UP Economists’ RH Paper = Emotionalism Plus Anti-Intellectualism
There is one important thing that every Filipino today should strive to understand: that the Filipino nation was built– and is now being destroyed– by its intellectuals whose philosophies, ideologies, and political advocacy and policies breach the laws of logic and reality. The high level of poverty, corruption, unemployment, and economic crisis that we all face today is the result of political decisions and advocacy, compromises, collective ignorance and arrogance, and anti-intellectualism of our past leaders and intellectuals who built the country’s political and economic consensus and foundation.
Prior to the promulgation of the 1935 Constitution, there was a group of tireless, determined nationalists who fought for the country’s independence from the Americans. What they did was highly patriotic and praise-worthy, but they went beyond that. They were the country’s early Hamiltonians, as they advocated strong economic protectionism to serve and protect the country’s economic interests. One of these men who helped shape our country’s political and economic foundation was Salvador Araneta, a Filipino intellectual who was schooled in Harvard University, who co-founded a highly influential organization called the National Economic Protectionism Association. This association, the main advocacy of which was to ‘foster the spirit of economic nationalism and national industrialization, and promotes the protection of Filipino interests in the country’s polity, economy, culture and environment’, was inspired by the strong nationalistic philosophy of an earlier movement called Ang Bagong Katipunan, which was organized to promote two underlying principles: economic nationalism and economic self-sufficiency.
It was men like Salvador Araneta, labeled by former President Manuel L. Roxas as the ‘prophet of disaster’, who laid down the political, economic, and ideological foundation of this country. It was because of these early intellectuals that our Constitution, which simply based many of its economic and political provisions on the 1935 Constitution, now reeks of protectionist, regulatory and welfare policies and rhetoric.
The next batch of intellectuals who followed the prophets of protectionism and economic nationalism introduced new political concepts and slogans that greatly influenced the country’s political culture and spectrum. These intellectuals, which included former President Ramon Magsaysay and justice Jose P. Laurel, promoted the concepts of social justice and egalitarianism that greatly defined the political and economic history of this country for the past 70 decades.
If the progressive era in the United States took place from 1890s to the 1930s, the statist-progressive era in the Philippines occurred from the 1920s up to the 1960s. In the United States, the progressive era was followed by the Great Depression and Franklin D. Roosevelt’s The New Deal was offered as a solution to the crisis; in the Philippines, the statist-progressive era was followed by Macapagal’s ‘Filipino First’ policy, which led to a series of protectionism, peso devaluation, regulations, and welfare programs in the 1960s.
Yes, this failing democratic-republican state was built by statist intellectuals who were motivated by good intentions.
Today a new breed of statist intellectuals strives to keep our protectionist status quo and to build a political-economic prison of heightened welfare state. This is no longer the era of Araneta, Macapagal and Laurel; this is now the golden age of new public intellectuals like protectionist Winnie Monsod, welfare statist Renato Puno, Malthusian-redistributive economist Arsenio Balisacan, and others who strive to create a new welfare society for all Filipinos.
A statist/welfare culture cannot be sustained without supportive institutions like universities, media outlets, influential think tanks, or even religions organizations. Since a culture is the result of a society’s intellectual achievement or bankruptcy, it needs the support of an ‘elite’ academic institution, the goal of which is to produce a new breed of statist intellectuals indoctrinated to preserve the status quo or to support the state’s welfare programs and protectionist/regulative policies. This academic institution that promotes all kinds of welfare programs and our culture of mediocrity and dependency is none other than the University of the Philippines.
Just recently a group of UP economists published a position paper in defense of the controversial Reproductive Health bill being pushed and supported by neo-Malthusians and population control statists in Congress. Like the economic czar of the President and former dean of the UP School of Economics, Director General Arsenio Balisacan of the National Economic Development Authority, these welfare economists believe that aggressive population policy is what we need to achieve economic stability and reduced poverty.
