Dilawan: Rise and fall of the EDSA regime - Duterte and the Next Wave

            

If Marcos was the logical conclusion of the Old Republic, which was built on a feudal society, where “a few enjoyed the fat of the land, and the many suffered”, then the natural extension of our post-EDSA republic, with its monopolistic capitalist model, is Duterte. The internal contradictions of each society ultimately brought about the conditions for the emergence of these leaders.

The lost opportunity of EDSA was that rather than building a more just and humane society, we simply re-incarnated the old one with the result of entrapping many Filipinos into a life of servitude to the vagaries of the market, as we pursued a neoliberal model of development.

Of Wedding Feasts and Famines

In the media-driven frenzy of royal-watching, the wedding between Kate and Wills harks back to a time when the pomp and pageantry of the monarchy provided a diversion from the daily struggles of their subjects. In England, as late as the 1930s, poor families struggled with the problem of hunger. Yet as George Orwell wrote, 

The basis of their diet, therefore, is white bread and margarine, corned beef, sugared tea and potatoes -- an appalling diet. Would it not be better if they spent more money on wholesome things like oranges and wholemeal bread or if they even, like the writer of the letter to the New Statesman, saved on fuel and ate their carrots raw? Yes, it would, but the point is that no ordinary human being is ever going to do such a thing. The ordinary human being would sooner starve than live on brown bread and raw carrots.

The May/June 2011 online version of the magazine Foreign Policy is devoted to the problems associated with food price inflation and the impact this would have on poverty and hunger. The development aid community has flagged this as a potential cause for dragging many in the middle to low income countries into poverty.

Calls have been issued to address this pressing problem. But in a piece written by Abhijit Banerjee and Esther Duflo, the general consensus regarding the issue is challenged. What if the experts are wrong, they ask.What if the problem of hunger is not caused by the lack of affordable food? Nobel Prize winning economist Amartya Sen has famously pointed to the fact that famines have only occurred in recent times in countries that lacked democratic institutions of accountability. Poor governance rather than a lack of food supply creates extreme hunger.

In India where Sen is from, despite the rise in per capita income, per capita caloric intake has declined. The piece points out that

(t)he change is not driven by declining incomes; by all accounts, Indians are making more money than ever before. Nor is it because of rising food prices -- between the early 1980s and 2005, food prices declined relative to the prices of other things, both in rural and urban India. Although food prices have increased again since 2005, Indians began eating less precisely when the price of food was going down.

What if the problem of hunger is not driven by a lack of affordable food, but the fact that the poor demand a different variety of food? They use one example to bear this out:

Using price data from the Philippines, we calculated the cost of the cheapest diet sufficient to give 2,400 calories. It would cost only about 21 cents a day, very affordable even for the very poor (the worldwide poverty line is set at roughly a dollar per day). The catch is, it would involve eating only bananas and eggs, something no one would like to do day in, day out. But so long as people are prepared to eat bananas and eggs when they need to, we should find very few people stuck in poverty because they do not get enough to eat.

To provide more evidence of this, they cite a study conducted in two regions of China where researchers offered randomly selected poor households a large subsidy on the price of basic staples believing this would result in greater consumption of food. Instead they found that:

(o)verall, the caloric intake of those who received the subsidy did not increase (and may even have decreased), despite the fact that their purchasing power had increased. Nor did the nutritional content improve in any other sense. The likely reason is that because the rice and wheat noodles were cheap but not particularly tasty, feeling richer might actually have made them consume less of those staples. 

They go on to point out the possible reasons why the poor might be eating less. Better water and sanitation for instance may lead to a lower incidence of nutrition depleting diseases. Women in rural villages which now have access to water no longer need to spend a good deal of effort fetching water to and from rivers. Aside from that is the penchant of the poor to spend on non-essentials like vices and other forms of entertainment (televisions, DVDs, mobile phones, movies, etc).

Many programs aimed at boosting protein and iodized salt intake have been met with a dismal response from poor households. It seems that when it comes to deciding what to spend their income on, they seem to have other priorities.

In The Pursuit of Happiness

The release of the report by the Commission on the Measurement of Economic Performance and Social Progress led by two Nobel Laureattes Joseph Stiglitz and Amartya Sen on 14 September has stimulated discussion on whether the "growth fetish" or the "GDP fetish" as Stiglitz puts it is somewhat misplaced.

The report notes that certain aspects of national income accounting could be responsible for providing misleading signals to us in our performance oriented world. These include the non-valuation of non-market activity and household related labour, the inclusion of environmentally destructive or socially undesireable activity, the undervaluation of quality improvements in products and the focus on inputs such as government expenditure rather than the efficiency and effectiveness of such inputs in providing desireable outcomes.

One of the more notable recommendations made by the commission had to do with incorporating other indicators of social wellbeing along with GDP to provide a more well-rounded picture of progress and development given the advances in econometric techniques that make such measurement possible.

The World Values Survey has been doing this for years. Measuring country results for both GDP per capita adjusted for purchasing power and a thing called the Subjective Well Being Index, the survey results has provided an "arc of happiness" that depicts the way in which economic well being contributes to overall well being. This arc suggests that past a certain level of income, say US$10 000 per annum, economic growth provides a diminishing marginal return on human happiness.

Back to the commission: one other important observation made was that reducing social inequality should be high up on the agenda of any government. As Stiglitz notes,

This means that there is increasing disparity between average (mean) income and the median income (that of the "typical" person, whose income lies in the middle of the distribution of all incomes).

Dealing with income inequality could mean addressing both sides of the distribution. At the top end, the compensation of corporate executives has to be governed properly, while on the opposite end, the need to improve access to education, healthcare and jobs for the most socially disadvantaged groups must be prioritised.