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Thursday, December 18, 2014

LAISSEZ FAIRE VERSUS DIRIGISM: PARADIGMS AND FAIRY TALES



LAISSEZ FAIRE VERSUS DIRIGISM: PARADIGMS AND FAIRY TALES


Erle Frayne D. Argonza

Across the continents, where markets have predominance in the economic sphere, there has always been the antipodal tendentialities of laissez faire and dirigisme. The bone of contention has been the state’s role in the economy. These tendentialities have surely represented two (2) hard-line oppositional streams.

Mercantilism, the progenitor of dirigism, contended that regulation should govern production, distribution, consumption and exchange. The (interventionist) state should be at the center of regulation, with the central goal of all economic pursuits being the accumulation of the wealth for King. Old Nationalism had held on to this contention, with the revision that wealth should be accumulated for the nation as a whole and no longer merely for the King, wealth that is correspondingly allocated to the folks in the form of wages and welfare (this ‘wealth for nation’ line is admittedly a concession to the Smithian physiocracy, a competitor discourse). Only the state, not the market, can best perform redistributive responsibilities for welfare, jobs and wages. Necessarily, development should be undertaken with strong state regulations in the four intervention areas mentioned. The Keynesian revolution revived the dirigist contention, using a demand-side premise, and held sway across the globe for around half a century since its inception.

Laissez faire, whose earliest articulators were the physiocrats, opposed dirigist doctrines with extreme zeal. Accordingly, the state should only intervene in matters of defense, justice and public works, and should keep its hands off the market. Accumulating wealth is a matter of private sector concern (industrialists and landlords), while free trade must be the condition of international exchange and distribution. Even matters of welfare must be left to market mechanisms to provide. Development efforts, i.e. the ones undertaken by ‘3rd world’ economies, must follow the laissez faire path. The logic behind the contention is that the market will produce the entrepreneurs who will be enticed to embark on bold ventures should they be left on their own to take off ‘infantile enterprises’.

The problem arises when, due to the predominance of non-market mechanisms, such as clientelist relations and redistribution-based exchange systems (haciendas, latifundia), development could hardly take off at all. In cases where entrepreneurs are of residual numbers, such as the one demonstrated by Philippine experience, laissez faire strategies would prove pathetic in results. This entrepreneurial scarcity had justified the adoption of dirigist policy frameworks, the principle ones being those that guided the ‘import substitution industrialization’ of 1947-1968. Various 3rd world states have sponsored the dirigist path, employing diverse models (socialist, mixed market-socialist), with fairly good results for many of them. The articulators of such states have argued that no country had ever prospered thru the laissez faire route, and that laissez faire can only work out when development had reached a highly mature level when consumerism propels growth, and where economic fundamentals are very strong and stable.

Many developing economies actually encountered tremendous snags as their states chiefly sponsored development efforts. Rent-seekers of every kind appeared on the scene, serving as barriers to the effective entry of possible investors from among potential competitors. In the Philippine case, asset reform in the agrarian sector had been a perennial failure, thus further complicating the already complex maize of structural problems. What happened, according to the defenders of laissez faire doctrines, was that dirigisme made the ensconced patrimonial groups become further entrenched, thus leading to a vicious cycle of slow growth, high poverty, high unemployment, and relative stagnation.

Such a situation served as the impetus for embracing neo-liberal reforms over the last twenty-five (25) years by the developing economies, the Philippines included. Laissez faire returned with a vengeance, popularizing free trade in the international sphere, and structural adjustments in the domestic sphere and public sector, to note: liberalization, deregulation, privatization, liberalized currency markets/devaluation, down-sizing, minimal/residual fiscal stimulus & budgets for social services, tax reforms and decentralization. Such a policy regime of ‘structural adjustments’ were instrumental in integrating national markets into a globalized one where there is freer flow of tradable goods, investments, information and labor. Not only that, the antipathy of foundational physiocracy towards manufacturing (biased for agriculture) returned, as cheap imports (owing to liberalized trade) destroyed established industries leading to ‘de-industrialization’. 

