Posted tagged ‘economics’

‘LATE’ CAPITALISM CRASHING DOWN ITS DEATH BED

September 25, 2015

‘LATE’ CAPITALISM CRASHING DOWN ITS DEATH BED

 

Erle Frayne D. Argonza

 

Good evening!

The events in the Eurozone are now getting to be more alarming. Forecasters are now claiming that another round of recession is in the offing, as the bubble burst that began in Greece will spread to Spain, Ireland, and other member-states of the EU.

Will liberal capitalism continue to live a life that seems to hang in the balance? Or will capitalism need to restore itself through totalitarian means? What’s so wrong with the system that it just can’t be sustained enough?

Let me share to you past blog writings about the subject: ‘mad economics’ and the ‘demise of liberal capitalism.’

[Philippines, 23 May 2010]

‘LATE’ CAPITALISM ENDS IN CRASHING BLOW POST-‘MAD ECONOMICS’

 

Erle Frayne Argonza

Good afternoon!

At this moment, I’m sipping coffee contained in a pack that is sold for worth P130, or $3.00. The pack is one of the domestic brands of brewed coffee blends, ready for the drip coffee maker, of the Arabica and/or Robusta varieties. In economic parlance, this coffee is a commodity because (a) it was intended for exchange and not for the coffee producer’s consumption alone, and (b) money was used to acquire (purchase) it.

I have such deep fondness for coffee, as I acquired my coffee-drinking behavior as a childhood habit yet. In my hometown of Tuguegarao (city), Cagayan province (North Philippines), coffee beans were grounded into powder form and sold right inside the ‘wet’ market, was brewed using the local decoction techniques, and was consumed by people of all ages from pre-school to senior’s age. That was then, and that was how I learned to drink this beverage at age 5 more or less. I was hooked to the habit since then, even as I continued to drink milk that I still do till now.
Both coffee and milk are among my health formulas, and both are commodities.

The question I’m asking now is, will commodity-based economics survive the times ahead? Both coffee and milk will survive for sure, but will the money economy that underpins them survive as well? As to the broader world system of capitalism, will it survive too or is it in fact on its death knell today?

Capitalism was the last of the world systems that embodied the ‘money economy’ to which it properly belongs. With the opening of the 20th century, the socialist world system appeared on the social landscape and attempted to serve as an alternative to capitalism, but this experienced its early demise as its implementers found out that it cannot be sustained after all. Both capitalism and socialism are embodiments of the ‘money economy’ as it later turned out to be, they are just but two sides of the same coin: the ‘money economy’.

Socialism is gone, and no matter what attempts there may arrive to survive it in some other forms, this variant of the ‘money economy’ is gone. Now capitalism is all alone, and it is getting more real than virtual that it too is bound to crash a catastrophic end, and with its demise, the “last of the (economic) Mojicans” is bound to disappear (my apologies to Mojicans if my note sounds ethnically incorrect). And with capitalism’s demise, the whole of the ‘money economy’ folds up like unto a book that had reached its last chapter, and deserves more to be consigned to the archives of history.

The Frankfurt school thinkers, notably Jurgen Habermas, cogitated that capitalism’s life span was extended somehow, and was dubbed as ‘late’ capitalism in this last phase of the world system. In this phase, state planning and interventionism were infused into the system to extend its life. Before ‘late’ capital came the mercantile, free enterprise, and monopoly phases of this world system. Will there be another phase to capitalism after ‘late’ capital?

Before I answer that extension of life span, let me stress that ‘late’ capitalism shall end in the following process and manner:

· The re-introduction of liberalization—of free market and free trade principles—into ‘late’ capital shifted engagements away from production, the real foundation of the economy, to the sphere of predatory finance, thus producing the gargantuan ‘bubble economy’. The ‘physical economy’ of production transmogrified into the ‘virtual economy’ that produces no real value other than imaginary or delusional values. It is ‘mad economics’ in operation, no longer the ‘rational economics’ of mercantilists, classicists and neo-classicists.

· The ‘mad economics’ led to the yawning gap between actually produced values and the aggregates of financial derivatives and debts combined, to the extent that the former shrinks at a rapid rate relative to the latter. As bubbles burst from one commodity sector to another, leading eventually to a crisis of gargantuan proportion, all the more will production shrink, unable to produce values that can input into the demand functions for fresh money to pay for aggregate credits, primary debts, secondary debt obligations, and so on.