Here let me try to dissect the arguments presented by these UP economists. But first, I’d like to inform my reader that I am not an economist. Yet I do not believe that one has to be an ‘economist by title or profession’ to talk about this issue, because the RH debate is not merely an economic issue; it is primarily an intellectual or philosophical issue. In tackling the RH bill issue, we do not merely talk about poverty or unemployment statistics, fertility and growth rates, demography and population figures, economic graphs and the like. We also talk about constitutional issues, including basic philosophical and moral principles, namely, individual rights, the proper role of government, the use of state force, freedom of conscience, freedom of religion, etc. The economic part of this debate is just one of the many aspects that form part of its highly complex nature or identity.
If we try to critically understand the RH bill issue, the primary question that should concern us all is: Should the state intervene in private family affairs to allegedly serve the interests of indigent women and the poor at the expense of breaching the rights of others? In other words, can justice be served by using state force against certain social sectors?
The main answer presented by the UP economics is a resounding YES. In fact, not only do they believe that the government must legislate population, but that the state should also tax the people and manage resources (translation: redistribute wealth).
In their position paper entitled “Population, poverty, politics and the Reproductive Health bill”, the UP economists argue that “the experience from across Asia indicates that population policy cumgovernment-funded FP
[family planning] program has been a critical complement to sound economic policy and poverty reduction.”
First, I don’t know what particular experience they’re talking about. But what they’re trying to say that the population policy can work together with sound economic policy and poverty reduction. The problem with that sweeping argument is that it fails to define ‘sound economic policy’ and ‘poverty reduction’. Also, it fails to cite a particular Asian experience to prove their pro-population control premise.
One of the Asian countries that aggressively applied population control policies is Singapore. Like the Philippines, Singapore started to control its population several decades ago. It was in the 1960s and 1970s that neo-Malthusian intellectual Paul R. Ehrlich achieved tremendous influence. From the 1940s to 1970s, Singapore’s politicians were worried about their country’s burgeoning population. This led to the promulgation of population control policies known as “population disincentives” designed to increase the costs of bearing third, fourth, and subsequent children. The tiny city-state’s Malthusian policies produced politically desired results, as its total fertility rate radically dropped to only 1.006 in 1975 from 5.45 in 1960. However, the country’s replacement rate continued to drop at an alarming level, a situation that forced its policy planners to rethink their population control agenda. Thus, in the 1980s Singapore’s policy planners decided to reverse their population control program. So instead of discouraging families to have at least two children, the government allowed them to have “three or more, if you can afford it”. It even rewarded productive families with tax rebates, subsidies for daycare, priority in school enrollment for children from large families, priority in assignment of large families to Housing and Development Board apartments, among other government incentives.
However, Singapore did not become an economic tiger by curbing its population. To develop Singapore, its founding father Lee Kuan Yew did exactly the opposite of what Filipino intellectuals advocated and politicians did in the Philippines. Instead of embracing protectionism and limiting foreign ownership of land and businesses, Lee Kuan Yew adopted free market reforms like lower taxes (the country has no capital gains tax), less regulations, no import tariffs except for duties on alcoholic beverages, tobacco products, petroleum products, and a few other items, no export duties, among others. In Singapore it will only take three days to start a business compared to our 35 days. This made Singapore the freest economy in the world and the easiest place to start and do business, according to Doing Business Index.
I must repeat: Singapore did not become an economic tiger in Asia by controlling its population. It became so by adopting free market reforms and sound economic policies.
On the other hand, China’s one-child policy might have helped lighten the communist regime’s welfare concerns, but it certainly improved its economy after it joined the WTO in 2001 (related studies here, here, here, here, here ) and compromised its Maoist principles by embracing free market reforms (see related studies here, here). Remember, Mao Tse Tung’s brilliant economic plan ‘Great Leap Forward’ killed more than 40 million in just four years (between 1958 and 1962), but that did not make China achieve higher economic growth.
Many third world nations are poor NOT because of their high population, but because they restrict economic freedom or openness. For even if a government tries to implement the most cruel, most aggressive population control policy without embracing free market reforms and sound economic policies (e.g., low tax rates, removal of tariffs and import and export duties, lower spending, etc.), nothing positive will ever happen.