Where are we twenty-five (25) years after instituting market reforms under the aegis of ‘structural adjustments’ (note: we began through the ‘structural adjustment loans’ of the World Bank, c. 1979)? National income continues to grow at dismally low rates, poverty had increased during the latter phase of the reforms (decreased only recently), unemployment remains high amid positive growth, and our developmental stage continues to be stuck up in the ‘growth stage’ (failed to reach ‘maturity’). Globalization, with its attendant ‘structural adjustment’ policies, has weakened nations, even caused fragmentation in others, a fact that had likewise been replicated in the Philippines with its separatist movements. Free trade had destroyed domestic industries (the USA case was hit so hard by this one), as some had to fold up (Marikina shoes exemplifies the Philippine case) and transfer elsewhere (Procter & Gamble-Philippine is an example). With weak or nil ‘safety nets’, chances are that many producers (e.g. fruits, vegetables) will lose against cheaply-priced imports. One thing is clear for the case of many developing economies, including the Philippines: market reforms failed miserably to get them to development maturity, even as it set back the development path of others.

So if both dirigisme and laissez faire have been failing in making life better for the nation and the majority of the people, what discourse than can work out to salve the ailments of most developing states? Expectedly, a ‘renaissance of nation-states’ has become the wave of the present, with many of its articulators defending a return to dirigisme in its old form—in its highly protectionist form. I used to be among such articulators, even as I now argue that Old Nationalism can have deleterious results when pushed to the extremes. We can’t wish globalization away, it is here to stay and galvanize some more, even as it challenges us all to path-find the opportunities that it can offer while neutralizing the threats that could result from it. In other words, re-echoing Herr Reich’s and Mdm Arroyo’s elucidations on the subject, I am now wont to advocate for a New Nationalism or neo-nationalism, a discourse that advances beyond the narrow confines of extremist dirigisme and laissez faire.

Let me move next to the key premises and contentions of ‘new nationalism’-Philippine style.


[From: Erle Frayne D. Argonza, “New Nationalism: Grandeur and Glory at Work!”. August 2004.  For the Office of External Affairs – Political Cabinet Cluster, Office of the President, Malacaňan Palace.]

Tuesday, December 09, 2014

SCARCITY VERSUS ABUNDANCE: THE CONTINENTAL DIVIDE



SCARCITY VERSUS ABUNDANCE: THE CONTINENTAL DIVIDE


Erle Frayne D. Argonza

The Continental Divide—between Euro-America (Europe, North America, Latin America) and Asia-Pacific—is no mere geographical cleavage, but more importantly cultural-civilizational. In economic doctrines, the division lies in the core premise that underpins all other economic variables and the social class arrangements that constitute the base for appropriating the values of the totality of efforts of production, distribution, consumption and exchange. While Western thinkers premise economic realities on scarcity, the Eastern thinkers notably sages presuppose the same on abundance.

The foundational doctrines of Western political economy—mercantilism and physiocracy—were both premised on scarcity. All other doctrines that emerged thereafter, inclusive of socialism, neo-classicism and marginalism, proceeded from the same premise. The most popular socialist thinker, K. Marx, envisioned a society of abundance, rationalizing such a vision on the presumed reality of scarcity (of resources) and its attendant effect, mitigated by social structures, of pauperization on the proletariat. This ‘scarcity premise’ is indubitably a hallmark of Western discourse.

Eastern discourse raises questions about such a premise. Among all Eastern thinkers, it was Gandhi who most succinctly articulated the difference. To the folks of the East, daily living is a reality of abundance, such an abundance abetted by continuous resource materialization and allocation as graces from the transcendent spheres. With the caveat, to note, that people live according to their needs. Accordingly, the planet has more than enough for everyone’s needs, but not enough for everyone’s greed. What could be wiser today than the said dictum, so simple in structure yet so profound in substance? (Review also Buddhist economics, Sarkar’s ‘progressive utilization theory’, Sri Aurobindo’s vedic economics, Baha’i economics, Vivekananda’s socialist visions.)

I couldn’t but agree more with the Eastern discursive stream than with the Western ones. Why, let us query, do  Filipinos keep on eating the whole day, sliding inputs down their stomachs as much as five (5) times a day? And why don’t the Filipinos save surplus money at all (many folks don’t even maintain back accounts)? That is because deep within their psyche, in the antechambers of their ‘collective unconscious’, resides the presupposition of abundance. Mother earth provides, the country provides, so why save for tomorrow, and why not consume that which is offered unto you when you arrive as a visitor amongst the town & country folks, such offerings being graces from God and His most divine minions?

Among ancient islanders, it was a vice to store resources (savings) for oneself, as this is a hoarding practice. Reciprocity then was the economic norm of behavior. When a household cooks nilupak, and a surplus of the delicacy is gathered after the eating, then the virtuous behavior is to share the excess nilupak among neighbors and kins rather than hoard it; and, conversely, it was a vice (read: very bad behavior) to throw away (surplus) that which has been provided for by Bathala and the anitos.

