Quote of the Day: Voting is Not a Duty, but a Right—Including the Right to Abstain

Economist Gary Galles writes at the Independent Institute on voting:

“If you don’t vote, you don’t have a voice in government”: This claim is falsified by the fact that even casting your vote won’t give you an effective voice in government.

“If you don’t vote, you have no right to complain about government”: This argument fails for the same reason. It also ignores the fact that facing what are typically binary choices between candidates, and yes-or-no votes on special-interest initiatives, further degrades your ability to invoke your preferences.

“If you don’t vote, you don’t care about America”: This is similarly unconvincing when your vote doesn’t alter the outcome. Not only has abstaining been common since America’s foundation, but not voting is perhaps the most effective way to protest that “none of the above” represent what you consider acceptable, because voting for “the lesser of two evils” is still voting for an evil.

“It is your duty to vote”: This assertion runs aground because if your vote won’t change the outcome, it cannot be your social duty. Voting is not a duty, but a right—including the right to abstain. Further, most voters are far from informed on most issues, and casting an uninformed vote is more a dereliction of duty than a fulfillment of it.

“You must vote, because the electoral process would collapse if no one voted”: This ignores two facts—that your individual vote won’t matter, and that virtually no one’s individual choice of whether to and/or how to vote alters an appreciable number of others’ voting choices. (Politicians, who won’t be taken seriously if they abstain from voting, are an exception.)

Does the fact that so many “your vote is crucially important” arguments are invalid imply you shouldn’t vote? No. However, those claims cannot justify voting on issues you are uninformed about, since that offers society no benefits. Since your electorally insignificant vote won’t change the outcome, it also means that voting to forcibly transfer others’ wealth to you or your pet causes is ineffective, as well as morally objectionable.

However, if such errors are avoided, voting can provide a means of cheering for those candidates and proposals that advance what James Madison called “the general and permanent good of the whole” without plundering others. So, while logic does not demand that you vote or that you abstain, it does impose limits on what one can justify voting for.

The above should not just apply to America, but elsewhere, including the Philippines

Quote of the Day: Blaming Bad Outcomes on Bad People rather than Bad Institutions

And yet: how often do you hear people saying that we need to vote the bums out and replace them with the wise, the virtuous, and the incorruptible? How often are people shocked (SHOCKED!) that politicians respond to incentives? How often do people treat systemic institutional failures as if they are individual moral failings by people who are of virtue insufficient for their office? How often do we blame bad outcomes on "bad people" rather than "bad institutions"?

This is from Professor Art Carden at the Econolog (Library of Economics and Liberty). 

The blaming “bad people” phenomenon represents what I call as “personality based” populist politics.

And related to this topic a suggested read is from The Freeman's debunking of one popular statist myth or the Clichés of Progressivism #17 – “All We Need Is the Right People to Run the Government”

Philippine Politics: Barangay Elections and the Pork Barrel System

The recently concluded Barangay elections reported accounts of massive and widespread vote buying (as much as 1,000 pesos per head) and a surge in the death toll from election violence (higher than national elections in 2010).

The 64 billion peso question: why all these?  What drives candidates to desperately seek political office at the cost of their lives and huge amounts of expenses?

The answer of course is no stranger to most: it has been both about perks and power.

Let us examine the perks or benefits from the officials of Barangay level.

The basic perquisites are as follows: 

Graph from the Rappler.

Aside from these, other benefits include Christmas bonus and cash gift, insurance coverage, as well as, benefits for accident, total or permanent incapacity, disability, death and burial.

There’s more. Barangay officials also get many subsidies in the form of “free hospitalization in government facilities, and free tuition in state schools for themselves and two of their legitimate dependent children (“legitimate” is specified in the law) during their incumbency. Based on their number of years in the service, barangay officials can get civil service eligibility”.

What are they not entitled to (for now)? 13th month pay, hazard pay, representation and transportation allowances, productivity incentive bonus, clothing and personnel and economic relief allowances.

[As a side note, the above also introduces the power aspect

National level officials have been pushing for more Barangay benefits from more funding to fare discounts. Why? 

It’s all about political power

This noteworthy excerpt captures its essence

“In theory, the law says [barangay elections] should be nonpartisan,” Casiple said, referring to a provision in the Omnibus Election Code barring candidates to represent or receive aid from any political party.

“But in reality, they’re important to mayors. That’s where the fight is. If you hold the barangay, it’s a ready-made machinery for ward leadership. It has become a fight by ordinary politicos,” Casiple said.

Casiple said this partisanship has translated the “perks” otherwise not stated by law, granted by higher government units. Off the top of his head, Casiple cited, as example: “Here in Quezon City, all barangay captains are given a car. “

Ergo, controlling the Barangay means ensuring votes from the grassroots level. So leaders from the local to the national level compete to gain their favor. This leads us to the key of Philippine patronage politics: whoever controls the local governments, controls the machinery for the national level]

Now even if we total cash and non-cash benefits these would amount to about at best Php 500k per year. For a three year term that would accrue to P 1.5 million. At P 1.5 million, 1K peso per vote expenditures, whether direct (vote buying) or indirect costs (ads or marketing campaign, organization, network and etc..), would translate to only 1,500 voters. There are about 3,518 voters per Barangay in the National Capital Region (registered voters: 6m, no. of Barangays 1,705 NSCB)

How will candidates recoup their election expenditures “investments”?

We can only make a guess. 

One, from their 20% share of the national internal revenue allotment (IRA). In 2013, the IRA budget for the 42,026 Barangays nationwide has been at P59,165,520,37.This will jump by 15% to 68.3 billion pesos in 2014.

Two, from their share of the other revenues from the allocations for local government units (ALGU) as part of the national government’s budget law, the General Appropriations Act. 

In 2014, the AGLU budget has been set  at 360.5 billion pesos.