The position paper states: “Moreover, the weaker is the state’s ability to tax and mobilize resources (including spending on the right priorities), the greater the negative impact on economic development of a rapidly growing population, which in every developing country is largely accounted for by the least educated and poorest segments of the population.”
This somehow defines the UP economists’ “sound economic policy”. They believe that the government must tax the people and industries and mobilize resources through redistributive programs and policies to encourage economic development. Are they trying to imply that our government has “weak ability to tax” with our high tax rates and more taxes? Again, Singapore did not build its economy by imposing higher taxes. Even China had to lower its taxes in order to attract foreign investors. If critically studied or analyzed very carefully, the proposed economic solutions of these UP economists, including those of NEDA chief Balisacan, show the exact opposite of the economic policies adopted by Hong Kong and Singapore.
In Malaysia, Mahathir bin Mohamad, instead of following in the Philippines’ protectionist and welfare footsteps, embraced free market reforms by cutting corporate taxes and liberalizing financial investments to attract foreign investors. The country’s continued sound economic reforms made it one of the freest economies in Asia. It was ranked 18th by the Doing Business Index.
Also, many economic studies show the negative impact of punitive taxation polices on economic growth.
This study, which investigates the impact of tax policy on economic growth in the states, published by the CATO Journal found that higher marginal tax rates had a negative impact on growth, and that greater regressivity had a positive impact on growth. It also found that states that kept the rate of growth in revenue below the rate of growth in income achieved higher levels of economic growth. The study concludes:
The analysis reveals that higher marginal tax rates had a negative impact on economic growth in the states. The analysis also shows that greater regressivity had a positive impact on economic growth. States that held the rate of growth in revenue below the rate of growth in income achieved higher rates of economic growth. The analysis underscores the negative impact of income taxes on economic growth in the states. Most states introduced an income tax and came to rely on the income tax as the primary source of revenue. Jurisdictions that imposed an income tax to generate a given level of revenue experienced lower rates of economic growth relative to jurisdictions that relied on alternative taxes to generate the same revenue.
In order to isolate the impact of taxes, we control for convergence and regional influences on economic growth in the states. The analysis supports the convergence hypothesis: states with lower initial levels of income per capita experienced higher rates of economic growth.
A 2006 study also supports the premise that high marginal tax rates can negatively impact long-term economic growth. This study presents the following conclusion:
Our findings indicate that high marginal tax rates, particularly rates of 50 percent or more, exert an adverse impact on long-term economic growth. We estimate that a 10 percentage point reduction in a country’s top marginal tax rate will enhance the country’s long-term annual growth rate of real GDP by approximately three-tenths of a percentage point.
It appears now that the UP economists’ idea is not supported by any empirical study. Since they did not mention any particular study, their absurd economic assertions should be taken with a grain of salt.
Meanwhile the rest of the UP intellectuals’ arguments appear to be the usual presentation of tragic statistics, alarming population and poverty data, populist welfare rhetoric, and incoherent platitudes. The arguments are as follows:
- “At the micro level, large family size is closely associated with high poverty incidence, as consistently borne out by household survey data over time.” RESPONSE: So what? The people need jobs, not government-funded RH services. Anybody in this country is free to extend any kind of help to these unidentified poor people or intended recipients of the measure.
- “The poor prefer smaller families, except that they are unable to achieve their preference.” RESPONSE: How do you know? You know that they prefer smaller families yet they’re not able to achieve their choice? Is it because most of them are unemployed or victims of the failed economic policies of the government which you support and advocate? Is that now the reason why you want the state to actively, aggressively adopt population control measures?
- “Lack of access to contraception has important health implications.” RESPONSE: Perhaps. Lack of access to food also has important health implications. It’s a matter of life and death. Should the government also provide us taxpayers’ funded food? Only the Catholic Church and other religious organizations oppose the use of contraceptives. There are a lot of individuals in the Philippines who oppose the bill on secular grounds.