Surely, economic theorizing that is so deeply steeped in Western streams will never get to the bottom of the reality of Filipino economic behavior. Flawed premises breed flawed models that consequently produce flawed explanatory constructs and flawed practices on the developmental sphere. To a great extent, the Filipinos continue to retain, rather unconsciously, the reciprocity-based ‘systems’ of antiquity, contributing in no small measure to their bayanihan mode of adaptation. This reciprocity helps them to survive disasters and permits them to adapt quickly to new environments that are strongly cash-based, such as urban centers. It is also the basis for creating Filipino ‘social capital’ (Peter Evans had articulated well on the principle) as human asset accretions arising from networks of volunteer social groups (civil society), the kind of capital that is a catalytic factor in various development endeavors.

New Nationalism may have to find an effective bridge between the two. What is sure for now is that the exchange systems of redistribution (feudalism) and markets (capitalism), both  imposed upon the islanders by Western empires, have undermined the Asian or ‘Islander Way’ of reciprocity premised on abundance. During the time of Gat J. Rizal, the islands were able to provide more than enough for everyone else, no matter how harsh the Latin-Hispanic feudal system was to the folks who were subsumed in its enclaves. Today, with over eighty (80) million people populating the archipelago, reality had assumed the scarcity mode, making us believe that scarcity has been the premise since antiquity.

The bridge between the East and West will be institutionalized through the popularization of a needs-based philosophy. However, the consumerism that is the hallmark of a revivified market strongly erodes a needs-based discourse. There surely is a dynamic tension between ‘basic needs’ and consumerism, and such a tension will be a chief definer of the premise’s compass in the succeeding decades.

 

[From: Erle Frayne D. Argonza, “New Nationalism: Grandeur and Glory at Work!”. August 2004.  For the Office of External Affairs – Political Cabinet Cluster, Office of the President, Malacaňan Palace.]

Thursday, December 04, 2014

ECHOING THE NEO-NATIONALIST THEME



ECHOING THE NEO-NATIONALIST THEME

Erle Frayne D. Argonza


This paper echoes the emerging discourse referred to as New Nationalism. Note that various writers have formulated theories anchored on New Nationalism. Their theories out-rightly impact on public policy and development practice, such as the framework articulated by Robert Reich (see The Work of Nations). Here at home, economists such as Emmanuel De Dios have begun to echo themes of harmonizing nationalism and globalization.  

The framework base of this paper will be (a) political economy combined with (b) institutionalism. The current approach of comparative political economy had proved to be a very instructive one, this being the most central framework in development studies and public policy studies, with its analytics carried out through cross-national methodology. This approach will also be integrated with the emerging cross-disciplinal trend of institutionalism, a framework that was actually started by sociologists, and is particularly strong in studies on civil society & development, state-society synergy and organization theory.

Being an Asian, this analyst will also liberally subscribe to core tenets of Asian thinkers, notably Mahatma Gandhi’s. New Nationalism should as much as possible integrate the Eastern and Western theoretical streams to be able to find meaningful anchorage in the whole of the Asian continent.

It is hoped that the article will be of use to various end-users for reflective purposes, particularly to advocacy groups and state agencies that are in the process of rethinking   paradigms & issues revolving around public policy.


[From: Erle Frayne D. Argonza, “New Nationalism: Grandeur and Glory at Work!”. August 2004.  For the Office of External Affairs – Political Cabinet Cluster, Office of the President, Malacaňan Palace.]

Tuesday, November 25, 2014

SOCIAL CAPITAL FOR MINING



Erle Frayne D. Argonza

This paper advocates for an alternative framework regarding mineral resource extraction. It begins with the contention that mining must be considered as primarily a community undertaking, whether the community be national or local. As such, mining must necessarily depart from market-driven models of extraction, or from state-centered models of development, and proceed to a community-oriented or constituency-based engagement.

To be able to comprehend the theme of this paper, let me begin with a story. About four (4) years ago, a former university student of mine at the University of the Philippines Manila informed me that a mining engineer wished to establish a (mining) foothold in the Cordillera. Accordingly, the engineer heard about my mystical background, and was interested to know if there are indeed precious metals in the proposed project site. That is, the engineer expected me to communicate directly to the invisible elemental entities in the area and ask their permission to establish a mining project.

Not only that. Having heard about my background as a political economist, with diversified interest and studies in indigenous culture, the mining firm he represented wanted to know what acceptable methods to employ in flushing out the indigenous people residing in the area.

