Lion Rock 10: On Having Centralized or Self-Government

This Saturday, I will attend the Reading Club Salon 2013 of the Lion Rock Institute in Hong Kong. It is a full day round table discussion with the theme this year, "Democracy -- Past, Present and Future".

There are dozens of reading materials. Today I read  Anti-Federalist Paper #3. This portion is cool.

'The only foreign, or at least evil foreign influence, must be obtained through corruption. Where the government is lodged in the body of the people, as in Switzerland, they can never be corrupted; for no prince, or people, can have resources enough to corrupt the majority of a nation; and if they could, the play is not worth the candle. The facility of corruption is increased in proportion as power tends by representation or delegation, to a concentration in the hands of a few. . . ."

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Yes, the main external or foreign source of social disharmony or even decay, is corruption from within, internal and self-inflicted misery. And that is why the more concentration of power in few people, more is corruption unleashed. Thus, people should not give too much power to any few people, even if they look like angels, even if they act and sound like angels.

"Where the people are free there can be no great contrast or distinction among honest citizens in or out of office. In proportion as the people lose their freedom, every gradation of distinction, between the Governors and governed obtains, until the former become masters, and the latter become slaves.... Our people are capable of being made anything that human nature was or is capable of, if we would only have a little patience and give them good and wholesome institutions; but I see none such and very little prospect of such. Alas! I see nothing in my fellow-citizens, that will permit my still fostering the delusion, that they are now capable of sustaining the weight of SELF-GOVERNMENT: a burden to which Greek and Roman shoulders proved unequal."

I agree with the statement that if people are free, corruption, extortion and distrust of the rule of law will significantly decline. And I think the "self government" here refers to a state of civil society. People are mature and responsible enough to run their own lives, their own communities, without much coercion and central planning.

"If the body of the people will not govern themselves, and govern themselves well too, the consequence is unavoidable — a FEW will, and must govern them. Then it is that government becomes truly a government by force only, where men relinquish part of their natural rights to secure the rest, instead of an union of will and force, to protect all their natural rights, which ought to be the foundation of every rightful social compact."

Yes, failure of "self government" would mean the success of coercive government. But such coercion is limited to protecting the people's natural rights. Right to life, right to private property, right to liberty.

"As to any nation attacking a number of confederated independent republics … it is not to be expected, more especially as the wealth of the empire is there universally diffused, and will not be collected into any one overgrown, luxurious and effeminate capital to become a lure to the enterprising ambitious."

Nice term, "overgrown, luxurious and effeminate capital" as magnet for foreign invasion.

"In small independent States contiguous to each other, the people run away and leave despotism to reek its vengeance on itself; and thus it is that moderation becomes with them, the law of self-preservation."

This is possible, so long as people have the freedom to "vote with their feet" or mobility among people across countries and continentis relatively easy.

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See also Lion Rock 6: Honoring Milton Friedman, July 31, 2013 
Lion Rock 7: Reading Club Salon 2013, Hong Kong, September 17, 2013 

Lion Rock 8: On Opposition, Factions and James Madison, October 01, 2013 

Lion Rock 9: Federalism, Decentralization and George Clinton, October 07, 2013 

Business 360 12: Optimum Size of Government, October 13, 2013

Parliamentary Dumdum Emotionalism

* This is my guest post in antipinoy today.

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Some people have the habit or disease of attaching their particular advocacies to their personalities. They have intertwined the issue or message to their personal identity. Thus, "Advocacy X = Person X". An attack on issue or an advocacy is seen as an attack on that person. This is a pathetic if not psychotic attitude because other people normally criticize an idea, not the person or group of people. There is a distinction between the message and the messenger.

At the facebook group "Kilos Pinoy", owned and administered by a friend, James Mangun, Warlito Vicente posted this poster sometime last week.

I commented on it by way of posting quotes from some free market thinkers.

Another free marketer friend, Carlos Tapang, also commented and we have a brief issue-based exchange.

Then the convenor of CORRECT Movement, Orion Dumdum Perez came in full of personal attacks. This is a type of guy who thinks that his advocacy for Parliamentary form of government is similar to his person. So an attack on the Parliamentary form of government, even being simply unconvinced of it, is considered as an attack on himself.