Notes the Philippine Senate:

Other items in the ALGU are the shares of local governments from tobacco excise tax collections and taxes from mining and other extractive industries, and the budget of the Metropolitan Manila Development Authority, among others.

Third there are other sources of funding from the Barangay level, include (as per the Department of Budget and Management

-Service fees or charges for the use of barangay property or facilities;
-Barangay clearance fees; 
- Fees or charges for the commercial breeding of fighting cocks and on cockpits and cockfights;
- Fees or charges on places of recreation with admission fees;
- Fees or charges for billboards, sign boards, neon signs and other outdoor advertisements; 
- Toll fees or charges for the use of any public road, pier or wharf, waterway, bridge, ferry, or telecommunications system funded and constructed by the barangay; 
- Revenues from the operation of public utilities and barangay enterprises (markets, slaughterhouses, etc.); 
- Fines (not exceeding P1,000) for the violation of barangay ordinances; and, 
- Proceeds from the sale or lease of barangay property or from loans and grants secured by the barangay government

In short, fees and taxes from the Barangay level

The above is the flow chart of how the Barangay establishes and supervises its budget via the DBM

So there you have it. Pork in its varied forms applied to the Barangay: from the national level: AGLU via IRA and AGLU via other shares of taxes, and from the Barangay level fees and taxes.

In essence, from top to bottom, Philippine politics operates under the Pork Barrel system

Every election, said the great libertarian H. L. Mencken, is a sort of advanced auction on stolen goods. The Barangay elections seem to validate this.

As I wrote in 2010

So essentially, the Pork Barrel culture reinforces the patron-client relations from which the Patron (politicos) delivers doleouts and subsidies, which is squeezed from the Pork Barrel projects, to the clients who deliver the votes and keeps the former in power. Hence, the Pork Barrel system is essentially a legitimized source of corruption and abuse of power seen from almost every level of the nation’s political structure, an oxymoron from its original “moralistic” intent (unintended consequences). As the saying goes “the road to hell is paved with good intentions”.

As we previously noted, ``Plainly said, when we demand for more social spending or welfare based programs to resolve our problems then we increase the funds allocated to politicians for their dispensation. Essentially, Pork Barrels signify our excessive dependence on government where the correlation of government spending and the price of getting elected are direct.”

Politicization of every aspect of social life from top to bottom leads to corruption, political and wealth inequalities and economic-financial repression which means a lower standard of living. The worst effect is the violence which politics incites, and of the degradation of society’s moral fiber

While the call for the abolition of the Pork Barrel is ideal and necessary it is not sufficient. 

For as long as the public thinks the Pork is a problem of personal virtuosity or what I call as personality based politics (and not of systemic defect), politicians will be able to camouflage pork into many different masks as shown by latest the speech by the Philippine president. 

In other words, to abolish the Pork requires a radical change of opinion by the public. As Scottish philosopher historian and economist David Hume wrote in Part I, Essay IV OF THE FIRST PRINCIPLES OF GOVERNMENT in Essays, Moral, Political, and Literary (bold mine)

NOTHING appears more surprizing to those, who consider human affairs with a philosophical eye, than the easiness with which the many are governed by the few; and the implicit submission, with which men resign their own sentiments and passions to those of their rulers. When we enquire by what means this wonder is effected, we shall find, that, as FORCE is always on the side of the governed, the governors have nothing to support them but opinion. It is therefore, on opinion only that government is founded; and this maxim extends to the most despotic and most military governments, as well as to the most free and most popular.

And the best way to attain such change is for the public to demand a third party audit of all forms of Pork from the top to the local level (past and current), with emphasis on the top. 

Only by opening the Pork's Pandora's Box will there be a bigger chance for an epiphany by the public that Pork is inherent in the nature or structure of the Philippine patronage based political system. Such that dismantling of the Pork Barrel has to occur from top to bottom. 

Yes this also means demolishing Pork at the Barangay levels.

Why the Pork Barrel Will Unlikely be Abolished

From today’s headlines:

In face-to-face interviews with 1,200 respondents aged 18 and above who were randomly selected nationwide, Pulse Asia also found that 67 percent believed that corrupt practices during the Arroyo administration involving the PDAF continued under the Aquino administration.

Most Filipinos, thus, approved of President Aquino’s announcement that the time had come for the scrapping of the pork barrel.

For about one in three Filipinos (32 percent), politicians were using the PDAF to get themselves and their relatives elected, while another 27 percent said the pork had given lawmakers an opportunity to receive bribes and commissions.

A fundamental reason why the Pork Barrel will unlikely be abolished (but will likely be transformed into another Pork with a lipstick) can be deduced from the consensus perspective which views the problem of Pork as having been based from personality virtues rather than an institutional-structural disease 

 

And media and their experts reinforce the populist belief that nirvana will be achieved (or the Pork will be of merit) once “angels” would run the government. 

But as 4^th President of the United Sates and “Father of the Constitution” James Madison Jr. warned in the Federalist papers (Federalist 51),

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.

Government is about political power or the control of people and of resources by a few. Or political power is about the rule of men over men.

This means political power is hardly about righteousness for the simple reason that political power is about organized force. And to acquire and wield political supremacy means political agents will resort to all forms of manoeuvrings (which includes unethical means) for the purpose of acquiring the privilege of control over men.

The principle of economics tells us too that politicians and bureaucrats, like all the rest, are mere mortal human beings who are driven by self-interests (Public choice) and thus will be subject to the frailties and temptations of the common men.

But instead of promoting equality through opportunity and law, political power is about unjust coercive redistribution, as the illustrious economist Thomas Sowell says it best

The first lesson of economics is scarcity: There is never enough of anything to fully satisfy all those who want it.

The first lesson of politics is to disregard the first lesson of economics. When politicians discover some group that is being vocal about not having as much as they want, the “solution” is to give them more. Where do politicians get this “more”? They rob Peter to pay Paul.

