EUROPE & AMERICA ON DOWNWARD SLIDE TO 3RD WORLD ECONOMIES

EUROPE & AMERICA ON DOWNWARD SLIDE TO 3^RD WORLD ECONOMIES

 

Erle Frayne D. Argonza

 

Magandang gabi! Good evening!

 

It’s dusk time as I write, and this dusk at a time of intensifying monsoon rains seems to bode images of a grim future for the West at large. The European Union or EU members and the USA, the gigantic pillars of the global economy, are particularly in dire straits as they have entered the zone of flat growth and perpetual recession.

 

As already tackled by me in diverse articles, the East is surging forward bringing life to the global economy as a whole. In contrast, the West is spiraling downwards, and the strategies their stakeholders are putting into place to arrest the downslide are at best palliative. As the East continues to surge upward, the West continues to stagnate and decay.

 

After World War II, both Europe and America embarked on massive infrastructures and heated industrialization that saw both economies dominating the global economy’s wealth production. The result of that was an OECD producing 60% of Gross World Product or GWP for some decades (today that’s down to 40% of GWP and will still go down).

 

That was the situation back then. By the 1990s, the situation had been badly reversed as a result of liberal economic policies instituted in the previous decade (80s). The rise of a ‘virtual economy’ dominated by predatory finance was instrumental in the West’s massive de-industrialization, decay of relatively unattended infrastructures, decline in science & technology research, and neglect of the transport sector (only Japan & Germany were actively pursuing maglev railways).

 

By the early 1990s yet, certain experts among economists and sociologists in America began echoing alarming notes about the possible downslide of the USA into a 3^rd world country should the economic decay, such as that of relatively unattended infrastructures, be allowed to continue till past 2010s.

 

In the late 1990s, my own circle of political economists in Manila (Sunday Kapihan/Independent Review) saw such a possibility ourselves as we consolidated the data made available to us thanks to the internet. By 1998 all fellows of our circle were convinced of the catastrophic direction that the USA and Europe were plunging themselves into, which could begin with a depression past 2005 and a thirdworldization by 2010s (both have been hit by recession this decade as a matter of fact).

 

When Katrina struck the USA and when those floods struck Europe just a few years back, and the same free market policies stubbornly remained in place, I knew the downslide would turn out to be irreversible. The fate of New Orleans, with its residents lining up for food akin to a depressed city, revealed an appallingly decayed 3^rd world city inside the USA which, to my mind, is but a fractional tip of a gigantic iceberg that are America’s decaying cities on the way to 3^rd world infamy.

 

If, for instance, just about 55% of the top 700 cities of the USA will be so badly decayed by 2015 and be declared as 3^rd world or ‘developing cities’, then we know more or less that America had catastrophically seen its worst state. With 97% of U.S. population living in cities (urban), likewise will the whole of the USA be declared as a ‘developing economy’ as early as 2015.

 

That is, again, if the destructive ‘virtual economy’ policies will not be taken down and reversed sweepingly. As I’ve declared in previous articles before (when Obama was still campaigning for the presidency), America must quickly return to a New Deal-type policy regime: interventionist, with great stress on revivifying infrastructures, revitalizing transport R&D (railways, shipping, etc), upscaling science & technology investments (including rockets), returning heavy industries (revive steel and many dead manufactures), and ensuring agricultural productivity.

 

Europe is not far behind such near-catastrophic downslide of the USA, just to remind our friends in Europe and the globe. Decisively institute interventionist policies in the continent, regulate the financial-banking sectors (criminalize predatory finance), and revivify social policy that were hallmarks of a once strong and mighty European economy.

 

And there’s no better time to act then now. Failure to act soon, by stubbornly instituting the palliatives (e.g. bailing out failing big banks, semi-regulating stock exchange), will be the best sure-fire formula to see a rapid thirdworldization of the West.

 

Before long, some messianic mad leaders in both continents would be drum-beating their being “stubbed behind the back” and generate new Hitlers and Bonapartes in their backyards. Act now, Western peoples, to avoid this eventuality from ever taking place at all.

 

[Philippines, 21 July 2010]

 

EUROPE & AMERICA ON DOWNWARD SLIDE TO 3RD WORLD ECONOMIES

EUROPE & AMERICA ON DOWNWARD SLIDE TO 3^RD WORLD ECONOMIES

 

Erle Frayne D. Argonza

 

Magandang gabi! Good evening!

 

It’s dusk time as I write, and this dusk at a time of intensifying monsoon rains seems to bode images of a grim future for the West at large. The European Union or EU members and the USA, the gigantic pillars of the global economy, are particularly in dire straits as they have entered the zone of flat growth and perpetual recession.

 

As already tackled by me in diverse articles, the East is surging forward bringing life to the global economy as a whole. In contrast, the West is spiraling downwards, and the strategies their stakeholders are putting into place to arrest the downslide are at best palliative. As the East continues to surge upward, the West continues to stagnate and decay.

 

After World War II, both Europe and America embarked on massive infrastructures and heated industrialization that saw both economies dominating the global economy’s wealth production. The result of that was an OECD producing 60% of Gross World Product or GWP for some decades (today that’s down to 40% of GWP and will still go down).

 

That was the situation back then. By the 1990s, the situation had been badly reversed as a result of liberal economic policies instituted in the previous decade (80s). The rise of a ‘virtual economy’ dominated by predatory finance was instrumental in the West’s massive de-industrialization, decay of relatively unattended infrastructures, decline in science & technology research, and neglect of the transport sector (only Japan & Germany were actively pursuing maglev railways).

 

By the early 1990s yet, certain experts among economists and sociologists in America began echoing alarming notes about the possible downslide of the USA into a 3^rd world country should the economic decay, such as that of relatively unattended infrastructures, be allowed to continue till past 2010s.

 

In the late 1990s, my own circle of political economists in Manila (Sunday Kapihan/Independent Review) saw such a possibility ourselves as we consolidated the data made available to us thanks to the internet. By 1998 all fellows of our circle were convinced of the catastrophic direction that the USA and Europe were plunging themselves into, which could begin with a depression past 2005 and a thirdworldization by 2010s (both have been hit by recession this decade as a matter of fact).

 

When Katrina struck the USA and when those floods struck Europe just a few years back, and the same free market policies stubbornly remained in place, I knew the downslide would turn out to be irreversible. The fate of New Orleans, with its residents lining up for food akin to a depressed city, revealed an appallingly decayed 3^rd world city inside the USA which, to my mind, is but a fractional tip of a gigantic iceberg that are America’s decaying cities on the way to 3^rd world infamy.

