"Past mistakes and wrong judgments."

That is lifted from Andrew J. Masigan's article, "What went wrong, and what can we do?" [The Philippine Star, 2nd Dec 2020]

Andrew is an economist, and here's another perspective from another economist: "The CREATE tax reform enters the scene at an opportune time, although we needed it many years ago." [CREATE passage – A "major" achievement, Gerardo P. Sicat, The Philippine Star, 2nd Dec 2020]

"To be equipped with a better weapon is better than without, but there are other hurdles. It removed the uncertainty concerning the country's competitive position about the corporate income tax and the nature of transitional measures for export firms and foreign investors.

"But immediate attention will have to be made about the next essential steps. The government's fiscal branch must pay attention to the suspicion that creating a super-body on fiscal incentives will impede speed and encouragement in promoting investments.

"It is also vital to be aware that the improvement of tax and incentives legislation is just one element of the problem in creating a highly progressive, vibrant investment community. [There are other issues, e.g., the peso exchange rate and reform in labor markets.]

"Remember, too, the constitutional restrictions concerning foreign investments!"

After two economists, let's hear from a humanist. "The term 'humanist management' is now beginning to be popular in academic circles. Amid the economic crisis caused by the pandemic, some business leaders are exploring this idea.

"One of the core issues in this debate is the issue of economics and its goal. The traditional economists hold that the primary goal is to grow the economy and use the 'gross domestic product (GDP)' as the barometer for economic progress. After the last global financial crisis, the mantra was to maximize GDP or 'grow the pie.'

"The traditional thinking was that the bigger the economic pie, the bigger the portions of the 'pie' for the 'common people.' Traditional economists, therefore, focused on the aspects of economic thought that could grow the 'pie.' This was the reason that the market economy and globalization became the mantra for most economists.

"The problem was that the concept and premise of capitalism – 'trickle-down' – did not happen. Instead, the rich became 'richer,' and the poor stayed poor. Even incomes of the middle class stagnated." [Elfren S. Cruz, Humanist economics, The Philippine Star, 3rd Dec 2020]

With due respect to Elfren – and his perspective is not isolated; so, let's dissect it for the benefit of the wider audience – are we problem-solving the Philippines like the economists quoted above, or are we doing an academic dissertation?

How do we see the economic miracle that Vietnam demonstrates – including overcoming poverty via rapid GDP growth? And before Vietnam, China and Malaysia and the Asian Tigers? As McKinsey expounded, capitalism lifted a billion people out of poverty. Are we hard-pressed to acknowledge reality because we were left behind?

For example, how can our top eight companies not generate a combined revenue to match Samsung Vietnam? Is humanist management the answer? Consider: The best we can do in the electronics industry is to be a third-party computer chip producer. At the same time, Vietnam is the regional manufacturing hub for Samsung smartphones, and soon, Apple AirPods.

Given the plight of Juan de la Cruz, shouldn't we be problem-solving?

The 2008 Global Recession came from greed. And that's the human condition we saw even in Eden.

No system can eliminate greed. And despots, for example, are the poster boys of "greed." Yet, they let people suffer abject poverty.

The wife and writer saw how ostentatious the world of these despots was during the heyday of the Russian tsars and Soviet empire — that is now extinct, for over-promising yet under-delivering. They also saw the "before and after" of China's ascent to superpower status.

On the other hand, the Philippines' backwardness stems from our closed economy – compared to our neighbors. And that instinct explains why we can't get industrialization going, e.g., Arangkada. But the blog won't tire of plugging Arangkada because it is one of our very few chances to overcome our backwardness.

What is Arangkada, again? Here's the Executive Summary from its website:

"Arangkada Philippines 2010: A Business Perspective is about creating a bright future for the Philippines, the 12th most populous country and probably the 10th or 9th by 2030. Arangkada is a guidebook to a better Philippines, with the Per Capita Income (PCI) of a middle-income economy, robust investment levels, better infrastructure, and higher government revenues to pay for social services, like education and health care. Absolute poverty would recede via inclusive growth with less malnutrition, crime, and insurgency. With more rewarding opportunities at home, Filipinos would have less reason to work abroad.

"Richly illustrated with numerous graphics, Arangkada Philippines 2010 contains 471 recommendations from Filipino and foreign businessmen and women for building a more competitive economy, reform-by-reform, leading to high growth and millions of new jobs. Catching up and keeping up is an imperative, not a choice. The Philippines has lagged for too long, losing competitiveness, despite its immense potential and location in the fastest-growing region with 60% of the global population. More than ever, opportunities abound for the Philippines to improve trade and investment ties in Asia and elsewhere and advance towards high-income status.