I am envious of his CORRECT Movement? Why, am I a politician competing with another politician for a particular political office? Am I competing for funding with his CORRECT donors? None of it. It is an illusory statement from an insecure mind.

I am an ingrate? True that Dumdum introduced me to the host of one GNN tv public affairs program host, and true that I was a guest in one of his programs. I must have failed to thank Dumdum 50x or 100x, I think I thanked him only once or twice, too bad. But I don't think I attacked him or his life and soul advocacy of Parliamentarism. I have been an agnostic on the form of government ever since, until now. I do not attack the Parliamentary of Presidential form of government per se, rather, I attack BIG and intrusive government, whether Parliamentary of Presidential. Dumdum posted long, trying to convince me and everyone who bothers to read his long postings fine. But here's the disease: If those long postings do not work and you remain unconvinced, woe upon you. Personal attacks and emotionalism will be launched upon you.

Then called me "evil as his apprentice and protege Froilan Bersamina... lunatic Talibannic extremist... Insane." This man must be suffering from some mental disorder. My critic above is against BIG and intrusive government, both parliamentary and presidential, never against Parliamentary form or Presidential form per se.  I criticize people though, who fashion themselves as "free marketers" but cannot explicitly criticize BIG and ever-expanding government, but I avoid mentioning names as much as possible.

See the repeated personal attacks. Too much angst, too much insecurity publicly advertised.

I remember the RH bill debate. Some "free marketers" supported further expansion of government, allowing the State to impose sex education in the elementary and high school curriculum, impose mandatory and obligatory pro-bono (ie, free) RH services by OB Gyne and other RH practitioners for several hours a year, and so on. I did not support that bill not for any religious reason but for the simple reason that it further expands and already intrusive government.

This is one instance where the proponent of that RH law, parliamentary or presidential government, does not matter. What matters is further expansion of that government and it must not be supported, if one advocates for free market and limited government.

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See also: 

Pol. Ideology 28: Parliamentarism Hard Sell and Free Market Deception, April 30, 2012 

Fiscal Irresponsibility 23: High Debt and Unemployment and Parliamentarism Hard Sell, May 02, 2012 

Probing a Megalomaniac Mind, May 02, 2012

The Curious Case of a Pathological Lying Pro-Parliamentary Dum-Dum: His "Ceteris Paribus", "Probabilistic Causality" Gibberish, October 07, 2013 

Mining 35: Opposition to Mining, Where Do They Come From?

In my previous article in this subject, I said that the EITI Secretariat has declined my belated application to join their conference last month. Upon the request of a friend who is a DOF official, the secretariat invited me to attend the conference of Day 2.

Below is my article today in Mining Week.
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Other than the usual left-leaning and anti-capitalism, anti-globalization groups, there are many other camps and individuals who oppose large-scale mining (metallic and non-metallic) for other reasons. What are these reasons and where do they come from?

During the “Conference on the Adoption of the 2013 EITI Standards” last September 27, 2013 at Crowne Plaza in Ortigas, sponsored by the Extractive Industries Transparency Initiative (EITI) International Secretariat and the World Bank, Dr. Elmer Billedo, Assistant Director of the Mines and Geosciences Bureau (MGB, DENR) was one of the speakers. Among the slides he showed was this one.

It is a useful illustration and it shows that the major groups of people who oppose the industry come from the following:

1. Politics and politicians, either for personal or professional reasons, the painted or assumed destructiveness of mining is exaggerated, begging for more regulations and taxation on top of existing ones, if not outright banning of LSM.

2. Propaganda groups, especially the anti-capitalism groups who dislike big corporations and multinational firms extracting rocks and soil from the Philippines and exported to other countries.

3. Lack of information by the public, media and other civil society organizations. Many are not aware that “responsible mining” is possible and is in fact happening in many large mining projects in the country.

4. Legacy mines, like the mining disaster in Marinduque about two decades ago. Then the occasional fatal landslides in Mt. Diwalwal and other areas where small scale mining (SSM) is the dominant practice, but is attributed to large scale mining (LSM).