 

If, for instance, just about 55% of the top 700 cities of the USA will be so badly decayed by 2015 and be declared as 3^rd world or ‘developing cities’, then we know more or less that America had catastrophically seen its worst state. With 97% of U.S. population living in cities (urban), likewise will the whole of the USA be declared as a ‘developing economy’ as early as 2015.

 

That is, again, if the destructive ‘virtual economy’ policies will not be taken down and reversed sweepingly. As I’ve declared in previous articles before (when Obama was still campaigning for the presidency), America must quickly return to a New Deal-type policy regime: interventionist, with great stress on revivifying infrastructures, revitalizing transport R&D (railways, shipping, etc), upscaling science & technology investments (including rockets), returning heavy industries (revive steel and many dead manufactures), and ensuring agricultural productivity.

 

Europe is not far behind such near-catastrophic downslide of the USA, just to remind our friends in Europe and the globe. Decisively institute interventionist policies in the continent, regulate the financial-banking sectors (criminalize predatory finance), and revivify social policy that were hallmarks of a once strong and mighty European economy.

 

And there’s no better time to act then now. Failure to act soon, by stubbornly instituting the palliatives (e.g. bailing out failing big banks, semi-regulating stock exchange), will be the best sure-fire formula to see a rapid thirdworldization of the West.

 

Before long, some messianic mad leaders in both continents would be drum-beating their being “stubbed behind the back” and generate new Hitlers and Bonapartes in their backyards. Act now, Western peoples, to avoid this eventuality from ever taking place at all.

 

[Philippines, 21 July 2010]

 

EUROPE & AMERICA ON DOWNWARD SLIDE TO 3RD WORLD ECONOMIES

EUROPE & AMERICA ON DOWNWARD SLIDE TO 3^RD WORLD ECONOMIES

 

Erle Frayne D. Argonza

 

Magandang gabi! Good evening!

 

It’s dusk time as I write, and this dusk at a time of intensifying monsoon rains seems to bode images of a grim future for the West at large. The European Union or EU members and the USA, the gigantic pillars of the global economy, are particularly in dire straits as they have entered the zone of flat growth and perpetual recession.

 

As already tackled by me in diverse articles, the East is surging forward bringing life to the global economy as a whole. In contrast, the West is spiraling downwards, and the strategies their stakeholders are putting into place to arrest the downslide are at best palliative. As the East continues to surge upward, the West continues to stagnate and decay.

 

After World War II, both Europe and America embarked on massive infrastructures and heated industrialization that saw both economies dominating the global economy’s wealth production. The result of that was an OECD producing 60% of Gross World Product or GWP for some decades (today that’s down to 40% of GWP and will still go down).

 

That was the situation back then. By the 1990s, the situation had been badly reversed as a result of liberal economic policies instituted in the previous decade (80s). The rise of a ‘virtual economy’ dominated by predatory finance was instrumental in the West’s massive de-industrialization, decay of relatively unattended infrastructures, decline in science & technology research, and neglect of the transport sector (only Japan & Germany were actively pursuing maglev railways).

 

By the early 1990s yet, certain experts among economists and sociologists in America began echoing alarming notes about the possible downslide of the USA into a 3^rd world country should the economic decay, such as that of relatively unattended infrastructures, be allowed to continue till past 2010s.

 

In the late 1990s, my own circle of political economists in Manila (Sunday Kapihan/Independent Review) saw such a possibility ourselves as we consolidated the data made available to us thanks to the internet. By 1998 all fellows of our circle were convinced of the catastrophic direction that the USA and Europe were plunging themselves into, which could begin with a depression past 2005 and a thirdworldization by 2010s (both have been hit by recession this decade as a matter of fact).

 

When Katrina struck the USA and when those floods struck Europe just a few years back, and the same free market policies stubbornly remained in place, I knew the downslide would turn out to be irreversible. The fate of New Orleans, with its residents lining up for food akin to a depressed city, revealed an appallingly decayed 3^rd world city inside the USA which, to my mind, is but a fractional tip of a gigantic iceberg that are America’s decaying cities on the way to 3^rd world infamy.

 

If, for instance, just about 55% of the top 700 cities of the USA will be so badly decayed by 2015 and be declared as 3^rd world or ‘developing cities’, then we know more or less that America had catastrophically seen its worst state. With 97% of U.S. population living in cities (urban), likewise will the whole of the USA be declared as a ‘developing economy’ as early as 2015.

 

That is, again, if the destructive ‘virtual economy’ policies will not be taken down and reversed sweepingly. As I’ve declared in previous articles before (when Obama was still campaigning for the presidency), America must quickly return to a New Deal-type policy regime: interventionist, with great stress on revivifying infrastructures, revitalizing transport R&D (railways, shipping, etc), upscaling science & technology investments (including rockets), returning heavy industries (revive steel and many dead manufactures), and ensuring agricultural productivity.

 

Europe is not far behind such near-catastrophic downslide of the USA, just to remind our friends in Europe and the globe. Decisively institute interventionist policies in the continent, regulate the financial-banking sectors (criminalize predatory finance), and revivify social policy that were hallmarks of a once strong and mighty European economy.

 

And there’s no better time to act then now. Failure to act soon, by stubbornly instituting the palliatives (e.g. bailing out failing big banks, semi-regulating stock exchange), will be the best sure-fire formula to see a rapid thirdworldization of the West.

 

Before long, some messianic mad leaders in both continents would be drum-beating their being “stubbed behind the back” and generate new Hitlers and Bonapartes in their backyards. Act now, Western peoples, to avoid this eventuality from ever taking place at all.

 

[Philippines, 21 July 2010]

 

ONE ASEAN: GET READY!

ONE ASEAN: GET READY!

 

Erle Frayne D. Argonza

 

Good evening! Magandang gabi!

 

The dark clouds of the electoral contests are now getting clearer in the Philippines. With our polls settled and our elected leaders about to begin their mandates, I’d now depart from election-related advocacies and move back to the international-global arenas.

 

I have written quite enormously about international political economy and subsidiary themes for over two (2) decades. Even my blogging has been consumed with peregrinations on the international arena. So let me go back to this arena, even as I now clarify that I am a strong advocate of One ASEAN.

 

As I’ve elucidated in my past writings (see 2007-08 articles), I perceive the ASEAN as the larger polity to which my own country will return in the future.

 

The Philippines, Indonesia, Brunei, Malaysia, Singapore, the whole of island Southeast particularly, were largely creations of Western powers. They used to be part of the Majapahit Empire, the world’s wealthiest region before Western colonization fragmented it.