After a while, of course, they discover that Peter doesn’t have enough. Bursting with compassion, politicians rush to the rescue. Needless to say, they do not admit that robbing Peter to pay Paul was a dumb idea in the first place. On the contrary, they now rob Tom, Dick, and Harry to help Peter.

In a related separate but related issue we see a variant of the Pork Barrel in action… (from another Inquirer article today)

In spite of widespread public outrage, the presidential body tasked with overseeing the pay and perks of state corporations justified Monday the bonuses that the Social Security System (SSS) had rewarded its managers while ramping up contributions of members, noting that 19 other state corporations have also handed out such management windfalls.

Paolo Salvosa, the spokesman of the Governance Commission for Government Owned or Controlled Corporations (GCG), talked to reporters after the panel members went to Malacañang to defend the much-maligned P1 million that the SSS board, headed by Emilio S. de Quiros as president and vice chair, ordered for each of its directors.

De Quiros announced at the same time that employees’ contributions to the SSS would be increased by 0.6 percent, raising their monthly salary contributions from 10.4 to 11 percent.

He said this would stretch pension funding capability “to perpetuity.” He indicated further increases in premiums were forthcoming.

The SSS chief has been roundly criticized, among others, for taking trips abroad, first class, all expenses paid, every two months since he took over the pension agency.

One may not be “corrupt” in the sense of 'kickbacks' and directly from pocketing of taxpayer funds, but the principle has been the all the same…

The politics of coercive redistribution is about the spending other of people’s money through the predation of Juan to pay Pedro and from the intermediation of political agents, who likewise benefits by getting a cut from such forcible transfer process. 

And Pork Barrel represents an element of the politics of coercive redistribution. It has been always easy to spend the toils and savings of other people in order to get elected or to maintain populist approval or for personal perks.

And in defense of the system, politicians run circles on the public by emitting smoke screens of putting the blame on previous administrations rather than to come clean by being transparent or by proving to the public of their alleged moral excellence by opening their earmarks (past and present) for scrutiny. 

Politicians also resort to legal technicalities to prevent such happening.

Bottom line: for as long politicians will be able to persuade their constituencies of the supposed necessity of spending other people’s money, the Pork barrel won’t likely be abolished.

The constituency should demand to scrutinize the Pandora’s Box as I earlier wrote

Yet the public should clamor for an independent non-partisan audit on earmarks (Pork barrel) of all incumbent officials (which should include previous tenures or positions) beginning with the highest to the lowest ranking.

This means abolishing the Pork may only happen from a radical reformation or transformation of public opinion. Or said differently, only when the public will be thoroughly convinced that the Pork is an incorrigible institutional defect will abolishing the Pork become a reality.

As the great Ludwig von Mises wrote (bold mine)

What determines the course of a nation's economic policies is always the economic ideas held by public opinion. No government, whether democratic or dictatorial, can free itself from the sway of the generally accepted ideology.

Robert Higgs: Strategy for Winning People Over to Libertarianism

Austrian economist Robert Higgs at the Independent Institute articulates on how the ideals of libertarianism can be won through the premises of consequentialism (utilitarian) and deontology (ethics) 

[bold mine, italics original]

In any event, after the more recent decades of my libertarian journey, I am now struck by a different aspect of this longstanding debate, which has to do with our strategy for winning people over to libertarianism. Strategy 1 is to persuade them that freedom works, that a free society will be richer and otherwise better off than an unfree society; that a free market will, as it were, cause the trains to run on time better than a government bureaucracy will do so. Strategy 2 is to persuade people that no one, not even a government functionary, has a just right to interfere with innocent people’s freedom of action; that none of us was born with a saddle on his back to accommodate someone else’s riding him.

In our world, so many people have been confused or misled by faulty claims about morality and justice that most libertarians, especially in the think tanks and other organizations that carry much of the burden of education about libertarianism, concentrate their efforts on pursuing Strategy 1 as effectively as possible. Hence, they produce policy studies galore, each showing how the government has fouled up a market or another situation by its ostensibly well-intentioned laws and regulations. Of course, the 98 percent or more of society (especially in its political aspect) that in one way or another opposes perfect freedom responds with policy studies of its own, each showing why an alleged “market failure,” “social injustice,” or other problem warrants the government’s interference with people’s freedom of action and each promising to remedy the perceived evils. Anyone who pays attention to policy debates is familiar with the ensuing, never-ending war of the wonks. I myself have done a fair amount of such work, so I am not condemning it. As one continues to expose the defects of anti-freedom arguments and the failures of government efforts to “solve” a host of problems, one hopes that someone will be persuaded and become willing to give freedom a chance.

Nevertheless, precisely because the war of the wonks—not to mention the professors, pundits, columnists, political hacks, and intellectual hired guns—is never-ending, one can never rest assured that once a person has been persuaded that freedom works better, at least in regard to situation X, that person has been won over to libertarianism permanently. If a person has come over only because of evidence and argument adduced yesterday by a pro-freedom wonk, he may just as easily go back to his support for government intervention tomorrow on the basis of evidence and argument adduced by an anti-freedom wonk. As John Maynard Keynes once cleverly replied to someone who asked him about his fluctuating views, “When the facts change, I change my mind. What do you do, sir?” If libertarians choose to fight for freedom solely on consequentialist grounds, they will be at war forever. Although one may accept this prospect on the grounds that “eternal vigilance is the price of liberty,” this kind of war is deeply discouraging, given that the anti-freedom forces with which libertarians must contend possess hundreds of times more troops and thousands of times more money for purchasing munitions.

