Posted tagged ‘macro-economics’


September 15, 2015



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]






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 / 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.]

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

March 4, 2015

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 / Promote synergy with civil society in the development path

February 5, 2015


NEO-NATIONALISM’S PREMISES & CONTENTIONS / Promote synergy with civil society in the development path


Erle Frayne D. Argonza

In the old formulations, development was an exclusive endeavor of state and market players. That is, the directions of development were largely the handiworks of political, bureaucratic and corporate elites. There should be an admission that this structural formulation was a factor in generating the crisis-level ailments of mass poverty, large-scale unemployment, low wages, sluggish growth and dependence. So why retain a formula that had failed us miserably?

The current context, where a dynamic and colossal civil society operates, points to the ever-growing recognition of the potent role of civil society in co-determining the compass of development. At the grassroots level, development efforts will be accelerated to a great extent by involving civil society formations acting as ‘social capital’ base, as studies have positively demonstrated (citations from Peter Evans’ works on ‘state-society synergy’). Insulating the state from grassroots folks, as the same studies have shown, have produced dismal if not tragic effects, e.g. India’s non-involvement of ‘social capital’ in the erection and maintenance of irrigation facilities resulted to program failure in the end.

Building and maintaining ecologically sound, clean cities can likewise be effected through the tri-partnership of state, civil society and market, as demonstrated by the Puerto Princesa case. Under the stewardship of the dynamic city mayor (Mr. Hagedorn), the tri-partnership was galvanized. Businesses have since been conscious of operating on clean technologies and environmental responsibilities, city streets sustain hygienic images, traffic is well managed as motorists exude discipline, and civil society groups constantly monitor the initiatives that saw their hands dipped into their (initiatives) making. All we need to do is replicate this same Puerto Princesan trilateral partnering at all level and in all communities to ensure better results for our development efforts.

The ‘state-society synergy’ in our country had just recently been appreciated and grasped by many state players. Being at its ‘take-off’ phase, it is understandable that synergy is only a lip-service among many state players, notably the local officials. State players still regard civil society groups with ambivalence, while civil society groups are suspicious of state players whose sincerity can only be as low as their Machiavellian propensities would dictate. Such local state players desire to subordinate civil society groups, and many politicians have constituted ‘government-initiated NGOs’ or GRINGOS as cases of non-authentic subordinated groups. On the other hand, local-level volunteer groups can at best perceive domestic politicians as ‘Santa Claus’ providers, and utilize them largely as gift-giving patrons. Strengthening state-society synergy has a long way to yet, but it is not exactly starting at ground zero in this country. It is, by and large, a core variable in developing citizenry and constituencies, and must be advanced beyond its current take-off phase.



[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.]



December 18, 2014


Erle Frayne D. Argonza

Across the continents, where markets have predominance in the economic sphere, there has always been the antipodal tendentialities of laissez faire and dirigisme. The bone of contention has been the state’s role in the economy. These tendentialities have surely represented two (2) hard-line oppositional streams.

Mercantilism, the progenitor of dirigism, contended that regulation should govern production, distribution, consumption and exchange. The (interventionist) state should be at the center of regulation, with the central goal of all economic pursuits being the accumulation of the wealth for King. Old Nationalism had held on to this contention, with the revision that wealth should be accumulated for the nation as a whole and no longer merely for the King, wealth that is correspondingly allocated to the folks in the form of wages and welfare (this ‘wealth for nation’ line is admittedly a concession to the Smithian physiocracy, a competitor discourse). Only the state, not the market, can best perform redistributive responsibilities for welfare, jobs and wages. Necessarily, development should be undertaken with strong state regulations in the four intervention areas mentioned. The Keynesian revolution revived the dirigist contention, using a demand-side premise, and held sway across the globe for around half a century since its inception.

Laissez faire, whose earliest articulators were the physiocrats, opposed dirigist doctrines with extreme zeal. Accordingly, the state should only intervene in matters of defense, justice and public works, and should keep its hands off the market. Accumulating wealth is a matter of private sector concern (industrialists and landlords), while free trade must be the condition of international exchange and distribution. Even matters of welfare must be left to market mechanisms to provide. Development efforts, i.e. the ones undertaken by ‘3rd world’ economies, must follow the laissez faire path. The logic behind the contention is that the market will produce the entrepreneurs who will be enticed to embark on bold ventures should they be left on their own to take off ‘infantile enterprises’.