 

Being a strong believer in ASEAN unity, I am willing to shed off my hard-line Filipino nationalism and don the cloak of pan-ASEAN patriotism. Majapahit was the original nation to me and to those who resonate with the same worldview, and eager am I to see my country return to the Empire.

 

The Empire no longer bears that name today. Rather, it goes by the name of ASEAN, short for Association of Southeast Asian Nations. But it bears the same geo-political and geo-economic contours of the Empire before it fragmented.

 

A benevolent Empire it was, as it used the fiat of trade cooperation to get membership into the polity. That is, to be able to become a part of the Empire, concur trade with its nexus and prinzeps. This was a much different track from the typical military occupation used by other regional and world powers to expand their territorial confines.

 

If we reflect back on what our state players are doing here today, where they’re concurring agreements and treaties using the most civil means conceivable to get to a higher level of unity, the same means actually revives the consensus methods used by our peoples in antiquity. Today, no matter how diverse our political, economic, and cultural systems are, we are talking to each other here, which is reflective of a ‘dialogues of civilizations’ approach.

 

From state-to-state and civil society-to-civil society talks, let us move on to direct people-to-people talks in the region. People-to-people interactions precede people-to-people cooperations. I strongly contend that people-to-people cooperation should eventually be the base for state-to-state and civil society-to-civil society cooperation and no less.

 

State-to-state talks are quite slow in results, even if market players joined state actors to buttress the former stakeholders’ positions. In some areas of talks, such as those involving territories, snags are observed.

 

People-to-people interactions and cooperation will do much to accelerate state-to-state talks that get snagged for one reason or another. The same cooperation can also accelerate the building of a pan-ASEAN identity which should precede any writing of a general treaty that will unify the region at least economically.

 

People-to-people interactions have already been taking place in the region for almost 2000 years in fact. Western colonization may have diminished the scales of interactions for a long while, but that era of imperialism is much behind us now.

 

As states, market players, and civil society players are preparing for larger talks ahead, let us noble peoples of the region go ahead and expand the levels of talks to build greater mutual confidence, appreciation of each other’s cultures, and trust. Along the way, we have fellow Asians and global citizens who will support our efforts as true friends.

 

In any way we can, let us get to know each other better. Let’s set aside utilitarian gains (e.g. get to know Asean pals who can become network marketing partners) and interact based on a true call of our hearts, of our souls.

 

That way, we contribute to building our preparedness for the grand future coming. We just can’t be caught flat-footed, not knowing what’s going on in our larger backyard because we allowed state players to monopolize the talks.

 

Fellow ASEANians, let’s get ready!

 

[Writ – Philippines, 11 May 2010. E. Argonza is adept at international political economy. He was a graduate student of former ASEAN Deputy Secretary General Wilfrido Villacorta, PhD. He has published various articles on the subject, as well as a book on global trade regime.]

WEST MARKETS SHRINK, ASIANS’ RISE AND OVERTAKE WEST SOON

WEST MARKETS SHRINK, ASIANS’ RISE AND OVERTAKE WEST SOON

 

Erle Frayne D. Argonza

 

Good evening from the Pearl of the Orient!

 

The International Monetary Fund or IMF has been quite bullish lately about Asian growth. It had forecast East Asia’s average growth at past 7% for this year, and shares an equally positive growth trend for RP at 5.5%-6%. Just what could be the implications of the growth trends on the global economy and the West?

 

As Asia expands, the West (Europe, USA, Canada, Japan) contracts. The trend will not change much over the next five (5) years, so let’s see where the East and West are headed for in the foreseeable future.

 

In early 2008 yet, the economists and financial analysts of the West (or North) were of the opinion that the technological cutting edge of the West was already breached by Asia by the end of 2007 yet. Remember that 2007 was the beginning of a new cycle of recession for the West which began in the USA with the implosion of the realty bubble.

 

Given that the Western economies are flat on their back growth-wise, and their toxic bubble economies have given them only virtual economy results (read: inflated values not based on real production but on speculation), there is ample reason to forecast that they will be mired in problems of saving their ailing banks, financial-monetary systems, and providing sovereign guarantees to their capitalists at the expense of taxpayers and infusing investments in the physical economy. This is now matter of fact, as we can clearly see.

 

Western economies have suffered from the ill effects of continuous de-industrialization for decades, of being remiss in their own infrastructures (USA seems to be the worst in infrastructure decay), and deteriorating investments in science & technology. From being a producer economy, Western economy generally has become a parasitical ‘eater economy’ that stands on no clear foundation other than financial quicksand.

 

In contrast, the Eastern economies have steadily built their strategic industries across the decades, reinforced their infrastructure expenditures and projects, and invested in science & technology. The Eastern economy generally has therefore been role-playing as ‘producer economy’ worth the emulation of other developing economies worldwide.

 

Result: by 2007, at the downspin year of a recessionary West, the East overtook the West in terms of cutting-edge technologies. To qualify, the technologies we refer to are those life-inducing technologies, not those death & destruction technologies that the West has clear edge till these days.

 

I still remember what my nationalist colleagues in the Sunday Kapihan that we then held every Sunday at the Sulo Hotel in Manila: the West knows nothing but perfect its Armaments. Dr. Emmanuel Yap, an economist who finished his PhD at Harvard University, was the most vocal about that emphasis on the death & destruction focus of Western innovations.

 

To continue, the added forecast that I’d share at this moment is this: from the years 2007 through 2015, Western markets will contract by at least 30%. That means their own consuming public will spend less and less across a 9-year stretch, until the consumption pattern will settle down by 2016 or so. Real GDP (gross domestic product) will radically decline during the period, shrinking by as much as 30%-40% contrasted to their 2006 levels (the last of the best years of the West).

 

In contrast, the Eastern markets will expand by at least 100% during the period. The giants China and India will go farther than that, with China expanding by as much as 200% during the same period. That means the middle income earners in the East will continue to rise by the year and consume more products by the year, even travel more overseas year by year.

 

Result: China will clearly overtake the shrunken economies of EU and USA by end of 2015. India may follow suit, at around the years 2020-2025. The last would be ASEAN, which will overtake the West by 2025-2030 period.

 

Once a region overtakes others technology-wise, it will just be a matter of time before the same innovator region will overtake the rest wealth-wise. Technologies—physical technologies, biotechnologies, social technologies, medical technologies—are precisely the cutting edge practices that will enable one region to overtake others across the globe.