In contrast, once the libertarian has persuaded someone that government interference is wrong, at least in a certain realm, if not across the board, there is a much smaller probability of that convert’s backsliding into his former support for government’s coercive measures against innocent people. Libertarianism grounded on the moral rock will prove much stronger and longer-lasting than libertarianism grounded on the shifting sands of consequentialist arguments, which of necessity are only as compelling as today’s arguments and evidence make them. Hence, if we desire to enlarge the libertarian ranks, we are well advised to make moral arguments at least a part of our efforts. It will not hurt, of course, to show people that freedom really does work better than state control. But to confine our efforts to wonkism dooms them to transitory success, at best.

If we are ever to attain a free society, we must persuade a great many of our fellows that it is simply wrong for any individuals or groups, by violence or the threat thereof, to impose their demands on others who have committed no crime and violated no one’s just rights, and that it is just as wrong for the persons who compose the state to do so as it is for you and me. In the past, the great victories for liberty flowed from precisely such an approach—for example, in the anti-slavery campaign, in the fight against the Corn Laws (which restricted Great Britain’s free trade in grains), and in the struggle to abolish legal restrictions on women’s rights to work, own property, and otherwise conduct themselves as freely as men. At the very least, libertarians should never concede the moral high ground to those who insist on coercively interfering with freedom: the burden of proof should always rest on those who seek to bring violence to bear against innocent people, not on those of us who want simply to be left alone to live our lives as we think best, always respecting the same right for others.

Mr. Higg’s proposition of libertarians making “moral arguments at least a part of our efforts” has been the bedrock of my “policy analysis” which some have mistakenly construed as being partisan.  

For clarity purposes, libertarianism is a cause to advance a free “non-aggression based” society and not to promote superficial and delusory "personality based politics" predicated on the principles of aggression.

Quote of the Day: Freedom is the Essence of Humanity

Oh they tell us that in a democratic system, we can vote and that this is our choice. We have nothing to complain about. If we don’t like the system, we can change it. But this is wholly illusory. The government completely owns the democratic system and administers it to generate the types of results that government wants. More and more people are catching on to this, which is why voter participation falls further in every election season.

The great thinkers of the libertarian tradition have always told us that freedom and the good life are absolutely inseparable. I think of Thomas Jefferson, Frederic Bastiat, Herbert Spencer, Albert Jay Nock, Ludwig von Mises, Murray Rothbard, F.A. Hayek and so many others. Even contemporary authors have addressed the theme. They had long warned that every step away from freedom would mean a diminution of the quality of life. We are seeing these prophecies come true.

Too often public policy debates take place on the wrong level. The core point is not to make the “system” work better or otherwise fine-tune the rules within a bureaucracy. We need to start talking about larger issues about the dignity of the human person, the moral status of freedom and the rights and liberties of the individual in society. The expansion of the state is not just wrong as a matter of “public policy”; it is wrong because it is dangerous to the good life and the quality of life.

To kill freedom is to kill the essence of what makes us human.

(bold emphasis mine)

The stirring excerpt is from the prolific Jeffrey A. Tucker at the Laissez Faire Books.

Again, the mainstream’s public policy debates can be summarized into the following alternatives 1) change the authority involved 2) throw money at the problem 3) control, restrain or prohibit activities of parties perceived as immoral and or 4) tax the alleged offenders.

And that’s why politics tend to become mostly personality oriented as policy debates have been premised on a system which is largely perceived as a “given”, and where the solution has been reduced to “saintliness” or “virtuosity” of those in power. The solution of which is like eternally Waiting for Godot who never comes.

Instead what truly matters is to debate the ethics, as well as, the feasibility from which the incumbent political system has been established. [Well anyway maybe economic realities would render the debate moot]

Unfortunately, all of which of mainstream’s way of solving social problems evolve around restricting people’s freedom.

Yet ironically and fortunately, many people find ways to circumvent or fight the repressive system—built to benefit and preserve the interests of the political insiders which thrive on patron-client relations or state (crony) capitalism—through the informal economy, black markets and corruption (as response to arbitrary regulations or statutes).

Bottom line: The battle for freedom continues.

Circumventing Political Term Limits via Political Dynasties

Chidem Kurdas at the Thinkmarkets notes that term limits on political authorities don’t serve as sufficient protection against the concentration of political power, and points to the recent events in Russia as example.

The point of term limits is to prevent the buildup of political power by one person or group. In Russia’s ersatz version, Vladimir Putin merrily plays revolving door with his protégé Dmitry Medvedev. Mr. Putin may win the election on March 4th despite the persistent protests sparked by his latest round of musical chairs with Mr. Medvedev.

That means Mr.Putin could potentially be Russia’s president again for two terms lasting through 2024, bringing his overall reign at the top as either prime minister or president to almost 25 years…

Mr Kurdas further argues that democracy and term limits may not be compatible.

It is sometimes argued that term limits are undemocratic—why not let the voters decide whether or not they want the candidate to stay in office for another term? This is the same type of argument as those used against Constitutional checks and balances.

The Russian situation shows how very dangerous is the notion of dispensing with limits and leaving it all up to elections. If anything, term limits need to be more stringent and unconditional so as to function as an effective barrier against politicians looking to consolidate their hold. Mr. Putin’s massive power, built over the years and now giving him almost complete control over the media as well as much of the economy, may yet enable him to overstay his welcome even as many Russians take to the streets to show their displeasure. To add a postscript to the wise old adage that power corrupts—the longer the reign, the greater the corruption.

The failure of democratic check and balance on political term limits has been a very relevant issue to the Philippine political setting.

Philippine politicians in almost all levels have become quite efficient in or adept at the gaming of the system.

In contrast to Russia’s experience, local politicians mechanistically circumvent term limits by having family relatives run for local or even national elective positions, thus resulting to pervasive political dynasties.

According to Wikipedia.org, the 14^th Congress of the Philippines (from July 23, 2007 to June 4, 2010 had about 75%) more than 75% of the lawmakers are members of the old political families.

