We give too much credit to China for the industrial-commercial challenge it now poses to America and the rest of the West. But if we step back to the bigger scheme of things, we’ll be able to trace back much of the prosperity we see in China today to its ultimate origins — the intellectual capital originating from the industrial revolutions and the creative explosions that began in the West — neat stuff that laid the commercial, technical, and industrial infrastructure that paved the way for the unprecedented quantity of capital and the unprecedented efficiency by which this capital is channeled and allocated that we see today.
Without all that — i.e. without the origination of this capital and the facilitation of its movement and allocation to those who need it the most — China will never have been the “manufacturing base” that it is today nor would India (and now the Philippines) be the outsourcing capitals of the world today. For that matter, neither will the Middle East see any of the oil wealth they enjoy today (because the ideas of the petroleum guzzling machinery and the production and lifestyle demand for these were all originated from the West). Japan, mighty industrial power that it is, itself started out as a net importer of capital (in all of its wondrous forms of which its financial incarnation is but a small subset) from the West.
There is, as expected, a lot of “debate” around how currencies’ relative values bob freely or get tweaked every now and then to suit the politics that surround the direction and speed of trade and capital flow across the planet. But stepping out of a regard for economics framed by a monetary system that has been perverted (enabled by modern technology) to such an extent that its place in human civilisation as a reliable measure of value has become suspect is the challenge that may define the 21st Century. Already two of the biggest global risks to our “civilised” way of life have come about as a result of the illusion of value that our monetary system propped up for us. The first is evident in how the global financial crisis (GFC) uncovered the ability of this system to hide regions in our economies that are devoid of real value. The other is the reality of this system epically failing to account for costs that have accrued against the ability of the planet to sustain human life over the last 200 years.
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I go into a bit of the detail behind the long buried notion that money is but a flawed scorekeeper of real value in my book. This excerpt is from the section where I introduce some concepts of “wealth” and “capital” that may sound a bit counter-intuitive to the textbook-imprisoned minds of some “economists”:
We have so far used the word “capital” in this chapter but have gone nowhere near any discussion about financial stuff. For most people, this can be quite disconcerting. However, a discussion on capital can potentially go on and on without ever touching on the subject of Finance. That is because financial stuff merely represents the mechanism — and a flawed one at that — for keeping track of and quantifying the value of capital. The fact is, capital continues to be created and destroyed below the radars of most economies’ financial systems. This flaw manifested itself many times in history, most notable of which were the stock market crash in the 1930’s that led to the Great Depression, the Asian Currency Crisis in 1997, and the Dot-Con meltdown in early 2000. In all of these instances, financial data consistently provided misleading information right up to the end when panic finally gripped the investing public. The financial indicators of the value of capital showed robust gains, but the subsequent crashes demonstrated with a vengeance the true value of the underlying capital itself (the assets — both tangible and intangible — owned by the businesses whose shares were traded in the equities markets) when people suddenly came to their senses.
What does this have to do with the the emerging challengers to America’s domination of the planet’s trade?
Simple. Much as the US laments the havoc that the Chinese economic juggernaut is causing its people’s way of life, the rise of China along with the wealth that puts teeth in the “belligerence” of these Arab desert kingdoms are creations of the American Way. Where it not for Americans’ glutinous appetite for oxymoronic economic constructs — cheap luxuries, mass individualised mobility, and commodity manufactured goods — none of these geo-politico-economic monsters would exist as the risks they now pose to the American way of life. But they do exist now.
That they now make the viability of the way of life of their creators precarious is the biggest irony that will define the 21st Century.
The three oxymoronic economic constructs have become addictions precisely as a result of the illusion of value that our present monetary system propagates. Affordable access to these makes the average schmoe today far wealthier than, say, any one of any ancient Egyptian Pharaoh you can name. But are these things truly affordable? Have we counted the real costs of all this stuff that we enjoy today? We evaluate their value on the basis of how much it “costs” to mass-produce these things in volumes that allow them to be sold to us at “affordable” rates. But think for a moment where this ability to mass produce them comes from. It comes from mechanisation. And what ultimately powers mechanisation? You guessed it. Fossil fuels.
When we think of mechanisation, think beyond the machines that power our factories to the machines that power the ships and trucks that transport raw materials and finished products to and from production and consumption sites. The trinket that comes together with a McDonalds “Happy Meal” — a product that would have come across as an artifact of exquisitely precise craftsmanship to an ancient Egyptian Pharaoh — was churned out in a factory somewhere in China and shipped thousands of kilometres so that it could give amusement to the average attention-deficited Western kid for all of five minutes. We produce them in vast numbers and give them away for free because our machines make it “economically viable” — even “profitable” — to do so. We do so because we can.
Our monetary system tells us this is so.