 

The bad news for the West is this: if their own states and markets will fail to solve their ailing problems in infrastructures and reverse de-industrialization, they will pathetically go down as 3^rd world or ‘developing economies’ past 2020. No less than their own economists warned of this possibility in the early 1990s yet, and sadly no one paid attention to them in their own backyards. City after city in the USA and EU will immerse in urban decay, becoming 3^rd world cities in the process.

 

My mother just retired from New York where she migrated since the 80s yet. She decided to come home back to the Philippines, and visited the Libis & Cubao areas of Quezon City/Manila suburb pronto upon her arrival. She was so deeply enchanted by the esthetic beauty of the architectures and planning in those mixed land use zones, while she complained of the dilapidated buildings and nauseating smells of cinema theatres in downtown Manhattan.

 

Those observations are signs of the times indeed. In just a year from now, the Pagcor City will rise in Manila, housing the world’s tallest tower. Burj Dubai, Petronas Twin Towers, and Taipei 101 are already similar hallmarks in other Asian cities, signifying the power shift from East to West.

 

The message is hereby brought to the West’s peoples: shift back from virtual reality to physical reality, from the virtual economy to the real economy. We Asians will help you along the way, as we’ve already been doing through our colossal treasuries investments, direct foreign investments, and quality Asian expatriates in your backyards that have been saving your collapsing economies from rapid decay.

 

 

[Philippines, 13 July 2012]

EUROZONE’S BURNING, CONVENE GLOBAL FINANCIAL CONFERENCE!

EUROZONE’S BURNING, CONVENE GLOBAL FINANCIAL CONFERENCE!

 

Erle Frayne D. Argonza

 

Magandang gabi! Good evening!

Eurozone is burning. Before the flames would reach infernal levels, the contagion effects thereof burning the other regions of the globe, a global financial conference should be convened most urgently.

The purpose of the conference would be to configure a new financial architecture. Such a policy architecture would then as guidepost to all nation-states and regional alliances (EU, trade regimes such as ASEAN, NAFTA, Mercosur, others) to follow.

In the absence of such a policy architecture, palliatives can only emerge from the board rooms of incompetent bureaucrats. Among such palliatives now arising are: (a) Merkel’s solution to regulate hedge funds operations (financial derivatives); and, (b) Obama & US Congress’ regulations of speculative excesses of its stock markets.

Such palliatives are merely piecemeal solutions, even as they are too partial and parochial. They weren’t derived from a comprehensive paradigm that could have generated clear explications of the financial/economic crises of our times. They are reactive rather than responsive. Absent a policy architecture, and the piecemeal solutions will only have short-run impacts, and will be folded up when “things will get better.”

The top agenda that must be taken up are:

• Criminalize speculative excesses. Speculation has fueled bubble economies worldwide. Financial predators have emerged from the oligarchic quarters up North, who have played havoc on the equities and currency markets. If it will turn out beneficial to ban and criminalize hedge funds operations later, then so be it. Such vulture funds have no place in a civilized world where we witness poverty and hunger rising.

• Tobin Tax cross-border transactions. In no way should unbridled cross-border transactions be allowed without taxation. A minimum Tobin Tax of 0.75% on all such transactions should be imposed. Higher tax on derivatives and commodities futures of 1.5% can also be agreed upon. The accruing tax revenues will then be turned over to the United Nations and attached agencies for their operations & maintenance budgets.

 

• Condone fraudulent/usurious debts. Debts that are fraudulent or too usurious, notably those lent to developing economies, should be completely condoned. The same economies can then have a fresh start and breathing space for anti-poverty, jobs, and related social development efforts.

• Abolish the Jurassic Fund (IMF). It is now time to re-assess the International Monetary Fund, leading to its abolition. It does not represent the interest of the member-states, but is rather a middle man peddling the interests of global financial cartels. Its top executives come from the ranks of the same cartels. It had imposed austerity measures on many developing economies, causing more hunger, poverty, low wages, and unemployment. This Jurassic Fund (to borrow from Walden Bello) must go!

 

• Identify financial ‘White knights’. Authentic financial ‘white knights’ from among the emerging markets should be properly identified and urged to expand their operations. These financial groups can offer long-term financing at very low interest rates. The end-users should be authentic market players that are engaged in the productive sectors, which will end the practice of ‘white knight’ financing (such as the Yen Initiative Package) that lent money to financial cartels which in turn re-lent them at higher interest rates.

• Ban banks from speculative pursuits. Commercial banks and development banks, or all banks for that matter, must be banned from engaging in speculative pursuits such as hedge funds, commodities, and ‘hot money’ operations. Banks must service the productive sectors and must infuse moral philosophy in their organizational cultures.

 

• Abolish stock markets. Stock markets have never been instruments for wealth redistribution. They are filled with dirty operators. It’s now time to abolish them. In their stead should be instituted a direct link between investors and market players in need of fresh money, thus abolishing the stock trader as ‘middleman’. Reforming the stock markets isn’t the answer, but rather their abolition.

 

• Institute gold reserve standard. The gold standard of the past was abolished, in order that gold be hoarded by a few cartels up North. It is time to institute a new form of gold standard serving as stabilizer and securitization instrument for currencies. The standard will eventually lead to a re-institution of currency control policy which redounds to a more stable global economy in the long run.

 

Let it be reiterated, that should the present situation be allowed to go on, with piecemeal parochial solutions carved out at best, a bigger global catastrophe will be in the offing. A more colossal nightmare is now unfolding, which we hope the Northern countries’ incompetent bureaucrats can see at all.

[22 May 2010]

[See: IKONOKLAST: http://erleargonza.blogspot.com,

UNLADTAU: https://unladtau.wordpress.com,

COSMICBUHAY: http://cosmicbuhay.blogspot.com,

BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,

ARGONZAPOEM: http://argonzapoem.blogspot.com]

NEO-NATIONALISM TAKES CENTER STAGE

Erle Frayne D. Argonza

This paper now ends with a note on the prospects of neo-nationalism making waves. Note that Old Nationalism is the dominant discourse within the nationalist streams, and this fact is fully recognized in this paper. Old Nationalists will definitely have a hard time digesting the premises and contentions presented in this article. Being anchored on Western discourses, secular and materialistic to the extremes, the said articulators will have none of neo-nationalism save for viewing it as another exotic fad that will soon fade away. This is understandable. “Old dogs can’t learn new tricks!” goes the idiom, and this holds true in every sphere of human endeavor.

