Stagflation: Manufacturing a way out (1)
Among philosophical dilettantes, it’s fashionable to misrepresent the likes of Plato as antidemocracy thinkers. This could be no farther from the truth. For those of us who had the privilege of studying actual political philosophy under the likes of Chicago University-trained Felipe Miranda—and later under philosophy professors in places like Oxford—we had no choice but to read the classics in full. Upon closer reading, it’s clear that Plato was not against democracy per se, but instead against its perversion by demagogues on the back of popular discontent with oligarchs.
In “The Laws,” Plato introduced a concept that is viscerally relatable to a 21st-century reader: “theatrocracy” (theatrokratia). In particular, he was referring to a perverted political system, whereby reason and facts were supplanted by the “rule by the audience.” What you had was performative politics and poetic vacuity, whereby the “sovereignty of the theater” enables jesters, sophists, and populists to co-opt well-intentioned yet decaying institutions. Theatrocracy represented a state of cultural degradation built on a simulacrum of post-truth pluralism. Sounds eerily familiar, right?
After months of methodical cross-examination of evidence, receipts, and authoritative witnesses, it must have become crystal clear that the Duterte dynasty represents precisely the kind of ”budol politics” Greek philosophers were warning about thousands of years ago. Sadly, however, the Dutertes’ cult-like following means many of our folks will remain loyal to them against all reason and facts. The current Vice President might end up in jail eventually, but any Duterte-adjacent candidate could still count on a fifth of our voters. Philippine democracy, however, is not only bedeviled by “simpleng buhay” demagogues.
While most of our politicians are precisely what Greek thinkers forewarned against, our technocrats have been nowhere as competent as Plato’s ”philosopher kings.” Unlike civil servants in elite bureaucracies in places such as Britain—the best, including countless prime ministers, usually took Philosophy, Politics, and Economics in Oxford—ours are mostly unidimensional lawyers, who know little about economics, and formally trained economists, who are more accountants than well-rounded social scientists a la Nobel-winning Daron Acemoglu or Joseph Stiglitz. How I wish we had more of the likes of Dean Raul Fabella and professors Gerardo Sicat, Cielito Habito, and Emmanuel de Dios. Few among prominent young economists in this country have shown the world-class dexterity of the aforementioned from the older generation.
Unsurprisingly, we have a country that has both failing democratic institutions and suboptimal economics. Are we surprised then that almost half a century after Ferdinand Marcos Sr.’s dictatorship’s ambitious yet devastatingly failed economic policies, the Philippines is yet again hitting a new economic wall? While the Marcos regime thrived on demagoguery and crony capitalism, the post-Edsa regime has been dominated by dynastic politics, market fundamentalism, and general technocratic mediocrity. The former had too much of corrupt state intervention, while the latter had too little of effective state participation in the economy.
It should come as no surprise, then, that the Philippines has been the most fragile economy in the region. Despite high dependence on energy imports from the Persian Gulf, state-driven economies, such as China, have preserved their economic stability. Meanwhile, our regional peers, such as Vietnam, another nation with a strong developmental state, have been booming on the back of strong manufacturing exports. As for high-tech industrialized nations such as South Korea and Taiwan, they are having their first boom years in decades, thanks to their exports of high-grade semiconductors.
Contrast this with the Philippines, which has been simultaneously undermined by dynastic corruption scandals (torpedoing government infrastructure spending) and, just as bad, a lack of industrial resilience. We got no state-driven strategic petroleum reserves. And as the exceptional technocrat-politician Joey Salceda has argued, we also abandoned our domestic refinery sector, thus leaving us at the mercy of a brutal global energy market.
By foolishly neglecting both our industrial base (out of fear of repeating Marcos-era cronyism) and undermining Aquino-era good governance reforms (Duterte reintroduced pork barrel on steroids), our elite has left us economically helpless. With our growth rates more than halved and inflation more than twice historical trends, the Philippines is confronting nothing less than a “stagflation lite.” In my next column, I will discuss why adopting a 21st-century industrial policy is our only and best way out of our crisis.
—————-