The problem arises when, due to the predominance of non-market mechanisms, such as clientelist relations and redistribution-based exchange systems (haciendas, latifundia), development could hardly take off at all. In cases where entrepreneurs are of residual numbers, such as the one demonstrated by Philippine experience, laissez faire strategies would prove pathetic in results. This entrepreneurial scarcity had justified the adoption of dirigist policy frameworks, the principle ones being those that guided the ‘import substitution industrialization’ of 1947-1968. Various 3rd world states have sponsored the dirigist path, employing diverse models (socialist, mixed market-socialist), with fairly good results for many of them. The articulators of such states have argued that no country had ever prospered thru the laissez faire route, and that laissez faire can only work out when development had reached a highly mature level when consumerism propels growth, and where economic fundamentals are very strong and stable.

Many developing economies actually encountered tremendous snags as their states chiefly sponsored development efforts. Rent-seekers of every kind appeared on the scene, serving as barriers to the effective entry of possible investors from among potential competitors. In the Philippine case, asset reform in the agrarian sector had been a perennial failure, thus further complicating the already complex maize of structural problems. What happened, according to the defenders of laissez faire doctrines, was that dirigisme made the ensconced patrimonial groups become further entrenched, thus leading to a vicious cycle of slow growth, high poverty, high unemployment, and relative stagnation.

Such a situation served as the impetus for embracing neo-liberal reforms over the last twenty-five (25) years by the developing economies, the Philippines included. Laissez faire returned with a vengeance, popularizing free trade in the international sphere, and structural adjustments in the domestic sphere and public sector, to note: liberalization, deregulation, privatization, liberalized currency markets/devaluation, down-sizing, minimal/residual fiscal stimulus & budgets for social services, tax reforms and decentralization. Such a policy regime of ‘structural adjustments’ were instrumental in integrating national markets into a globalized one where there is freer flow of tradable goods, investments, information and labor. Not only that, the antipathy of foundational physiocracy towards manufacturing (biased for agriculture) returned, as cheap imports (owing to liberalized trade) destroyed established industries leading to ‘de-industrialization’.

Where are we twenty-five (25) years after instituting market reforms under the aegis of ‘structural adjustments’ (note: we began through the ‘structural adjustment loans’ of the World Bank, c. 1979)? National income continues to grow at dismally low rates, poverty had increased during the latter phase of the reforms (decreased only recently), unemployment remains high amid positive growth, and our developmental stage continues to be stuck up in the ‘growth stage’ (failed to reach ‘maturity’). Globalization, with its attendant ‘structural adjustment’ policies, has weakened nations, even caused fragmentation in others, a fact that had likewise been replicated in the Philippines with its separatist movements. Free trade had destroyed domestic industries (the USA case was hit so hard by this one), as some had to fold up (Marikina shoes exemplifies the Philippine case) and transfer elsewhere (Procter & Gamble-Philippine is an example). With weak or nil ‘safety nets’, chances are that many producers (e.g. fruits, vegetables) will lose against cheaply-priced imports. One thing is clear for the case of many developing economies, including the Philippines: market reforms failed miserably to get them to development maturity, even as it set back the development path of others.

So if both dirigisme and laissez faire have been failing in making life better for the nation and the majority of the people, what discourse than can work out to salve the ailments of most developing states? Expectedly, a ‘renaissance of nation-states’ has become the wave of the present, with many of its articulators defending a return to dirigisme in its old form—in its highly protectionist form. I used to be among such articulators, even as I now argue that Old Nationalism can have deleterious results when pushed to the extremes. We can’t wish globalization away, it is here to stay and galvanize some more, even as it challenges us all to path-find the opportunities that it can offer while neutralizing the threats that could result from it. In other words, re-echoing Herr Reich’s and Mdm Arroyo’s elucidations on the subject, I am now wont to advocate for a New Nationalism or neo-nationalism, a discourse that advances beyond the narrow confines of extremist dirigisme and laissez faire.

Let me move next to the key premises and contentions of ‘new nationalism’-Philippine style.

[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.]


November 3, 2014

Erle Frayne D. Argonza

Magandang hapon! Good afternoon!

Let me share to you at this moment some notes regarding the ‘globalization’ experiment and the flawed policies that sustained it. There has been much ballyhoo about the global economy’s integration, over the last three (3) decades, as having been carved out supposedly by the Anglo-Saxon policy architects, using Thatcher & Reagan as the face for the ‘neo-liberal’ policy regime they installed.

Little do peoples across the globe, including experts who are so mired in their own parochial perspectives, know that the liberalization of country economies has a great deal to do with the Zaibatsu offensive. The West should better accept the facts: that their technocrats and policy shapers have run out of fresh ideas since the 1970s onwards (i.e. mentally bankrupt), a gap that they filled up by looking up to Japan and the NICs (newly industrializing countries) for copycat purposes.