But one thing is sure at this juncture: New Nationalism is germinating right at the very center of state power, as the President herself expressed her subscription to and advancement of the new discourse. Surely, a coterie of like minds are gravitating around her, who are looking for an alternative to the neo-liberal frameworks that sorely failed, but who nonetheless find the extremist dirigism of Old Nationalism passé and repulsive. GMA’s reaching the helm of power signifies that nationalism has finally won amid over a century of struggle, as patriots of diverse ideological orientation won the previous electoral rounds nationwide. But a new phase of nationhood is coming into being, an evolving context that demands a corresponding new discourse to defend it and root it firmly.

Being one among those who strongly desire for an alternative framework, I am inclined to think that many potential articulators are waiting in the watersheds of civil society, political parties and state bureaucracy for the new discourse. Many of them began with the Old Nationalist frame but now find the old frame dilapidated and requiring gross recasting or replacement. My forecast is that it will take just about a minimal work to concur a synergy of efforts among these stakeholders. The moment that the synergy commences and gains momentum, neo-nationalism will quickly move into the mainstream, engulfing civil society, political parties and the state like wildfire. It may even serve as the new inspirational light of the business sector. And, who knows, maybe even church stakeholders, notably the bishops, would regard neo-nationalism as life-giving elixir-in-a-bottle floating amid wild seas intoxicated with every kind of antiquated ideological frames that have become inimical to national growth.

Such is the enormous prospect of neo-nationalist discourse gaining centerfold, that even the neo-liberal advocates might follow suit, taking its cue from the bandwagon effect of the new discourse that may take place in just about a couple of years from its inception. The neo-liberals are under fierce attack from everywhere, and are on the retreat, and the only graceful retreat for them is to find common grounds with the new discourse, even if they may not embrace the discourse entirely. After all, the (new) discourse does not seek to destroy the market, that it is inclusive as it appreciates the role of various stakeholders in the development game, from paupers and vagabonds to gentry and capitalists. The strength of the discourse lies precisely in this inclusiveness, a strength that makes it worth applying in the practical world.

[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.]

THE OLIGARCHY QUESTION

 

Erle Frayne D. Argonza

What should the nation do to the oligarchs? Remember that the constitution and strengthening of the nation-state, as clearly indicated by historical accounts, involved the class factor, to wit: the various middle and lower classes forged a united front to overthrow the trilateral alliance of the monarch-nobility-priesthood. Nationhood was and will always be a struggle against predatory oligarchs, as exemplified by the violent overthrow of the gentry (monarchy, priesthood/Church, nobility) to be able to advance the gains of the French Revolution. Likewise did the socialist revolutions in various countries resulted to the strengthening of the nation-state, a strengthening that was achieved precisely through the institutional decapitation of the oligarchy, the physical elimination of many of its members and the seizure of their assets.

In the Philippine case, the oligarchy is represented by (a) the landlord-capitalist oligarchs and (b) the Catholic Church. The landlord-capitalists were the products of the commercial era of the 19^th century up through the industrializing era of 20^th centry, while the oligarchic Church exists as a carry-over from the feudal Hispanic era. On the one hand, the landlord-capitalists have begun to preach ‘corporate social responsibility’ coupled with Santa Claus dole-outs handed over to ‘shirtless folks’, many of whom are shanty residents. On the other hand, the Church has been preaching a ‘preferential option for the poor’ as mandated by the post-Vatican II doctrines, coupled with ‘basic ecclesial organizing’ among communities aimed at contributing to ‘social capital’ and empowerment. The question is, do such sets of actions coming from the oligarchy suffice to redistribute wealth and contribute to poverty alleviation?

The maximalist solution is the one offered by Old Nationalism as a response to the question. The domestic Bolsheviks, whom we count among nationalists in the Philippine setting, are particularly hot on seizing the assets of the landlord-capitalists (‘comprador class’ as the Maoists labeled them collectively) and declaring these under state control. But the same (old) nationalists are silent about Church wealth, which is so enormous it is clear that Church oligarchism is a factor contributing to the ailments of our society. Is it because the Church had contributed immensely to the growth of the Left, by way of the politicization of many bishops, clergy, religious and ministers along the Maoist/Marxist way, and by the utilization of Church convents for such purposes? So now it seems that a Left seizure of power, if ever, is a surefire guarantee for perpetuating Church oligarchism, while landlord-capitalist wealth gets seized and declared as state assets, if not as Communist Party assets.

Neo-nationalism may very well consider the minimalist solution to the question. Sequestering assets by the large-scale and jailing/exterminating oligarchs may only be fruitful in the short-run. But if the value-base of possessive individualism, greed and predatory practices, including usury and rent-seeking, are not eradicated, oligarchs will again appear in the future, thus returning us all to where we were before, as billionaire oligarchs are now appearing by the dozens in post-Bolshevik Russia. “If you can’t beat them, join them!” is likewise unsound, as this is tantamount to capitulation to oligarchism. The minimalist way begins by declaring that oligarchs, when presented with sound options, can participate in the development game. With the strengthening of institutions, they will also begin to exhibit more accountability and responsibility, by first exhibiting truthfulness in their tax declarations and payments, henceforth fattening the public purse no end.

The structural landscape is now changing, and oligarchs are compelled by the exigencies of the times to recognize the winds of change. Gone were the days when oligarchs were as powerful as Zeus and His Olympian Entourage who can never be prosecuted for their crimes, inclusive of crimes of extracting unjust rent from people’s purses without public consent. As the Meralco case demonstrates, erring oligarchs do go punished, or at least the erring firm cannot just engage in criminal acts without being penalized. When civil society is strong and every kind of public interest group vigilantly watches the oligarchs’ acts with zeal, the Olympian stance of greedy oligarchs receive stunning blows by way of court litigations. Meanwhile, oligarchs in localities who commit heinous crimes, such as that of a former mayor in Southern Luzon, got jailed for such crimes, something that was unimaginable in the past. Institutions of justice are now galvanizing, thanks in part to a vigilant civil society and the synergy concurred by the state with it.

I would now boldly declare a forecast that in the long run, transcendent values would permeate the private sphere so greatly, resulting to greater compassion and the return to simple lifestyles. Eventually, the oligarchs will voluntarily share an immense portion of their wealth to the people, through stock sharing schemes, donating large stockholdings to social enterprises, and funding the equity components or even the working capital of social enterprise ventures. Other more exemplary acts will be in the offing too, benign acts that are truly redistributive and not just rhetorical clichés of ‘corporate citizenship’.

