‘LATE’ CAPITALISM CRASHING DOWN ITS DEATH BED

‘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.]

SCARCITY VERSUS ABUNDANCE: THE CONTINENTAL DIVIDE

SCARCITY VERSUS ABUNDANCE: THE CONTINENTAL DIVIDE

Erle Frayne D. Argonza

The Continental Divide—between Euro-America (Europe, North America, Latin America) and Asia-Pacific—is no mere geographical cleavage, but more importantly cultural-civilizational. In economic doctrines, the division lies in the core premise that underpins all other economic variables and the social class arrangements that constitute the base for appropriating the values of the totality of efforts of production, distribution, consumption and exchange. While Western thinkers premise economic realities on scarcity, the Eastern thinkers notably sages presuppose the same on abundance.

The foundational doctrines of Western political economy—mercantilism and physiocracy—were both premised on scarcity. All other doctrines that emerged thereafter, inclusive of socialism, neo-classicism and marginalism, proceeded from the same premise. The most popular socialist thinker, K. Marx, envisioned a society of abundance, rationalizing such a vision on the presumed reality of scarcity (of resources) and its attendant effect, mitigated by social structures, of pauperization on the proletariat. This ‘scarcity premise’ is indubitably a hallmark of Western discourse.

Eastern discourse raises questions about such a premise. Among all Eastern thinkers, it was Gandhi who most succinctly articulated the difference. To the folks of the East, daily living is a reality of abundance, such an abundance abetted by continuous resource materialization and allocation as graces from the transcendent spheres. With the caveat, to note, that people live according to their needs. Accordingly, the planet has more than enough for everyone’s needs, but not enough for everyone’s greed. What could be wiser today than the said dictum, so simple in structure yet so profound in substance? (Review also Buddhist economics, Sarkar’s ‘progressive utilization theory’, Sri Aurobindo’s vedic economics, Baha’i economics, Vivekananda’s socialist visions.)

I couldn’t but agree more with the Eastern discursive stream than with the Western ones. Why, let us query, do Filipinos keep on eating the whole day, sliding inputs down their stomachs as much as five (5) times a day? And why don’t the Filipinos save surplus money at all (many folks don’t even maintain back accounts)? That is because deep within their psyche, in the antechambers of their ‘collective unconscious’, resides the presupposition of abundance. Mother earth provides, the country provides, so why save for tomorrow, and why not consume that which is offered unto you when you arrive as a visitor amongst the town & country folks, such offerings being graces from God and His most divine minions?

Among ancient islanders, it was a vice to store resources (savings) for oneself, as this is a hoarding practice. Reciprocity then was the economic norm of behavior. When a household cooks nilupak, and a surplus of the delicacy is gathered after the eating, then the virtuous behavior is to share the excess nilupak among neighbors and kins rather than hoard it; and, conversely, it was a vice (read: very bad behavior) to throw away (surplus) that which has been provided for by Bathala and the anitos.

Surely, economic theorizing that is so deeply steeped in Western streams will never get to the bottom of the reality of Filipino economic behavior. Flawed premises breed flawed models that consequently produce flawed explanatory constructs and flawed practices on the developmental sphere. To a great extent, the Filipinos continue to retain, rather unconsciously, the reciprocity-based ‘systems’ of antiquity, contributing in no small measure to their bayanihan mode of adaptation. This reciprocity helps them to survive disasters and permits them to adapt quickly to new environments that are strongly cash-based, such as urban centers. It is also the basis for creating Filipino ‘social capital’ (Peter Evans had articulated well on the principle) as human asset accretions arising from networks of volunteer social groups (civil society), the kind of capital that is a catalytic factor in various development endeavors.

New Nationalism may have to find an effective bridge between the two. What is sure for now is that the exchange systems of redistribution (feudalism) and markets (capitalism), both imposed upon the islanders by Western empires, have undermined the Asian or ‘Islander Way’ of reciprocity premised on abundance. During the time of Gat J. Rizal, the islands were able to provide more than enough for everyone else, no matter how harsh the Latin-Hispanic feudal system was to the folks who were subsumed in its enclaves. Today, with over eighty (80) million people populating the archipelago, reality had assumed the scarcity mode, making us believe that scarcity has been the premise since antiquity.