Philippine politicians have done this through a mélange of tactics in the form of manipulation of the political system through laws, buying voters with various forms of welfarism and through Pork Barrel politics.

There has also been a marketing dimension in the promotion political dynasties, political debates have been reduced to personal issues (what I call as personality based politics) which has been amplified by mainstream media, and lastly, selling elections via the celebrity cult status (where politicians try to get a lot of media mileage or associate themselves with media or sports celebrities).

The failure of democracy to curb political abuse through term limits represents the proverbial tip of the iceberg. That’s because the chink of the armor of mob rule politics is mainly rooted upon the popular reliance to the political means of allocation of resources

As the great Professor Ludwig von Mises wrote,

The capitalistic social order, therefore, is an economic democracy in the strictest sense of the word. In the last analysis, all decisions are dependent on the will of the people as consumers.

For as long as people remain highly reliant on politicians rather than themselves, the political environment will be highly vulnerable to the manipulations by the political class and their allies (directly or indirectly).

Democracy only works if the system benefits individual liberties.

As US Chief Justice Charles Evans Hughes one said

While democracy must have its organizations and controls, its vital breath is individual liberty.

Quote of the Day: Welfare State and Personality Based Politics

As the ranks of those dependent on the welfare state continue to grow, the need for the rulers to pay attention to the ruled population diminishes. The masters know full well that the sheep will not bolt the enclosure in which the shepherds are making it possible for them to survive. Every person who becomes dependent on the state simultaneously becomes one less person who might act in some way to oppose the existing regime. Thus have modern governments gone greatly beyond the bread and circuses with which the Roman Caesars purchased the common people’s allegiance. In these circumstances, it is hardly surprising that the only changes that occur in the makeup of the ruling elite resemble a shuffling of the occupants in the first-class cabins of a luxury liner. Never mind that this liner is the economic and moral equivalent of the Titanic and that its ultimate fate is no more propitious than was that of the “unsinkable” ship that went to the bottom a century ago.

From Professor Robert Higgs.

Oh, this very much applies to the Philippine political setting. Think Pork Barrel politics and the 250 political dynasties. And that's why the search for the elusive efficacious leader who is supposed to deliver us from hardship will always be just that: a constant source of frustration. People don't realize that the much sought after miracle of effectiveness and justice from the nanny patriarch state will always be a mirage.

Former Central Banker Papademos Is Greece New Prime Minister

Over at Europe, Central Bank—Wall Street—Welfare state interests are becoming entrenched politically.

First we have Mario Draghi, an alumnus of Goldman Sachs as the president of the European Central Bank (ECB).

Now we have an ex-ECB vice president as Greece’s PM.

From the Bloomberg

Lucas Papademos, named today to be interim prime minister of Greece, steered the country into the euro region as central bank governor more than a decade ago. Now the former European Central Bank vice president will have to secure the country’s euro membership for a second time.

Papademos, who has never held elected office, helped foster economic growth rates that surpassed Germany’s and France’s in his eight years at Greece’s central bank before moving to the ECB in 2002. Most recently a visiting professor at Harvard University in Cambridge, Massachusetts, and an adviser to departing Prime Minister George Papandreou, Papademos takes over a country weeks from being unable to meet its debt obligations…

Appointed Greek central bank chief in 1994, Papademos presided over an economy lagging behind its European counterparts. Growth had averaged 1.3 percent in the previous decade, almost half the average of the other 11 countries preparing to join the euro.

Papademos, who described his monetary strategy as “eclectic” in a 2001 interview with Institutional Investor magazine, stabilized the drachma and inflation in his early years at the Greek central bank.

In March 1998, Greece devalued the drachma by 14 percent against a basket of European currencies to join the EU’s exchange-rate mechanism. Papademos then kept the bank’s main rate above 10 percent for the next two years to curb consumer prices following the devaluation. By 2000, inflation, which had been 14.2 percent in 1993, slowed to 3.2 percent.

Papademos’s legacy as central bank governor was blown apart by the debt crisis that’s ricocheting through world markets. As Papandreou’s government, elected two years ago, revealed that the country’s budget deficit was more than double the previous administration’s effort, investors dumped the country’s bonds, forcing the country to seek a European Union-led bailout.

The interests of politically endowed banking cartel are evidently being protected through revolving door politics.

Obviously the same story, but only different personalities involved.

Quote of the Day: The Myth of the Beneficial Bureaucracy

From Professor Michael Rozeff (bold emphasis mine)

As a rule, the regulatory agencies all produce abominable regulations, and it doesn't matter who is heading them. They are all bureaucratic. They all create an impossible administrative law apparatus that lacks justice. They all are out of control of their creators, the Congress. There is no such thing as a beneficial regulatory agency. They are a fourth branch of government that combines legislative, executive, and judicial functions, and that's worse than even the ordinary government, if such a thing is possible.

There is no one to "take a good look" at regulators and their regulations on an ongoing basis. Congressmen certainly can't do it and don't do it unless there is such a big squawk that they have to.

It's a near certainty that a close look at any agency will uncover all sorts of cozy and corrupt relations with those whom they regulate. It will uncover cushy and protected jobs. There is probably a library of books written by ex-bureaucrats that provide gory details of the agency blunders and poor organizations.

It is pointless to "look into" these bureaucracies. They need to be completely eliminated but if that is too radical, then I always have the other radical suggestion, which is that all those Americans who want to be regulated by these agencies volunteer to be so controlled; and those of us who do not want to be run by these agencies gain our freedom to live our lives free from their regulations.

To add to this stirring quote, the above reminds me of the frequent investigations conducted by the local congress/senate mostly on corruption charges or on controversial issues that draws much of the public’s attention.