Correspondingly, a more radical organizational culture will crystallize, such that, during times of crisis, Big Business will no longer have to downsize in order to continue to gain profits and declare dividends. Rather, the remedial step will be to cut down on the working hours and temporarily cut down on wages and pay scales, so that no one gets unemployed in the process. That is because the personnel are also co-owners of the physical assets. Furthermore, as already suggested earlier, new accounting systems will arise that will more than highlight human assets as the most important assets in the agency, thus eradicating notions of downsizing or expelling people during crisis periods. The ‘corporate citizen’ will therefore become a living organism, unlike today when the concept is simply a strategy to evade taxes by diverting profits to corporate foundations.

Should we follow the Bolshevik way, it means that eventually the local Bolsheviks would become the new oligarchs. The Communist Party becomes the all-powerful economic Santa Claus owning vast assets, while the branches of government controlled by the Party, such as the army and parliament, will also respectively own vast assets, utilized for earning profits that will fatten the purses not only of the said organizations but of their CEOs’ as well. And when market reforms will be undertaken as Bolshevik dirigism can no longer be sustained, new capitalist-landlord oligarchs will emerge, blessed by the all-powerful partocrats with the mandate to “let a thousand millionaires bloom!” As the party oligarchy and the new landlord-capitalists enrich their purses, multitudes will continue to live the lives of paupers, homeless and jobless, cared by no one other than by howling winds of uncertainties and stray dogs who keep them company. Surely, this maximalist route is not the most pro-active route to counterveil against oligarchism, but is in fact a most reactionary route, the stuff of outdated Victorian-era vampire formulas of sucking rent from out of the toiling folks.

As to the Church assets, which will be luckily retained in the advent of a delusional Bolshevik victory, the key is the Bishopric. Bishops are the power-wielders of the Church, and are necessarily the biggest obstacles to change within the Church. “In the long run, we shall all be dead!” declared Keynes than, and such will be the state of the bishops: the Old World bishops will be dead soon, as new generation bishops take their place. Not only are the same Old World bishops—due precisely to their feudalistic, sexist and Victorian-era prudish (pretending) mindsets—the stewards of the vast assets of the Church, their ranks are also replete with narratives of sexual misconduct, corruption and every type of scandalous misconducts from cryptic figures. Hopefully, the new generation bishops will go beyond mouthing ‘preferential option’ discourses to uplift the poor, and move soon enough to redistribute the vast Church assets by proclaiming their utilization for developmental purposes. Such assets can be used to collateralize credit as well as for loans that should be offered at very low interest rates, thus converting the Church into a ‘white knight’ at last.

Meanwhile, the Old Nationalists who are still waving the insurrectionary flag can still recoup by joining the legal stream, as some entrenched leaders of communist front organizations are now doing. Their party groups can join political society, while their mass movements and NGOs will continue to operate as civil society groups, and become part, hopefully, of those forces that will popularize to our people the ‘rule of law’ and ‘rule of reason’, in other words become authentic modernizing forces. Such is a very welcome move by the insurrectos, and is in fact the forecast pathway for the concerned rebel forces.

[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.]

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Reform the international financial system

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Reform the international financial system

 

Erle Frayne D. Argonza

 

The global financial system is indubitably a homestead of predatory financiers. Usury and global speculation, the masterpieces of financiers, are the enemies of nations. Usury in international finance is at an all-time high, raising questions about the legality and moral propriety of   current lending practices. Incidentally, the said financiers are the ones who exercise the clout within the International Monetary Fund and the World Bank, whose chiefs have always been CEOs from the bank headquarters of the financiers. The said banks have always acted out as the marketing agents of financial cartels, even as many nations that have followed the austere ‘structural adjustments’ imposed by them have been reduced to paupers.

 

It is high time for ‘white knights’ to appear in global finance, lending money accordingly for developmental and investment purposes at very low interest rates (lower than 1.5% annually) and at very long-term payments (25-50 years). Such institutions are now beginning to appear, but creditors remain cautious about their moves. Such institutions are autonomous from the power orbits of the Western financial cartels, are well niched in Asia (e.g. China), and appear to be creditor-friendly.

The reform though should go beyond the ‘white knight’ route. We must actively participate in Asia’s establishment of its own monetary fund and a single-currency regime, and take a leading role if opportunities allow. It may prove beneficial yet to re-institute a regime of gold reserve standard, which should back up the Asian currency. This same monetary fund will then serve as the regional ‘white knight’ that will provide credit to nations in need in the region and continent. The actions will also accelerate the economic cum political integration of the ASEAN and the economic integration for the entire East Asia, steps that will further stabilize the national economies and continuously sustain their respective growth. Meanwhile, a regional currency can stabilize soon enough upon its launching, that it would be a difficult job for criminal financiers to manipulate it, such as the success of the ‘Euro’ now exhibits to the globe.

 

Still another key intervention measure is the control of predatory speculation through a ‘Tobin tax’ on cross-border currency and related purchases (J. Tobin’s proposal in the early 70s). A tax of 0.75% alone on the current cross-border exchanges, which amounts to $300 Trillions annually, would generate $2.25 Trillions. The said money will then be used to fund the operations of international organizations such as the United Nations, UNDP and authentic international NGOs for social development purposes. The money can also be used by ‘white knight’ financing institutions of international scale. This set of actions will then induce reforms in the other institutions, with chain reaction effects leading to declining speculation in the long run, as the oligarchic bankers/financiers adjust their rates to more competitive rates in the face of challenges coming from global ‘white knights’.

[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.]

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Strengthen national banking and the monetary system

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Strengthen national banking and the monetary system

 

Erle Frayne D. Argonza

 

 

Economic stability at all levels demands the strengthening of a national banking system, and concomitantly the strengthening of monetary system with sovereignty-backed parameters and rules. First and foremost of monetary missions is the re-assertion of the powers of the Constitution of the Republic over the Bangko Sentral ng Pilipinas. Needless to say, the country today faces a weak national bank, and necessarily a weak monetary system engendered by it. Sovereignty questions impede the effective operations of national banking in the country, as indicated by the excessive meddling of the International Monetary Fund, acting as agent of the global financial cartels, in the Bangko Sentral’s operations. The first step should be a thorough investigation by the Congress of the Republic to determine precisely who owns and controls the Bangko Sentral, and conduct related oversight functions to assess the entire consolidated assets of the said bank inclusive of unaccounted precious metals.

Should there be a need to institute maximum monetary controls, the national bank should be mandated by the Congress precisely to exercise such controls through a regime of currency controls, where found warranted. In no way should our national currency be subjected to attacks by predatory financier speculators, as what the latter have been doing from the mid-1997 onwards. Money is the lifeblood of the economy, and rendering our money under a regime of free exchange rates and free trade leaves us extremely vulnerable to the machinations of such greedy forces, further weakening our national economy. Monetary controls are the best antidotes to the ailment of a weak currency. Were it possible to revive a system of gold reserve standard, then let such a strategy be studied and enforced, to ensure stability in monetary concerns and the currency markets.