· The crisis will then move on to the further shrinking of production, tightening of credit sources, and hyperinflationary situation in utilities (notably gas & power), food, base metals and other vital commodities. Total economic collapse results from the foregoing.

· The economic collapse then leads to social unrests, turmoil, upheavals, civil wars, food wars, water wars, and possibly intercontinental wars such as another 3rd world war. The clash of world powers and their surrogate emerging markets will become the flames of a possible long war akin to the 30 Years War (c.1618-48).

Let me now end at that instance. Suffice me to proclaim that the death knell of ‘late’ capitalism and the whole of the ‘money economy’ of the last 2000 years or so are ending. The ‘non-cognitive economics’ of the Roman to feudal era, the ‘rational economics’ of the Renaissance to monopoly capital era, and the ‘mad economics’ of ‘late’ capital were markedly the underpinning mediation processes of that entire 2000-year epoch. The epoch and its last phase of capitalism is rapidly drawing to a close.

[Writ 22 August 2008, Quezon City, MetroManila.]

CAPITALISM’S DEMISE: WHAT WENT WRONG?

Erle Frayne Argonza

To all fellow men and women out there who may have deep fondness for the liberal capitalist model of economic adaptation, I hope that you can make some adjustments in your cognitive banks. Capitalism is not a permanent facet of human life, but merely one among various epochs that will come to pass. Only impermanence is sacrosanct in the cosmos, so please refrain from singing hallelujah to a world system that is on its death knell as I articulated in a previous article.

And please refrain from swallowing hook-line-&-sinker the contentious propaganda of Francis Fukuyama about the ‘end of history’, that accordingly history had concluded with the galvanization of liberal capitalism, that history makes no more sense. Fukuyama’s theory is a slapstick narrative of hyper-valuation of the ‘mad economics’ of late capitalism and hypo-statization of reality that has no relation at all to the real in the world out there. Fukuyama had taken as ‘real’ what is actually ‘virtual’, and froze time much like unto a fairy tale of timelessness, of history-less Nietzschean moment that is fit more for infants than for adult humans.

Fukuyama epitomizes the ‘mad economics’ of all those Pied Pipers of the global oligarchy for whom he works, and his discourse is akin to the ‘mad discourse’ so described by the late Michel Foucault. The ‘mad economics’ of Friedman, Hayek, Fukuyama, and all those technocrats who serve as processors and bagmen for the global oligarchy, is precisely symptomatic of that colossal ailment of a world system, and as we all know, madness can never salve ailments but rather hasten the system’s death. Caput! Blow your horns, prepare dirges to this Dead One!

Unless that you yourselves have become maddened by the seemingly infinite monies flowing unto your purses as you are among the beneficiaries of ‘late’ capital, unless that you are indeed now suffering from combined maladies of sociopathy and schizophrenia, unless that sanity had departed from thee forever, please heed the last plea of your own conscience where sanity had retreated: CAPITALISM IS DEAD! No amount of propagandizing, of contorted interpretations, can ever change the course of history at this juncture, as we are all headed for a TOTAL SYSTEM COLLAPSE in the months ahead. Read that please: MONTHS AHEAD, not years ahead.

What went wrong with capitalism? I’m sure all of you fellows knew what went wrong, do I even need to answer that? Your previous thinker mentors, among economists and sociologists, forewarned you all of the forthcoming demise of capitalism, but you paid nary an attention to those brilliant minds as you were so engrossed in your ‘conspicuous consumption’, behaving more like some infantile EATERS or as anthropoids rather than as thinking and spiritually evolving humans. You are all very much human, so please consistently behave like one, and begin by listening to the Inner Voice of your conscience, for that voice is your soul’s.
Let me summarize the diagnostics, forewarnings and/or prophecies of our thinker mentors from the West, and I’d stress WEST because there are some other thinker mentors from the EAST and SOUTH whose peregrinations are so recondite they are not so easily digestible. Let me just stress the WEST as this is what is common to us all. So let me re-echo the thinkers and their theories:

· Karl Marx & Friedrich Engels: The internal contradictions between the private nature of capital (ownership of means of production) and the social nature of production. The ‘crisis of overproduction’ and the ‘law of the falling rate of profit’ are attendant patterns. Social revolution results, then the alternative society will be constructed.