5. Current violations of environmental standards, by some LSM companies, and is more rampant among SSM but is attributed by the public to LSM.

6. Lack of benefits, coming from some mine workers themselves and residents of the mining village. Sometimes this is an objective assessment but oftentimes, it is a subjective and biased opinion. For instance, some residents who are not connected with the mining company may feel that they should be “entitled” too to some benefits like free or highly subsidized healthcare, education, given by the mining  firm.

As a result of such opposition, (a) local government units (LGUs) are issuing more ordinances and resolutions against mining; (b) Congress is considering Bills declaring “mining-free” provinces, cities and municipalities; (c) MGB-DENR and BIR-DOF are increasing regulatory requirements and taxes; and (d)

Advocacy groups  are filing complaints and cases against mining projects, both in Congress and the Supreme Court.

During the open forum, I spoke and shared my observation that many anti-mining groups are easy to address if they are shown with lots of data, that responsible mining can and does exist, that LSM are already over-taxed, that the total area under LSM is very small compared to the total land area of the country. That I was surprised that my former teacher at the UP School of Economics (UPSE), Prof. Winnie Monsod, is misinformed and thinks that mining tax is only the 2 percent excise tax, that is why she is advocating that the Malampaya natural gas sharing scheme of 60-40 of net revenues going to the government and the private developer respectively, should also apply in mining.

Then I suggested that the MGB, DOF and DILG should produce more detailed data available online, like breakdown of mining taxes and fees collected by both national and local governments from LSM, SSM and large non-metallic mining. If the public can see these data for themselves, negative sentiments against LSM and mining in general can decline.

The participation of the Philippines at the EITI is a good move. The regulated and taxed companies can declare how much they have paid to the barangay, city/municipal and provincial governments, the royalties and social development management projects (SDMP) given to communities and people’s cooperatives, and to the MGB, BIR, BOC, SEC and other national agencies. These agencies will also be forced to report how much they collected from each mining enterprise, small and big alike.

Of course there are other costs that are not reported by the mining firms. Like special and monetary requests by the LGUs and national agencies, otherwise these government officials will harass the mining firm, if not disallow its continued operation. This data is hard to produce.

Nonetheless, information is empowerment. The more information that will be available to the public, the lesser will be the misconception and unnecessary opposition  to mining.

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See also: 

Mining 31: Prof. Winnie Monsod's Faulty Tax Proposal, August 22, 2013 

Mining 32: Output Contraction in 1st Half 2013, September 02, 2013 

Mining 33: Job Creation, Taxes and the Politics of Envy, September 13, 2014 

Mining 34: EITI, Taxes and Other Costs of Regulations, September 24, 2013

IDEAS 5: Who is a Liberal? What is Limited Government?

This is a nice, well-written paper defining what is liberalism and libertarianism, who is a liberal, what is the rule of law, limited government, and free market capitalism. Written by a friend, the CEO of IDEAS in Malaysia, Wan Saiful Wan Jan. Posted today in their website, reposting here. This essay complements my previous papers under "Pol. Ideology" series in this blog.
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The word “liberal” has been bandied about quite a lot lately. Most of the time the term is criticised for something completely unrelated to what the word actually means. There are also many cases of people being labelled as liberals when they are not.

Clearing the confusion surrounding liberalism is not easy. But we have to start somewhere. So let me try.

The word ‘liberal’ has been abused so much that, in some cases, the meaning has been greatly distorted. In America, the word has been stolen by those who generally believe in greater state intervention (e.g. Obama’s Democratic Party). In Malaysia, some have been trying to associate liberalism with Pakatan Rakyat. Neither of these represents liberalism in the classical sense. In Malaysia, none of our mainstream political parties have a coherent philosophical foundation, while in the US, the Democrats are on the left.

Classical liberalism is usually used in Europe to describe a political philosophy that in the United States would be called libertarianism. Of course there are differences in the details, but for the purpose of this article, let us simplify the discussion and use liberalism and libertarianism interchangeably.