The interest rate controls should likewise continue, but the state must see to it that the rate regimes are within the bounds of sovereignty parameters, representing thereof the national interest and the subsidiary interests of the various social sectors. And, should conditions warrant, our national bank should be among the key initiators for constituting new supra-national institutions, such as an Asian Monetary Fund, thus signaling our participation in reforming the entire financial & monetary system (see below). Our involvement in an Asian Monetary Fund could be a fitful strategy to finally exit from the International Monetary Fund, further strengthening our national banking and monetary system.

 

[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.]

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Concur co-stewardships with communities affected by extractive industries

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Concur co-stewardships with communities affected by extractive industries

 

Erle Frayne D. Argonza

Our mining sector had been in the doldrums for quite some time now. The production levels of both (a) base metals and (b) precious metals have surely been at lackluster levels. Meantime, logging has been totally banned to arrest further deforestration and its accompanying desertification and soil erosion. It is only in the energy sector where extraction has been impressively high, and the sector is appreciably a very dynamic one even in terms of R&D considerations. We are now at the crossroads concerning such sectors as mining and forest resources, where a revivified extraction is in the pipelines but couldn’t move because of constitutional and/or statutory constraints.

Note that most of the country’s natural resources for extraction are habituated by (a) tribal peoples and (b) migratory slash & burn peasants. Such populations have long ‘guarded’ the resource-rich habitats. It would surely be a faulty policy to drive them away—hidden under the euphemism of ‘relocation’—in order to give way to a mining concessionaire. Likewise would it be unsound to merely integrate some of their members as wage laborers for the extraction operations. Such actions, derived from regarding the people as ‘high disutility’ entities, are plain reactionary, even as they push the populations to the limits, leading to the folks to constitute hostile millennial movements and rebel separatists. The moves are reactionary as they contribute to the weakening of the nation, to the fragmentation of the national community.

The most pro-active path to address the concerned issue is to design and concur stewardship arrangements with the said populations. Three things are addressed by the stewardship: (1) the people will stay in the area, with better housing and amenities, who in turn will monitor and safeguard the entire operational sites; (2) where necessary, the same folks will be employed in the operations and administrative jobs where applicable, on a first priority basis; and, (3) the people will be co-owners of the firm, with equity/stock participation derived through a calibration of their productivity potency, historical role in stewardship of the area, and other variables. It is argued that this stewardship path is the win/win formula for the state, investors (market), and the communities concerned (‘social capital’/civil society). Consequently, the contribution to the GDP through resource extraction jumps up to a historic high level.

 

[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.]

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Continuously open the market to external investors

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Continuously open the market to external investors

 

Erle Frayne D. Argonza

 

National savings continue to hover at a pathetically low rate of seventeen percent (17%), which is significant but is way below the minimum of thirty percent (30%) to render it as ‘critical mass’, like that of our neighbors’. The problem cannot be addressed sufficiently than through a continuing inflow of capital from external investors. Note that in today’s global context, the term ‘foreign capital’ has already lost its meaning, as the boundary between ‘domestic’ and ‘foreign’ has been effectively erased. The cross-country partnering cum out-sourcing arrangements among diverse firms have become the norm of today’s business, rendering obsolete the previously sacrosanct notions of ‘domestic’ capital and ‘foreign’ direct investments. Not only that. Latest researches have verified that transnational corporations or TNCs now tend to create more values within their host countries and reinvest the profits locally than remit them back to their ‘home country’ (a term that has also begun to lost meaning).

This doesn’t mean though that such investors should be served ‘free lunch’, through very long regimes of tax havens or through spurious ‘strike-free zones’ (read: haven for wage freeze) which makes our laborers appear like wild jackals who need to be perpetually gagged. Some forms of valves (capital controls) should also be instituted, so that the capital investments and profits wouldn’t just flow out like hemorrhage the moment that the economy hits cyclical crisis. Surely, pro-active measures can be devised to let the said investors stay, more so for those that truly re-invest their ROI for their original and diversified business concerns, as well as to those that conduct dynamic R&D and truly transfer technology.

 

In today’s globalizing context, corporate ‘national champions’ have become obsolete. The bygone era of ‘national champions’ can still be observed in the names of certain firms, such as in the names Philippine Airlines, Philippine Long Distance Telephone, or in Bank of America, American Express. Asset re-structuring is the norm, and large corporations are becoming rapidly globalized. Mergers and de-mergers are happening at rapidly ‘chaotic’ paces. The circumstances challenge investors/stockholders to quickly grasp the lesson of   ‘thriving on chaos’ or else their ventures would face bankruptcies and foreclosures as what befell many former large ventures, inclusive of former ‘national champions’.

The thought that “foreign capital might harm national interest” is simply passé and out-of-context, in as much as the term ‘foreign’ has lost its meaning save for the antiquarian Old Nationalists who regard foreign things as essentially dangerous (but are they not using foreign frameworks in their perceptions of foreign things?). Let the investors come in, recombine their assets with our domestic investors’, extend their stock participation beyond the forty percent (40%) constitutional limit. Note that “our very own” big corporations are participating in ‘foreign’ countries, and their levels of investment participation go beyond forty percent (40%). It is high time that we readjust our thinking about the matter.

[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.]

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Continue to stimulate growth through the ‘physical economy’

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Continue to stimulate growth through the ‘physical economy’

 

Erle Frayne D. Argonza

This writer strongly argues that the greatest driver of the economy must be the ‘physical economy’. By ‘physical economy’ we refer to the combination of (a) agriculture, (b) manufacturing, (c) infrastructure, (d) transport and (e) science & technology (S&T) whose results further induce ‘production possibilities’ in the sectors a-d. An economy that is prematurely driven by the service sector, growing at the expense of the physical economy, will create imbalances in the long run, failing in the end to meet the needs of the population. A premature service-driven economy would be subject to manipulations by predatory financiers, who would do everything to destroy the national currencies and consequently the physical economy of the nation as well. An economy driven by derivatives and every kind of speculative pursuit is a ‘virtual economy’ such as what has dominated the USA since the era of Reaganomics.