It does this without making a full accounting of the bigger reality that surrounds free Happy Meal trinkets shipped thousands of miles from the Third World rat hole where they were manufactured;
– That it is environment-killing machines that allow goods to be made in numbers that make them “affordable” and even disposable;
– That it is environment-killing machines that make “viable” the moving of goods from places where they can be manufactured cheaply to places where they can be consumed wantonly; and
– That it is global wealth disparity between the First World and the Third World that underpins economists’ rationale behind the need for “economic growth”.
The big lie is that everyone can enjoy First World standards of living. Indeed, we are made to believe that everyone is entitled to such levels of affluence — a belief that justifies humanity’s foolish rush to embrace “globalisation”. But stop for a minute and imagine a world where every Chinese and Indian household has one car, one washing machine, one water heater, one air conditioner, and one or two kids who buy lithium-ion battery-powered mobile phones and iPods every couple of years.
Can such a world exist?
Look no further than how outsourcing may just be the new OFW-ism — no more than the most recent gold rush that may further impoverish Filipinos.
Perhaps it is time that the intellectual capital that made the West great and that spread the notion of limitless “growth” that today underpins the aspirations of emerging China and India be applied to the task of coming up with a better regard for the challenges we face in the coming decades.
benign0 is the Webmaster of GetRealPhilippines.com.
I wonder if it’s hard for some people to understand that China became a power not because of the “Chinese system,” but because it made use of the “western” concept of capitalism? Â
If the “Chinese system” is so good, then why is Joma Sison in the Netherlands rather than China?Â
If you look at History; China was the biggest trader in the old world. Remember the Silk Trade? The Silk Trade Route goes from China to the Middle East; goods carried by camel caravans. Many Inns and Businesses were established along the way of this Silk Trade Route.. The Ming Dynasty built Trading ships and established factories. They traded with the old world, including the Philippines. It is in the Chinese genes, that they are good business people. Same as in our genes, that we indulge in too much politics.
The greatest capital of a businessman is his: Brain and Vision. This is the reason, we see people with less education and seemingly humble beginning; rise to build big businesses. Our country is monopolized, by: political oligarchs, who control also our vital businesses and industries. They control also the source of informations; like the media. I may not have been educated in Economics. But, my observations and experiences in working for corporations; have given me good insights of how things work in our world…
The brain and vision can’t do everything alone. To be properly and efficiently used they need go along with values and education. By education I am not talking about scholar education, but about the way your parents teach you how to be responsible and assume your successes and your failures.
Through their multicultural history, the Philippines have gained the comparative advantage of being opened to several cultures, ways of thinking and languages. They understand it (Chinese, Western, Asian etc.) and are able to adapt to it. Though, because of the sustained feudal system (you can call it clanic or whatever you want but everybody understands what I mean), the “education” I am refering to has never made it through.Â
What I mean is that the filipinos have never been empowered enough to assume their own skills.
As an example, I deal with filipino colleagues or employees everyday (iam European), and I have to fight so that they assume their responsibilities in the failures as well as in the successes. Some of my employees have the intellectual capital to be creative and inventive in a way that would benefit their company and inderctly their advancement, but they won’t have the reflex to propose their ideas and fight for it.
The filipino “elite” is the equivalent of the former colonists that consider they own their land and people, and the rest of the filipino people considers itself as owned by this elite.
The efficient use of intellectual capital that led to the industrial revolution in my own country only broke through after the rest of the people violently dismantled the so-called elite. Then only, the skills and intellectual capital have been efficiently exploited.
This will not happen in the Philippines because people do not feel the need of expressing, assuming, capitalizing on their skills. They consider that they are lucky enough the “big guys” give them a salary to survive, so they don’t try to impose their own view.
The efficient use of intellectual capital that led to the industrial revolution in my own country only broke through after the rest of the people violently dismantled the so-called elite.
Which part of “Europe” are you from, anyway? The closest example I can think of for that is France, and there was quite a Reign of Terror that followed, then periods of more empire. It helped that much of Europe was already very wealthy from colonizing, not being a colonizer.
I’m not sure that, assuming such a dismantlement happens in the Philippines, such capital will be more efficiently exploited afterward.
Oops, I meant “colonizing, not being colonized. Carry on.
I have tried to write three answers already to clarify what I meant, but without success!!!
I am not at all calling for a violent revolution, what I meant was showing how the ruling elite of the Philippines can be compared to the ruling elite of France before the revolution: forbidding the talents and skills lying in the non-elite people from blossoming and beinge expressed, used, for the good of the country, for the good of the people.
France is and has always been a country of extremes… my post was certainly not a recommandation…
But in a supposedly democratic country, it is not normal that everybody accepts a double-speed system… Wealth and influence can not forever replace ideas and intelligence… And as for now, I don’t see a lot of examples of people breaking through the historical barrier betweenÂ
elite and rest of the people in the Philippines.