A libertarian’s most basic belief could be traced back to the Abrahamic and Greek idea of a “higher law”, a law by which everyone, including the ruling elites, could be judged. The advent of Islam strengthened this belief, and reinforced the idea that those in positions of power are not the ultimate source of authority. They too are subject to the law.

Libertarians believe in the “rule of law”, not the lack of rules and laws. Libertarianism is a call for everyone to be subject to the same set of rules, with no one being above the law. This is the best safeguard that we have against dictatorship and totalitarianism.

Rule of law calls for equality between the ruled and the ruler. Since the ruling elite holds the key to coercive power – such as the ability to legislate, and control of the armed forces and the police – it is very important that their powers are limited.

If the ruling elites have unlimited powers to legislate and dictate, we will quickly descend into the rule of men. Hence we need a “limited government”, which is another important principle of liberalism.

The government is an institution to which citizens delegate the authority to rule. It is this delegation that gives government its power. But the government is such a powerful institution that it can easily become a dangerous one, especially when it coerces citizens into obedience.

To prevent government coercion, the roles and powers of the government must be limited, usually through a written constitution that both enumerates and limits executive power with checks and balances.

This is an important point. The ruling elite exists because we the citizens empower them. The rakyat is the true master, and those in power are the servants. Not the other way round. We must do all that we can to prevent anyone in power from behaving like kings and this is why we must demand a limited government.

The concept of limited government implies the need to respect “individual liberty and responsibility”. Individuals are free to choose how they live their lives as long as they do no harm to others, and they must be responsible for what they do. The religious ones must be free to practice their religions, while those who are not must be free to be so too.

Islam tells Muslims to be among the most liberal in this sense. In the Golden Age of Islam, a Muslim leader Rubi’e bin Amir proudly told Persian General Rustom that Islam was sent to free mankind from servitude to other men so that they serve only God. Of course, the rise of a new generation of human gods in Islam (and in other religions) deserves a treatment on its own, but we must be careful to distinguish the principles from the practice.

Perhaps most importantly, the concept of individual liberty demands that those in power must not encroach into what is private to the individuals. The government should only step in when individuals do harm to others, but otherwise they should leave us alone. (See: The Liberty Manifesto)

It is well known that liberals support free markets. But many are confused about why this is so. Some accuse free marketeers as supporting inequality between the haves and the have-nots. And others confuse between the actions of capitalists and principles of capitalism.

Libertarians support the free market capitalism because it is the only system that respects human dignity. The free market is the only system that truly gives people choice and prevents cronyism. In a free market, businesses have to compete to please the rakyat, the consumers. But in a non-free market, businessmen can ignore the rakyat because all they need to do is to collude with politicians to gain favourable treatments and subsidies.

A non-free market system victimises the rakyat because it denies our freedom to choose. And more often than not, systems other than the free market result in the privatisation of profits and nationalisation of losses. All the cronyism, nepotism and corruption that we see around the world are almost always the result of collusions between politicians and businessmen, which can only happen when the economy is not free and this is exactly what the free market want to eradicate.

In short, and at a great risk of oversimplifying a complex issue, being a liberal or a libertarian means believing in the rule of law, limited government, individual liberty and responsibility, and the free market. (See: Philosophy of IDEAS)

The next time someone accuses liberalism of this and that, I urge you firstly judge whether that person knows what he is talking about or not. We need to spot those who more often than not talk nonsense, and expose them for their ignorance.

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See also:
Think tanks for liberty 1: IDEAS Malaysia, February 02, 2011
IDEAS 2: Wan Saiful Talk in Manila, September 9, September 07, 2013 
IDEAS 3: Wan Saiful's Presentation in Manila, September 11, 2013 
IDEAS 4: Photos of Wan Saiful's Talk on the Politics and Economy of Malaysia, September 12, 2013

Happy 88th Birthday, Margaret Thatcher

Yesterday was Margaret Thatcher's 88th birthday. Happy birthday, Iron Lady. RIP.