I would hazard the thesis that our national economy moved to a service-driven phase prematurely. Look at all the fiasco after our ‘physical economy’ had rapidly declined in GDP contributions since the early 1990s, as the service economy advanced in its stead! Relatedly, the over-hyped Ramos-era ‘Philippines 2000’ economy was largely a ‘bubble economy’ driven by speculation and portfolio capital, and was more in kinship with the ‘virtual economy’ than any other one. We have not fully recovered from the bursting of that bubble, even as we are now threatened with another bursting of sorts—of the debt bubble, leading to fiscal crisis.

It pays to learn our lessons well from out of the immediate past experiences. And the clear message sent forth is: get back to the physical economy and re-stimulate the concerned sectors, while simultaneously perfect those services where we have proved to be competitive, e.g. pre-need sector, retail, restaurant/f&b. We should also strive to learn some key lessons from other countries’ positive experiences such as China’s, whose economy continues to grow enormously, and grow precisely because it is the physical economy that primarily drives it up and lead it—at an enormously rapid rate—towards development maturity, permitting China to outpace the USA’s economy on or before 2014 (using GDP Purchasing Power Parity indexing).

[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.]

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Evolve from ‘capitalist markets’ to ‘social markets’

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Evolve from ‘capitalist markets’ to ‘social markets’

 

Erle Frayne D. Argonza

 

 

The ‘capitalist market’ (or simply ‘market’) is the haven of financial predators and market sharks, while the absence of market is the homestead of the rent-seeker and exclusively-privileged partocrat (single party bureaucrat). As the cases of the ‘mixed economies’ and that of China’s have demonstrated, the market impeccably performs a   pivotal role in stimulating growth & development, and should not be wished away too soon. Rather, we should evolve a market that is not a ‘pure market’ in the classical sense.

As experiences world-wide have transparently indicated, leaving everything to the market redounds to: (a) diminished welfare, as indicated by low wages, low accessibility to social services, high unemployment, and massive exploitation of labor; (b) ecological disaster, indicated by environmental degradation, depleted natural resource base, destruction of indigenous communities and their natural habitats; (c) speculation in the capital and realty markets, leading to further instabilities and proneness to shocks, both internal and external; and, (d) lackluster product innovation due to low value given to S&T development, in societies where there is a lack of entrepreneurs, such as the Philippine case demonstrates.

The balance lies in developing a ‘social market’, where concern for private initiatives as well as for welfare are harmonized and balanced, while at the same time controlling speculation and optimizing conditions that induce innovations. Within the context of a social market, there should increasingly evolve ‘social enterprises’ or collectively-owned enterprises: cooperatives, people’s corporations, grammin, and other related types that are rising though still at an experimental phase. While private enterprises should continue to prevail, large-scale enterprises should begin to innovate on new physical asset-ownership schemes that would eventually see a large portion of the assets co-owned by ordinary folks and corporate employees. In the long run, the ‘social market’ will be a terrain where both wealth gaining and welfare providing functions will be fused exquisitely, signifying the end of state-induced welfare and the return of welfare functions to communities.

[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.]

NEO-NATIONALISM’S PREMISES & CONTENTIONS / People are the most important assets, revise accounting systems!

NEO-NATIONALISM’S PREMISES & CONTENTIONS / People are the most important assets, revise accounting systems!

 

Erle Frayne D. Argonza

 

 

The prevailing mindset perceives assets in terms of physical assets (estates, chattel, monies). Ownership is then defined in terms of right to control and dispose of such assets. Wealth is computed in terms of the values, calibrated through price, created through the utilization of the physical assets. For a while, the classicists introduced the notion of ‘labor theory’ of value, premised upon the value-producing powers of labor. But the efforts of the classicists failed to get translated into acceptable accounting systems, as such systems have always been based on physical assets and prices.

Look at what is happening among various agencies, especially business firms: there is a lot of ‘pirating’ of people going on among them! Likewise are there efforts to retrieve those same people ‘pirated’ by competing agencies. The same event holds true for the state and NGO sectors: ‘piracy’ on grand scales! This phenomenon is a clear manifestation that people, not physical assets, are the most important of all in an organization. When an agency loses good personnel, the effect is instantly debilitating, a debilitation that can be offset only through the timely arrival of replacements who are as good as the ones who left. The converse is also true: when an agency needs people to shore up its output levels, ‘pirate’ high-achievers from other agencies most especially those who have “made a name” in the sector concerned. The piracy of people in the entertainment world is even more instructive in indicating to us the central import of people, not physicals, as value producers. We need not belabor the point that the ‘piracy’ strategy comes often in the form of higher pay scales and incentives.

That is why it pays so much to manage people well, and to design new organizational principles that would bring out the maximum potencies of people most specially the highly talented ones. Bureaucracies have become outdated dinosaurs, as ‘flat organizations’ have become the wave of the present: the new organizations make plenty of room for self-initiatives, resourcefulness and innovativeness by good staff. Bureaucracies, which follow from only two principles—vertical (hierarchy) and horizontal—can stifle innovativeness, as experiences have shown. The ‘task master’ mindset and ‘boss mentality’, as well as the excessive stress on routinary processes, have turned off many achiever personnel most specially the highly talented ones whose nature of work is ‘symbolic/analytic’ (to use Reich’s term). Today, new principles are emerging that are leading to a massive ‘re-engineering of the organization’, such as Total Quality Management or TQM, web organizational structure, team work principles and ‘human resource empowerment’.

Yet inspite of such revolutionary changes and explosion of amazingly appropriate principles about organizations and human resources, no changes are happening in the accounting systems that can correspondingly reproduce the organizational principles taking place. The only appreciable concept is that of GDP Purchasing Power Parity or PPP, which computes total income on the basis of purchasing power of local consumers relative to those of the world’s strongest economy. Using the GDP-PPP, the Philippines’ GDP stood at $379 Billions as of the end of 2003, with GDP-PPP per capita at around $4,600 more or less. (See The World Factbook, 2004, for such index reports.) But this indexing does not in any way address the accounting question raised here.

Should the notion of ‘human capital’ become popular, the accounting system should consequently follow. The notions of ownership would then change, indicating the revolutionary implications of the paradigm shift. Those pretending ‘radicals’ of the day, many of whom are steeped in 19^th century socialist thought, tend to view the asset realm from the focal lenses of antiquated Victorian-era ownership concepts, and are no less conservative than the oligarchs they sordidly hate. They offer no radical solutions beyond changing (antiquated) asset ownership, strategies that eventually stifle innovativeness and human expression, as criminal Stalinist regimes have shown. New Nationalism must take on the challenge of presenting a far more revolutionary concept that can, in the end, contribute to evolving a strong base of ‘human capital’, ‘social capital’ and ‘strong nation’.

[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.]