"Despite a dynamic population and a land blessed with natural resources, economic progress has been slow. In most international ranking surveys, the Philippines is slipping. The country has not improved its competitiveness as much as others and continues to slide despite recent GDP growth and rising PCI. The country should strive to move twice as fast – 'Arangkada' – which means 'to accelerate.'"

Still, there is no perfect system. If we want to talk of the West and the wealthy nations, they are going through the post-industrialization era. And that is irrelevant in the case of the Philippines. We have yet to move up to an industrialized economy.

Recall that capitalism was the response to the ails of feudalism. And given capitalism has its imperfections, the world thought socialism was the answer.

Consider: If socialism is to supplant capitalism, why did the Soviet empire go extinct, and why did China embrace capitalism? But then, because China remains an autocracy, the world is witnessed how misplaced it can be amongst the community of nations – or the free world. Unsurprisingly, even Duterte is hedging on the VFA.

In other words, a system that doesn't respect individuals and the rule of law and transparency can't be a good neighbor and be trusted. And that is why feudalism is passe. On the other hand, despite its flaws, the US demonstrated to the world that it wouldn't tolerate "fascism." Translation: Trump became a one-term president.

For example, why are there Republican senators supporting Biden's call for another stimulus? Recall Trump did not want to hear the Covid-19 disaster experts predicted because an economic slowdown would undermine his reelection.

And with red states today reeling from the pandemic and straining state and local economies that under the law must keep their budgets balanced, a federal response is imperative. It is ironic punctuation to Trump's election defeat.

In the meantime, the wife and writer's friends in Eastern and Central Europe haven't stopped sharing with them how imperfect socialism is.

And so, one can't do an armchair assessment of these significant isms. They are too complex to assume expertise, even for us in the Philippine elite.

That's why the blog has spoken to "Design Thinking," which has become the heart of "innovation" models. It is a step up from "brainstorming," although cross-functional thinking is critical in both cases. Recall "behavioral economics" and see below; beyond classical economics, a nation's competitiveness depends on its industry's capacity to innovate and upgrade.

To appreciate design thinking, even lawyers participate in design thinking exercises. Yet in the Philippines, we are still into particular expertise akin to silos instead of harnessing the impact of varied experiences – to attain dynamism. Consider: Big Tech companies no longer put a premium on college degrees; instead, they seek real-world experiences from those they want to hire.

Whatever we do, if we can't wear dynamism's hat, we will always fall short. See below; why the writer – doing marketing and advertising globally for decades – is talking to a young person much younger than his daughter.

Recall too that despite the writer's recognized expertise, he preached principles instead of rules to his Eastern European friends. Why? He has lived through a highly competitive industry where "today's excellence is tomorrow's commonplace."

Consider: The Americans have their job cut out for them. The good news is that innovation is in their bag of tricks. Eureka may not come overnight, just like the vaccine for Covid-19, but they don't shrink from challenges.

They recognize that the universe does not stop – for a perfect system to be tailor-made. For example, the writer started a conversation with a 27-year old American who recently graced the Forbes magazine pages as among America's future.

He and his roommate, while in college, started a project on how to encourage Americans to vote. And after graduation, they turned the idea into a business undertaking in advertising and marketing. Unsurprisingly, they attracted investors and are today a $10-million enterprise.

And the writer shared the story of his Eastern European friends that he met when their business was even less than $10-miilion – and became one of Europe's fastest-growing companies.

The word is dynamism.

But since dynamism is Greek to us Filipinos, we can't get over the reality that perfection is not of this world. Recall "materiales fuertes" that we grew up with; it also explains why innovation is not our cup of tea.

Consider: Trump kept pointing at China, forgetting that Nixon opened the doors to China. And that was the beginning of the era that lifted China's people from poverty. It made Wal-Mart even more prosperous across the Pacific because they found a source of cheap products that Americans loved.

Of course, in the process, American manufacturing declined. Ditto for coal, although it accelerated given the concern for the environment and why mining turned south – in West Virginia and Pennsylvania, for example.

But even Japan, despite their manufacturing prowess, suffered. Today, given the pandemic, suicide is on the rise. People losing jobs are desperate.

The universe will not stop. For example, China is not the first to undermine the US economy. Recall how Japan was once the supposed culprit.

And that is the problem we have in the Philippines. We are so wedded to the past – that dynamism isn't in our vocabulary – because of our instincts: We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

And that is why the blog has quoted Fr. George Gorospe several times. We can't step up to the plate and problem-solve. Messrs. Masigan and Sicat deserve kudos, indeed.

Given the plight of Juan de la Cruz, our decades-old inability to problem-solve is a disservice to the nation.

And if we don't stop and acknowledge our instincts, we stand very little chance to move forward.

And it must come from us in the elite class. We can't continue to justify the status quo even if it benefits us. Nor search for systems and nations and whatever else to blame instead of owning our failings.