Reaganomics, as neo-liberal policies of ‘privatization’ was dubbed (Thatcher of the UK preceded Reagan by a year), is as voodoo as one can get, seductive as any enchanting mantra-resonating principle can be, and was indeed potent in erasing the vestiges of the Regulated Economics doctrines that preceded the era. In the emerging markets, they were dubbed as ‘structural adjustment policies’ or SAPs, were imposed by the IMF-World Bank Group on debtor nations, and can be summed up as follows:

• Core principles: Privatization, Liberalization, Deregulation
• Subsidiary Principles: Tax reforms, trade liberalization, free floating exchange rates, diminished state subsidies for welfare, increased utility prices (revenue generation)
• Governance Principle: Decentralization (local government autonomy)

Such policy reform measures, as far as developing countries or DCs were concerned, came in as very harsh, cruel ‘austerity measures’ imposed by the IMF. We citizens from the ‘margins’ can never forget these measures, the pauperization that they effected, the dislocation of marginal producers, the decline of health services and rise of morbidity rates, and so on. In the Philippines, our very own capital goods industries were either delayed or un-implementable (such as integrated steel), as the money allocated for their purposes simply dried as dictated by the World Bank.

But there’s another set of policy architecture that wasn’t Anglo-Saxon, and didn’t receive their inspiration from the classicists (Smith, Ricardo) and the monetarists (Friedman, Hayek). This set of liberalization policies came from Zaibatsu country, and were crafted by Japanese technocrats. Not only policies, but also institutions were addressed by them, giving rise to the globalized economy that we have today.

Chief among those technocrats was Kenichi Ohmae, who in the 1980s was a think-tank executive. Further down the line were many other technocrats, who were organically linked to the Zaibatsus (landlord-industrialist-financier oligarchs), taking up cudgels for Ohmae.

Globalization, as one better realize, was never meant as any ‘win/win’ formula for nation-states in the arena of international trade as the liberal thinkers came to defend it later. It was outright a strategy to pre-position Zaibatsu corporate interests outside of Japan, notably the U.S. and European markets.

At that time of conceptualization, Zaibatsus have already efficaciously penetrated the Asian markets, and had leveraged their investments’ entry via aid and technical knowledge diffusion (including sponsoring Developing Country scholars in Japanese universities & special institutes). The old doctrine of ‘Asia Co-prosperity sphere’ was finally won, without firing a shot this time (unlike Imperial Japan era expansionism).

In the 1980s, the clamor for mooring investments and trade in the Western markets became ever stronger. The offensive tactic adapted was rather two-pronged, which made the new voodoo mantra even more potent:

• On the micro-level, permeate other markets with new concepts such as ‘Theory Z’ (decentralized authority, see W. Ouichi), total quality management or TQM, new tools for strategic planning, mergers and de-mergers. Till these days, the tools are considered sacrosanct in all sectors of society, including the Catholic Church that now uses ‘bottom-up’ planning added to strategic planning (my observations done in 2001-02 in a California diocese).

• On the macro-level, blend the Reagan-Thatcher ‘structural adjustments’ with the ‘globalization’ doctrine. The Zaibatsu technocrats fanned out across the globe, some of whom were positioned inside international bodies, and sweetened liberalization via a supposedly ‘win/win’ growth strategy for participating countries. This brilliant blending, which Western thinkers didn’t perceive at all as any subtle tactic by a predatory class (Zaibatsu), soon caught up fire and became buzz word for nigh three decades.

Before long, the Japan Inc. was being bandied across the globe as worth any country’s emulation. Southeast Asia and Korea went for it. Even the former presidents of the USA admired the Japanese Inc. doctrine of renewed private initiatives and shift from macro- to micro-economics as stabilization and growth measure. Bill Clinton of the USA spoke so fondly of ‘globalization’ like some captive fan of an economic icon, and moved to negotiate the NAFTA.

Little do unsuspecting, gullible peoples across the planet, more so the policy experts of the West, realize that the Japanese voodoo economics was largely intended to permit Zaibatsu investments to breed and morph inside their economies. Using merger and buy-in tactics, the Zaibatsu agents made it appear that their sponsors came in for benign purposes or so. If there is any group in the world today that is enjoying its last laugh, it is the Japanese militarists of the past, who finally saw the success of their nation’s offensives and the decline of the West via ‘organized chaos’.

