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Is Henry Sy an ‘Oligarch’?

April 23, 2012

A blog reader asked me that question. An ‘oligarch’ is a businessman who wields or possesses a great deal of political

Henry Sy: under fire for his 'corporate greed'.

Henry Sy: under fire for his ‘corporate greed’.

influence. In the Philippines, the terms ‘oligarch’ and ‘crony’ are used interchangeably. To me, an oligarch is someone who achieved his wealth or influence through political connection or machination. In other words, he achieved his alleged economic success through dishonest means or through relying on government connection and protection. Without using well-oiled political connections/influence he would not have reached his status. He could be the man- or one of the men- behind the curtain. To protect his corporate interests, the oligarch tries to influence politicians to make favorable protectionist laws and regulations designed to limit economic competition. He considers competition evil or a threat.

On the other hand, a crony, who is either an oligarch or a budding oligarch, is someone who enjoys a current regime’s political help, support, or protection.

This is a political and economic reality in our country today. The protectionist laws and regulations (mandated in the 1987 Constitution) that are being pushed and supported by the leftists or communists actually benefit politically protected cronies and oligarchs. Since they believe that foreign investors are tools of ‘imperialism’ and ‘capitalist corporate greed’, they want to limit foreign competition in our economy. These clueless, mindless pro-protectionist leftists have no clue at all that the cronies and oligarchs whom they detest are laughing their asses off all the way to the bank. This makes the country’s leftists and statist professors and intellectuals who strongly support protectionism “useless idiots.”

My answer to that question is as follows:

I don’t know if he’s (Henry Sy) an “oligarch” by choice, or whether he actively supports protectionism in the Philippines just like the Lopez family did in the past. I don’t know the facts as I didn’t investigate this matter. But definitely he’s an oligarch-by-law or by-default. Like many ‘oligarchs’ in the country, Sy benefits from our protectionist constitution. Without protectionism, he would have faced tough competition from foreign competitors like Walmart, Target, Kmart, ShopKo, and many foreign department stores and mall operators. Unfortunately, many of our business tycoons either expressly or impliedly support the status quo. I’m not sure whether Sy expressly or impliedly supports our protectionist system. What I know is that he remains mum on this issue. I say, as a businessman, he should actively support free market system and the opening of our economy to foreign investors and strongly oppose regulations and protectionism. Because of his inaction and passivity, I can say that Henry Sy is guilty ‘morally’ for not doing the right thing and for not supporting the right cause.

Isn’t so ironic that the protectionism being strongly supported and campaigned by the country’s mindless, clueless leftists, in truth and in reality, BENEFITS the OLIGARCHS (translation: the filthy rich, the politically connected, the fat bourgeois ala Mike Arroyo, and the real robber barons like Mike Defensor) whom these mindless, clueless leftists strongly detest and hate? Their protectionism actually benefits the kind of people who represent everything their leftist ideology considers evil, immoral, or non-proletarian.

I received a follow-up question from the blog reader codenamed galdo12. He asked: “Are you saying that if one owns a big business in the Philippines(or a tycoon like Henry Sy), it follows that he is an “oligarch-by-default”? By the way, I think I should rephrase my question: “is Henry Sy a politically-connected businessman?””

My answer:

“Are you saying that if one owns a big business in the Philippines(or a tycoon like Henry Sy), it follows that he is an “oligarch-by-default”?”

– I’d like to say I implied that. But the way I see it, big businesses benefit from our protectionist system. However, I’d like to see some counter-arguments against my assumption. In the first place, this country is in breach of the principle of reciprocity in international law. Foreign countries allow foreign investors, businessmen and professionals, whereas we totally bar foreign professionals and limit and totally bar foreign investors’ equity in business and in land, respectively.

“is Henry Sy a politically-connected businessman?”

That I don’t know. To answer that question, we must know the facts. We must know how Sy became financially successful and how he maintains his business empire. I don’t know the facts behind Sy’s success. I don’t know whether like Lucio Tan, Henry Sy also used political connection to protect his empire.

I added the following commentary:

Also, as to whether owners of businesses are, by default, “oligarchs”, I’d like to make the following observations.

It would be unfair to automatically call all owners of businesses “oligarchs” or filthy rich because they simply benefit from our protectionist system, right? Whether they agree or disagree with our protectionism or not, the system is already there, unless their ancestors or they themselves supported it. In this case, they are morally guilty. The Lopez family is a good example.

What, then, is the objective test or standard to be used in determining, judging whether a successful entrepreneur or investor is “guilty morally”?

The following Ayn Rand’s statement is not an analogy, but rather a tool or guide which we could use to gauge whether a successful Filipino entrepreneur is guilty by default.

The useless idiots. Thanks for supporting the oligarchs you hate lol!

The useless idiots. Thanks for supporting the oligarchs you hate lol!

In Philosophy: Who Needs It?, Ayn Rand wrote:

Many students of Objectivism are troubled by a certain kind of moral dilemma confronting them in today’s society. We are frequently asked the questions: “Is it morally proper to accept scholarships, private or public?” and: “Is it morally proper for an advocate of capitalism to accept a government research grant or a government job?”