The bridge between the East and West will be institutionalized through the popularization of a needs-based philosophy. However, the consumerism that is the hallmark of a revivified market strongly erodes a needs-based discourse. There surely is a dynamic tension between ‘basic needs’ and consumerism, and such a tension will be a chief definer of the premise’s compass in the succeeding decades.

[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.]

SPARTACUS UNVEILED: TROUNCING BONARPIST EUROPE

SPARTACUS UNVEILED: TROUNCING BONARPIST EUROPE

Erle Frayne D. Argonza

Hail Bonaparte! Hail New Rome! Hail the Empire!

Such slogans could very well be the reverb calls across Europe any one of these coming months. Bonaparte is coming back to Europe, beginning with the consolidation of the union and the implementation of a state ideology based precisely on the centralized institutions that Napoleon Bonaparte seeded during his halcyon days.

New Rome has arisen, with its center at Brussels. Its ‘wings’ are EU and USA (with Canada its client-state), two continents that face each other across the Atlantic like select guardians of the West. As already elaborated by this analyst in couples of articles, Bonapartism in a new form is the emerging state ideology of New Rome that is sometimes referred to as the 4th Reich.

“Bombard the old world to perdition” was the late Emperor’s agenda and directive on his enthused army. The old world today refers to the nation-states, and their destruction would mean the return to the powerful cities plus regions that would altogether bow obeisance to Brussels.

The new twist in Europe today, when it is burning economically upon the burst of bubbles in the de-industrialized south (Greece began it all), is the entry of the Jurassic Bank—the International Monetary Fund—into the Bonapartist game of the oligarchs. A salvation agenda comprising of saving ailing banks and imposing austerity measures on creditor countries is the swagger of the rather thuggish dinosaur, as we observed recently.

When a dinosaur institution is called upon to salve Europe’s problems, it is clear that the ‘handwriting on the wall’ of the old world of European nations has come. With cities and regions demanding return to old days of social privileges (evaporated by austerity measures), more riots are anticipated, thus justifying more draconian gendarme tactics enforced upon angry wage workers and professionals.

If the violent protests will continue and reach ‘critical mass’ in both southern and northern sectors of the union, then the rationale for a continental police state will arise. A New Bonaparte, whoever may this politician be, shall be catapulted phoenix-like to the nadir of totalitarian power, with the support of the union’s central and national parliaments.

As you can see, Bonapartism without a Bonaparte is an oxymoron. The maelstrom in the continent will continue to build up until the condition will be ripe for a totalitarian gendarme state. The maximum agenda of a New Bonaparte would be no less than “bombard the old world” of nations: eradicate them and replace them with pre-configured regions.

Such a move will deter whatever re-actions may come from the citizens to re-strengthen the bargaining positions of their respective nations and go back to the old national currencies. Necessarily, the assets of the national armies will be re-directed to Brussels that will serve as the central command, and the assets will include the nukes of UK and France.

Since the Roman pathos or spirit has been revived anew, with war pursuits (notably versus New Persia) on the menu of hawkish adventurisms, then Europeans can only but hope for the presence of a Mark Anthony who can battle the Emperor from within Brussel’s institutions. Wishful thinking, as in a totalitarian setting all the Mark Anthony wannabes will be either jailed or terminated. Like Mark Anthony of the last days of the Roman republic, dead, caput!

In the absence of a Mark Anthony in the continent, then Europeans can best leverage their strength via a new Spartacus. Let the Spartacists gel as a gigantic movement from the diverse grassroots and working class movements in the continent, and rest assured they can be the ones that can form the resistance.

Europeans better galvanize solidarity the quickest now as an anti-fascist front versus a determined Bonapartist oligarchy & technocracy. There is no better time to revive Spartacus than now. Reviving Spartacus after the Empire and neo-Bonaparte are in place will prove to be counterproductive and defeatist.

I hope that Europeans would wake up fast to recognize the dreaded dragon of Bonapartism rising so rapidly in their backyard. Only they can stop the new fascism from consolidating further and installing a new Emperor Bonaparte.

