Classes on Friday August 19, 2011

For the benefit of everyone, yes we'll have a class on Friday, August 19, 2011, same time, same place. :)

Topics for Term Paper

·        Arsenio H. Lacson, Mayor of Manila

·       Rafael Lacson, Governor of Negros Occidental (1949-1953)

·       Clash of warlords

o   Mindoro

o   Masbate

o   Abra

·        “Biography” of corporations

o   Philippine Airlines

o   SM = Shoe Mart

o   University of the East

o   Smart

o   Globe

·        The old elite

o   Madrigal

o   Ayala

o   Aboitiz

o   Elizalde

·        History of the sugar bloc

·        History of the tobacco bloc

·        History of the coconut bloc

·        The media lords:

o   Lopez family

o   Duavit-Gozon

o   Emilio Yap

o   Manuel Pangilinan

o   Marixi Prieto

o   Eugenia Apostol 

Topics and consultation for Term paper

For more convenience and faster dissemination of information, let us use this blog for proposing topics for your term paper. Indicate your name and the topic you are proposing. Also whenever you want to consult, please post here your preferred time and date of consultation. This will help you and your classmates to see who are consulting on what date, to avoid time conflict as well as be aware of the topics that your classmates already got to avoid proposing the same topic.

The following are to consult tomorrow (August 4, 2011) (with Dr. Nemenzo's approval)
1. Mendoza, Justin- 2PM
2. Garcia, Jacel- 3-3:30PM
3. Ramirez, Roseanne- 2:30PM

To those who are planning to consult on Friday, (August 5, 2011) sir is okay for consultation before class.

For the rest, please indicate your preferred schedule for consulting by posting a comment in this post so it will be easier to track. Thanks!

Classes suspended today (July 27, 2011)

Malacanang already announced suspension of classes today due to typhoon. We'll meet on Friday. Please be guided accordingly. Thanks!

Attention Everyone

Please watch the State of the Nation Address of Pres. Noynoy Aquino on TV today. Thanks!

Oligarchic control of the state By Tony Lopez

Manila Times

July 19, 2011

Oligarchic control of the state

By Tony Lopez

THREE weeks ago, upon the invitation of economist Bernie Villegas, I attended a seminar on structural reform at the University of Asia and the Pacific.

The consensus after four hours of discussion is that there is need to amend the Constitution to open up the economy and allow a greater inflow of foreign investments to push the country’s economic development.

The view of the participants is that there are just too many areas closed to foreigners. The restrictions were imposed in the 1935 Constitution and which were carried forward into the 1973 and 1987 Constitution.

As a result of these restrictions, the economy has remained in the stranglehold of the country’s entrenched oligarchies and power brokers. There are no more than 100 families controlling the politics and business of this country.

Five of the six largest commercial banks are all privately owned, by oligarchs. The six banks control more than 70 percent. The five largest private banks are: No. 1 BDO owned by retailing and property magnate Henry Sy Sr. (the richest Filipino); No. 2 Metrobank owned by auto and property tycoon George SK Ty; No. 3 Bank of PI owned by the banking, telco and real estate conglomerate Ayala Corp. chaired by Jaime Augusto Zobel de Ayala; No. 5 RCBC of industrialist-philanthropist Al Yuchengco; and PNB of tobacco and property mogul Lucio Tan (the second richest Filipino).

These bank owners are among the 15 richest individuals in the country. Sadly, they are not exactly among the 15 largest individual taxpayers.

Two-bit actors and radio-tv personalities pay more taxes than they do.

With just P331.5 billion of equity, the five largest private banks control P3.29 trillion or 51 percent of total banking industry resources, P2.5 trillion or 53 percent of total system deposits, and P1.52 trillion or 58 percent of total commercial banking loans. The owners of these banks multiplied every peso ten times in terms of banking resources, 7.5 times in terms of deposits and 4.5 times in terms of loans.

If you are or have been a small businessman you will know just how difficult to obtain loans from these banks. The practice reminds you of Shylock.

“We’re still an oligarchy run by a few families,” says Senator Manny Villar, the first Filipino brown billionaire. “They (the oligarchs) are happy with the present setup now and they will not allow the Constitution to be tampered with.”

“The media, from what I’ve seen, is also controlled by groups that do not want to change the Constitution,” the former Senate president adds. “And that is why any proposal (to amend the Constitution) will be killed right away.”

Villar notes the difficulties encountered by small entrepreneurs in growing their business.

“We always look at foreign investments but we don’t look at the local, the small entrepreneurs, who are unable to borrow, unable to access credit because our banking system is controlled by five or six families and they are happy investing in ROPs (government debt papers) or lending to big industries,” the senator relates. “Right now that is our banking system—it’s a cartel and it’s getting fewer and bigger through consolidation.”