To cut the story short, I declined the offer, even as I registered my vehement opposition to the sordidly profit-oriented venture of this engineer. If mining has to prosper at all, it must begin with the reality that there are people who have been settled for many epochs in the area of extraction. A win-win solution to the mining problem must be executed, not by expelling the local residents but precisely by involving them in the venture.

Let me now share to you another story. In 1998, at the height of the Asian financial crisis, my consulting firm then, the Phoenixkonsult, contracted a project with a client. The project was about yellow clay extraction, with Bicol as the project site. In a small town in Bicol is found yellow clay, a rare material that has various industrial applications as well as aesthetic uses. Incidentally, the area also has some Aeta-related residents as well as marginal peasants.

Being then the board chair of the corporation, or being in a central position to direct the developmental strategies of the firm, I strongly proposed that the project involve the residents in a number of ways.

First of all, in the feasibility study preparation, the residents can be tapped as eco-scanners to identify possible sites where the material was highly concentrated. Also, the same residents will be constituted into a cooperative, properly trained in social entrepreneurship, and invited to be co-investors in the mining project through their cooperative. A third involvement would be to tap those residents who are physically capable enough as human resource for the extraction and production activities.

Such a scheme is what social scientists and development practitioners like myself refer to as tapping ‘social capital’. Mining should not just be regarded as investment capital, but should also consider the vast wealth of social networks—‘social capital’—that can wield tremendous powers of production. Studies in comparative political economy have shown that developmental pursuits that tapped ‘social capital’ ended up more appreciably better than those that failed to do so.

The development experiences of Brazil are particularly instructive. As documented by such social science luminaries as Peter Evans (see Evans’ works on ‘state-society synergy’), those projects in agriculture, irrigation and urban-based infrastructure and housing in Brazil where a state-civil society partnership was consistently used, turned out really good in results. On the other hand, those projects that were largely state-centered or market-driven and insulated from the community networks eventually faltered, as indicated by typical experiences in most Third World economies.

In today’s evolving global context, state-centered development has become ridiculously passé. In this old framework, the state performs the role of a ‘provider state’—giving out everything such as candies and shelter units to helpless people waiting for the ‘Santa Claus’ dole outs. Such a framework had proved to be disastrous in results. Not only did it reinforce a strong dependency syndrome among the people, it also led to vicious poverty instead of eradicating this malaise. It need not be stressed that much money went to the pocket of state officials and contracting firms’ managers through this old framework.

The new framework delimits the state’s role to that of an ‘enabler state’. In this framework, development efforts are properly the tasks of market players, who possess the investment capital, and civil society players, who possess the vast social networks of ‘social capital’. The state then builds the policy environment and strong institutions that can support and sustain various developmental efforts.

I strongly contend for a ‘social capital’ approach to mining. In this approach, the first thing to do is to recognize the institutional capacity building efforts of people who live in the areas of resource extraction. Stewardship agreements must be concurred between market players and community or social enterprises of the folks, with the state serving as a mediator or facilitator. I am very optimistic about the positive results of this scheme, compared to market-driven and state-centered approaches.

You see, when people, through their social enterprise groups, are motivated to co-direct development projects, the people themselves will do so much to zealously guard and monitor the entire project or enterprise venture. The bonus for indigenous peoples is that they have easy access to the spirit world, to the nature beings in the area (called ‘elementals’ by mystics), beings that can also be tapped to guard the project.

Now, go back to the cranky old models (market-driven and state-centered), and remove the indigenous peoples from the scene of a gargantuan development effort. What will you have?

It would be instructive to recall the Celophil and Chico dam projects, both Cordillera-based, that proceeded from the old frameworks. The disastrous offshoots of the projects became the fuel for insurgent groups, largely peopled by the I.P.s, to wage zealously bloody campaigns against the colossal projects.

There is no further reason today for the likes of the Celophil and Chico projects to be repeated. We must have learned lessons from their failures at this juncture. But it seems that those who now wish to revive a mining sector that has been in the doldrums for two (2) decades to go the route of Celophil and Chico.

I wish not to further highlight the folly of any idea today that wishes to pursue development by expelling people like they were deadly toxins. Many advocates of win/lose pursuits are well placed in government even as they dominate the corporate sector. They simply couldn’t see the folly behind their antiquated approaches, blinded as they are by greed.

As a final statement, let me declare that the framework elaborated in this brief paper is not an official policy framework of state. Rather, it is a policy framework that should be discussed among various quarters and social sectors, the state included. The state after all comprises of a plurality of framework trends operating in a vast array of bureaucratic mechanisms. There is no such thing today as a monolithic state with a singular framework dominating the policy environment. Rather, the state is a fluid field for contestation by various interest groups that are all aiming to influence the shaping of the policy environment.

