Wednesday, May 9, 2012


Less in substance, more in rhetoric.

The case of ACCFA versus ACCFA workers is an interesting look at how the notion of government intervention became so ingrained in Philippine law as to be taken for granted. The 1969 Supreme Court decision is full of citations of local and foreign sources that reinforce the role of government beyond the maintenance of peace and order, particularly in economic affairs. By the time the 1987 Constitution was written, it was simply assumed that the state had no limits in serving ‘the public interest.’

Justice J. Makalintal says:
“The growing complexities of modern society have rendered th[e] traditional classification of the functions of government [crime prevention, protection of property, etc.] quite unrealistic, not to say obsolete.
The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally, and only ‘because it was better equipped to administer for the public welfare than is any private individual or group of individuals,’ continue to lose their well-defined boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times.
Here as almost everywhere else the tendency is undoubtedly towards a greater socialization of economic forces. Here of course this development was envisioned, indeed adopted as a national policy, by the [1935] Constitution itself in its declaration of principle concerning the promotion of social justice.”


What’s surprising about the 1969 decision is that it still makes an issue of ‘laissez-faire or not laissez-faire’ at all. A decade earlier, president Ramon Magsaysay was already a big hit with his “those who have less in life should have more in law” crap. The 1935 Constitution, Article II, Section 5, spells out the social justice policy clearly. But it appears that even in this intellectual shithole, lawyers and judges were still aware of the concept of the absence of government in the economy, or limited government.

Not to say that Makalintal’s argument for state intervention holds any water. In the first place, how does social ‘complexity’ equate to the need for government? Do economic principles change in a more complex society? What’s more, is government any better a tool for coping with such complexity than free enterprise? Indeed, the fact that individuals’ preferences and actions are so complex makes central planning all the more difficult, if not impossible.


To even accept a role of government at all is to necessarily defy people’s wills which otherwise manifest as self-bettering economic action. By subverting this actual will of the people, government thus breeds social conflict, the very class antagonism that many seek to remedy via government.

And to even assume that some sectors such as electricity or mining require government monopoly, is the beginning of Makalintal’s error. Because when these agencies and franchises screw up, or when government regulations limit competition and decrease quality of goods, laissez-faire is blamed, and the scope of government intervention widens so as to prevent such ‘exploitation.’


The notion of social justice became popular due to the faults of the state, with the free market as scapegoat. Given that we have a whole century of bullshit legislation and jurisprudence biased against the market, it will probably take at least seven generations for Filipinos, and humanity in general, to be weaned off glorification of the state.


“If we wish everybody to be well off, we shall get closest to our goal, not by commanding by law that this should be achieved, or giving everybody a legal claim to what we think he ought to have, but by providing inducements for all to do as much as they can that will benefit others. To speak of rights where what are in question are merely aspirations which only a voluntary system can fulfill, not only misdirects attention from what are the effective determinants of the wealth which we wish for all, but also debases the word ‘right’, the strict meaning of which it is very important to preserve if we are to maintain a free society.” ­― From Law, legislation and liberty, Book II.