I shall hasten to answer: “Yes”—then proceed to explain and qualify it. There are many confusions on these issues, created by the influence and implications of the altruist morality.

There is nothing wrong in accepting private scholarships. The fact that a man has no claim on others (i.e., that it is not their moral duty to help him and that he cannot demand their help as his right) does not preclude or prohibit good will among men and does not make it immoral to offer or to accept voluntary, non-sacrificial assistance.

A different principle and different considerations are involved in the case of public (i.e., governmental) scholarships. The right to accept them rests on the right of the victims to the property (or some part of it) which was taken from them by force.

The recipient of a public scholarship is morally justified only so long as he regards it as restitution and opposes all forms of welfare statism. Those who advocate public scholarships, have no right to them; those who oppose them, have. If this sounds like a paradox, the fault lies in the moral contradictions of welfare statism, not in its victims.

Definitely that is not an analogy; however, Ayn Rand’s eloquent, logical answer to the question could help us analyze whether a Filipino owner of big business is automatically an Oligarch or a ‘robber baron’.

Ayn Rand said: “The recipient of a public scholarship is morally justified only so long as he regards it as restitution and opposes all forms of welfare statism.” But public scholarship is certainly not the same as the ‘beneficial protectionism’ that supports local businessmen. In the first place, ‘protectionism’ is NOT something that you pay to the government. It’s already there by bureaucratic fiat. Or in other words, we are NOT forced, coerced by the government to support, either financially or morally, our protectionist system.

But the following statement could somehow provide an answer: “Those who advocate public scholarships, have no right to them; those who oppose them, have. If this sounds like a paradox, the fault lies in the moral contradictions of welfare statism, not in its victims.”

Borrowing the principle and premise of that statement, I say, those who advocate, support, either expressly or impliedly, our protectionism, OUGHT to have no right to it. Those who oppose protectionism are NOT morally guilty.

But is mere INACTION or PASSIVITY tantamount to support of protectionism? I say, the answer is YES. Every businessman or investor in this country must know how to protect his/her rights and trade. That is his/her primary duty to himself/herself. In reality, protectionism is NOT beneficial to REAL BUSINESS PEOPLE. Protectionism, in fact, regards our Filipino entrepreneurs as weak and inferior to foreign investors. Why do they need protection in the first place?

I call your attention to principle of PRIMACY of REALITY/EXISTENCE over CONSCIOUSNESS.

To weak, incompetent, corrupt business people who rely on government support, subsidy and connection, protectionism serves their alleged “self-interest”. However in reality, it does NOT. To strong, able, competent, good business people, protectionism is totally unnecessary. It is evil.

Why did I say protectionism is, in the long run, a destructive form of government ‘support’? What is protectionism in the first place?

Protectionism requires government intervention or regulation to be enforceable. Wikipedia offers an objective definition of this term: “Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow (according to proponents) “fair competition” between imports and goods and services produced domestically.”

We all know that protectionism is what is now hurting our local economy and impoverishing our own people. Because of protectionism, there is artificially limited trade in this country that caused/causes joblessness, less investment, high prices of commodities, lack of business opportunities, poor services (electricity, products, water utilities, etc.), monopoly, graft and corruption, etc. But how will it hurt our own local investors and businessmen?

Protectionism is government or state power. If the system is already there, then the government would have more reason and leeway to impose more protectionist policies and regulations. Thus, the following are the direct, logical consequences of protectionism that could hurt or even destroy local businessmen, including the oligarchs who supported the system:

  1. Cronyism. When we speak of cronyism, we also speak of favoritism, and this favoritism is temporary. It depends upon who makes the law or who wields the political power. As deposed president Joseph Estrada once said, “weather, weather lang yan”. Some cronies largely benefited under Estrada’s short-lived term, yet a number of these protected cronies were purged or ignored during the long term of Gloria M. Arroyo. In fact, the Lopez family that strongly supported, or still supports, our protectionism, was economically hurt by Arroyo’s political wrath. This means that there is no balance or consistency in the country’s economic arena. If you support protectionism, you’re in effect turning the government into a battlefield of political largesse and support. If you’re not part of the country’s economic elite, the tendency is, you’d not succeed, especially when your economic success largely depends on political connection.
  2. Favoritism. I explained this in #1. If you’re not part of the country’s economic elite, you wouldn’t get more government support, subsidy or protection.
  3. More taxes. Ever heard of the Text Tax issue? I tackled this issue here.  The politicians said, because our telcoms are now so successful, they must contribute more to the government. Of course, since our oligarchs benefit from our system, they must support the giver of protection, which is the government. The logic here is: since our protectionist system limits trade and foreign businesses, there are only few businesses that pay taxes to the government. And since the government has been spending more than it collects, naturally it has to levy more taxes, and because it cannot tax the people, it has to tax big businesses.
  4. More regulations. One proposed regulation: Antitrust law.
  5. More arbitrary government powers. One proposed law: RH bill.
  6.  Statism or dictatorship.

In other words, protectionism does not serve the self-interest of our local entrepreneurs. Instead, it expands government’s arbitrary political power and ups our degree of statism or dictatorship. This is the reason why every rational businessman must oppose, reject protectionism.

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