But this I am optimistic about: if given a chance to prosper, a ‘social capital’ framework for mining will sell like very hot cake. I am very sure about this forecast. And may the communications enclaves allow this idea of ‘social capital’ for mining to germinate and percolate, because whether we like it or not this will be the direction of resource extraction in the foreseeable future. Bar it from crystallizing, and the result will be more resentments leading to more vicious insurgencies. Permit it to galvanize, and the whole nation becomes heroic in the eyes of the international community for setting new precedents. So, which option is the better choice?
[Note: The author is a political economist and social development consultant. The paper was delivered in a panel lecture at the Kamayan Forum, Kamayan

Restaurant, Manila, 12 noon-2 pm, 19 November, 2004.]

Tuesday, November 11, 2014

WILL ZAIBATSU OFFENSIVE BE ACCOMPANIED BY NEW JAPANESE MILITARISM?



WILL ZAIBATSU OFFENSIVE BE ACCOMPANIED BY NEW JAPANESE MILITARISM?
Erle Frayne D. Argonza


In a previous article, this writer articulated the success of the Japanese Zaibatsu offensive. As one ought to realize, the success of the Zaibatsu offensive came at the expense of other markets, notably the North’s. Intellectually bankrupt as they are, the policy makers and technocrats of the North never foresaw the catastrophic consequences of predatory policies more so those concerning finance that came from their Japanese partners.

Today, Zaibatsus are well prepositioned across the globe, and it doesn’t matter anymore whether their headquarters will still be based in Japan. They have already fanned out beyond their boundaries, thanks to gullible states and market players in host countries that aren’t equipped to read the psyche of their Japanese partners. Japanese market presenters carry the mien of humble partners who bow in deep respect before you during business meetings, so who could ever suspect the rather cold-blooded nature of such gestures.

What the world must observe with greater focus these days, when global fascism is rising, is the resurgence of Japanese militarism. It may come in the form of ultra-nationalism, or ultra-conservatism, and may have nothing of the ‘Hail Emperor’ mantra of the previous Empire. But seeing the rise of predatory Zaibatsus, focused observers can never miss out on the possibility that the economic offensive may be accompanied, at some juncture of global economic crisis, by a very resurgent militarism.

Japan was very badly isolated during and after the 2nd World War, and till the early 1970s its moves at extending cooperation came with enormous suspicion, more so from the Asians whose countries were “burned down to the ground” by invading Japanese military forces. There surely was a colossal repackaging of Japan’s image, from wartime arrogance to new era peace-loving and humble advocate. To prove their sincerity, they even crafted their new constitution such that offensive forces were banned and only defensive military forces allowed.

No one ever heard of Japan getting involved in the arms race for many decades, and till these days the mindsets of somnambulistic folks tend to regard the Japan of the present as the peacenik country of post-war yesteryears. Even my old folks, who suffered miserably from the cruelties of Japanese forces during the war, have come to forgive Japan, though they still harbor the pains during moments of reminiscing.

The peacenik image is a product of its own context, this one must be reminded about. Japan was in high growth for many decades, than it matured onwards till it reached consumer society proportions around the 1980s. Then came the ‘globalization’ voodoo economics, and the rest was history.

That was then. The situation now is different. The global economy is crashing down, the plunge still hasn’t ceased, and the EU-USA experts just couldn’t learn from Japan’s ‘bailout’ mistakes. As the economy falters, anxieties arise within a country, and tensions across borders will increase. Superstition and groupthought (fascism) are rising, and before long we will see the fireworks of another world war ensued in the hottest spots of the globe.

EU-USA (West) and Japan (East), which comprise the pillars of the global economy, are now on the decline. If we study the behavior of their peoples well, whenever they experience severe crises, they undertake wars as strategy to release or canalize collective anxieties. They identify a Bogey Man (e.g. Nazi’s identified the Jews, North Americans identified the Southern slave owners during the US civil war,…), and then transfer their internal anxieties and defects on the Bogey Man, and war ensues.

Such economic pillars just seem unable to manage their decline without taking down others. This is classic binary mindset, destructive and demonic. Such mindset is responsible for using nuclear arms, regarding the casualties on their perceived enemies thereafter as mere statistics. And East Asia better prepare for the eventuality that this mindset will become dominant again in Japan in the short run.

