions. Government “cures” in non-core functions, whether waterfalls development or tomato regulation or tertiary education, often do more harm than good. There is wisdom in this quote, “if market imperfections arise, government can help by doing nothing.” This is because government interventions very often (a) are financed too far and widespread (raising taxes, reducing citizens’ take-home pay), and (b) are done too long (the agency and the bureaucracy stays on even after private players have adjusted to changes in supply-demand situations).
Tuesday, October 18, 2005
Pol. Ideology 1: Minimal Government Manifesto
(This is the Manifesto we issued when we formed MG in March 2004:)
The Minimal Government Manifesto
Minimal Government = Minimal Bureaucracy = Minimal Taxes.
Smaller government appropriation from our hard-earned income = Greater individual freedom where to spend or save their hard-earned money.
Smaller government restrictions in movement of goods, services and people = Greater individual freedom where they will work, invest, trade, travel, rest and retire.
---------------------------------------------
In the beginning of human civilization, at primitive hunting societies, men learned to trade with each other. The animal hunters traded their excess animal catch with fish hunters for the latter's excess fish catch. Or traded with craftsmen for the latter's carpentry, musical instruments and other artistic services. Or traded with early farmers who practiced the early technologies of agriculture. Thus, men invented the MARKET for the exchange of goods and services, and it went well. There was no government then made up by full-time administrators and enforcers of mutually-agreed rules.
Later as population and economic activities expanded, market failures arose - monopolies, oligopolies, externalities associated with production like pollution, dealing with criminals and other deviants that disrupt social order and threaten property rights, dealing with external aggressors, etc. So men invented GOVERNMENT. And government invented TAXES and various fees. Initially it went well.
Later, governments introduced government failures and inefficiencies - bureaucratic red tapes, corruption, excessive tax rates, excessive trade barriers, state-sponsored monopolies, etc. So men invented non-profit organizations, more commonly referred to as non-government organizations (NGOs) and civil society organizations (CSOs). Initially it went well in attempting to reform government and state failures.
Later, it became evident that "reforming government" has become an oxymoron. Bureaucracies, once created, seldom decline, let alone die. In fact, governments later invented habitual BUDGET DEFICIT Many politicians run for government positions not to reform government but to maintain, if not worsen, those state failures.
Some groups went extreme and invented communist parties and socialist parties, to make an already super-imposing state become a "Big Brother" interventionist socialist state, supposedly to "centrally plan" the basic needs of its people. Later, many socialist states could not even plan and produce how many tons of bread and rice, how many million liters of gasoline, how many pairs of jeans and shoes, will be needed by their people. Scarcity led to political instability which later led to collapse of many socialist governments, from the Soviet Union to Eastern Europe. The remaining socialist states (China, Vietnam, Cambodia, etc.) survive because they have allowed the market system to exist in the economic sphere while maintaining political monopoly.
Why reform government when markets can do the delivery of some public goods and services more efficiently?
Why reform government when some government functions can be privatized?
Why keep high and complicated taxes when many citizens are privately paying for services that should have been done by government, but failed to deliver because of government failures?
Why let government bureaucrats and politicians decide how much they should appropriate from our hard-earned income and wages, and where they should spend our hard-earned money, including how much to pay for themselves, their travels and their parties?
In the case of the Philippines, why should the productive sectors be heavily taxed, even harassed by tax administrators -- the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), etc. - when the former seldom or do not send their children to public schools, do not go to public hospitals when they get sick, spend a big sum to live in gated villages for their personal protection, pay for the maintenance of their villages' street lighting and garbage collection? These services are long-held and believed to be "public goods" and hence, should be provided by the state. But many of these services are now provided by the private sector.
We, members and supporters of Minimal Government movement, believe in the following philosophies and principles:
a. Shrink the size of government and this will reduce corruption in government. If there is less to steal, less stealing will happen. If there is less power to wield unjustly, less power will be wielded unjustly.
b. Reduce tax rates and this will reduce corruption in tax collection. If there is less taxes to pay, less tax evasion will happen.
c.. Lessen "free riding" in benefits that other people have paid for. People should pay for services that they enjoy and benefit, whether publicly or privately provided.
d.. Should government be involved in delivery of social services, the task should be given to local government units (LGUs) and less to national government agencies.
e.. Optimize individual freedom to choose, to trade, to travel, to be happy. The privilege of selling to whomever wants to buy and to buy from whoever want to sell is basic human right and human freedom. To restrict who can sell to whom and who can buy from whom is a violation of such human rights.
