PHYSICAL ECONOMY IN RP'S 2010 POLLS

Erle Frayne D. Argonza

The debates by presidential candidates have been reverberating the media audiences in the country for couples of weeks now. The issues have ranged from those that are social policy-oriented (subsidies to poor, health, education, housing, jobs) to macro-economic policies (sustaining growth, accelerating development) and moral policies (corruption, reproductive health). Some articulations of foreign policy were also heard from the competing gentlemen.

Seemingly confusing in their broadness, somehow the various forums for the debates (not actual debates but simply presentation of each one’s opinion about policy questions) did give a semblance of information-based campaigns by enthused candidates. This is already quite a departure from previous polls when debates were sparse and superficial, and should be lauded by observers.

What this analyst, who is a public policy expert, wishes to see clearly in the debates is the economic issue of whether to highlight the physical economy policies versus the virtual economy in the management of jobs and wealth creation by the next government. I raised this same question in the last presidential poll in the USA that pitted Senators Obama and McCain in a neck-to-neck fight. I shared my own assessment then that Sen. Obama resonated nearest to a physical economy inclination and should be supported by USA’s voters.

To reminisce a bit, the national economies saw the radical ascent of Reaganomic policies of privatization, deregulation, liberalization, and reinforcing policies beginning in 1980. Such policies led to the rapid integration of nations into a global economy, liberalized the cross-border flow of financial and monetary assets, and eventually led to the predominance of the ‘virtual economy’ based on predatory finance.

In the mid-90s, the Philippines saw its investments structure alarmingly imbalanced, with 86% or 6/7 of total comprising of portfolio capital, and only 1/7 or barely 16% in real or physical economy investments inclusive of FDIs (direct foreign investments). As early as 1989, I already raised the alarm bells that excessive radical liberalization of the economy could jeopardize the financial sector in the short run and lead to an economic collapse that could be far worst than the 1984-86 Depression of the Marcos era.

When a situation comes that the virtual economy dominates over the physical economy (agriculture, industry, S & T, transport) and subordinates the latter, a bubble is created. A bubble economy is one that grows on the basis of speculations in stocks and predatory operations of financial derivatives (secondary debt papers traded in the global market), and is bound to collapse when a burst comes since it isn’t based on tangible goods.

Surely enough, when the bubble burst in Thailand in June 1996, the ‘butterfly effect’ of a mini-flapping of wings created a storm across a vast region. We then dubbed that crisis as the ‘Asian financial meltdown’. The economies and financial institutions that had the greatest exposure to portfolio finance suffered the most.

The worst was yet to come though, as the USA had to wait for 2007 before it would experience its own crash, a catastrophic crash that spread to Europe and Japan (twas barely out of a decade-long recession). The same bubble economy and its predictable burst led to the crash, a recession that hasn’t fully retreated yet. Europe is still in flames today (watch the financial flames in Greece, Spain, Finland), while Japan remains as flat as it was during its 10-year crisis (1994-2004).

The fact of the matter is that, in a virtual economy, the predatory financiers (bankers included) gain the most, while the people pay the price for the collapse. And the payment comes in the form of ‘stimulus package’ that are derived from tax revenues. So the equation is that financiers run away with the massive loot, and the people pay for the cost of the looting crime. The culprits then run away largely unpunished, while the people face the punitive flames of massive business closures, retrenchment, unemployment, and bad debts.

In my book Fair Trade & Food Security (Kaisampalad publication, 2005/07), I emphatically stressed that we have to reverse the free market and free trade policies to be able to regain economic wellness. Reversal means we have to go back to the principles of regulated economy (production, trade, distribution, consumption), and replace free trade with fair trade in our international trade.

Strong regulatory frameworks, coupled with strong institutions and good governance, will redound to bringing back the physical economy into place. With the economy based on the physical or real economy, this country and any country for that matter will weather any economic storm both local and global. There is ample funds to pay national debts, balance the budget, fund social programs, create jobs, and increase wages.

Among all presidential candidates, only that of Senator Manny Villar so far resonates the strongest in terms of echoing the physical economy. This resonance could be explained by the fact that the noblesse legislator immersed himself in housing & infrastructures for the longest time of his life as an entrepreneur, and only fractionally engaged in speculative engagements. Besides, he was witness to the maelstrom on the realty sector caused by the bubble burst of ’97, a burst that wasn’t of his own making as it was the maneuverings of George Soros & pals via currency attacks (monetary markets) that led to the meltdown.

I hope you would agree with me that the slogan for this year’s polls would be: “It’s the physical economy, stupid!”

[Philippines, 19 March 2010]

ECONOMY THAT HEALS: CHALLENGE OF THE NEW EPOCH

Erle Frayne Argonza / Guru Ra

Magandang Hapon! Good afternoon!

Please know first that this writer/analyst is both (b) economist and (b) mystic-healer. For some time now, the challenge of contributing to the construction of an ‘economy that heals’ has been knocking at my ‘mental coconut’, a task that explains this article and many yet that will succeed this one.

As an economist, my lines of subspecializations are: (a) development economics, (b) political economy & public policy, (c) international political economy, (d) economic sociology, and (e) enterprise economics (or biz economics). As a healer, my subspecializations are: (a) psychosocial counseling, (b) pranic healing, (c) distance healing (w/ angelic reinforcement); and, (d) soul healing (includes chakra alignment & cleansing, past life issues resolution).

Having laid out my brief economic & healing credentials, let me now proceed to my thesis. First of all, as a developmentalist (practical economist) and healer of long standing, let me declare my categorical observation that the ‘world system’ economy of today, which is an admixture of capitalist-dirigist-fascist-clerical economic systems, is characteristically: (a) non-healing, or pathological, (b) is hoarding-based rather than sharing-inspired, and (c) is already on its terminal phase, needing replacement rather than its recycling.