Around 1994, the magic of the Japan Inc. began to cramble. Recession came, and before long many banks and investment houses were catching fire. That was the origin of the bankrupt and immoral Bush-Paulson ‘bailout’, which began with the ‘crisis management’ tactic in Japan to save ailing banks and financial institutions. Eventually, Zaibatsu technocrats were forced to revive the Western tool of ‘interest rates’ intervention, to the extent of bringing down interest rates to zero percent and sustaining it there for many years.

There also came that moment, in the late 1990s through 2006, when Zaibatsu financiers suddenly were so awash with funds (liquidities), at a time when Western economies reached low growths. The ‘yen initiative’ package was therefore conceptualized as another last-ditch voodoo tactic, which was implemented by loaning out large funds at zero or low interest, which Western financiers than re-loaned at profitable interest rates. Many such funds reached the USA& EU realty subprime mortgage markets, to recall. Again, note the seemingly benign nature of the financial gesture.

Just as when the realty markets were beginning to sneeze in America, the last voodoo measure was pulled out. The ‘crisis management’ was already folded up earlier, as Japan’s economic growth was propelled up anew by the Asian markets notably China’s. Just as when USA & EU needed the Zaibatsu loans very badly, and ditto for portfolio investments, they were pulled out, thus ensuring the crash of both economies.

Japananese voodoo economics is now bowing out, as the compass of policy initiatives at present is pointing to the reconstruction of macro-economic, New Deal type measures intended to attack problems both on short-term (bail out on productive sectors) and long-term basis (induce physical economy rather than predatory finance). But the withdrawal of the voodoo regime is not being done without witnessing its catastrophic results.

That’s surely tragic for the West or North. I wonder how Zaibatsus & technocrats perceive peoples outside their borders: whether they regard the latter as human beings worth co-partnering with, or as hungry lizards that must subsist on crumbs of investments & finance from Japan that have been buttressed by enormous tons of gold acquired through production and plunder of occupied lands, across the 2,000 years of Japan’s existence from kingdom to nation.

Honestly, I don’t know the answer. But if the Zaibatsus are receiving flaks from outside their borders, it wouldn’t be a surprise. There are no more borders for Zaibatsus by the way, just an entire planet with seamless web, cocooned in all corners by their corporate money.

[Philippines, 14 November 2008]


September 26, 2014

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.

[22 August 2008, Quezon City]


January 12, 2011

Erle Frayne D. Argonza

Good day to you, fellow global citizens!

 The newspapers this morning released a gladdening news about a macro-economic fundamental in my beloved Philippines: foreign exchange or FOREX reserves breached the U.S. $62 Billion mark. The news item means that my country has all the foreign currencies to purchase a year-long worth of imports and still end up with a surplus of money.

That is inarguably good news, a veritable proof of how strong the Philippine economy is. My country surely belongs to the ‘Asian economy’ and is part of the region that is intractably the growth driver of the global economy today. PH’s forex grew by almost 50% from $44 Billion in 2009 to $62 Billion in 2010, and that is a very newsworthy development.

Practically all of the major macro-economic indicators in the country ended up with good results as of end of December 2010, thus ensuring prognosis of healthy fundamentals in the foreseeable future. GDP growth rate is good (c. 7%), balance of payments is at surpluses worth billions of U.S. dollars, exports & imports have rebounded since the lamentable contraction in 2009 (affected by the North’s recessionary winds), wages have been going up, inflation rate has been a manageable 2.8%-4.2%, debts are manageable (no fiscal crisis in the short run), domestic market had expanded by double digit, and liquidity has been sustained at manageable level.

So far so good! I have no better wish than to see the rising forex levels sustained so that PH can breach forex reserves of $100 Billion as early as 2012. At that level, we can safely say that foreign currency (dollar, pound sterling, yen, euro) will be an over-the-counter commodity, thus ending decades of forex crisis that was a factor behind PH’s low capability to secure foreign loans for its big ticket development projects.

The days of the forex crisis—whence forex levels wasn’t even enough to pay for 1 month of imports—is way behind us now in the ‘pearl of the orient seas’. Our forex reserves, added to the other macro-economic fundamentals, have rendered our country as more than stable economically and financially, thus meriting an upgrade in its assessment by investment evaluators (e.g. Moody’s).

The only thing to watch out, in a cautionary manner, is the contribution of portfolio investments to the forex level of late. As the northern economies burn, ‘smart money’ has been departing from their niches and finding new havens in Asia. And so a substantial sum of billions of dollars of that ‘smart money’ found its way into the Philippine financial and capital markets.

Our financial markets here are very highly liberalized, so the danger that volatilities can bring to our very own forex reserves is there. Extreme volatilities elsewhere in the globe can lead to investors’ gross divestment of their portfolios, thus leading to a domino effect of economic crash.