All in all, what is the difference in between the ruling Spanish and the current elite? A poor colonized Filipino could never become a great ruling Spaniard without becoming part of a Spanish Family (that’s what i understand from the rise of the mestizos, but tell me if I am mistaken) as much as a poor Filipino today can never expect becoming wealthy and influent if he does not get included into an already rich and influent family/clan (example of Villar, tell me once again if i understand it correctly)…
And from what I understood so far of the people I work with, as they don’t come from the elite of the Philippines, they have never been taught that they could be amazingly brilliant and successful, and so they see themsleves as forerver-hard-working and they seem to find it acceptable that other people are amazingly powerful even if they are stupid…
What I hope for the Philippines (country that I love and keep discovering everyday) is that ALL the people will get pride and ambition, and that only can come with the way you see yourself…
EDUCATION!!!!!!!
Didnt the Japs did the same when the Brits forced them to open up to the rest of the world? Meiji Restoration.
The word “Meiji” means “enlightened rule” and the goal was to combine “western advancements” with the traditional, “eastern” values (Beasley, W.G. [1972])
The Americans; not the Brits. U.S. Commodore Perry, docked on Tokyo Bay, to force the Japanese to open up trade. It is called:Gunboat Diplomacy. It still works today; but, in the form of War Games Exercises…This was the reason North Korea recently bombarded the island territory of South Korea. U.S. and South Korea were about to conduct War Game Exercises nearby…this provoked North Korea…Gun Boat Diplomacy can go wrong…especially, if the other guy has nuclear weapons…
Oh, and sorry I went really far from the original topic…
All of this to say that I consider the Filipinos have a cultural advantage in globalization as compared to other asian countries. But that cultural advantage is not fully exploited because the people’s intellectual capital is not used.Â
And the people’s intellectual capacity is underused because of the mass media’s demonization of intellect–to the media, Dumb is Good, Smart is Evil.
For reference, folks, I developed this article further into an even more coherent piece which you can check out here. 😉
dang! globalization thingy comes about when the people of the wealthy industrialized western world woke up one day; and, they do not like the garbage/pollution progress has produced in their own backyard… the west has imposed strict laws/rules/regs concerning factory pollution/emissions which drives the cost of doing biznez. to unprecendented level… so, they set shops to turd world countries with no regards to the health of its people and the environment… the finish products are, in turn, “exported” to the west, ‘merka in particular… kaya, ‘merkans enjoy 60″ HDTD 3D tv without fear of polluting their own source of oxygen…
HA!HA!HA! Â Yo porgotten something, Pareng Ulo. Â When they are done with their HDTD 3D TV, you know where they will outsource their garbage? Â POOR 3RDWORLD COUNTRIES. Â Most of them go to China. Â With Chineses resourcefullness, they take the Television apart and make another television to export to Philippines.
Globalization did not promise us anything.
During the Galleon trade in the year before I was born, there was already globalization. Â There was no word for it yet. Â Mexicaneses believed it was cheaper to buy from Philippines and Philippines thoughted at that time that it was cheaper to buy from Acapulco.
The first recorded export of OFWs was during these time. Â Flippinos were the one who concoct Tequila.
Number of Filipinos who can work but don’t: 29.1 MILLION!
According to a report released by the Philippine Central Bank (BSP), remittances by overseas workers to the Philippines was supposedly the “highest monthly level so far recorded”. This was reported by the Inquirer.net as due to a “robust demand by foreign companies for Filipino skilled and professional workers”.
But then the National Statistics Office (NSO) for its part seemed to beg to differ on how “skilled” these “professional” workers are, citing how one in three Filipino workers are “unskilled”.
NSO employment and population figures further highlight how the mere existence of an immense number of Filipinos despite being able-bodied enough contribute negatively to the national product:
Number of Filipinos aged above 15 years: 61.2 million
Number of Filipinos in the workforce: 39.3 million
Shortfall: 61.2m – 39.3m = 21.9 million
Translation for those who are a bit slow: There are 21.9 million Filipinos who can work, but aren’t.
What exactly are 21.9 million able-bodied Filipinos doing?
That is not a really hard question given that this is the Philippines we are talking about here, so I won’t go much into that. I’ll leave us with this though: Even if $18 billion in OFW remittances (forecast annualised) is channeled towards supporting these 21.9 million unproductive souls, that works out to a paltry $822 per capita income per annum. Then again, a bunch of folk who sit around on their bums all days texting their friends and singing karaoke probably don’t need that much money to begin with.
The point I want to make (which I think I’ve already achieved, at this point) is more around how meaningless headlines like “OFW remittances surge to $15.46B” are.
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Those in the 16-20 age range are being full time college students.
Welcome…we teach each other…contribute your opinion…use Tagalog or English.