Friday, March 30, 2007

Wealth Redistribution: A Suggestion

Here's a comment i made in reaction to UPn Student and Watchful Eye's comments over at mlq3's:

Unlike in Malaysia, where the Chinese community constitutes a substantial minority (around 30%), the ethnic-Chinese population here is far too small to be the made the target of affirmative action programs as implemented by UMNO. Besides, our geographic proximity to China and hundreds of years of trade ties means that a lot of ethnic-Filipinos actually have mixed blood so the distinction between Malay/Chinese does not seem to apply as strongly to us. (Physically, Filipinos resemble Thais more than they resemble Malaysians or Indonesians.) The Filipino super-rich is a small community so a more targeted approach may be desirable.

As i mentioned* in Ellen’s blog previously, i’m hoping that the next leader of the country (whether he/she be democratically elected as i would prefer, or a dictator), would summon the 300 wealthiest families of the Philippines to Malacanang and ask each of them for a workable plan to redistribute a portion of their wealth to the poor (e.g. as seed money for livelihood programs). This plan, once agreed upon, should be closely monitored by the grassroots organizations for faithfulness of implementation and quality of execution. Within the ranks elite, they should also agree to police their ranks of would be cronies.

Where we should have a broad based policy against a class of people would be the big landowners (rural or urban) as it has been shown that among the forms of inequality, as i mentioned in this post and as alluded to by hvrds below, it is inequality in land ownership that is the most detrimental to economic growth. That’s why our neighbors who tackled this matter early on had more success in economic development. Besides, it is better for capital to be diverted to industry rather than real estate.

Update 11-22-07: Interesting discussion on what to do with the Philippine elite at this thread over at Manolo Quezon's blog.

*comment at February 15th, 2007 at 7:35 pm


mschumey07 said...

The problem in our country is plain and simple greed. Even if our richest would contribute, the chances of the pooled funds being used properly is almost nil.

The biggest landlords, our congressmen refuses to yield to agrarian reform. They come up with ways to circumvent the law. They use their positions to cling to every square inch of land they own. They push the private sector to part with their wealth while they who should lead by example gets to keep what they have.

Its sad, really sad for a rich nation like ours where its people are landless, homeless, jobless and hungry.

cvj said...

Hi Schumey, I would say it's greed combined with, as Watchful Eye said in mlq3, the absence of love for country. I'm hoping that enough of them (the landlord-congressmen) would have at least some enlightened self-interest to follow the agrarian reform law and, moreover, make the laws that will renew and revitalize the social contract. As Hernando de Soto recounted in his book 'The Mystery of Capital':

"[The] property revolution was always a political victory. In every country it was a result of a few enlightened men deciding that official law made no sense if a sizeable part of the population lived outside it."

sparks said...

I'm sure solutions like these have been thought of even before we were born. That they have not yet been put in place is testament to just how difficult it would be to do so. Do we need bloodshed to do it? Can we do it through the present (dysfunctional) democratic set-up?

Another thing to consider is, we have not, and perhaps cannot, pursue development in a domestic vacuum. There are external forces who have, and will continue to intervene (whether they be MNCs, the IMF-World Bank, foreign governments). In many cases, our local elites profit from these external ties.

One particularly hairy part is, how do we follow the same export-oriented model by the East Asian NICs without US support? Well, then, how about a more modest target like Malaysia? Again we need a strong autonomous state to do that. By autonomous I mean a state that is able to resist being overrun by certain interests.

If we assume that the State must play a central role in development, as it has in countless other examples, then we have two tasks:

1. Reform the state
2. Selectively eschew the neoliberal orthodoxy to which we have blindly subscribed through our WTO and IMF commitments.

The question is how do we first reform the state, then enable the state, when neoliberal policies have weakened the state in favour of the private sector? Can we reverse a process that has gone on for 20 years?

Hay naku. Pinag-isip mo tuloy ako. At ngayon, lalong na-depress. Hehehe.

cvj said...

Hi Sparks, i realize that there's nothing in our present elite that would lead us to expect any enlightenment coming from them, even of the self-interested variety. That's why i'm hanging on Randy David's analysis. If we maintain the Presidential system long-enough, the probability of our people, just like what has happened in Latin America, electing a champion in the mold of Hugo Chavez who can do battle with the oligarchs is increased (my scenario 4). As Randy, Manolo and others have written, i believe the oligarchs have sensed this which accounts for the push for a unicameral parliamentary system. They're hoping the rural-urban divide will trump any class conflict that emerges.