Recall the 3 Cs of a hardy mindset, e.g., we control only ourselves, no one else. So, we better figure out how to raise Juan de la Cruz from abject poverty.

When Filipinos have to become OFWs to make both ends meet, there is something utterly wrong. And it comes from our tiny economic pie, as in Juan de la Cruz surviving in less than $2.50 per day – per the World Bank's definition of poverty.

That's why the blog keeps saying we must keep our eyes on the ball. We must industrialize.

Humanist management in an economy dependent on consumption and driven by OFW remittances and the BPO industry will not raise Juan de la Cruz from poverty. We are over a hundred million. Indeed, we need a much bigger economic pie – or more than $2.50 per day.

The posting is not to malign humanist management.

Recall the writer's old MNC-company was a model employer, both in the Philippines and among Fortune 500 companies. And his Eastern European friends were recognized as well – i.e., beyond one of the fastest-growing companies in Europe, they pay factory workers at the 75th percentile amongst comparable companies, including Western ones.

The posting is to stress that we cannot be mixing apples and oranges. See above; what Arangkada says and why the Philippines must accelerate economic growth.

And the challenge in front of us is a tough one given our instincts and lack of development experience.

For example, we can't wrap our heads around the demands of self-government and personal responsibility in the pursuit of the common good – the heart of democracy and free enterprise.

Even the US has to get back to the American experiment's foundation because it is not about tribalism as conservative or progressive but being one nation, aka the common good.

And that is the challenge for the Biden administration. Thankfully, he is sending the right signal, e.g., he is neither left nor right but a centrist. And that is the way he can expose any hypocrisy from McConnell, i.e., is he out to obstruct like he proudly proclaimed during Obama's time or to solve America's problems?

The signal from his caucus is alarming. They expect rigor from the Biden team's governing style, but which they tossed out the window to kowtow to Trump. For example, Trump holds the title for generating the highest deficit ever, and why honest-to-goodness conservatives worked against Trump's reelection.

Let's get back to the Philippines. The common good is contrary to the crab mentality. And the latter comes from a lack of development experience. In layman's terms, all it says is, "experience is the best teacher." Absent experience, we are at the dualism level – as in either/or – and through experience, we move up to relativism.

For example – and let's pause again right here; it explains the Pinoy crab mentality in more ways than one:

We can't prioritize because we have not experienced how focusing on the vital few over the trivial many will generate a much bigger bang for the buck – aka the Pareto principle.

It also explains why our decades-old approach to fiscal and monetary policies, while logical were linear.

That is why the blog reminded the business community that the PBSP (Philippine Business for Social Progress) is half a century old, and we're still focused on sharing prosperity. We can't imagine we can traverse "poverty to prosperity" with Juan de la Cruz. He isn't a second-class citizen.

Consider: Mahathir – who came to the scene eleven years after the PBSP – has successfully led and turned Malaysia to be "One of the most open economies globally, with a trade to GDP ratio averaging over 130% since 2010. Openness to trade and investment has been instrumental in employment creation and income growth, with about 40% of Malaysia's jobs linked to export activities. After the Asian financial crisis of 1997-1998, Malaysia's economy has been on an upward trajectory, averaging 5.4% since 010. It's on the way to achieve its transition from an upper-middle-income economy to a high-income economy by 2024." [World Bank]

Malaysia and the rest of our neighbors hold the mirror for us to see and recognize past mistakes and wrong judgments. But that will only keep if we in the elite class lead the nation to respond to the demands of self-government and personal responsibility in the pursuit of the common good, i.e., the heart of democracy and free enterprise.

And we can't if we are committed to our instincts: We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

Gising bayan!

“Here is a land in which a few are spectacularly rich while the masses remain abjectly poor. And where freedom and its blessings are a reality for a minority and an illusion for the many. Here is a land consecrated to democracy but run by an entrenched plutocracy, dedicated to equality but mired in an archaic system of caste. 

“But the fault was chiefly their own. Filipinos profess the love of country, but love themselves – individually – more.” [Ninoy Aquino, Foreign Affairs magazine, July 1968; Stanley Karnow, New York Times Magazine, “Cory Aquino’s Downhill Slide,” 19th Aug 1990.]

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“True social reform has little to do with politics. To unmoor ourselves from the burdens of the past, we must be engaged in the act of continual and conscious self-renewal. All men are partially buried in the grave of custom. Even virtue is no longer such if it is stagnant.

“Change begins when we finally choose to examine critically and then recalibrate the ill-serving codes and conventions handed down to us, often unquestioned, by the past and its power structures. It is essentially an act of imagination first.” [David Henry Thoreau; American essayist, poet, and philosopher; 1817-1862]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

“Development is informed by a people’s worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]