[Philippines, 30 July 2010]

[See: IKONOKLAST: http://erleargonza.blogspot.com,
UNLADTAU: https://unladtau.wordpress.com,
COSMICBUHAY: http://cosmicbuhay.blogspot.com,
BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,
ARGONZAPOEM: http://argonzapoem.blogspot.com%5D

RED REVOLT IN BANGKOK: OLIGARCHISM ASSAULTED

Erle Frayne D. Argonza

Good evening! Magandang gabi! Buenas noches!

The Red Shirts phenomenon in Thailand seems to baffle many observers world-wide. Accustomed as they are to seeing Thailand as a nation in moderation, they just couldn’t believe that a revolt just took place right at the heart of the nation: Bangkok.

Conditioned as they were by Establishment media, they continue to peddle the same blind thought about the Red Shirts as cult followers of the former premier Thaksin Shinavatra. True, the Red Shirts exalt the former premier to the pinnacle of heroism. But there’s more to the Red revolt than Thaksin, and those blind observers better rethink their nauseating contentions.

Thailand, like the rest of the developing world, tied up its economy to the global economy with great exuberance. The Thai state showed fidelity in instituting liberal reforms that quickly encumbered the country to the global economy and therefore played themselves into the hands of the financial cartels and ‘military industrial elites’ of the North.

By mid-1990s, it was clear that Thailand had departed from the cherished principles of the general welfare, the same principle that  transformed backward regions into economic powers. The same cherished doctrines, which one finds in the teachings of spiritual masters (P.R. Sarkar, Vivekanda, Gandhi, Buddha, Baha’ullah, Sri Aurobindo), are also the ‘philosopher’s stone’ that can redistribute wealth to the greater masses.

Departing from those cherished principles would clearly spell the following hazards: (a) de-industrialization, agriculture decay, and mass lay offs; (b) destruction of national currencies upon their total subordination to currency markets dictated by the speculative maneuverings of global financiers; (c) huge income inequalities between the middle-to-upper brackets and the poorer working classes and rural food producers.

It is not surprising that in June 1997, Bangkok was the site of the 1^st spark of currency attacks in the region by the cabal of George Soros & pals. What followed next was the Asian financial meltdown, and the rest was history.

Bangkok, or its technocratic-oligarchic coalition of rulers, sadly departed from the very teachings of the Lord Gautama who, 2,600 years back, showed the way to ‘right livelihood’ and proper living. The same oligarchic-technocratic elites likewise departed from the post-war interventionist policies that led to the re-structuring of its economy and could have, with more institutional strengthening, led to poverty elimination and a materialized ‘middle class dream’ for the Thais.

The revolt waged by the Red Shirts is therefore a re-declaration of the commitment to noble principles of the public welfare taught by the spiritual masters of the East. They were among those excluded from the globalization game, eking a life amid abundance accruing on select urban habitués and oligarchs.

Meantime, Thailand’s own oligarchs have clearly integrated their wealth pursuits to those of the global financial cartels, and their wealth keep on growing at the expense of the masses. King Bhumibol himself leads in the massive wealth accumulation as his exemplars, the royal houses of England and Netherlands, have taught his family the way to unhampered accumulation via a regime of liberalization, privatization, and deregulation.

The Royal Family in Thailand must be assessed by its own people whether it stood up clearly for the general welfare during its reign. Whether the same family still stands for Thailand’s interest, or for the interest of their personal pockets and those of their friends in the global oligarchy.

The Red Shirts, as I see it, is part of a worldwide chain of mass revolts against the global oligarchy whose godless global economy has been encumbering more folks down pauperism and hunger. It is much related to the people’s protests today in Greece that is suffering from the same greedy pursuits of the global oligarchs and austerity measures of the IMF.

Even if all of the revolting Red Shirts in Thailand were annihilated today, their termination will not mean death to the anti-oligarchy movement across the globe and in Bangkok. Justice is on the side of the Red Shirts no matter how violent and crude they may have behaved in the Big City.