To simplify my terms, the present system, which is principally organized around capitalism (economy for profits, based on money system), is:

· SICK: A ‘sick economy’ is one based on flawed, sick principles that no longer work. Necessarily, a ‘sick economy’ (borrowing from Erich Fromm’s and Erik Erikson’s ‘sick society’) is a parametric condition that induces anxiety, anomie, alienation, and related pathologies that can lead to neuroses, sociopathy, psychoses, and total self-fragmentation.

· GREED-BASED: The ‘hoarding orientation’ (see Erich Fromm’s works) of the ‘world system’ (see Immanuel Wallerstein’s works) had propelled greed to the level of madness, thus reinforcing ‘system sickness’. Greed multiplies greed, more greed creates more greed, and so on, ad aeternum, thus leading to more ‘economic sickness’, to more madness and system collapse and societal catastrophe.

· SCARCITY PREMISE: Western economics had postulated (declared as a self-evident given) that scarcity is the fact of life. This postulate had since underpinned ‘hoarding’ economics, and had remained unchallenged in the West and mainstream circles. This is flawed from the very inception. Scarcity is not given, not a universal law either, but is a product of enslaving, hoarding power relations. It is an ideological rampart in support of the more real exploitative relations between the ‘hoarding classes’ and the producer underclasses that they bound and gagged in property relations.

· DYING & DEATH-INDUCING: The system is now dying, it is now on its death throes, yet many refuse to see it die. Bank bailouts and interest rate interventions are among those examples of tools that no longer work, yet they continue to be employed. Furthermore, the ‘sick economy’ also induces so many deaths due to poverty, anxiety, starvation, consumerist pathologies (obesity, cardiovasculars), genocides, etc. What is needed is to bury the system and build a new one rather than to perpetuate it.

Let me then declare the next thesis: that a new economic ‘world system’, which is in the nature of a ‘healing economy’, is a viable one. We may perhaps use different terms to refer to the same ‘world system’—sharing economy, cooperative economy, non-hoarding economy, consensus economy—but let us better recognize where we all converge: the ‘healing economy’.

Following from the foregoing statements, the contours of the new ‘healing economy’ or world system would be the obverse of the previous observations. They are:

· WELLNESS ECONOMY. A vibrant, wellness-oriented world system is one that will also see that everybody will have enterprises, jobs, and related pursuits that will see their talents grow and utilized to the utmost. It is an economy that also promotes the wellness paradigm, welcomes the advent of the alternative healers as ‘new kids on the block’ rather than to denigrate them as ‘quack doctors’, promotes equity and the highest values of the general welfare in their true sense, and is generally conducive to healthy relationships, institutions, communities, and healthy world.

· SHARING &/OR NON-HOARDING. ‘Hoarding orientation’ had degraded us humans to the most putrid hovels of the non-human or anti-human for many eons now. It is time to reverse such demonic conditionality and state. In the economic sphere, the highest principles of the ‘rule of Divine Love’ (compassion as core value) and ‘principle of giving’ (golden rule) must become dominant and sacrosanct. To talk of ‘compassionate capitalism’ is an oxymoron and subtly demonic. We have no more need for capitalism and the other isms, what we need is a non-ideological sharing economy and enough of those isms that have only exacerbated our ‘sick economy’ and ‘sick society’. Ditto for competition principle, the core of capitalism, which has no place in the emerging context. Cooperation-loving-sharing is the value trilogy of the emerging context, not competition-hatred-hoarding of the capitalist world system.

· ABUNDANCE. The true state of the universe is one of abundance, not scarcity. “From above, so below,” declares the Teaching. From the abundance of the cosmos, to the abundance of the Earth & Solar system, this is the sacrosanct law and not that peddled lie about scarcity. Healing economy is one that is attuned to the very dynamics of the cosmos and not divorced from it. An operative healing economy will ensure that all members of society, all citizens of Earth or Terra, will be attuned to this sacrosanct law, and will experience abundance in everyday life. “The world has enough for everyone’s need, but not enough for everyone’s greed,” declared the late Mahatma Gandhi in his swadeshi writings. Gandhi referred to the same law, and stated it in axiomatic manner.

· DYNAMIC & LIFE-INDUCING. The healing economy will prove itself to be dynamic and life-inducing as well. It does not follow from absurd ‘creative destruction’ demonology worship of capitalism, but from ‘creative constructivism’ of a Godly society. In the present system, just by destroying the currency of one nation (e.g. currency attack versus ASEAN/East Asia, 1997), many workers will lose their jobs and many small enterprises forcibly close shop, leading to anxieties and deaths. Is that what you call Godly and ‘creative destruction’? Very boldly I’d say, echoing spiritual masters who said the same, that a wellness-sharing-loving-giving economy will be truly life-inducing, as it will not need wars and destruction of nations to sustain it.

Having shared to you in brief the contours of the new economic world system, let me now close with the reiteration of the challenge: building the healing economy is the greatest economic task of the moment and the eon now unfolding before us. We can no longer be clinging to dinosaur world systems that bred so much maladies in the past, we should move on and build a new one that will be the economic foundation of a new society of loving, giving, sharing, Oneness, and authentic human liberation.

Enough with those bailouts, IMF-World Bank mergers, bank mergers, interest rate manipulations, stock markets, speculations, government take-overs, hedge funds,...Enough with greed, hoarding, hatred, competition, bloody vampire economics of the Old World!

Peace & Love Advocates of the world, let us build the New Economy of Healing without reserve. Let’s not be cowed by the intimidations of the demonic Pied Pipers and fascistic war machines of the Old World elites. We shall overcome! Carpe diem!

[Writ 08 December 2008, Quezon City, MetroManila]