I have no problem admitting that short-term investments do make an economy healthy enough, provided that the regulatory mechanisms—available as tool to address volatilities’ adverse effects—are strengthened or reinforced at this moment. We can never have a repeat again of the Asian financial meltdown in 1997, a meltdown that began with currency attacks and then led to domino effects of crashing blows on banking, realty, manufactures, infrastructures, and the other sectors as well. No sir! We can and should never have a repeat again of that Dark Year of ’97!

Short of installing capital control measures, such as what Mahathir Mohammad did for Malaysia, PH’s central bank and monetary board should evaluate quickly the impact of possible volatilities through simulation models at hand. Maybe more tighter regulatory interventions should be installed as options in case of the contingencies arising, measures other than manipulating the liquidities through interest rates or shoring up fiscal capabilities through extended treasuries sales.

Among the options to be taken is the imposition of a Tobin Tax on all cross-border financial transactions. I have been echoing this option since the late 1990s yet, and I will again echo it this time. Just by imposing 0.35% tax on all such transactions, the country can accumulate buffer stocks of monies for the rainy economic days, at the same time that it can contribute immensely to international organizations such as the UN (as per prescription by the late economist James Tobin).

Meantime, for the Filipinos and Asians, cheers over the buoyant forex reserves in Manila! Mabuhay!

[Philippines, 08 January 2011]


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November 10, 2010

Erle Frayne D. Argonza


Magandang araw! Good day, most especially to fellow Southeast Asians!

For this piece I’m going to focus on the theme of an ASEAN-wide rocket industry-based aerospace program. ASEAN is about to integrate economically by 2015, so may the member states put in the list of agenda for action the launching of a regional aerospace program.

As the region’s member countries grow at immense rates, the middle class of the region will likewise grow that will serve as its sustaining consumption base. A large middle class will mean a higher demand for telecommunications infrastructures that will, in the main, depend on satellite and related facilities.

So, instead of each member country trying to outdo each other by launching their respective rocket industry-based aerospace programs, the countries better sit down together within the aegis of an ASEAN economic union, concur a binding agreement regarding the launching of an ASEAN aerospace program, and fund the entire program internally from ASEAN resources.

With an ASEAN central bank in place by 2015, it wouldn’t be so difficult to generate funds internally for all sorts of grand projects from infrastructures to aerospace. An ASEAN development bank would then be securitized by the central bank and allocate funds for the aerospace program.

Malaysia today is in the stage of research & development for a rocket industry and has begun training & development for its technical experts. It may be prudent for the ASEAN to assign to Malaysia a lead role in orchestrating the ASEAN aerospace, with the quid pro quo of compensating Malaysia for lending its expertise and certain aspects of the backward linkages for the future industry.

The aerospace program would largely be used to launch satellites and only secondarily for space research & development. The space R & D can come later, maybe at a time when the ASEAN will be prepared for political unification in the long run.

With a satellite industry in place, the ASEAN can then compete with other market stakeholders (countries & regions with satellite industry) to supply and launch the satellites of other developing countries. Project costs can be cut down at the satellite production phase, thus bringing down prices of ready-to-launch satellites and ensuring patronage by many developing countries.

All of the essential components—at the backward linkages—of satellite production are now present as running industries in the region. From metallurgy to computer software & hardware, name it and the region has it. Hence the viability of satellite industry is very high enough.

It is in the domain of rockets that the ASEAN would need to co-partner with other countries at the production phase. It can be an option for ASEAN to co-partner with Russia that can supply the rockets that will launch ASEAN’s satellites. China and India are other options also for supplying the rockets.

However, in the long run the economic union should work out to establish a strong rocket industry for itself. The rocket industry can spin off into a more comprehensive program later, one that can be extended to launching R & D in other planets and their respective moons, space tourism, and sending missions beyond the solar system.

Rocket technology can also be modified so as to integrate it into the mining industry, so that in the long term ASEAN can mine for metals in other celestial bodies. Environmental standards are getting to be stricter by the year, standards that can constrain the extraction of rare & precious metals regionally, so the alternative in such a context would be to mine for the metals in other celestial bodies.

The aerospace program is one developmental area that will prove the potency of a regional approach to launching it contrasted to country-initiated approach. Given the gargantuan level of funding that a rocket industry cum satellite industry will entail, funding that a member country will be hard put to supply, then regionalize the program altogether to circumvent country constraints.

[Philippines, 07 November 2010]







October 7, 2010


Erle Frayne D. Argonza

Magandang araw, mga kapamilyang global! Good day, fellow global family members!