It is doubtful whether the bureaucrats in Bangkok will manifest the political will to clip the powers of the local oligarchy, redistribute patrimonial wealth equitably, and reverse free market/free trade policies. The same bureaucrats, led by the British-twanged premier, are enjoying the fruits of their partnership with the oligarchy, so where does that lead them to?

Mark my word well: there will be more Red Shirt revolts across the globe with the passing of the months ahead. Let me repeat: the months ahead. The anti-globalization/anti-oligarchy wasn’t invented by the Red Shirts of Thailand, as they are merely among the embodiments of the ethos of the public welfare that is a global phenomenon as well.

Lucky enough if King Bhumibol and his minions of oligarchs will survive the judgement that will be cast upon them by struggling Thais in the months ahead. Bhumibol should better reflect on the Nepal experience: the handwriting on the wall of oligarchic monarchs and cronies.

[Philippines, 20 May 2010]

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

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

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

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

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

LABOR DAY 2010 SOLIDARITY

Erle Frayne D. Argonza

01 May 2010

 Solidarity greetings to all toiling men and women of the Philippines and the world!

With glee and fulfillment I, as a fellow toiling man, express the highest appreciation for the power of labor and the fruits of all the toils of struggling workingmen & women across the millennia of human history. Truly, it is through our labor that our God-given creativity and wisdom find manifestations, galvanized as goods and services in the workplace. Nothing can ever refute such a universal fact or law about the potency of labor.

As a re-dedication to the working class movement across the planet, let me share this humble poem of mine.

REFLECTIONS ABOUT WORK

Erle Frayne Argonza y Delago

There can be

no savoring the foods

offered by Terra

without working hard for their generation;

no consumption of bounties

in torrential showers

without striving

for their production;

no recital of flowery

words about justice

without active contention

for their fruition;

no pleasant rest

of mind and body

without processing by

the sweatshops of labour;

no blissful state

of realized utopias

without rendering sufferings

from waylaid obstacles.

[Poem writ. 27 Sept, 1987, University of the Philippines, QC.]

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 ‘2^nd 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 ‘3^rd 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.]

‘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 20^th 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 then leads to social unrests, turmoil, upheavals, civil wars, food wars, water wars, and possibly intercontinental wars such as another 3^rd 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.]  

MANILA PEACE UPDATE: BACK-CHANNEL TALK WITH NDF

Bro. Erle Frayne D. Argonza

 

[Writ 01 May 2008, Quezon City, MetroManila. The author, a professor at the premier University of the Philippines, was a former consultant and senior official at the presidential palace.]

 

Let me share to you some notes about the efficacy of the back-channel strategy as applied to the Peace Talks. By Peace Talks I refer to the on-going negotiations between the GRP (Government of the Republic of the Philippines) and the rebel groups (National Democratic Front, Moro Islamic Liberation Front). For this briefer, I will focus on the GRP-NDF talks, the NDF being the Maoist movement led by the clandestine Communist Party of the Philippines (founded 1968).

 

The Maoist rebellion here began as soon as the New People’s Army or NPA, the military arm of the CPP, was formed. The Philippines than was predominantly agrarian, landlordism was the main stumbling block to industrial progress, the 1948-launced Import Substitution Industrialization was floundering badly, and mass poverty must have been reaching as much as past the 75% mark. With an agrarian population as base, it wasn’t difficult for the CPP-NPA to justify an armed struggle based on the Maoist strategy of encirclement: build rebel based first in the hinterlands where the enemy forces are weak, then gradually constrict the urban areas (cities, big towns) from the countryside.

 

Almost four (4) decades after the launching of the Maoist rebellion, nowhere is there any site of a victory by the Left rebels. Supposedly, the guerilla fronts have reached past the 3-digit level (160+ as of latest claims by the CPP), but those are largely spread out in rural hinterlands. RP’s population is now around 60% urban and only 40% rural, and urbanization is still spreading fast, mutating the rural landscapes into new mixed-use urban and suburban mini-cities.