Yet these public sessions are held hardly because of the pronounced intent of “in aid of legislation" to cleanse or reform an innately and incorrigibly corrupt system but for the opportunity to grandstand to the public, generate votes to prolong their tenures and their hold on political privileges, and most importantly, to expand their stranglehold over society with even more arbitrary rules which comes with more diversion of resources from the economy to fund the relentless expansions of regulatory agencies or the bureaucracy to enforce these feckless and corruption enhancing laws. This is another example of political insanity—doing the same thing over and over and expecting different results—except that these web of controls expand to cover different facets of our social life.

The public’s attention are always being diverted or framed to where the political establishment wants them to look at. To analogize, in a sports game, we cheer at the game itself but hardly examine the process from which the game came about.

It’s a wonder how these supposed investigators with all their unchecked hold over humongous amounts of pork barrels will be able to exorcise corruption. This would seem like the proverbial pot calling the kettle black.

The unfortunate nature of politics is that credit is usually gained from the degree of sensationalism extracted from the blaming of personalities than from the system.

And it is why the framework of the incumbent political institutions represents “an impossible administrative law apparatus that lacks justice” as Professor Rozeff writes. Corrupt laws which empowers corrupt political enforcement agencies will never deliver justice.

All the rest is public relations travesty.

Philippine Corruption: Not Because Of Political Culture, But Due To State Capitalism

In watching the live coverage of the unfolding Libya unrest at the Al Jazeera.net, a news segment reported on the 25^th celebration of People’s Power revolution here, in the Philippines.

Al Jazeera interviewed a local political analyst who said that the People Power has not vanquished many of the deeply rooted deficiencies, primarily corruption, in the Philippine society mainly due to “political culture”.

This is a vivid example of misreading the effects as the cause.

Where the definition of Culture, according to wikipedia is “the set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group”, this only means that what has been represented as “political culture” is actually the embedded incentives that has shaped “the set of shared attitudes, values, goals, and practices” of society.

Obviously, corruption as a culture didn’t emerge mainly from tradition or religion, but from arbitrary “noble sounding” anti-competitive and redistributive welfare laws which has underpinned the local political economic platform.

Given the social democratic ethos of the local society, where government has been romanticized as supposedly the nation’s “would be” saviour, and where the failure to attain government utopia has been attributed to the lack of virtuosity, then obviously, but unknown to many including the above expert, economic dependence based on non-price sensitive political distribution of resources only nurtures and feeds on corruption.

This is because society’s main energy have been directed towards lobbying, in order to secure politically granted economic rents, instead of competing to satisfy consumers via voluntary exchanges.

And that’s how corruption emerges—by determining society’s winners and the losers, the politically granted winners rewards or shares the rent with the political authorities.

So the maxim “it is NOT what you now but WHO you know” encapsulates the operating environment under the political culture of overregulation and patron-client based corruption or state/crony capitalism.

Thus the expectations of a virtuous government represents as no less than signs of ignorance of how the politics of violence has and will always be wielded. And that’s why we keep getting the same set of recycled leaders to the dismay of the many wrongheaded deluded idealists.

The only way to reconfigure “political culture” is NOT to elect or put to power a virtuous central planner, which is an illusion and a source of sustained frustrations, but to divert the energy or activities of the population from politics to productive voluntary exchanges.

We have to remember that governments comprise of human beings who suffers from the same flaws as everyone else, i.e. subject to personal biases, lack of knowledge, operates on preferred networks and comfort zones, has their own distinct and most likely flawed perception and interpretation of events and etc...

Importantly politicians and the bureaucrats are also self interested agents whom are subject to personal preferences and needs—career, self esteem or etc…

The only difference is that they have the mandate to use force over us.

So the power to control and the human aspect of supposed “public servants” makes them vulnerable to asymmetric (patron) exchanges with select economic clients.

Thereby the only way to eradicate corruption is by reducing dependence on political power as means to distribute economic opportunities, which alternatively also means expanding society’s reliance on the price based market system.

We can start with the junking of many of inequitable and protectionist laws and streamlining of the others.

In short, let the rule of law and respect of property rights prevail, culture will follow.

Corruption In The Philippine Military: What Else is New?

Today’s headlines reported a 'surprise' bombshell-a corruption expose within the Philippine Military.

This from the Inquirer, (bold emphasis mine)

A retired lieutenant colonel on Thursday made a surprise appearance at the Senate and disclosed how he and his ex-bosses allegedly amassed wealth, with a large portion of the loot taken from soldiers’ salaries.

Seated on a wheelchair following a stroke, George Rabusa dropped a bombshell: that Angelo Reyes, a former Armed Forces chief of staff, received a send-off gift (“pabaon”) of “not less than” P50 million when he retired in 2001.

Rabusa said he personally delivered the cash to the “White House,” Reyes’ then quarters at Camp Aguinaldo, that year. He said he was accompanied by the then military comptroller, Lt. Gen. Jacinto Ligot.

“We had to convert [the money] to dollars because it was very bulky,” Rabusa said during the Senate blue ribbon committee’s initial hearing on the plea bargain between government prosecutors and ex-military comptroller Carlos Garcia.

On top of the purported “pabaon,” Reyes, who later became defense secretary, allegedly received a monthly take of at least P5 million—or around P100 million in his 20 months as AFP chief of staff. Rabusa said he and Ligot made the monthly deliveries.

Rabusa said Reyes’ office also received another P5 million monthly, but added that the amount was spent for office needs and was not necessarily pocketed by Reyes.

Yawn.

So what else is new?

Almost everyone would chime in to passionately condemn on such ‘repugnant’ act. But this perspective has been largely premised on the moral aspects of human frailties.

While people see this as something to seethe at, I see this more of a humdrum, if not an amusement. That’s because the mainstream hardly ever discusses on what incentivizes public officials to resort to such ‘detestable’ action. The assumption has always been premised on virtuosity and personality, and hardly on the system which fosters this.

People rarely see that corruption is mainly a product of the political distribution of resources.

