So now much of Europe and (maybe soon) the United States are now in the bizarre position of being potential candidates for intervention by the International Monetary Fund (IMF). The IMF for its part is ready to do just that and marshall its stash of (or, perhaps more appropriately, ready access to) dollar reserves to which the Philippines had recently “contributed” USD1 billion.
Various “cause-oriented” groups are up in arms huffing and puffing about how a billion clams could’ve been used to fund sacks of morsels to be tossed into the gaping mouths of the Filipino poor.
The thing with populist rhetoric is that their propagators are very adept at reducing long complicated stories into two- to three-word slogans.
Then again, just a generation or two ago, things actually were a lot simpler. Back then, countries produced the stuff that its population consumed and exported the surplus. When the price of a product or commodity rises, people paid more to buy said product or commodity. Now, however, prices are by sleight of hand kept low so that ordinary schmoes can buy things they don’t need and consume more than what their backyards can produce and feel like a million dollars in the process. Those low prices are made possible by “globalisation” — the idea that (1) funds from countries with vastly different financial circumstances can be made available in a perversely advantageous way in another; and/or (2) people from countries with vastly different labour situations can be employed in a perversely advantageous way in another.
So we all created a world held together by dubious “value” chains. The First World dependent on cheap Third World labour to keep their valued consumers fat, happy, and trendy and the Third World dependent on cheap foreign capital and exchange rate disparities to keep their workers employed and their retailers fat and happy.
What is wrong with that picture? Quite simply, a big chunk of the value of capital in the First World is now propped up by profitability made possible by labour employed from Third World countries whose ability to consume is made possible by that very same employment. All the while the substance that once underlay First World capital — production capacity — vanished from under their feet even as they came to be dependent on the Third World for markets for their manufactured products. Meanwhile, in the Third World, an addiction to the easy money made possible by wages owing to the capital-intensiveness (an irony lost in the term) of the First World atrophied domestic capability to build capital indigenously — which means that deflation of the value of capital in the First World will likely leave more and more Third World people unable to find employment.
The world economic order has become a Gordian Knot of mutual dependence in which one country fuels another’s illusion of prosperity within a closed system that produces no real aggregate net added value overall. No real aggregate net added value being created sounds ominous when one considers the continued growth of the planet’s human population.
In short, it seems global wealth may be a zero-sum game. The wealth and economic vigor of a set of nations is made possible only by the poverty of all the rest, just like a closed system is made dynamic only by movement driven by inequities in energy levels at different locations within it.
So will USD1 billion “lent” or not “lent” to the IMF really make a difference to the average Filipino schmoe as some politicians and “activists” claim it would? Probably not. Ultimately, in an OFW nation like the Philippines, the health of a bunch of “distressed” European nations will most likely have a bigger effect on ordinary families than $1bn that would have been all but spread thin across a nation saddled by an enormous population of 100 million. Even if that money were simply disposed of as cash dole outs (as is the Filipino’s preferred mode of wealth distribution), each Filipino will have received only $10 — enough for a week or two worth of pagpag* meals perhaps.
As such — for argument’s sake, using the underlying premise of the flawed thinking of those who huff and puff about this issue — perhaps Europe deserves that $1bn more than Filipinos do. At least in Europe, there is some semblance of a track record of results given opportunities and second chances.
[*NB: Pagpag is the colloquial term for a popular Filipino dish.]