"Let us never forget this fundamental truth: the State has no source of money other than money which people earn themselves. If the State wishes to spend more it can do so only by borrowing your savings or by taxing you more. It is no good thinking that someone else will pay – that 'someone else' is you. There is no such thing as public money; there is only taxpayers' money" -- Margaret Thatcher, October 1983

"As Ron once put it: the nine most dangerous words in the English language are 'I'm from the government, and I'm here to help.' As usual, he was right." -- M.Thatcher on Ronald Reagan, 2002

"I came to office with one deliberate intent: to change Britain from a dependent to a self-reliant society -- from a give-it-to-me, to a do-it-yourself nation. A get-up-and-go, instead of a sit-back-and-wait-for-it Britain." -- M. Thatcher, February 1984

"We want a society where people are free to make choices, to make mistakes, to be generous and compassionate. This is what we mean by a moral society; not a society where the state is responsible for everything, and no one is responsible for the state." -- M. Thatcher

And the Lady was among the early if not the first, head of state to be a non-believer of global ecological central planning.

Bottomline is simple...

See also, Pol. Ideology 39: Thatcherism, April 10, 2013

IAF Seminar, Gummersbach, Germany, Part 2

This is the continuation of my earlier paper, IAF Seminar 2008, Gummersbach, Germany, posted in January 21, 2011. The course that I attended in THA, Gummersbach, Germany, was "Civil Society and Local Government" conducted I think, from October 26 to November 2, 2008. or almost five years ago. I feel nostalgic...

Our batch visited some government offices in Cologne, about one hour by car from Gummersbach. A local paper featured one story about such visit.

 One of those lecture-workshops. To my right was Asma Asfor from Palestine, to my left Isil Cakmac from Turkey.

My other batchmates from different countries. From left: Jingjing Cai from China, Pai from Indonesia, Xinggo Li also from China, Diego Conti from Brazil, Bastian Saputra from Indonesia, Brian Lariche of Malaysia, Asma Asfor from Palestine, Nora from Colombia (?), Marcelo from Venezuela, and Elsa from S. Africa.

Other batchmates from other countries.

We also have evening lectures, about 2x, excluding the welcome and farewell dinners of the 8-days seminar.

Fellowships in the evening. We have a quota of 1 free glass of beer per night per participant. Some batchmates don't drink, so they give their beer stub to us drinkers, so we can have two glasses on a night. The glasses are big anyway, so two bottles should be enough.

Business 360 12: Optimum Size of Government

* This is my article for B360, a monthly business magazine in Kathmandu, Nepal, October 2013 issue.
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Most of the discontent and disharmony of people within and among countries around the world can be traced to the size and degree of invention and regulations of government. Some people want government to be as extensive as possible, approaching a socialist economy, some want no government at all.

Too much government means too many taxes and fees to sustain a big army of government officials and personnel, and also sustain an enormous number of people who will be waiting for various subsidies and welfare that the government will give or promise. Citizens will also have to comply with too many regulations and restrictions.

Thus, many people want a certain government size that is neither too big nor too small and allow government to perform its main functions, especially those related to protecting the citizens’ right to life against murderers and aggressors, right to private property against thieves and destroyers of property, and right to liberty against bullies and dictators.

The question of what is an optimal, most efficient, midway between maximum and minimum government size, has been discussed possibly since government was first invented.

The Lion Rock Institute, Hong Kong’s first and only free market think tank, will hold its second “Reading Club Salon 2013” this coming October 19, 2013, in Hong Kong. The theme of this year’s round table discussion will be “What is Democracy?” The theme last year in Reading Club Salon 2012 was about Populism and Welfarism.

Among the reading materials for the participants of this extensive and focused discussion is a book by Dr. James Buchanan, The Calculus of Consent: Logical Foundations of Constitutional Democracy [1962].

Chapter eight of the book, “The Costs of Decision-Making”, tackles this subject. It is an attempt by the author to construct a theory of an optimum size of the collective unit or government, subject to constitutional determinations. His theory is that “The group should be extended so long as the expected costs of the spillover effects from excluded jurisdictions exceed the expected incremental costs of decision-making resulting from adding the excluded jurisdictions.”

This means that government can expand as long as the externality of an activity is larger than the internal costs to people if such activity is shouldered by their individual or small units.