Let me echo a theme that has been reverberating among circles of economists in the USA lately: a new cycle of economic crash. I’ve already begun to echo notes about whether the ‘stimulus package’ did its task as effectively as it can to deliver the goods, notes that connect to what the economists have been saying of late.

Among a leading light of the US economist circles is Joseph Stiglitz, former executive at the World Bank. A brilliant and dynamic mind in America, Stiglitz represents a coterie of rare experts who can be adjudged as independent-minded, for most of America’s experts are intellectual prostitutes whose purses are fattened by their loyal patronage of oligarchic and political interest groups.

America’s economists are again echoing the alarm calls about another round or cycle of recession which could lead the USA into a ‘double-dip recession’ the impact of which could be the worst that the U.S. work force will have ever experienced. The alarm call practically resonates with an identical forewarning by European economists on the bigger crash that could happen to Europe’s already burning economy.

The very same experts are very keen observers of the global economy aside from their deep grounding in their own domestic economies, and so the cautionary echoes include Japan’s and Canada’s economies as well. Practically all of the pillars of the Western economy—all powerful members of the OECD—have been receiving alarm calls from their own economists.

Maybe the media should better seek audiences with other experts as well, notably the sociologists and public policy as well, who have been keenly observant of the domestic (USA’s) and global economies. Why not consult the likes of Peter Evans and Theda Skocpol for instance, who have been doing works over the past decades that run parallel to what economists have been doing?

Chances are that the experts across a broad spectrum of the social sciences will end up with parallel if not identical evaluations about the impact of the stimulus package and the directions of the US economy and society.

The last round of financial reforms and a new stimulus package announced by White House recently just don’t seem to fit into the expectations of the noblesse experts who all trace the economic malaise of America to the effects of excessive liberalization reforms. Those reforms saw the diminution of the ‘real economy’, to note: (a) de-industrialization, (b) agricultural decay, (c) infrastructure neglect and collapse, (d) neglect of transport & communications sectors, and (e) decay/erosion of science & technology.

Whether the Bush & Obama stimulus package was able to shore up the collapsing ‘real/physical economy’ is now doubtful. The recent Obama-initiated reforms is only putting some caps on regulation problems for big business and ensuring some fairness in the games of the financial-monetary sectors. The coming tax cuts are added incentives to big business that do not necessarily ensure the revivification of the physical economy.

And that’s where the rub lies in America today. By the very fact that a new ‘stimulus package’ is being prepared in the pipeline means precisely the failure of the recovery program. As already shared by me in a previous article, the pronouncement of a new pump priming package is already causing jitters among portfolio and long-term investors.

With the investment field blurred anew in the USA, the resuscitation of employment to full employment level had been turned into an elusive dream. Whether tax cuts can induce new investments (inclusive of the realty sector), factoring the new financial reforms, will be a raging debate not only in America but among other global observers as well.

I am now of the opinion that Obama has been badly advised by his own economic team about the policy and institutional options for salving the structural ailments of the US economy. Bad advise means the resort to ‘bad economics’, a behavior that is ‘bad science’. Bad science breeds bad practice, and bad practice breeds disasters and catastrophes.

Will Obama and the policy-makers listen to the independent-minded economists this time?


[Philippines, 01 October 2010]







December 11, 2008

Erle Frayne Argonza / Guru Ra

Magandang Hapon! Good afternoon!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Writ 08 December 2008, Quezon City, MetroManila]


November 30, 2008

Erle Frayne D. Argonza

Magandang hapon! Good afternoon! Buenos tardes!

At this juncture, this economist, who is also a healer (pranic healer, soul healer, psychosocial counselor), will begin to articulate economic problems from a wellness vantage point. I will be calling the paradigm ‘healing economics’ as a fusion of wellness principles and economic analysis.

If we observe the ‘treatment’ applied by public policy experts on national economies today, we would see that the solutions to the problems are largely short-term ones that only mitigate economic collapse for a while. We can call them ‘band aid’ solutions to problems that are more of ‘cancerous’ in nature, and by common sense we know that band aid cannot cure cancer.

The economies of our nations have already been integrated over the last three (3) decades or so. This integration constituted the ‘global economy’ which is distinct from national economies and which manifest its own laws. National economies have become interstices or tissues of the global economy, and trying to cure ailing national economies without taking into consideration the wellness of the whole global economy will fail.

What is now urgently most needed, as a formula for enabling healthy national economies, is to put into place a new global ‘financial architecture’ as a beginning treatment. There is no way that economies can heal without the proper macro-policies and institutional frames that support them, and those policies cum institutions must be constructed at the global level.

