Human Rights Lawyers Discuss Market Economy
Human rights and market economy are two words normally not associated
with each other, yet there is a strong connection. To discuss this,
the Friedrich Naumann Foundation (FNF) conducted a half-day seminar
for Ateneo Human Rights Center (AHRC) staff and interns on 14 May
2008 in Makati City.
“This is the first time the Center looked at human rights
from the perspective of economics,” said AHRC Executive
Director Carlos Medina Jr. “This gave us a better perspective
of things. For example it is assumed that government should
provide basic services, but actually government
should provide for the correct environment [for
the market to supply these],” he said.
FNF Resident Representative Siegfried Herzog started the seminar
with a discussion on the
basics of market economy. He explained how the free market
can be understood as an instrument of decision-making. It is very
good at directing goods and services to their optimum usage, creating
win-win situations for producers and consumers. He also stressed
the important role government has in providing a strong institutional
framework for this to work well. This includes defining and protecting
property rights and effective contract enforcement. In other words,
strong and impartial rule of law is required, which is
of course a key concern of human rights advocates.
Government, however, often intervenes directly in the market
mechanism through price control, subsidies, taxes, tariffs and
monopolies. Reasons are either political or quick fix measures
as the negative — and usually severe — effects of
these distortions in the market will not be felt at once. Herzog
argued that
government would be more efficient
in
creating equal access to the market thereby helping
the disadvantaged to compete on better terms. This is
done through crafting and implementing
laws against unfair
competition and penalizing business externalities like environmental
degradation.
Participants then discussed these issues in groups. They specifically
looked at: rice subsidies, minimum wage fixing, creation of monopolies
and cartels and effects of taxes and tariffs. In each case, the
challenge was to analyze the potential positive and negative effects
both in the short and the long term.
The last part of the seminar dealt with the economic reality facing
the poor. Their economic progress is hampered by burdensome
regulation that keeps their businesses
in the informal sector. This puts them at the mercy
of politicians and bureaucrats who will protect them for bribes
or votes. The obstacles to growth remain formidable.
Moreover, for a market to function property rights is needed.
The act of
buying and selling is really a
transfer
of property rights. Assets with clear property rights
can become capital because the
financial sector
can then c
reate credit using these as collaterals.
Physical control of assets without the existence of transferable
property rights by contrast
does not allow the creation
of credit and thus limits investment and growth. Thus,
the
greatest obstruction the poor have is they
often
do not have well-defined property rights
even if they control assets like a slum hut. Giving the poor access
to efficient property rights through land reform or making it
easier for squatters to have land titles would allow them to invest
in their property and to access credit more easily. Studies of
the land reform program in the Philippines have indeed found this
to be true.
The real challenge therefore is to make
the market work for the poor. That means bringing
the benefits of a well-designed and impartially implemented rule
of law to their daily lives. This task is one that advocates of
human rights and alternative lawyering have been concerned with
all along.
