Freedom and Market Economy

(September 07 - 19, 2003)
by Angelico Mercader

Angelico Mercader

The IAF (International Academy for Leadership) seminar on Freedom and Market economy brought together some 25 colleagues from the various offices of the Friedrich Naumann Stiftung worldwide, including myself – the Communications Officer of the Foundation’s Philippine Office.

Most of us participants were regular local staff and were no experts in the field of economics -- market economy, in particular. This commonality opened interesting discussions which allowed us to dig deep into the subject. Hence the rich sharing of country situations -- on the degree of freedom, the hindrances and opportunities for freedom and how market economy is related to these conditions.

This extensive exchange through working groups, paralleled by lectures on key concepts, brought me to ponder on the case of my own country with issues I feel strong about.

So Much Freedom, No Wealth

An attractive proposition during the course of the seminar is the notion that the more freedom a society has, the wealthier it could be. This is supported by empirical data from the Economic Freedom Index which shows greater economic growth for countries that have more economic freedom. Further, nations that have a high human rights record are those that are wealthy, as exhibited by data from the World Human Rights Guide, Oxford: OUP, 1992.

This makes me wonder about the irony of freedom and economic development in the Philippines. While we Filipinos enjoy so much freedom, majority of our people remain poor.

In one of our sessions, we enumerated country-specific obstacles to attaining freedom and I couldn’t help but admit that one problem in the Philippines is that we don’t seem to know what value there is in the freedom we now enjoy. We love fighting for freedom, but when we attain it, we take it for granted. Freedom has always been “from” oppression and not the freedom “to” prosper or “for” self-fulfillment.

We couldn’t internalize freedom as the right to determine our lives, to educate ourselves, build on our capacities, develop our potentials and excel in our chosen field and prosper on our own merits. That it means having the free will to do as we deem fit so long as we do not infringe on the rights of others and we act within the rule of law.

Worse, we find it difficult to be responsible with our freedom. It’s as if our freedom is a given, without accountability.

Then we tend to abuse our rights but are easily paranoid by situations which we deem as threats to freedom. But it is not freedom what we are protecting. Rather, it is a comfort zone where we shelter ourselves with the convenience of not having to be responsible or accountable for our own well-being. We complain for what our government could not provide for us. We habitually blame government for our miseries.

What hinders our economic development is our lack of a sense of responsibility which has worsened with our culture of dependency. Consequently, we deprive ourselves of our freedom for economic prosperity.

In one of our sessions, I learned our response to our culture of dependency -- the principle of subsidiarity. The tasks of fulfilling the individual’s needs should be performed by the smallest possible entity – the individual himself. This task is not a duty but a right. Where he could not provide, the next possible entity should – such as family or community as a matter of solidarity, which is the individual’s duty to everyone. The state must then protect this right through its system of laws.

Thus we must strive to work for our own needs and stop depending or even blaming others for our circumstances. But at the same time, we must be in a position to assist others to help themselves.

In our own words, sariling-sikap (self-reliance) and bayanihan (sense of community).

To make our freedom work for our economic plight, we need to take stock and be accountable for our scarcity. We need a greater sense of resourcefulness if we want to prosper – where anyone could be creative, enterprising and competitive.

Fear of Competittion

I couldn’t help but agree to the proposition of market economy where it encourages competition that the fittest survives.

Many have argued that there is no real competition since the “big players” bully the smaller players for their own advantage. But I would have to believe Adam Smith when he said (at least how I understood him) that in a competition, each competing individual’s interest serves as the common good and that it pays one to specialize on what one does best compared to another, even though one can do everything better than the other – or the law of comparative advantage.

We Filipinos, in my observation, are easily intimidated by competition and tend to be defeatist. We are threatened by the big players, instead of taking on the challenge to compete with them.

I would attribute this (as I’ve learned many times in history class) to our colonial mentality where, through many generations, we have developed in our psyche this belief that anything foreign is better than what is local, in our own words, istateside (from the States). Evidently, our trivial brand consciousness has brought us to luring ourselves with the feel-good experience of wearing even just imitations or fake brand names – just as long as they are, istateside.

This retreat then brings us to build our own economic arena, where we settle for mediocre standards. This way, we compete only with our own, without the need to strive for superior quality. It’s a pity that in this own arena of ours, counterfeit products (dvd’s, software, branded apparel, etc.) have evolved to be a growing industry. Worse, also in that arena are the rich families, who own our country, protecting their monopolies.

If this is the kind of mind set that we Filipinos will bring to the global market, then we are obviously not “fit” to survive the competition. Before we even start complaining about overbearing foreign competitors, perhaps we should first assess our fighting stance.

Sure there are exceptions. Many Filipino entrepreneurs are succeeding today. In fact, in major cities and certain industries, we now enjoy Filipino products and services of even better quality, if not the same, compared to foreign brands.

But the bottom line remains – majority of the 80 million Filipinos remain poor.

Our fear of competition, to me, is deeply rooted in our fear of ourselves – of feeling “unworthy” and “inferior.” Taking responsibility for ourselves also means snapping out of our inhibitions and asserting ourselves, believing in our capacities, building on our skills and being prepared to take on any challenge.

Nationalism as Strenght to Compete

In many of our discussions, nationalism was identified as a hindrance to opening up markets in many countries. I was bothered by this and had it in my heart until I had the chance to ask about it on our last day.

I asked our facilitator, Dr. Hartman about how nationalism influenced development in Germany to be able to compete globally. Much to my content, he affirmed my supposition – that a sense of pride in one’s nation – how it suffered and how it has risen, a sense of identity as Germans – an appreciation of their heritage and value for who they are as a people – was a driving force in their progress.

Their nationalism was not an excuse but served as an inspiration to rise up and take on the challenge. So did Japan, South Korea, Singapore and other developing nations.

Our young history may have taught us Filipinos about nationalism as a movement against foreign intervention, foreign influence, colonialism, etc.

If only we can transcend that and take nationalism as an affirmation of our identity as a people -- that we too, can be as creative or ingenious as Americans or Germans; if we can appreciate our heritage and see the value of who we really are – and build on our own identity – then perhaps we can use that pride as our driving force too.

Empowering the Merchants

It seems that the dynamics of the global market may always put any country on either side of the competition. Conditions may and may not be favorable on various circumstances.

While world leaders and economic experts continue to debate, the fact is life has to go on. We cannot suspend our businesses until issues have been resolved. We cannot stop the emergence of new businesses for that matter.

As we find our country, in many ways, competing in the world market, what it boils down to, it seems, is empowering our merchants be highly competitive. So that whatever circumstances arise, they may be in a position to adapt and continue surviving, if not succeeding.

Further, it also boils down to empowering the people to be able to create their own businesses and be successful in their endeavor.

But empowerment takes more than just building a business or creating a conducive environment for business. As a prerequisite it involves developing in each individual an entrepreneurial spirit and a values system that emphasizes self-reliance, self-worth, self-actualization and a sense of pride in our nationhood.

This perhaps, is the role of education in empowering the merchants (or “would be” merchants) of our country. All the training that the education system provides in terms of skills, technology, business management, etc, may be futile if in each individual there is no the drive, and consciousness to work for his own prosperity.

Liberalism and Market Economy

In the way that the seminar has made me appreciate liberalism, I would surmise that the key for Filipinos to participate successfully in a growing market economy is the propagation of self-empowerment within the values system of every Filipino.

Market economy encourages free competition. Perhaps the smallest competing entity is the individual.