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Opportunity to reform market economy

Part 3

Over the short run the government is well advised to allow the opening of public schools to in-person instruction  as early as possible.  We need not wait until a vaccine is discovered.  As pointed out by The Economist in an article entitled “The risks of keeping schools closed far outweigh the benefits,” (July 18, 2020), COVID-19 poses a low risk to children.  Those under 10, according to British figures, are a thousand times less likely to die than someone aged between 70 and 79.  Children are not especially likely to infect others.  As a host of studies in developing countries have shown, education is the surest path out of poverty.  Depriving children of it will doom them to poorer, shorter, less fulfilling lives.  The World Bank estimates that five months of school closures would cut lifetime earnings for the children who are affected by $10 trillion in today’s money, equivalent to 7 percent of current GDP.  President Duterte should listen to officials of the Department of Education and Culture who recommend that at least in the regions with low risks of infection, schools should be allowed to open for in-person instruction as early as possible.

To attain inclusive and integral human development, it is clear that the State will have to be a more pro-active agent in economic development.  This may not be to the liking of the pro-free market conservatives.  There is no way, however, that society can address the challenges of a continuing threat from the corona virus without strong state intervention, not only in terms of strict regulations of human behaviour but also in propping up a weak economy that results from these restrictions.  This new arrangement that transfers a greater burden to the State in achieving more inclusive development could be an opportunity for the private sector to finally de-emphasize profit maximisation as the ultimate end of business but to give greater importance to helping address certain societal goals while making a reasonable rate of return on capital invested.  While there will always be some business people who will be motivated by greed (as in the case of the top executives of the infamous German company Wirecard), it is hoped that the pandemic has shocked societies to such an extent that there  will be an increase of people going to business as human beings who are motivated by the desire to build a more just and humane society.

I am sincerely hoping that the tragedies that have fallen on the lives of hundreds of millions of people all over the world who have lost their jobs and their means of livelihood will increase the number of those who start businesses with the main intention of having a positive impact on society.  I hope there will be more entrepreneurs, especially among the millennials and centennials, who will want to establish what are known as social enterprises (businesses that are for-profit but are started primarily to address a social need like generating employment, cleaning the environment, improving the quality of education, or improving the state of public health).  I also hope that even those companies whose main reason for existence is still to make a profit will follow the example of the leading Philippine corporations that showed outstanding philanthropy during the pandemic by generously spending hundreds of millions of pesos in constructing medical facilities for COVID-patients, donating Personal Protective Equipment, and performing varied forms of corporal works of mercy.  May their tribe increase in the new normal.

Especially worthy of note is the logistics hub being put up by San Miguel Corporation in tandem with a social enterprise called Rural Rising PH, as reported by Karl Ocampo in  The Philippine Daily Inquirer (July 20, 2020).    Called the “Better World” sustainability project, it  is meant to cut the additional costs often slapped by middlemen and traders on food commodities by bringing the products directly to consumers and resellers at farm-gate prices.  It will be located on a  property owned by SMC in UP Village, Diliman, Quezon City.  It will initially function as a central marketplace for fruits and vegetables from all over Luzon. Eventually, the two organisations said that they would develop programs to teach farming skills and cottage industries to interested farmers and consumers.  Killing two birds with one stone, the property will also be used as a food distribution centre where excess produce may be distributed to urban poor communities in the Metro Manila area that do now have access to nutritious and affordable food.  This is a perfect example of a partnership between the State (providing the needed rural infrastructures) and the private sector coming up with the last mile logistics facilities to help both rural and urban poor.

As author Fr. Alfonso-Lasheras wrote in his reflections on Pope Francis’ “The Joy of the Gospel”, “The economy and economic sciences are invited to not lose sight of their ability to initiate processes that can include  more and more people in the economy; an economy that must increasingly and more efficiently provide the necessary means for a decent life to as many people as possible.  The economy and the economic scenes are invited to see the profound unity of economic processes that must prevail over conflict and competition.  The market is not only the place where producers, sellers, and consumers enter into competition.  The market is also an  expression of a community that enables and supports the economic performance; the community is a moral-ecological niche that sustains the life of a legal and economic institution like that of the market.  The economy and economic sciences are invited to build a discourse in which economic ideas are always in dialogue with reality, instead of concealing it…”  This pandemic is indeed an opportunity to reform the market economy along the lines of the social teachings of the Catholic Church.

For comments, my email address is bernardo.villegas@uap.asia


Source: Manila Bulletin (https://mb.com.ph/2020/08/18/opportunity-to-reform-market-economy-3/?utm_source=rss&utm_medium=rss&utm_campaign=opportunity-to-reform-market-economy-3)

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