Monday, August 6, 2012

NOTES ON THE IMPENDING HOUSE PASSAGE OF THE RH BILL (August 2012)


1. That’s life

Oh well, it’s just several billion pesos of damage. Compared to the over-2-trillion pesos wasted every year henceforth via the national budget, this ‘responsible parenthood’ machine is peanuts.

If, however, you use contraceptives for whatever reason, e.g. water balloons, you can expect prices to rise, and for access to diminish. And the poor will eventually be even worse off with regard to contraceptives than unlucky you. Read why here.

2. Economic ignorance ― I don’t know, and I don’t care that I don’t know

Most feel so strongly, and are quick to express such feelings, about what is actually an economics issue, without making an effort of economic analysis. They leave this to the economists of UP and Ateneo, who have made studies of course.

But what do these so-called economists do? They present figures of the depressing situation of infant and maternal mortality, of children forced to live in substandard conditions. This is no analysis. This is a presentation of facts, of which, for the sake of argument, I assume to be true. But nowhere in such data is it found that, by enforcing a government program involving education on and distribution of contraceptives, the poor people’s access to contraceptives will be increased. This is taken for granted, and therein lies a fatal error.

If people only rechecked this premise of “important issue = government program for important issue,” things might be different. If they actually studied the nature of monopoly and the harm it does in any sector, then they might realize that having the government handle it is the worst thing they could possibly do for their cause. You can’t just say “Leave the technicalities to the government” when government management of resources is technically impossible.

3. “Tingnan mo yung nanay na may sampung anak at sabihin mong walang overpopulation!”

Another careless premise is, of course, the Malthusian theory of overpopulation. It seems so obvious that there are plenty of people, and poverty is prevalent, hence larger population = poverty, in their minds. But by reducing populations while nonetheless maintaining the rate of poor productivity, poverty will just be as prevalent.

What is needed is not reduction of populations, but a harnessing of capital in the most useful manner as determined by consumers, a market process hindered by prevalence of government in all our sectors.

In short, the inherently monopolistic, violent nature of government is the cause of poverty. Everything else ― inadequate health care, lousy education (including of the RH-loving bourgeoisie), work hardships, bad roads, frustrating traffic, high market interest rates, poor showings in international sports events, etc. ― is a symptom.

4. Announcement

I sometimes have fun in this blog and call people “stupid” for not knowing any better about political economy. No more.

It sucks to hear wrong-headed statements from family and friends whom I know aren’t stupid. Heck, if you were to ask them, they know that I am the stupidest tanga-head of them all.

These RH Bill proponents are misguided. That’s all. Calling them stupid, even as a joke, is unnecessary. Of course, the condescension of shifting from ‘stupid’ to ‘misguided’ may even be more insulting. 

Friday, August 3, 2012

AN OPEN LETTER TO RH BILL ADVOCATES


Dear RH Bill Advocate,

I suppose that you support the passage of the Reproductive Health (Responsible Parenthood) Bill because you believe this is the means of empowering the poor in making choices for family planning. You are also concerned that the population is growing at too great a speed for existing resources to cope.

The issue of Pro- or Anti-RH is not about being pro-contraception or anti-contraception, or about religion at all, inasmuch as the issue has been framed this way. It’s about whether the RH Bill will accomplish whatever noble goals it is intended to accomplish.


Will it work at all?

I wonder what you have to say about the idea that the RH Bill, contrary to its intentions, will make contraceptives even more inaccessible to the poor. Perhaps this is the first time it has occurred to you. I’m not talking about funds being pocketed by conniving bureaucrats and businessmen, although this is the norm. I’m talking about the provisions of the proposed law being followed to the letter, and thus rendering these family planning products even more scarce.

It’s simple economics, really.* Whenever you have a national provider of a product, this eliminates or weakens competition, making investment in the sector less attractive. With less products on the shelves, the pricier they get, which may not burden you or I that much… but then, you and I aren’t the intended beneficiaries of the program.

But even with high prices, you say, at least such products will reach the poor, if they receive these for free. 

However, even in a best-case scenario (which is doubtful) where the administration is able to cover most poor people in need, the products will continue getting more scarce, and pricier, until something must give in, and surely that is worse than the current situation where contraceptives are indeed available in stores, in sufficient supply.


Count the cost

I wish I could hear your reply to what I said in the above paragraphs. Perhaps you’re imagining that the government will take on the business of producing contraceptives, and thus make up for the deficiency in private investment. But ask yourself how well such a sector will do under the same model that the post office, or PhilHealth, or any other number of GOCCs follows. You might be able to stomach the wastage that ensues, if it’s for the noble purpose of funding a family planning program.

But funding ‘Responsible Parenthood’ will get more and more difficult, and will inevitably subtract from the already dismal situation in general health care. We have seen hundreds of billions spent on education and health care, without any remarkable outcomes (to put it nicely). Are you willing to support this happening to contraceptives in particular? You may have more in common with the bishops than you think.


How did we get here? How can we get them here?

The situation, as I paint it, is quite pessimistic. If the poor are not to be helped via an RH Bill, how will they then be helped? Could the issues associated with family planning be mere symptoms of a much more general problem of poverty? If so, how can such problems be solved without being to the prejudice of other pressing problems, e.g. tuberculosis? I think that through this line of questioning, we may start to get somewhere.

Instead of assuming that the best we can do for the poor is to make things easier for them even as they remain poor, I ask: What are the conditions that have allowed the rich and middle class to enjoy their standard of living, that have made products such as iPads and contraceptives accessible? If your answer is, “Through exploitation of the poor,” then I’m afraid there’s no hope for any of us, because this means the only way to raise up the poor is for them to exploit us.

But I refuse to believe such a paradigm, not so much because it’s undesirable, which it is, but because our daily lives attest to something else as cause of our relative prosperity: the ability to choose. When we have options open to us, we tend to make decisions that better our lot, and, if we affirm this same ability to choose in others, they’re better off as well.

If only such conditions prevailed, in contrast to the present monopolization of our many industries, e.g. banking, ‘public’ utilities, pharmaceuticals, etc. I have no doubt that this would make for more employment, more productivity, a better standard of living, so much so that the perceived need for an RH Bill is rendered moot, or marginal enough to be handled by local agencies ― the actions of which would not require legislation and tiring debates.


In closing

With the administration recently giving explicit support to this ‘Responsible Parenthood’ legislation, it is time to reevaluate our positions so as to not only fight for the right ends, e.g. poverty alleviation, but to support the right means.

Sincerely,
Me

P.S. Some additional thoughts of mine.


* The causality of monopoly [All that follows is premised on the fact that resources are finite]:
- Entrepreneurs need signals to decide where to risk to invest.
- With the government usurping specific resources for production of a good, such as contraceptives, non-favored producers face rising costs just to acquire these inputs, making it less viable and less appealing to invest for those without legislated mandate.
- A monopoly thus emerges.
- Sans competition, or with reduced competition, input costs rise further, indicating that more and more capital is diverted from other sectors in the economy to maintain output of the monopolized product. 

Additional notes on monopoly:
- Monopolies could not innovate, only maintain the status quo. It is via disequilibrating entrepreneurship, the taking of risks and failures of individual entities, that innovation could come about. A government that risks and fails ― which is the rule ― harms the sector as a whole.  
- Instead of assigning government the inevitably ineffecient task of production and/or distribution, it is government barriers to investment that must be dealt with so as to maximize the incentive to satisfy customers in the sector.
- Subsidies, as incentives to produce, have an opportunity cost, because they necessitate taking away from other sectors, with funding coming from taxes otherwise used to meet actual consumer preferences that signal other productive activities within the economy.