Opportunity to reform market economy

Published August 3, 2020, 10:00 PM

by Dr. Bernardo M. Villegas

The crisis brought about by the COVID-19 pandemic provides a singular opportunity to significantly reform the so-called free market economy that has been embraced by countries of different political shades and persuasions, from socialist China to capitalist America.  Although it cannot be denied that the experiment with market-oriented economic policies by China has resulted in the liberation from dehumanizing poverty of hundreds of millions of people over the last 20  to 30 years, there continues to be scandalous disparity of income and wealth among those who have benefited from these reforms and those who have been left behind.  The massive unemployment that has been caused by the lockdowns of  economies all over the world has worsened the inequity in the distribution of income even in the most developed countries of Europe and elsewhere.

The human sufferings that we are witnessing during the worst global economic crisis in 150 year  should bring world leaders to finally come to their senses and listen to what Pope Francis has been saying about   the limitations of the free market economy in respecting the dignity of each human person and in pursuing the common good of society.

In The Joy of the Gospel, Pope Francis clearly states that “the dignity of each human person and the pursuit of the common good are concerns which ought to shape all economic policies. At times, however, they seem to be a mere addendum imported from without in order to fill out a political discourse lacking in perspectives or plans for true and integral development.”  The Holy Father points out that  growth in social justice “requires more than economic growth, while presupposing such growth.”  it requires decisions, programs, mechanisms, and processes especially geared to a better distribution of income, the creation of sources of employment, and an integral promotion of the poor which goes beyond a simple welfare mentality.”  In the publication “This Economy Kills,” authors Andrea Tornielli and Giacomo Galeazzi, inspired by the teachings of Pope Francis, enumerate the types of leaders who are needed for authentic human development in both developed and emerging markets. 

According to them, we need “men and women who look to the future, who are committed to pursue the common  good and whose goal is not just the next election campaign.  It requires men and women who not only look at the spread and stock market indices as indicators of the health of a country but inquire whether the younger generations have a job, a future, and hope; whether children have kindergartens and schools that can educate them by introducing them to reality; whether couples have the opportunity to buy a house; whether there are effective welfare programs available for the elderly; and whether those who still bet on the future by putting children into the world are justly taxed, rather than penalized.  It requires men and women who are engaged in politics and work in institutions without corrupting themselves or letting others corrupt them, even managing perhaps to revive a minimum of esteem (which has never been so in decline) for that ‘highest form of charity’—that is, politics—in as much as it is exclusively committed to the common good and to the real lives of people, with special attention   and dedication to those in difficulty, those left behind, those  who are excluded and should be included.”

We have in the above quote a program that should permeate the so-called new normal post-pandemic.  What I have read so far about prognostications concerning the “new normal” are mostly about means, not ends. There is a lot of talk about the digital transformation that all economic sectors shall have undergone as a response to the changes in consumer lifestyle and business practices brought about by COVID-19. It asserted that digitalization will be a universal practice. Online purchases of practically all types of consumer goods and services; modes of payments; delivery of formal education and all types  of skills training; banking practices; religious services; sports events; forms of entertainment; etc.  These transformations, however,  could occur without addressing the fundamental problem of great disparities in the distribution of income and wealth and may even exacerbate the problem of the poor if, for example, their children are further left behind because they lack the resources to participate in online learning.  Although the means are also important, there should be greater emphasis in the transformation of the ends or objectives of the economic system.  Our leaders should ask themselves how to make the structural changes necessary to reduce mass poverty (which has worsened during the many lockdowns made necessary by the pandemic).  In more concrete terms, the economic system should be geared to providing more nutritious food to the poorest of the poor; better quality education and health care to the bottom 20 percent of the population; free health services to those who cannot afford them;  socialized housing for the homeless; and well paying jobs for the unemployed and underemployed.

The new normal should give the highest priority to providing the small farmers with what they need to eke out a decent living by providing them with the necessary infrastructures such as farm-to-market roads, irrigation systems, post-harvest facilities, access to credit and other farm support services that have long been denied the Filipino farmers.  I have always maintained that the first cause of dehumanizing poverty in the Philippines is the long-term neglect of rural and agricultural development.  It is not a coincidence that 75 percent of those who fall below the poverty line are in the rural areas. Many of them are the beneficiaries of agrarian reform who, after being provided with one or two hectares of land, were completely abandoned to their own resources.  They are the landless farm workers, the “kaingeros” (slush-and-burn farmers), and the subsistence fisherfolk. Hopefully, the shortage of food during  the pandemic has made it crystal clear that food security should be on top of our economic objectives.  Food security now and in the future can be made possible only by a significant increase in the productivity with which we use our agricultural resources.  To be continued

For comments, my email address is [email protected]

 
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