To achieve these ends, we seek to advocate and campaign for the following basic measures:
1.. Merge line departments when their functions tend to overlap or occasionally conflict. Out of current 21 Departments, we believe these can be reduced to only 13 or 14. (See a discussion paper on "Merging Some Line Departments for Expenditure Reduction and Making the Philippine Bureaucracy More Efficient"). Corollarily, some bureaus and attached agencies under those
departments can be merged, if not privatized.
2.. Corporatize, if not privatize, up to 90 percent of the current 120 state universities and colleges (SUCs). Government should re channel revenues and savings from this move to improve public elementary and secondary education, and to expand scholarship opportunities to poor but intelligent tertiary education students. After all, the really poor students do not reach college. They drop
out even before they finish elementary or high school.
3.. A flat individual income tax rate of only 10 percent, versus the current 6 tiers, from 10 to 34 percent. A lower corporate income tax of 16 percent of net income, versus the current 32 percent. Theoretically, we believe that income taxes can be abolished, and government can shift to consumption tax. You buy a car or house, you pay tax. You buy gasoline or hamburger, you pay tax. You buy clothes or shoes, you pay tax. But in consideration of the swelling public debt and perennial budget deficit, we settle for a 10 percent income tax flat rate.
4.. Encourage the poor and those in the informal sectors to pay taxes. It is them who mainly benefit from public education, from public health care, from public safety. Many poor people have money to bet in jueteng, cockfighting and other forms of gambling, have money to buy beer and cigarettes, gin and local alcoholic drinks. Hence, they should pay taxes where they themselves will benefit from basic public services.
5.. Privatize a big portion of current public forest land. The government has terribly failed in protecting public forest land, currently constituting 50 percent of the country's total land area of 30 million hectares. Sell some of those public forest land, tax the new private landowners, while holding them accountable against activities that cause heavy environmental damage – rapid soil erosion, forest fires, uncontrolled mining tailings, etc.
6.. Corporatize or privatize other idle and underutilized resources - including police or military reservation areas. If these are military areas for instance, proceeds from such revenues should be devoted only to modernize the Armed Forces and to retire some maturing domestic debts. Savings from interest payment can be used to increase the pay of uniformed personnel.
7.. Liberalize further international trade. Trade protectionism benefits a few local producers and their workers but penalize the majority of the population. Savings by consumers from cheaper and/or better quality imported goods and services create additional demand on other goods and services, which create new business and employment opportunities which can more than offset business and employment displacement in the affected sectors.
8.. Liberalize further foreign investments into the country. It is better to bring foreign investors and businessmen into the country, than sending Filipino workers to foreign lands. Because of fast population growth and not so good educational system, labor supply always outstrips labor demand annually in the country.
9.. Deregulate sectors where monopolies and oligopolies thrive, where tentacles of government regulations kill entreneurship. The local shipping industry should be deregulated and liberalized to allow competition by foreign shippers, to give justice to local producers who complain of high rates imposed by local shipping monopolies and oligopolies, not to mention government red tapes.
10.. Support the move towards strengthening the LGUs through federalism.
We are NOT advocating a "Zero Government", though. Economic and political theories, as well as practicalities of daily lives, prove that there is role for government. Thus, we believe that there is room for government regulation and intervention in these areas, among others:
1.. Administration of justice, of upholding basic human rights against threats to life and property. This include functions by the Department of Justice (DOJ), the police (PNP), the Judiciary (Supreme Court and lower courts).
2.. National defense against potential external aggression. The Armed Forces of the Philippines (AFP) can be reoriented to focus on air and naval defense. Fighting the communist insurgents, smugglers of prohibited goods (bombs, illegal drugs, etc.) and Muslim extremists is better handled by the PNP and local government units (LGUs).
3.. Basic education (elementary and secondary) and health care for the poor. But these should better be done more by the LGUs and less by the national government.