Just by using that ‘global’ category as a yardstick, we can see that the solution of bank bailouts being rushed in the USA and echoed in Europe are not the long-term salvation to the ailment. That bailout route was already tried in Japan in the 1990s, it was then called ‘crisis management’, and it resulted to a 12-year recession-to-low growth catastrophe. Japan became the “sick man of Asia” for a decade, which was unbelievable for observers who knew this country’s economic might all along.

If there are certain realities that we must admit as having already turned into dead carcasses, they are:

·        Virtual or Bubble Economy: Economy that is founded on speculation, with values derived from out of financial values themselves and divorced from production, cannot be sustained for long. It is finally DEAD. Only fools would still think that reviving it, without regulating and/or criminalizing the economic predators that thrived on it, is the soundest healing work preferred. Nobody needs to heal a dead thing, just bury it deep below the ground, lest you create a zombie or vampire out of it.


·        Free Market of Currencies. Treating currencies like commodities that are tradable without sufficient regulation, is voodoo paradigm of ‘monetarism’. This is now DEAD. It can never work, it doesn’t, and will never work under any given context. Free market doctrine (laissez faire)), in the first place, was long dead. It was a doctrine that was enforced by the British Empire, through the “power of the gun,” and supported the slave trade business. To revive such a doctrine in the current context—guiding trade and exchanges in the monetary-currency markets—is plain voodoo practice, as it fattens the purses of economic predators at the expense of national economies and marginal social sectors.

The route to strategic healing, which combines ‘preventive’ with ‘curative’ treatments, is through a new ‘global financial architecture’. This can be and should be done most urgently, as the carcasses are now spreading havoc of ailments across the planet, through a global conference of all the nation-states. Through this conference, proper diagnostics can be done, with the help of top experts, including those representing marginal sectors, and proper treatment can also be conjured.  

An outline of agenda items for deep reflections in such a treaty-making conference would be as follows:

·        Shift Back to Regulated Trading of Currencies/Monies. Money is the lifeblood of the economy. As such, no private group or whatsoever should be allowed to play it like gambling toys just to fatten their already fat pockets. Private stakeholders that gamble in the currency markets are like cancerous corpuscles in the blood vessel, their operations must be well regulated and certain trading activities declared as banned.


·        Securitize Currencies with Precious Metals. A reconstruction of the gold standard should be done most quickly. This system was junked in 1971 yet, and look at the catastrophic result of its folding up. Not only gold, but certain other precious metals and crystals, such as diamonds, can be declared as securitization measures to guide money production within any country at any given time.


·        Fixed Exchange Rates. National currencies are still around. In no way should they be forcibly junked in favor of a global currency, which is too premature a measure. Within a period of transition, of say 25 years, national currencies should be the chief legal tender, exchangeable based on fixed exchange rate policy.


·        Tobin Tax on Cross-border Financial Transactions. All cross-border financial-monetary transactions, done as matter of business engagement, should be imposed a Tobin Tax, the amount of which will be defined in the conference. The revenues generated from such tax will then be used to fund the United Nations and its attached institutions (UNESCO, WHO, ILO, etc). Through this measure, all cross-border transactions can also be monitored, making it easier for international enforcers (e.g. Interpol) to counter-check sabotage and related criminal operations by predators.


·        Ban or Criminalize Excessive Speculation. Excessive speculation of currency markets and related financial transactions must be banned and declared as crime. Those engagements of ‘currency attacks’ that have wrecked many economies are on top of the agenda for criminalization. Till these days, they remain unchecked, due to free trade principles in currency and financial trading.       


·        Ban Banks from Derivatives Operations. Banks should operate largely in support of developmental and re-development pursuits. In no case should any country be allowed unrestrained speculative and/or derivatives operations that leave the banks vulnerable to collapse.   


·        End Usury One and For All. For as long as usury remains, poverty and underdevelopment will never end, while once wealthy economies can crash back into 3rd world status. Usury must be criminalized as an evil  act, thus ending once and for all a long history of predatory hoarding.


·        Create New Global Financial Institution. To enforce and monitor the new financial architecture put into place, a new global financial architecture or GFI should be installed as well. The international Monetary Fund is a total failure, even as it was used as a mere tool by predatory financiers to extract usurious rents and disable national economies through immoral austerity measures. In the long run, this GFI can be considered as the infrastructure for a global central bank, should cooperating states approve it in principle.    


Incidentally, the clamor for installing a new financial architecture is now getting stronger by the day. I am very optimistic that this will be concurred in due time, for failure to do so would prolong the agony of global economic collapse and decline. Let us cross our fingers that it will be called for very soon.