- “The health risks associated with mistimed and unwanted pregnancies are higher for adolescent mothers, as they are more likely to have childbirth-related complications.” RESPONSE: Then educate those young people yourselves. Can that ‘sex’ or RH education not be done by private organizations? Can it not be incorporated into existing subjects in elementary or high school levels WITHOUT passing the bill? Can it not be done by the media and other pro-RH organizations?
- “There are unintended social costs (negative externalities) arising from mistimed and unplanned pregnancies.” RESPONSE: In a welfare state like the Philippines, yes, there are heavy economic and social costs arising from unwanted pregnancies. If you want to prevent unwanted pregnancies, the only solution is private charity or privately-funded or initiated RH education campaign. If you’re able to brainwash or indoctrinate a lot of young and old Filipinos to support the RH bill, there’s no doubt you could also mount a successful RH campaign.
The Philippines is poor because of its protectionism, regulations and failed welfare and economic policies that discourage both local and foreign investors. It is poor because of our high level of corruption due to our highly intrusive political system. A number of Asian nations achieved economic growth, not by curbing their population, but by adopting sound free market economic policies. The only key to economic growth is economic freedom or liberalization, not population control policy. For instance, Japan, which has one of the highest populations in the world, is so much worried about its fast declining and ageing population that it adopted drastic, aggressive measures to increase population growth. Other economically progressive countries that try to boost their population growth are Russia and Portugal. These countries, which are faced with alarmingly low fertility rates, are economically rich and stable, unlike the Philippines, because of their relatively freer economies and practical economic policies, and not because of their low population growth. Doing Business Index ranked Japan 20th, Portugal 30th, and Russia 120th in terms of ease of doing business. The Philippines was ranked 136th.
But what do I mean by sound economic policies. For economic policies to be sound, they must be anchored on tested, proven principles, practical and necessary economic decisions, and reality-based philosophy for living on earth. That is, they must be based on logic and reason. Thus, my proposed economic policies for this nation are as follows:
- Privatization of government-owned and controlled corporations, including public hospitals and state-owned universities and colleges.
- Government downsizing (certain burdensome, unnecessary, redundant government agencies, departments, offices, or bureaus need to be abolished).
- Lower taxes. Other taxes should be scrapped, such as capital gains tax, EVAT, estate tax, etc. Although I am against taxation, other taxes like corporate income tax and individual income tax should be proportionately cut. This is because it would be economically disastrous to abruptly lower or abolish taxes with our more than a century welfare state experience.
- Scrapping of protectionism (e.g., removal of 60-40 ownership arrangement and other foreign ownership limitations, tariffs, import quotas, anti-dumping laws, direct subsidies, export subsidies, and exchange rate manipulation).
- Economic liberalization, which covers all the above-given measures.
- Combating corruption. I believe that the best way to fight corruption is to downsize or limit the powers of government. It is the idea of welfare state that causes, breeds, and invites graft and corruption.
- More focus on the protection and enforcement of rights, including intellectual property rights.
However, all of the above-mentioned measures require constitutional revision, not merely amendment. The only impediment or obstacle there is to national and economic progress is the 1987 Constitution. Also, it appears that my proposal is the exact opposite of the UP intellectuals’/economists’ economic/political policy, as they propose more taxes, more government intervention, and more redistribution of wealth.
The UP economists talked about “sound economic policy” yet they propose exactly the opposite of what Asian economic tigers rejected for years: higher taxes and higher welfare spending. I’m sure their alleged ‘sound economic policy’ is nothing but a mishmash of protectionism, regulations, and more welfare programs. Economic realities show us that high welfare spending cannot create wealth. This is what the experiences of Greece, Spain and other European countries show us today. For even if our government tries to spend on “the right priorities”, our politicians’ tendency to perpetuate their stay in political office and to enrich themselves with stolen people’s money would pervert the system and drain our public coffers. More welfare programs or expenses means more money to be looted.
Here’s an honest advice to the UP economists who published this alleged position paper: Next time, try to define your economic policy and do not forget to support your assertions/arguments with facts or reliable economic studies.