· Max Weber: Industrial capitalism’s granite product, the bureaucracy, led to dehumanization. He never forecast though whether this dehumanizing system can be sustained—but please read between the lines. (His contemporary Emile Durkheim had a similar observation about ‘anomie’ or normless state of urban/industrial society.)

· Thorsten Veblen: The end-phase of industrial capitalism is markedly pathological. ‘Conspicuous consumption’ is the disease of this phase, the toxic behavior from the ruling class that later filtered down to the emerging middle class.

· Joseph Schumpeter: The internal contradiction between the desire for profit and the revolutionary character of innovation. The demise of capitalism will see the possibility of the technical class taking over society and build that alternative system later.

· Daniel Bell: The ‘post-industrial’ society had already been born right inside capitalism. A distinct modality in itself, post-industrialism will eventually prevail in a system that isn’t capitalist (or money economy) but rather knowledge-based. The ‘service worker’ had arrived on the social landscape, the prototype class of the future.

· Theodore Adorno, Jurgen Habermas, Herbert Marcuse: ‘Late’ capital is characterized by the pervasiveness of ‘instrumental reason’, where reason is used to justify the non-rational (‘madness’ in Foucault’s argot), where state planning/intervention was infused into a system that scorned intervention.

· Alvin Toffler: Both capitalism and socialism are based on hoarding, both are variants of the same industrial society of yesteryears, both are based on ‘2nd wave’ capital-intensive technologies and non-renewable energy sources. The ‘post-industrial’ society is altogether distinct, isn’t based on hoarding, production-consumption (‘prosumer’) is based on ‘3rd wave’ knowledge-intensive technologies and renewable energy sources, knowledge cannot be hoarded.

I need not articulate further, do I? They all converged on one theme: capitalism is transitory, it bred social maladies (alienation, dehumanization, anomie, conspicuous consumption,…), is systemically flawed, and will be dismantled at sometime in the future.

No matter how delimited their theories maybe, as they all proceeded from certain perspectives (they were all ‘paradigm’-based in the jargon of Thomas Kuhn), they all proclaimed—in either tacit or explicit fashion—the coming demise of the system. They weren’t as silly as Fukuyama who popularized seemingly ‘satanic verses’ (distorted precepts) about a non-changing, permanent economic landscape called ‘liberal capitalism’, but were rather so adroit at social forecasting that they saw a vision of the future as they were articulating on their empirical observations of the present society.

So, fellows out there, prepare for the months and years ahead. We are headed towards those stormy months, years, maybe even decades. How the future society will come to shape is not easy to forecast. “Something blurs the Force, darkens our sight of the future,” declared a Jedi Master in the Star Wars cinema fame. Let me end right here.

[Writ 22 August 2008, Quezon City, MetroManila.]

EUROPE’S BURNING!

September 6, 2015

EUROPE’S BURNING!

 

Erle Frayne D. Argonza

 

Europe is on fire. Save for those who choose to be blind, the Union is going through an incendiary economic burn. How far will the economic burning go, whether it will spread to a larger continental inferno, no one can tell for now.

Before the EU’s creation, welfare policies were prevalent from east to west of the continent. Liberal reforms then arose, commencing with the Tory’s (Thatcher era) wholesale adoption and social marketing of the same, and copied by the conservatives and liberals of the continent alike.

By the turn of the century, upon the commencement of the Euro, liberal reforms already saw the uncontrollable ascent of predatory finance worldwide. Liberalized financial-capital markets paved the way for their immanence.

Among those instruments created by the predators was financial derivatives. To recall, a decade back the derivatives markets were already awash with exposures totaling over $150 Trillion, with 36% of these in the hands of British financiers while 15% were in Americans’ hands.

By 2001, the alarming projection was leaked out that derivatives will be inflated to exceed $350 Trillions within the new decade. At a time when the global economy was producing past the $40 Trillion in Gross World Product or GWP, it was sheer madness to consider debt papers of past $350 that could meltdown the globe in case of a gigantic bubble burst.