Demented minds in Japan have two (2) bogey men today: (a) North Koreans and (b) Chinese. As this is happening, events have already shown the preparedness of Japan to mobilize its troops for missions outside the borders (e.g. Iraq war). Japan also possesses the technical capabilities to produce weapons of mass destruction such as nukes and probably the Tesla Earthquake Machine or TEM.

Intelligence reports have it that Japan is capable of constructing WMDs and manufacturing new series military vehicles (e.g. aircraft carriers) in just less than a year upon call to action. We wouldn’t be surprised if we receive further intelligence information that such WMDs and vehicles are in fact already in place, needing supplementation in quantities and troop mobilizations.

It need not be overstressed that Zaibatsus are awash with money to fund militaristic or Banzai offensives for sustained periods. They already demonstrated this, during the Gulf War and Iraq War, when their coffers coughed up large sums by the tens of billions of dollars to pay the bills for the offensives while the USA provided the main attack hardware and human ‘warm bodies’ (like they were the Hessian Troops of the global
oligarchs).

If ever that the USA-EU would fall into a state of totalitarian governance (police state, fascism), and Japan would follow along that direction, then chances are high that the North Atlantic Alliance (USA-EU) and Japan would form a new Axis Powers alliance. The North Atlantic powers would constitute the Western flank, while Japan would comprise the Eastern flank of the alliance.

It will be déjà vu for sure. If indeed such is the direction. Peace advocates still have time to scuttle new treaties up north that could redound to concentrating enormous powers in central governments that are undisguised fascist police states. There is still time, but time is now short.

Before long, Japanese slogans of Banzai! will be heard again across the Pacific. Just by hearing it, or reading it on the papers and TV, many middle class Asians will die of heart attacks. Let us just hope that it will only be a slogan of marginalized mad people in Japan and nothing more.

[Philippines, 15 November 2008]

Sunday, November 02, 2014

ZAIBATSU GLOBALIZATION ‘VOODOO ECONOMICS’ BOWING OUT



ZAIBATSU GLOBALIZATION ‘VOODOO ECONOMICS’ BOWING OUT
Erle Frayne D. Argonza

Magandang hapon! Good afternoon!

Let me share to you at this moment some notes regarding the ‘globalization’ experiment and the flawed policies that sustained it. There has been much ballyhoo about the global economy’s integration, over the last three (3) decades, as having been carved out supposedly by the Anglo-Saxon policy architects, using Thatcher & Reagan as the face for the ‘neo-liberal’ policy regime they installed.

Little do peoples across the globe, including experts who are so mired in their own parochial perspectives, know that the liberalization of country economies has a great deal to do with the Zaibatsu offensive. The West should better accept the facts: that their technocrats and policy shapers have run out of fresh ideas since the 1970s onwards (i.e. mentally bankrupt), a gap that they filled up by looking up to Japan and the NICs (newly industrializing countries) for copycat purposes.

Reaganomics, as neo-liberal policies of ‘privatization’ was dubbed (Thatcher of the UK preceded Reagan by a year), is as voodoo as one can get, seductive as any enchanting mantra-resonating principle can be, and was indeed potent in erasing the vestiges of the Regulated Economics doctrines that preceded the era. In the emerging markets, they were dubbed as ‘structural adjustment policies’ or SAPs, were imposed by the IMF-World Bank Group on debtor nations, and can be summed up as follows:

· Core principles: Privatization, Liberalization, Deregulation
· Subsidiary Principles: Tax reforms, trade liberalization, free floating exchange rates, diminished state subsidies for welfare, increased utility prices (revenue generation)
· Governance Principle: Decentralization (local government autonomy)

Such policy reform measures, as far as developing countries or DCs were concerned, came in as very harsh, cruel ‘austerity measures’ imposed by the IMF. We citizens from the ‘margins’ can never forget these measures, the pauperization that they effected, the dislocation of marginal producers, the decline of health services and rise of morbidity rates, and so on. In the Philippines, our very own capital goods industries were either delayed or un-implementable (such as integrated steel), as the money allocated for their purposes simply dried as dictated by the World Bank.

But there’s another set of policy architecture that wasn’t Anglo-Saxon, and didn’t receive their inspiration from the classicists (Smith, Ricardo) and the monetarists (Friedman, Hayek). This set of liberalization policies came from Zaibatsu country, and were crafted by Japanese technocrats. Not only policies, but also institutions were addressed by them, giving rise to the globalized economy that we have today.