A society whose economic opportunities have been controlled by politics would end up having the same or repeated repercussions, thus a vicious cycle—which is why there is nothing new.

As Ludwig von Mises wrote,

``Public opinion is not mistaken if it scents corruption everywhere in the interventionist state. The corruptibility of the politicians, representatives, and officials is the very foundation that carries the system.”

And government officials as human beings are tempted by the same follies as anyone else, except that they advantageously operate with the power of legal coercion behind them.

And a bloated bureaucracy, regardless of which government agency, tends to fall into the same trap, as political favors, concessions and privileges are extended or exchanged within the bureaucracy or with select entities in the private sector, under the aegis of political mandate, that frequently leads to the same ‘perverted’ incentives.

Here is a simple (Occam Razor’s-law of parsimony) solution: starve the beast and corruption should fade naturally.

The Politics of The Rice Scam

This from today’s Inquirer

An NFA audit found that 8 of the 10 awardees of the rice importation quotas in Luzon were all cooperatives with offices in Pangasinan province, said a source privy to a Malacañang probe of the previous administration’s massive rice importation program that the NFA said was overpriced....

In his report to Mr. Aquino last week, Banayo said the private importation deals were given to favored contractors supposedly through a questionable first-come-first-served scheme.

“Among the findings were: fictitious cooperatives and corporations were given the quotas, and qualifications standards were extremely liberal,” Banayo said in his executive summary submitted to the President.

Some comments...

In politics, the basic objective for the politicians is to grab credit (aimed at attaining high approval rating for election purposes) at the expense of another. This is usually coursed through the virtuosity (I am clean, the other is dirty) route. It represents crab mentality at its finest.

This issue is actually a revival. We dealt with this here: Government Failure: Imported Surplus Rice

The above news account exemplifies-special access or political privileges, privatizing gains while socializing losses or importantly the fundamental symptoms of the maladies of political distribution empowered or enabled by arbitrary laws. This maybe called either crony capitalism or rent seeking (state capitalism) or both.

Since it is the state who determines “who gets what” or the politically picking winners and losers (and not via the market forces through the price mechanism), the obvious result is inefficiencies, distortions, wastages (overpricing), and corruption. And who pays for all these? Obviously, the taxpayers.

Once politics is involved, economic calculation is set aside, as politics become the driver of the attendant actions by the leadership to redistribute resources. “Overpricing” thus becomes a politically subjective factor. (Based on which price level? As determined by whom? And when?)

This of course, is related to the problems of time consistency or the political sustainability of the policy over changing circumstances. The rice scam was an urgent issue during the Typhoon days of Pepeng and Ondoy. Today, with the urgency lost, wrong and questionable political decisions become a fodder for politicking.

This also represents as the knowledge problem, where the political leadership don’t know the costs and consequences of their actions (since they are just human) and the where unintended consequences of politically based actions extrapolate to a huge negative externality (side effect) on the populace.

The point is the problem isn’t mainly based on the virtues of the political leadership, but on the system that encourages such errant actions and malfeasances. Personality based politics won't solve the problem.

Lastly when the political leadership says “Let us reform the NFA. Let us reform its mandate so it will be much better”, the answer shouldn’t be in the direction of more political concentration and distribution of resources, but economic liberalization from the clutches of power hungry politicians.

In short, let the markets decide!

The Corrupting Influence of Political Power

Remember J. J. Tolkien’s The Lord of the Rings where “One Ring to rule the other Rings of Power” changed the behaviour of those who got hold of the powerful exotic ring by making them addicted to power.

Well, this has empirical basis.

According to Cato’s Julian Sanchez, (bold highlights mine)

The humor site Cracked rounds up some serious social science on the psychological effects of power and authority. The results are sobering—if not entirely surprising. When people in experimental environments were made to feel as though they were powerful—either by recalling actual instances for their lives or by being placed in simulated positions of power for a few hours—researchers found that they became less compassionate, less prone to take the perspective of others, more able to lie without feeling guilty about it, and more prone to consider themselves exempt from the rules and standards they righteously insist apply to others. What’s striking is how quickly and easily the experimenters elicited dramatic behavioral differences given that (unlike people who actively seek power) their “powerful” and control groups were randomly chosen.

Simply said, entities who acquire political power would most likely see a shift in perspectives and in attitudes. In short, ideology or platform becomes a secondary issue to ego.

And this is one reason why public image seems to be a foremost concern for politcos. Aside from the need to get re-elected they see popularity as feeding on their bloated self-esteem.

And applied to politics, this seems like a prominent reason why the public’s romanticized expectations of “changes” from new leadership usually ends up in frustration—the public fails to account for the risks of individual character shifts of the political leaders when assuming power.

Again Mr. Sanchez,

It’s useful to keep this in mind because, while the overwhelming lesson of the last half century of social psychology is that situational influences can easily swamp the effect of individual differences in character, our political rhetoric takes scant account of this. Political campaigns focus heavily on questions of “character”—which especially in the case of “outsider” campaigns should be of limited predictive value....The remedy is, invariably, to replace them in positions of power with better people from the other team. These social science results suggest that this is unlikely to work: The problem is power itself.

Lord Acton was right, "Power tends to corrupt, and absolute power corrupts absolutely.”

Distinguishing Political Indentity From Ideology

This is excellent stuff from Brink Lindsey on Partisanship published at the Cato Unbound. (Pointer to Bryan Caplan of Econlog).

Here, Mr. Lindsey observes that partisanship is much about identity more than ideology.

Here is an excerpt: (bold highlights mine)

``It’s not just that partisans are vulnerable to believing fatuous nonsense. It’s that their beliefs, whether sensible or otherwise, about a whole range of empirical questions are determined by their political identity. There’s no epistemologically sound reason why one’s opinion about, say, the effects of gun control should predict one’s opinion about whether humans have contributed to climate change or how well Mexican immigrants are assimilating — these things have absolutely nothing to do with each other. Yet the fact is that views on these and a host of other matters are indeed highly correlated with each other. And the reason is that people start with political identities and then move to opinions about how the world works, not vice versa."