 

It is now getting clearer that the Maoist rebellion here has been reduced to a Zapatista-sized rebellion, and its strategy of encirclement has become obviously intractable and nauseatingly archaic. Unless that it shifts in strategy from rural-based armed struggle to urban-based mass movement type, the new Zapatistas of Manila (CPP-NDF) may lose enormous mileage in their campaigns and legitimacy. A rising middle class here will never be able to identify with a movement that tends to diminish the importance of the ‘middle sectors’ in shaping the political wind, most specially in Asia to which Manila is now closely hued to (for many centuries the Philippines was alien to Asia and was more hued to its colonial masters in the West).

 

Often than not, the Peace Talks get stalled. This has been the history of negotiations here. But at least what is clear, as has been shown by the past negotiations with the military rebels and the Moro National Liberation Front or MNLF, is that the GRP talking point is not “surrender all of you or die!” but rather one of negotiated political settlement. It took much time for the GRP to admit to this new precept in peace talks, but state negotiators have to rather take this option as it had proved relatively successful as exemplified by the previous cases.

 

One strategy used by the GRP whenever peace talks get stalled is the ‘back-channel talk’. Often than not, the names of back-channel negotiators are not identified at all in public, or that the information is strictly confidential. Having once moved in the corridors of power as a consultant and later a senior state official at the presidential palace, my very own boss then was among them, and his experiences in the BCT (shortened ‘back-channel talk’) are my basis for assessing the efficacy of the strategy.

I found out, to my own dismay being a patriot who was impatient for results, that the peace talks get stalled every now and then not because of ‘insincerity’ of the ‘other party’ but rather due to the lack of trust by the rebels in the GRP negotiating panel’s composition. One must realize that here in Manila, the ‘nat-dems’ (the Maoist national democrats) had that historical animosities and antipathies with the ‘soc-dems’ (non-Maoist social democrats) who were indeed rabidly anti-communist as any observer would notice. Sadly, before the incumbent president GM Arroyo sat in power, the ‘soc-dems’ were already visible and influential in shaping the contours of peace talks including those held with the Muslim rebels.

 

In 2004, barely had the presidential election campaign commence when the peace talk stalled again. The usual bitter reason raised, as per information coming straight from the rebels to their contacts in the GRP other than the peace panel, was the ‘soc-dem’ presence in that (peace) panel (notably the intelligence top-gun Norberto Gonzales, and another ‘soc-dem’ cabinet member Ging Deles). Before that, in the 1990s, there was the complaint against the ‘opus dei’ negotiators. You see, the NDF can never really trust these negotiators who hinge their loyalty to their Vatican-led spin doctors.

 

The ‘nat-dem’ line is that the ‘soc-dem’ and their predecessors the ‘opus dei’ are clerico-fascist, are rabidly anti-communist and will never trust communists or Marxists of whatever rainbow hue they possess. The cleric-fascists supposedly opt for a total destruction of anything Marxist, much more of Maoists, and cannot be trusted in any way in peace negotiations. Of course, in the open mass media the typical line of the Maoists is that GRP is insincere, a line that the MILF rebels likewise echo.

 

That’s why it pays for any incoming president in particular to review the composition of the peace group that s/he inherits from a previous president. Well, the fact is that all the presidents from Corazon Aquino through Gloria Arroyo owe their victories in one way or another to the support of the ‘Jesuit mafia’ (to whom the ‘soc-dems’ owe allegiance) and the ‘opus dei’ (RP’s version of generalissimo Franco’s phalangists). So nary a president can just consign church players to roach-ridden dust bins, rest assured.  

 

A remedial measure adopted by a president here, which the incumbent particularly and that of the flamboyant Fidel Ramos found efficacious, was the use of BCT negotiators. And the result was even more stunningly successful whenever a BCT negotiator was a former comrade of the Left. Many senior-level officials since the 1990s yet, the rank going to as high as cabinet level, were former ‘nat-dems’ including dozens of former CPP cadres no less. They may have left the underground, but they were still in good faith with their former movements which they never antagonized in any way.

 

As the presidential poll got nearer in 2004, the BCT negotiator then, who is personally known to this writer, got himself busy moving in and out of the country to see the NDF officials face-to-face. There was this particular official session between the NDF and GRP, which the BCT negotiator witnessed, and to the shock of the attendants the NDF officials pulled out pronto even before the session even started. But the rebel officials never left the venue, they simply cuddled at a particular nook and discussed their moves right there.