Reform is needed in a nation of 95 million (the 12th largest population in the world), a country where one of every four families is certifiably poor, where 70 percent of the wealth is owned by only the top two percent of the population, where both unemployment and underemployment are massive and beyond mitigation, where economic growth in the 25 years before 2005 was the slowest in the world (bar none), where both the Muslim separatist and communist insurgencies are the longest running in the world, and where taxpayers (including the richest people and largest corporations of the land) are congenitally disposed to evade or not pay taxes.

In his paper at the Center for Research and Communication seminar on structural change July 1 at the University of Asia and the Pacific, former National Security Adviser Jose T. Almonte enumerated some of the reforms.

Almonte suggests increasing the pay of government workers. Their pay is 60 percent below market rates, he notes. “This practically encourages officials holding great discretionary powers but take home so little pay to sell favors to their clients,” he points.

“We must raise the standards of openness in all public transactions. And we need to put more teeth in our Ombudsman institution. Right now, corruption is a ‘high-reward, low-risk’ offense,” Almonte urges.

“Far too many branches of our police and justice system are inefficient or even corrupt. Access to the courts is difficult and costly, and decisions are sometimes arbitrary,” he noted.

Also the ‘no-reelection’ clause (for a sitting president)—together with the procedural difficulties of impeachment—in effect places the President beyond the reach of the popular judgment. “I would prefer a President with two four-year terms,” Almonte winces.

He suggests a truly autonomous Commission on Elections —“by vesting it with its own status and resources, enabling it to computerize its facilities, and empowering it to regulate party finances and access to the media.”

Almonte insists on “developing a stable two-party system. At last count, we had 162 separate parties registered with the COMELEC—but with none large enough and coherent enough to make public policy.”

He thinks “switching to the parliamentary system might in fact help institutionalize our parties, and make the centralization of political power easier to organize, it will also rid us of the protectionist provisions that prevent the entry of foreign capital into key sectors of our economy.”

On another front, Almonte says “if we are to begin redressing the balance of our lopsided economy, we must make countryside development a centerpiece of public policy. And the bulk of our spending in human capital, we must shift to our most disadvantaged regions in a kind of affirmative action.”

Finally, Almonte complains, “the very center of the State itself has been captured by the national oligarchy.”

“Interest groups have such effective control of the State machinery that rule making and enforcement serve not the general welfare but particular interests,” he says.

“Oligarchic influence on the highest State organs enables powerful individuals, families, and clans to tilt the rules of competition in their favor —and acquire privileged access to the rents and commissions generated by public investments.”

In the Defense of Elitism

Elitism has been viewed in two differing lights as either "inevitable and desirable" or "remediable and regrettable" (Heywood, 2007, 83). For advocates of modern democratic rule, the latter contention is particularly resonant. After all, democracy was founded on the idea that all are born equal with natural rights and thus should be free from the arbitrary rule of the few.

However, these same theorists (Hobbes and Locke) also prescribe that we surrender some of these rights to a sovereign to escape the state of nature. Whether by necessity or by convenience, these same scholars acknowledge that a smaller group should exercise power in a society, as expounded upon by scholars such as Michels and Mosca. This smaller group, as C. W. Mills puts it, form the power elite that shapes the trajectory of a nation's policies. While modern democrats advocate checks on this power elite through representative government and separation of powers as advocated by Locke, the fact remains that in modern democracies, as in the autocracies that democracy was pioneered to replace, power is still exercised by a small group.

There are few escapes from the "iron law of oligarchy" as Michels puts it. One would be direct democracy closer to what was envisioned by the Athenians who pioneered classical democracy wherein all citizens would participate in governing, commonly done through plebiscites and referendums in modern times. However, this means of governing has drawbacks in terms of practicability (What mechanism can be used to allow all citizens of a state to participatey?) and convenience (Would people participate in governing if this took time away from their labor or leisure?).

The other escape would be anarchy, or the absence of the state, which brings us back to the state of nature and whether existence in a society is possible without government or would life be "solitary, poor, nasty, brutish, and short." Interestingly, Marx believed that through the "withering away of the state" people would be able to live harmoniously in the absence of the state, albeit through the heavy hand of the state during the period of the "dictatorship of the proletariat." Still, no socialist state has reached the communist mode of production leading many to rethink Marx's "withering away of the state."

For the most part, it would seem that the rule of the few has more or less been accepted in mainstream political discourse. If the formation of political elites is unavoidable, then what separates democracies from autocracies is not whether the few or the many rule, but the ability of the people to constrain the power of the ruler, often manifested in electoral rules mandated by a constitution. This would be what prevents the formation of Aristotle's "perverted" government (rule for the ruler) and foster "natural" government (rule for all).

Thus, elitism per se should probably not be antagonized as only unchecked elite rule is detrimental to society. In our case, elites for the most part have proven to be non-cohesive with a large number of them implementing unpredictable policies, exercising unchecked power, and possessing unclear motives...

Oh well...

Reference

Heywood, A. (2007). Politics (3^rd ed.). New York: Palgrave Macmillan