[Writ 28 November 2008, Quezon City, MetroManila]


September 10, 2008

Erle Frayne Argonza

Magandang umaga! Good morning from Manila!

As one can see in the title, Adam Smith’s ideas about political economy were unoriginal or copycat. So I’m going to articulate some notes about the matter. This may come as a shocker to the devotees of Smith and fanatical ideologues of liberal or free market capitalism, but it had to be accepted. This is a matter of fact, not of speculation or libel.

This note is not intended to demean Smith nor to denigrate those whose actions are copycat, far from it. Doing copycat items is among the pathways to success, this lesson is greatly stressed most specially among marketing professionals. If one cannot succeed through innovative or original ideas and practices, then take the ‘copycat way’. Network marketing had already perfected the ‘copycat way’ in fact, by way of optimizing the principle of duplication  (duplicate those presentation lines and themes before your niche customers or clients).

There are people who have this wrong notion that Smith invented liberal capitalism, and this has to be corrected. A simple knowledge of economic history will do. Having taught economic history at the Philippine’s premier university (U. Philippines) for some time, I know as a matter of fact that couples of influential writers emerged in the theoretic domain—who were focused on economic questions—before Smith appeared in the social landscape. Smith appeared when physiocracy, to which Smith properly belongs, was already making waves in France through the works of such gentlemen as Quesnay and Mirabeau.

But as one can see, Smith was a Scot, of the British Isle, and right in his own backyard there were couples of gentlemen too who wrote voluminously on the subject of political economy, from a vantage point that was already departing from the mercantilism of the previous couple of centuries. The departure concerned the sources of wealth, where the same thinkers opined that the ‘sphere of production’ had to be emphasized more than the ‘sphere of exchange’ which the mercantilists, notably Thomas Mun, discoursed on.

Some representative thinkers who preceded Smith were the following:

·        Sir William Petty (1623-87): Considered the founder of political economy. A charter member of the Royal Society.


·        John Locke, Sir Dudley North, David Hume, David Hume: Further propounded on basic principles of political economy. E.g. rent, trade, role of government.


·        Richard Cantillon: His book Essai sur la nature du commerce en general (1755) was “the most systematic statement of economic principles” (E. Roll, A History of Economic Thought).


·        Sir James Steuart: Wrote the voluminous Principles of Political Economy (1767), which was among the first textbooks in economics of that time.


·        Honore Gabriel Riqueti, Comte de Mirabeau: Enlightenment thinker, involved with the French revolution, a political moderate who opined that modernizing France better follow the US model of industrialization path. He influenced many younger physiocrates.


·        Francois Quesnay: Formally a fellow of the ‘economistes’ or ‘physiocrates’, was known for his popularization of the ‘tableau economique’ (economic table, title of his book), bringing political economy closer to empirical science.


·        Jean C.M.V. de Gournay: Another eminent fellow of the ‘physiocrates’, who collaborated with Quesnay in advancing principles of political economy.


·        Nicolas Baudeau : Wrote Introduction a la philosophie économique (1771).


·        G. F. Le Trosne: wrote De l’ordre social (1777).


·        André Morellet:  “ best known by his controversy with Galiani on the freedom of the grain trade during the Flour War” (quoted from Wikipedia).


·        Mercier Larivière and Dupont de Nemours: Also eminent members of the ‘physiocrates’.

Smith actually lived in Paris during his youthful heydays, where he stayed with the equally youthful Duke of Buccleuch circa 1764-1766. The Parisian exposure was Smith’s way of baptism into the illustrious physiocrats’ thought streams, and the rest was history.

So to my fellows in the professional world and this planet who continue to churn thoughts that Smith was the ‘originator of capitalism’, please rethink your opinions. Historical facts do not the least substantiate your thesis. Rather, what is right is that Smith brought political economy even closer to empirical science than ever, and his Wealth of Nations was a monumental effort during his time to construct a text book on the subject that was considerably a scientific material more than philosophy (ethics, metaphysics) though Smith still wrote philosophical treatises within the ambit of the methods of philosophy.

I need not belabor the point that Smith didn’t invent empiricism. Just by reflecting on the names above, one can see the names of giant figures in British empiricism (e.g Hume, Locke), who themselves took off from intellectual giants that preceded them (e.g. Francis Bacon).

So, please disabuse yourselves of Smith as ‘originator’ of anything. He never even boasted of originating anything at all. Rather, he systematized thought constructs that were already prevalent during his heyday. The purposes of his economic doctrines were already explained in some other articles writ by me.

[22 August 2008, Quezon City, MetroManila.]