4.. Infrastructure development where there is little or no private sector interest. This includes power development, public works, transportation and communication facilities.
This is a tall order and a big challenge for us all. We expect public support, especially the middle class and salaried employees, for these reform measures. Reforms not only in governance, but also in our philosophy and concept of the role of governments, in the limits to their intervention, in our lives.
March 2004
The Minimal Government Manifesto
Minimal Government = Minimal Bureaucracy = Minimal Taxes.
Smaller government appropriation from our hard-earned income = Greater individual freedom where to spend or save their hard-earned money.
Smaller government restrictions in movement of goods, services and people = Greater individual freedom where they will work, invest, trade, travel, rest and retire.
---------------------------------------------
In the beginning of human civilization, at primitive hunting societies, men learned to trade with each other. The animal hunters traded their excess animal catch with fish hunters for the latter's excess fish catch. Or traded with craftsmen for the latter's carpentry, musical instruments and other artistic services. Or traded with early farmers who practiced the early technologies of agriculture. Thus, men invented the MARKET for the exchange of goods and services, and it went well. There was no government then made up by full-time administrators and enforcers of mutually-agreed rules.
Later as population and economic activities expanded, market failures arose - monopolies, oligopolies, externalities associated with production like pollution, dealing with criminals and other deviants that disrupt social order and threaten property rights, dealing with external aggressors, etc. So men invented GOVERNMENT. And government invented TAXES and various fees. Initially it went well.
Later, governments introduced government failures and inefficiencies - bureaucratic red tapes, corruption, excessive tax rates, excessive trade barriers, state-sponsored monopolies, etc. So men invented non-profit organizations, more commonly referred to as non-government organizations (NGOs) and civil society organizations (CSOs). Initially it went well in attempting to reform government and state failures.
Later, it became evident that "reforming government" has become an oxymoron. Bureaucracies, once created, seldom decline, let alone die. In fact, governments later invented habitual BUDGET DEFICIT Many politicians run for government positions not to reform government but to maintain, if not worsen, those state failures.
Some groups went extreme and invented communist parties and socialist parties, to make an already super-imposing state become a "Big Brother" interventionist socialist state, supposedly to "centrally plan" the basic needs of its people. Later, many socialist states could not even plan and produce how many tons of bread and rice, how many million liters of gasoline, how many pairs of jeans and shoes, will be needed by their people. Scarcity led to political instability which later led to collapse of many socialist governments, from the Soviet Union to Eastern Europe. The remaining socialist states (China, Vietnam, Cambodia, etc.) survive because they have allowed the market system to exist in the economic sphere while maintaining political monopoly.
Why reform government when markets can do the delivery of some public goods and services more efficiently?
Why reform government when some government functions can be privatized?
Why keep high and complicated taxes when many citizens are privately paying for services that should have been done by government, but failed to deliver because of government failures?
Why let government bureaucrats and politicians decide how much they should appropriate from our hard-earned income and wages, and where they should spend our hard-earned money, including how much to pay for themselves, their travels and their parties?
In the case of the Philippines, why should the productive sectors be heavily taxed, even harassed by tax administrators -- the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), etc. - when the former seldom or do not send their children to public schools, do not go to public hospitals when they get sick, spend a big sum to live in gated villages for their personal protection, pay for the maintenance of their villages' street lighting and garbage collection? These services are long-held and believed to be "public goods" and hence, should be provided by the state. But many of these services are now provided by the private sector.
We, members and supporters of Minimal Government movement, believe in the following philosophies and principles:
a. Shrink the size of government and this will reduce corruption in government. If there is less to steal, less stealing will happen. If there is less power to wield unjustly, less power will be wielded unjustly.
b. Reduce tax rates and this will reduce corruption in tax collection. If there is less taxes to pay, less tax evasion will happen.
c.. Lessen "free riding" in benefits that other people have paid for. People should pay for services that they enjoy and benefit, whether publicly or privately provided.
d.. Should government be involved in delivery of social services, the task should be given to local government units (LGUs) and less to national government agencies.
e.. Optimize individual freedom to choose, to trade, to travel, to be happy. The privilege of selling to whomever wants to buy and to buy from whoever want to sell is basic human right and human freedom. To restrict who can sell to whom and who can buy from whom is a violation of such human rights.