An externality can be positive (say killing mosquitoes in many villages to control malaria, dengue and other diseases) or negative (say air pollution). The presence of an externality does not justify automatic government intervention. Job creation and entrepreneurship has positive externality as people will have stable source of income, criminality is reduced, but it does not mean that the State should put up thousands of government corporations nationwide.

Buchanan suggested State decentralization to reduce basic cost functions to individuals. He wrote,

The decentralization of collective activity allows both of the basic-costs functions to be reduced; in effect, it introduces elements into the political process that are not unlike those found in the operating of competitive markets. 

Both the decentralization and size factors suggest that, where possible, collective activity should be organized in small rather than large political units. Organization in large units may be justified only by the overwhelming importance of the externality that remains after localized and decentralized collectivization.

This is a sensible suggestion to allow some degree of local government competition. Local governments are not the same, there are differences among them not only in natural resources but also in public policies. Such differences are the basis for competition among them and people and private enterprises choose the local governments that give them better treatment while collecting not too high taxes and fees.

While this scenario is worth supporting, liberalism's concept of expanding civil society is a superior alternative. If things can be done by civil society, then do not give that function to local government, and much less to the national or central government.

So, what is the optimum size of government?

One that is small enough and not cause unnecessary regulatory burdens and costly taxes and fees, but big enough to enforce the rule of law. To provide security and peace of mind to people that their lives, their private property, and  their dignity and freedom of expression and mobility are respected and protected against aggression and forced expropriation.

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See also:Business 360 9: Free Trade and Economic Prosperity, July 03, 2013 
Business 360 10: Foreign Aid as Band Aid Solution, August 11, 2013 
Business 360 11: Avoiding Middle Income Trap, September 19, 2013

Lion Rock 7: Reading Club Salon 2013, Hong Kong, September 17, 2013 

Lion Rock 8: On Opposition, Factions and James Madison, October 01, 2013 

Lion Rock 9: Federalism, Decentralization and George Clinton, October 07, 2013

Weekend Fun 49: Lefties Songs

During our student activist days in UP in the 80s, we heard a lot of protest songs. Anti-dictatorship, anti-imperalism, anti-capitalism, etc. But what remained in my mind until now are the funny ones. Like these three.

(1) (A marching tune often played by drum and bugle corps, I don't know the title)

Sandaang masinggan, hawak ng hukbong bayan
lulusubin ang Malakanyang.

Sa bundok sa gubat, kami ay walang gulat
lulusubin ang Malakanyang.

Ang aming lider, Amado Guerrero
Victor Corpuz ang commander

Ang sigaw namin ibagsak ang pasismo
pyudalismo, imperyalismo

Ang suot namin, pajama ng Vietcong
pati jacket ni Mao tse tung

Ang sigaw namin ibagsak ang pasismo
pyudalismo, imperyalismo.

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(Photo just for fun, during the UPSE alumni reunion 2010)

(2) Tamad na burgis, na ayaw gumawa

sa pawis ng iba'y nagpapasasa
pinalalamon ng manggagawa
hindi marunong, mahiya -- walang hiya!

bandilang pula, iwagayway (3x)
ang mga anak pawis ay mabuhay.

Kolehiyala or conio version:

Tamad na bourgeousie na ayaw mag work
sa sweat ng others, nag e-enjoy-enjoy
pinapa-eat eat ng mga workers
hindi marunong ma-ashame, wa shame!

bandilang red, i-wave-wave-wave (3x)
ang mga sons of sweat, ay long long live.

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(3) Metrocom, may helmet at may truncheon

Metrocom, may teargas at may thompson
palo sa harap, palo sa likod
palo sa paa, palo sa ulo
palo ng palo, p____ ina nyo
mamamatay din kayo. 

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Of course I'm no longer a leftie or socialist now. Abandoned that ideology more than two decades ago.

See also:
Weekend Fun 39: Funny Photos in Manila Floods, August 12, 2012
Weekend Fun 45: Life is Like a Bikini, It is Brief, June 30, 2013
Weekend Fun 46: Pork Barrel's New Names, August 25, 2013 
Weekend Fun 47: San Miguel, Galman and Inuman, August 31, 2013 
Weekend Fun 48: On Being Old and Crazy, September 14, 2013