 

As usual, among the GRP panelists were around three (3) ‘soc-dems’ and one ‘opus dei’, and so the knee-jerk Pavlovian response of the rebels was to back off, as if they perceive some hostile man-eating Martians across the bargaining table. Seeing the urgency of a mediation response, the BCT official immediately admonished the GRP panelists to stay and wait while he moves on to massage the rebel side. He then went over to his former comrades, muscled enough courage and confidence to deal witRih them, and pronounced his lines that fruitful things can come out of the session if only the rebels returned to the table.

 

Well, voila! The rebel officials did return to the table, though without a hint of trust shown to the GRP panelists. The panel wasn’t exactly an entirely ‘socdem’-‘opus dei’ tandem, as the BCT official had pointed to the rebels, and so it was a matter of competent communication of their positions that would matter the most at that historic moment.

 

I was myself very busy then with the presidential campaign, being a consultant and spokesman for the incumbent exec who was running for another 6-year stint when the talks resumed. And I was so exuberantly elated at the rebels’ return to the table. The BCT negotiator, being my direct boss in the campaign (he was also among the top coordinators for the ‘parallel campaign machinery’ of GM Arroyo), then narrated the series of events which never came out of the news.

 

Not only did the rebels return to the ‘nego’ table (nego = negotiations, negotiating) as a result of the success of confidence-building spawned thru the BCT strategy. A week before the presidential poll, the top rebel honcho Jose Maria Sison officially announced that the NDF was supporting the GMA-led team in the elections. ‘Joma’ (as Sison was fondly nick-named) even released a formal memorandum to all CPP cadres and members, to openly vote for Arroyo in her presidential bid.

 

We now have new faces among the GRP panelists here, and the political winds have quite changed since 2004. The GRP-NDF war had resumed, peace talks continue but without verve and mutual trust. But BCT had more than amply proved to be a worthwhile strategy for peace negotiations. We should all look forward to its further application in many cases of conflict resolution—from rebellion-related to labor-related conflicts (settling strikes, lock-outs, barricades).

DOMAIN OF WEALTH OF NATIONS: BOTH DOMESTIC & OVERSEAS

Erle Frayne Argonza

 

[Writ 23 March 2008, Quezon City, MetroManila]

 

 

The antiquated debate regarding which domain should be the main source of national wealth—whether domestic or overseas—is still alive today. In the article of New Nationalism, I argued that in the emerging context of post-industrialism, this debate has become futile and unproductive. Instead of stressing a domestic versus international mindset, I argued for a both/and frame.

 

Admittedly, the overseas domain as a source of wealth is as palatable as it used to be during the era yet of the city-states of Northern Italy (Venice, Florence). This has become the backbone of mercantilism, which in turn became the backbone of nationalist economics. Old Nationalism henceforth carried the pro-mercantilist banner of seeking wealth primarily from international operations. But this time around, this position has to be revised in the light of import-substitution success.

 

In the Philippine case, we have been having it both ways. On the one hand, our manufacturing sector’s products are largely consumed 86% of the time for the domestic market, indicating the optimization of the import-substitution aspect of our development efforts. On the other hand, our overseas employment and investments have been churning out a whopping Net Factor Income from Abroad or NFIA worth 11% of the GDP.

 

New Nationalism, to my mind, should rather have it both ways, as culled from this and other parallel experiences in emerging markets. At this time particularly, Foreign Direct Investments or FDIs by Philippine-owned or controlled companies has begun to take off and contribute to our national coffers. Add to this our exports worth 40% of GDP, and remittances from labor export of worth 10% of GDP, and one can see the broad picture of the potency of the overseas domain as source of national income.

 

Below is the entire subsection on the domains of wealth production culled from the New Nationalism article.

 

Generate wealth from both external and domestic markets.