To achieve these ends, we seek to advocate and campaign for the following basic measures:
1.. Merge line departments when their functions tend to overlap or occasionally conflict. Out of current 21 Departments, we believe these can be reduced to only 13 or 14. (See a discussion paper on "Merging Some Line Departments for Expenditure Reduction and Making the Philippine Bureaucracy More Efficient"). Corollarily, some bureaus and attached agencies under those
departments can be merged, if not privatized.
2.. Corporatize, if not privatize, up to 90 percent of the current 120 state universities and colleges (SUCs). Government should re channel revenues and savings from this move to improve public elementary and secondary education, and to expand scholarship opportunities to poor but intelligent tertiary education students. After all, the really poor students do not reach college. They drop
out even before they finish elementary or high school.
3.. A flat individual income tax rate of only 10 percent, versus the current 6 tiers, from 10 to 34 percent. A lower corporate income tax of 16 percent of net income, versus the current 32 percent. Theoretically, we believe that income taxes can be abolished, and government can shift to consumption tax. You buy a car or house, you pay tax. You buy gasoline or hamburger, you pay tax. You buy clothes or shoes, you pay tax. But in consideration of the swelling public debt and perennial budget deficit, we settle for a 10 percent income tax flat rate.
4.. Encourage the poor and those in the informal sectors to pay taxes. It is them who mainly benefit from public education, from public health care, from public safety. Many poor people have money to bet in jueteng, cockfighting and other forms of gambling, have money to buy beer and cigarettes, gin and local alcoholic drinks. Hence, they should pay taxes where they themselves will benefit from basic public services.
5.. Privatize a big portion of current public forest land. The government has terribly failed in protecting public forest land, currently constituting 50 percent of the country's total land area of 30 million hectares. Sell some of those public forest land, tax the new private landowners, while holding them accountable against activities that cause heavy environmental damage – rapid soil erosion, forest fires, uncontrolled mining tailings, etc.
6.. Corporatize or privatize other idle and underutilized resources - including police or military reservation areas. If these are military areas for instance, proceeds from such revenues should be devoted only to modernize the Armed Forces and to retire some maturing domestic debts. Savings from interest payment can be used to increase the pay of uniformed personnel.
7.. Liberalize further international trade. Trade protectionism benefits a few local producers and their workers but penalize the majority of the population. Savings by consumers from cheaper and/or better quality imported goods and services create additional demand on other goods and services, which create new business and employment opportunities which can more than offset business and employment displacement in the affected sectors.
8.. Liberalize further foreign investments into the country. It is better to bring foreign investors and businessmen into the country, than sending Filipino workers to foreign lands. Because of fast population growth and not so good educational system, labor supply always outstrips labor demand annually in the country.
9.. Deregulate sectors where monopolies and oligopolies thrive, where tentacles of government regulations kill entreneurship. The local shipping industry should be deregulated and liberalized to allow competition by foreign shippers, to give justice to local producers who complain of high rates imposed by local shipping monopolies and oligopolies, not to mention government red tapes.
10.. Support the move towards strengthening the LGUs through federalism.
We are NOT advocating a "Zero Government", though. Economic and political theories, as well as practicalities of daily lives, prove that there is role for government. Thus, we believe that there is room for government regulation and intervention in these areas, among others:
1.. Administration of justice, of upholding basic human rights against threats to life and property. This include functions by the Department of Justice (DOJ), the police (PNP), the Judiciary (Supreme Court and lower courts).
2.. National defense against potential external aggression. The Armed Forces of the Philippines (AFP) can be reoriented to focus on air and naval defense. Fighting the communist insurgents, smugglers of prohibited goods (bombs, illegal drugs, etc.) and Muslim extremists is better handled by the PNP and local government units (LGUs).
3.. Basic education (elementary and secondary) and health care for the poor. But these should better be done more by the LGUs and less by the national government.
4.. Infrastructure development where there is little or no private sector interest. This includes power development, public works, transportation and communication facilities.
This is a tall order and a big challenge for us all. We expect public support, especially the middle class and salaried employees, for these reform measures. Reforms not only in governance, but also in our philosophy and concept of the role of governments, in the limits to their intervention, in our lives.
March 2004
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