``So yes, most partisans are “better informed” than most independents, because they have a political identity that motivates them to have opinions and then tells them which ones to have as well as the reasons for having them. Consequently, partisans may have more information in their heads, but their partisanship ensures that this information is riddled with biases and errors and then shields those biases and errors from scrutiny. This is not a state of affairs worth defending.

``Virtue as well as truth is a casualty of partisan zeal. Even when partisans know what the score is, they’re constantly tempted to shade the truth, or at least keep silent, in order to be a good team player. Recall, for example, the fury unleashed this past fall on the handful of conservative commentators who were willing to admit the obvious: Sarah Palin was obviously, embarrassingly unprepared for the office she was seeking. In coalitional psychology, the only thing worse than an infidel is a heretic, and that fact ensures that most partisans keep their heterodox opinions to themselves. Good for the team, perhaps, but bad for the soul — and the republic."

My comment:

Mr. Lindsey' observation, in my opinion is spot on.

In the Philippines, the partisan crowd think that they argue about issues, but all the while their arguments revolve around identity or personality. Definitely not ideology. That's why I call this Personality Based politics, where leadership preferences are based mainly on popularity, symbolism or connections.

For example, the public's impression of corruption appears mainly a moral issue. Lost in the argument is the interrelationship between regulatory structure and how these affects behavior of affected agents, the bloated bureaucracy, the quality and web of laws, the incentives governing the officials and the bureaucracy, patronage system, election spending, restrictions, and many more.

And it's why the elixir of "clean" government won't happen. Not when the critical decisions affecting the economy are determined politically.

It's just that democracy allows people to vent changes in terms of hope-even when they are false hopes.

In addition, it is also true that highly partisan people engage in analysis that are highly biased and full of logical errors. Although this would seem like economic creed, perhaps identity indeed is more the culprit for such incoherence. The confusion perhaps stems from forcing to fit data mined facts to the belief adhered to by the leaders.

Mr. Lindsey sees a change in the shape of politics as a sign of hope,

``In America until relatively recently, and in less developed democracies today, the predominant form of partisanship has been a concrete, personal loyalty to specific leaders and comrades. This is the partisanship of patronage and clientelism — of the Jacksonian spoils system, Tammany Hall, and the Chicago machine. In the twilight of this phase of American democracy, 64-year-old Illinois state legislator John G. Fary won a seat to Congress and made this statement of his plans: “I will go to Washington to help represent Mayor Daley. For twenty-one years, I represented the mayor in the legislature, and he was always right.”

``In the newer style of partisanship, which has emerged with a richer and better educated electorate, loyalty has grown more abstract. Now shared allegiance to broad principles of public policy is the defining element of party ID. Parties have grown more ideological, and so have partisans. Polarization is the name we’ve given to this development.

``I regard the shift toward a more ideological politics as progress. Broadly speaking, we have been moving away from politics as an amoral struggle between rival gangs and in the direction of politics as a contest of competing values. Because people have differing values, and assign different weights to the values they share, there can never be an end to politics. Accordingly, even in an ideal world where all citizens are completely rational and equally public-spirited, a politics and thus a partisanship of values would still be necessary. Here, then, in the realm of values, is the purest and most durable source of political identity."

My comment: Somehow, the web should be able to amplify on such shift as people learn more about ideals and form groups 'tribes' that eventually command the public's attention, draw a larger following and eventually acquire political heft.

Albeit perhaps, this would take longer to happen in the Philippines. Nevertheless, as a Confucian saying goes, a journey of a thousand miles begin with a single step.

Popularity Based Politics Equals Waking Up To Frustration

It is election season anew in the Philippines. Yet like in most democracies, elections are turning out to be merely popularity contests.

People are made to believe that alleged changes brought forth by a new leadership, rather than changes in the system, is what matters most. Candidates are chosen based on symbolism and the free goodies that they offer.

Little do the public understand, as Rev. Edmund Optiz warned that ``The state being what it is, it matters little who holds office and wields its inordinate powers. This truth is dawning on some persons today; but the general public, however disillusioned with politicians, still has faith in politics as the means of curing all the ills of society and improving the quality of life. Hopefully, people will someday realize that what counts is the overextension of state power, not who holds public office. The important thing is to refute statist ideas, whatever their guise..."

Real life experiences should serve as examples...

In the US, President Obama had been ushered in as the most popular elected president.

And as we noted in US Politics: Extrapolating Hope and Change to Presidential Term Realities, ``Yet high approval ratings tend to be followed by a collapse over the years."

It's barely been a year and as recently noted in President Obama's Popularity Falling Back To Reality, "Americans seem to be waking up to the harsh realities of life".

Hope appears as being interchanged with unmet expectations or frustrations.

Take this Bloomberg report, ``President Barack Obama’s approval rating has fallen below 50 percent for the first time in polling by Quinnipiac University as U.S. voter discontent grows over the war in Afghanistan.

``Obama’s job approval rating fell to 48 percent in the Nov. 9-16 survey of registered voters nationwide by the Hamden, Connecticut-based university, with 42 percent polled saying they disapproved of the job he is doing."

“In politics, symbols matter, and this is not a good symbol for the White House,” Peter Brown, assistant director of the Quinnipiac University Polling Institute, said in a statement."

It's not just in Quinnipiac University but also among major pollsters...

As Gallup

ZogbyRasmussenreports

Pew Research

And even in Google search trends

So while Wall Street maybe cheering on the recent gains from rising markets, such optimism isn't being translated to the main street.

Our point is: we should realize that economic freedom matters more than delusional popularity contests.