Chief among those technocrats was Kenichi Ohmae, who in the 1980s was a think-tank executive. Further down the line were many other technocrats, who were organically linked to the Zaibatsus (landlord-industrialist-financier oligarchs), taking up cudgels for Ohmae.

Globalization, as one better realize, was never meant as any ‘win/win’ formula for nation-states in the arena of international trade as the liberal thinkers came to defend it later. It was outright a strategy to pre-position Zaibatsu corporate interests outside of Japan, notably the U.S. and European markets.

At that time of conceptualization, Zaibatsus have already efficaciously penetrated the Asian markets, and had leveraged their investments’ entry via aid and technical knowledge diffusion (including sponsoring Developing Country scholars in Japanese universities & special institutes). The old doctrine of ‘Asia Co-prosperity sphere’ was finally won, without firing a shot this time (unlike Imperial Japan era expansionism).

In the 1980s, the clamor for mooring investments and trade in the Western markets became ever stronger. The offensive tactic adapted was rather two-pronged, which made the new voodoo mantra even more potent:

· On the micro-level, permeate other markets with new concepts such as ‘Theory Z’ (decentralized authority, see W. Ouichi), total quality management or TQM, new tools for strategic planning, mergers and de-mergers. Till these days, the tools are considered sacrosanct in all sectors of society, including the Catholic Church that now uses ‘bottom-up’ planning added to strategic planning (my observations done in 2001-02 in a California diocese).

· On the macro-level, blend the Reagan-Thatcher ‘structural adjustments’ with the ‘globalization’ doctrine. The Zaibatsu technocrats fanned out across the globe, some of whom were positioned inside international bodies, and sweetened liberalization via a supposedly ‘win/win’ growth strategy for participating countries. This brilliant blending, which Western thinkers didn’t perceive at all as any subtle tactic by a predatory class (Zaibatsu), soon caught up fire and became buzz word for nigh three decades.

Before long, the Japan Inc. was being bandied across the globe as worth any country’s emulation. Southeast Asia and Korea went for it. Even the former presidents of the USA admired the Japanese Inc. doctrine of renewed private initiatives and shift from macro- to micro-economics as stabilization and growth measure. Bill Clinton of the USA spoke so fondly of ‘globalization’ like some captive fan of an economic icon, and moved to negotiate the NAFTA.

Little do unsuspecting, gullible peoples across the planet, more so the policy experts of the West, realize that the Japanese voodoo economics was largely intended to permit Zaibatsu investments to breed and morph inside their economies. Using merger and buy-in tactics, the Zaibatsu agents made it appear that their sponsors came in for benign purposes or so. If there is any group in the world today that is enjoying its last laugh, it is the Japanese militarists of the past, who finally saw the success of their nation’s offensives and the decline of the West via ‘organized chaos’.

Around 1994, the magic of the Japan Inc. began to cramble. Recession came, and before long many banks and investment houses were catching fire. That was the origin of the bankrupt and immoral Bush-Paulson ‘bailout’, which began with the ‘crisis management’ tactic in Japan to save ailing banks and financial institutions. Eventually, Zaibatsu technocrats were forced to revive the Western tool of ‘interest rates’ intervention, to the extent of bringing down interest rates to zero percent and sustaining it there for many years.

There also came that moment, in the late 1990s through 2006, when Zaibatsu financiers suddenly were so awash with funds (liquidities), at a time when Western economies reached low growths. The ‘yen initiative’ package was therefore conceptualized as another last-ditch voodoo tactic, which was implemented by loaning out large funds at zero or low interest, which Western financiers than re-loaned at profitable interest rates. Many such funds reached the USA& EU realty subprime mortgage markets, to recall. Again, note the seemingly benign nature of the financial gesture.

Just as when the realty markets were beginning to sneeze in America, the last voodoo measure was pulled out. The ‘crisis management’ was already folded up earlier, as Japan’s economic growth was propelled up anew by the Asian markets notably China’s. Just as when USA & EU needed the Zaibatsu loans very badly, and ditto for portfolio investments, they were pulled out, thus ensuring the crash of both economies.

Japananese voodoo economics is now bowing out, as the compass of policy initiatives at present is pointing to the reconstruction of macro-economic, New Deal type measures intended to attack problems both on short-term (bail out on productive sectors) and long-term basis (induce physical economy rather than predatory finance). But the withdrawal of the voodoo regime is not being done without witnessing its catastrophic results.

That’s surely tragic for the West or North. I wonder how Zaibatsus & technocrats perceive peoples outside their borders: whether they regard the latter as human beings worth co-partnering with, or as hungry lizards that must subsist on crumbs of investments & finance from Japan that have been buttressed by enormous tons of gold acquired through production and plunder of occupied lands, across the 2,000 years of Japan’s existence from kingdom to nation.