 

Various stakeholders in the past were divided along the question of what should be the driver of growth & development (demand-side discourse): the external, or internal market? The followers of the ‘externalists’ were the ones behind the export-oriented development strategy, whose rationalizations for massive exports were quite poor recycles of the mercantilist contention that wealth should be produced more from out of the external markets (colonies during the time of empires). The ‘internalists’ were the ones behind import-substitution strategies, whose rationalizations were poor photocopies of Keynesian demand-side formulations.

 

In today’s context, it is wiser to view both the external and domestic markets as synergistic spheres for accumulating national wealth and meeting head-on the demands for delivering welfare. The external market discourse can work only in circumstances where a domestic demand has failed to develop, which in our case was the pre-1990s economy. By the late 1990s, it was clear that a significant change had taken place on the demand side of our economy, as folks were buying a lot of articles of commerce at a time of crisis. The middle class population is rising relative to the entire population, whose households’ needs have become more differentiated and have leaped beyond the bounds of ‘rice-and-galunggong’ expenditures. Today, Filipino families purchase around fifty-three percentum (53%) of their household needs from supermarkets, malls and large retail centers, even as the wet markets and sari-sari stores are declining in importance. These changes are real, and we cannot be blind to them by continuing to harp on an export-driven growth.

 

We must then fast-track large-scale redistribution schemes, such as to witness the rise in purchasing powers of our own people. This cannot be done outright during the next three (3) years, as we face a fiscal dilemma of crisis proportions. But beyond 2007 lies new opportunity fields. The fiscal route to stabilization will have been solidly achieved by then, and the nation can embark on more ambitious endeavors aimed at increasing incomes, reducing unemployment and poverty and increasing domestic consumption.

 

As the domestic market catches up in stabilizing the economy and producing national wealth, stakeholders shouldn’t be remiss in improving the competitiveness of our export products. Our great advantage is that we have ample supplies of skilled labor, with wages still relatively low. The power sector is also quite rich in supply of electricity, even as new projects are now being planned to neutralize possible supply problems in the short run. Hopefully, power supply would stabilize and electricity cost would decrease, contributing thus to rendering our exportable articles more competitive enough. Save for capital goods and petroleum, large volumes of which our producers continue to import, the other factors of production are within our hands to control and manipulate, inclusive of rent and interest rate. It is hereby argued that, with such factors controllable enough, we can optimize conditions for rendering our exportable articles maximally competitive and continue to permit the external market to be a source of substantial wealth. What more if we produce all of our essential capital goods, thus further bringing down the cost of production, given that the price of other factor inputs also go down?

 

EVOLVE SOCIAL MARKETS

 

Erle Frayne D. Argonza

 

[Writ 23 March 2008, Quezon City, MetroManila]

 

As already exacerbated in my previous articles, this development expert strongly argues for dirigisme (state intervention). Even in the yogic-mystical terrain, I strongly argue for interventionism in the physical plane, though this paradigm may hold water only here and not necessarily in other dimensions or trans-physical spheres where money economies are absent.

 

Incidentally, we now have emerging models for dirigist paths to sustainable development. For lack of a better term, the model is simply called ‘social market’. It is an integration of state intervention and market-driven economy. Extremes of socialism and laissez faire have both proved as flops. These extreme forms are beyond salvation and are both being junked today. They have become junkshop models.

 

Asia is the best laboratory today for the conscious evolution of ‘social markets’. China, Vietnam, and India are the countries to watch. I just hope that the original ASEAN 6 (Philippines, Singapore, Malaysia, Indonesia, Thailand, Brunei) will move towards their respective version of social markets.

 

Maybe before this century will end, the exemplars for the nascent social markets will crystallize all the more. The terminology may change hence. Even the economic context will have mutated. The post-industrial economy or ‘Aquarian economy’ (using mystics’ language) will galvanize all the more though not possibly to its fullest yet.

 

This century may still see the operation of a money economy, hence the operation of a semblance of markets where people will procure the most of information and values in order to fulfill their amenities. The contention of the writer is intended largely for this nascent economy of the current century. The future generations better take on the cudgels for forecasting those that would apply for the future centuries.

 

The essential contention is summarized by the excerpt from the article as shown below.

 

Evolve from ‘capitalist markets’ to ‘social markets’.

 

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

 

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

 

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