Europe was already flat on its back for a straight two (2) decades since after the collapse of the Soviet Union. Periodic stagflations and recessions have seen the rise of poverty incidence and, consequently, the re-emergence of neo-fascist movements.

Being strongly tied up to the U.S. economy, it was not surprising to realize that a contagion of the U.S. recession will surely hit Europe, which did happen. The ugly side of the formula was the aiding of ailing banks that were badly affected by the crisis, an intervention that was flawed and immoral as it entails using taxpayers’ money to aid criminal bank speculators.

Barely out of the U.S. contagion effect, Brussels was shocked to see that a new fire had started within the Eurozone— Greece to be exact. As this was happening, Spain also began to sneeze & cough, as some of its own banks (notably Santander) spiraled down bankruptcy scale. Other member-economies were also having their own financial crucifixions going by the early part of this current year.

If we diagnose what’s going on in the financial sectors of member states, we can easily pinpoint banks as hotspot fire sources. They were heavily into speculative pursuits, with enormous exposures to derivative operations.

Just exactly how that happened can be traceable to certain acts in the North by the mid-80s. Commodities markets have sprung up on that decade, even as a global recession took place then, threatening OECD economies. Liberal reforms were already permeating diverse sectors, and within the backdrop of liberalization, financial derivatives and equivalent portfolios were launched in mass scales.

Banks shed off their previous stance of inhibiting themselves from speculative pursuits. Soon they’d find themselves investing into every speculative games they could lay their hands into, inclusive of hedge funds operations.

Now, to fast track to the present, economists estimate that EU’s aggregate derivatives are within the range of $180-$200 Trillions, estimates that seem conservative. Measure this against the gross domestic product of EU at $13 Trillions, and you would be driven to ask: just exactly where will Europe get the funds to pay the hedged financials in case of bursts and massive bankruptcies?

If all of the hedge funds investors would ask for a forced payment of their total of, say, $200 Trillions more or less, who would pay for such debts? Where will the money come from? Is it morally right to extract taxes from European workers to pay up for the dirty debt papers in case? Is it likewise morally right to impose wage cuts on workers who were not the culprits in the virtual economy game in the first place?

Concerned Europeans should better rethink the Euro and ask whether the new currency really worked for their welfare. It is now clearer that the Euro was a sell-out idea and project, that it was launched to satiate the insatiable pockets of greedy financiers represented by the top financial houses there.

And Europeans better see how silly it is to allocate taxpayers’ money worth $1 Trillion to bail out ailing banks and industries hit by the rising meltdown. For measured against total debt papers of $180-200 Trillions, $1 Trillion would be ridiculously paltry.

Yet another ridiculous intervention is the austerity measure imposed by the IMF on Greece. We’ve had so many precedents of the deleterious effects of such measures on developing economies that aimed at eventually graduating from IMF programs as a salvation measure in the short run. While emerging markets are getting out of a burning house (IMF & austerity measures), Greece voluntarily entered this house. Unbelievable!

As per reports reaching my focals, Germany had the greatest exposures to Greece’s banking sector, with exposures running to hundreds of billions of euros. British financiers, on the other hand, have their hands full in Spain’s banks.

It isn’t difficult to forecast that the fire in Greece could spread to other eurozone economies. Not even the UK, which decided to stay out of the eurozone, will be spared from the bonfire. Spain is almost there now, and who knows what country will be next.

If banks and industrial conglomerates will simultaneously burn in all of the member-states of the eurozone, with total aid claims of past the GDP of $13 Trillions, then Europe will be on the brink of a continental inferno.

Concerned readers better think for yourself whether Brussels and the bureaucrats do have the right answers to the raging problems of Europe. Poverty incidences are now hitting past the 20% mark in member countries, while massive lootings of the financial and currency markets by predatory financiers take place every day in the continent.

Well, let’s all wait and see for what happens. Let us hope that a mad Nero bureaucrat wouldn’t appear to orchestrate the burning farther to infernal scale. That would bring a new nightmare to the whole planet if it happens.

[Philippines, 20 May 2010]

ONE ASEAN: GET READY!

August 27, 2015

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.]

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

May 5, 2015

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

April 25, 2015

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

April 15, 2015

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

April 5, 2015

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.]