Honestly, I don’t know the answer. But if the Zaibatsus are receiving flaks from outside their borders, it wouldn’t be a surprise. There are no more borders for Zaibatsus by the way, just an entire planet with seamless web, cocooned in all corners by their corporate money.

[Philippines, 14 November 2008]

Friday, October 24, 2014

CORPORATE PHILANTHROPY: CAN IT SURVIVE THE COMING ‘TECHNOTRONIC’ CAPITALISM?



CORPORATE PHILANTHROPY: CAN IT SURVIVE THE COMING ‘TECHNOTRONIC’ CAPITALISM?
Erle Frayne D. Argonza

‘Late’ capitalism, this current phase that replaced the ‘monopoly’ capitalism of the pre-war era, is now DEAD. As elucidated by Jurgen Habermas, thinker of the Frankfurt school, capitalism was able to move to its present state but only with massive state planning/intervention. State intervention had since the early 70s been relaxed, via globalization, but this only created monstrous predatory finance that hastened the collapse of the system.

As already elaborated in previous articles, the system is now DEAD. In the late 1990s yet, we Fellows of the Independent Review (a circle of economists and experts in Manila) were of the opinion that the system will be dead in couples of years. The ‘virtual economy’ based on magical statistics, speculation, fictitiously valued investments, and conspicuous consumption, can never be sustained, and is bound to crash and die. It was just a matter of time, as we all noted in 2000 (the last time I met the Fellows), before the bubble will burst somewhere (we forecast it will the USA) and the global economy will come crashing down…And it did, beginning last 2007 yet. That descent to the marshes of death is still going on today.

As I also declared in some previous articles, capitalism can still survive, though no longer the ‘late’ capitalism of state planning-to-globalization era. It will be a capitalism in an era of state terror heretofore unparalleled: ‘technotronic’ capitalism in the aegis of global police-state. Nation-states are enemies of the global oligarchy which will re-engineer the world by destroying nations (aftermath of atrocious World War III and global synarchy) and replacing them with city-states and region-states.

If corporate social responsibility or CSR will survive the times, it must be re-tooled at this juncture when the tumultuous changes are gathering winds. Failure to do so, many CSR pursuits will disappear in time, while only those CSR platforms of the most powerful and wealthy oligarchs can survive. All the CSR formats of today can last in relevance maybe till 2040 at the most, after which my forecast is their relevance will have reached its end.

By the year 2050, when populations will have leveled down to a census target of 2 Billion warm bodies, a figure that will be more manageable to the global elites, every member of society will be chipped and provided for. By that time, there will be no further need for ideological movements as Pied Pipers of the new system. Everyone else will be programmed by the system, from cradle to grave the chipped Manchurian Candidate or MC will be provided for. Poverty will end by then, the Millenium Development Goal of the UN will be finally met (the UN will be transformed into the tyrannical global state headed by a global Bonaparte, armed with its own police/military forces), and then will end the ‘sustainable development’ or ‘social development’ pursuits of ‘late’ capitalism.

The chipped Manchurian Candidate or MC will be half-human half-machine hybrid, and will be well provided for as mentioned. Population will be totally controlled, weak and senior members of the population will be ‘oven-baked’ or eliminated, natality will be controlled following China’s pattern of today, criminality will be almost nil, and no one will ever be poor again. Hybrid-human behavior can be easily modified using those advanced cybernetic prototype programs past 2050, and so nobody can fool around with the system.

Tell me, fellows, in a situation such as that coming context of advanced cybernetics or ‘technotronics’ (machine-controlled humans), what need will there be for CSR? Maybe CSR will go back to Victorian Era philanthropy practices, whereby wealthy sponsors will fund the theaters and chipped performers whose performances will be perfected all the more by cybernetics. The staff of the CSR formats of that era, if indeed applicable, will be chipped as well, like those outfits that will be funded because they will perform before the oligarchic-intellectual crowd by then.

When that next capitalist system comes, there will be no more activists or revolutionaries save for those who will proclaim Hallelujah forever to the radically altered, new system. Libertarian activists will be the species of yesteryears, the CSR proto-activism of today will be consigned to history, and anybody who will go against the system will be easily eliminated by sentinel robots of the most advanced prototypes.

Let me end with the challenge: CSR better retool now and reshape its image if it desires to exceed its institutional career. Now is the time.

[Philippines, 28 August 2008]
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