Political Economy - Philippines

Political Economy

Economics, in its most general sense, is the science of scarcity. It deals with the allocation and distribution of limited resources to the economic elements concerned. The distribution of these resources is however a complex process involving supply and demand. The trade of goods and services is manifest in the market. Thus, the market is an essential part of the society. The society can hardly function without a market where the demands of the people, from the most basic necessities to luxury, are generally sufficed. Expansion of the market is a goal of a lot of economies. The market is a determinant of the quality and the stability of the economy, and the economy is the society’s most physical and concrete basis of its progress and wealth.
Most of the economic giants of the world are capitalist countries characterized by large corporations producing and distributing capital goods for a profit. Private interests drive capitalism but as what Adam Smith described, private interests ultimately lead to the public welfare by what he called the invisible hand. This is an ideal scenario in the free market. However, minimal intervention of government in the market is still advantageous for the nation, as long as the main intention leans toward the benefit of the society. Most, if not all of the countries in the world allow their government to interfere with the market, giving the government power to manipulate the economy. The ability to influence the economy is indeed a great responsibility, but most of the time, it is seen as a privilege that is very hard to pass. This is clearly shown in the movie Fahrenheit 9/11. The movie shows how George W. Bush used his political position to gain an upper hand in his economic status. It presents how his private interests negatively affected the public that eventually led to hostilities where a lot of people suffered. The social life of the people is greatly defined by their economic status. We can see the economic nature of the different social institutions starting from the most basic unit of the society, which is the family. Economic stability is an ultimate goal to achieve. Education, too, especially in the Philippines is very economic in nature. That is why it is impossible to prevent people from pursuing their own private economic interest, even at the expense of others. As what the Pareto optimality states, you cannot be better off without making someone worse off. The Philippines is still regarded as a developing country. More harshly said, it is not yet as rich and as developed as the first world countries. After the world war II, the Philippines was seen as one of the countries most likely to achieve economic power in the future. But as we can all see, this assumption is far from reality. History can account for the fact that the structural weaknesses of the government eventually led to our present economic status. A lot of reforms passed by certain politicians failed, which I deem is because of the major changes of economic plans from president to president. The government’s long-term program dies after a new president is elected. The Philippines is still a young nation and I don’t think it has the capacity to cope with major transformation in a short time. The constant alteration and modifications in the market clearly has a negative effect in our society. Poverty is the result of our country’s economic predicament. The fraction of the population of the country below the poverty line is an obvious indication that most of the people in the Philippine society are not having their fair share of its resources. The distribution of income in our nation is apparently defective. The wealth of our nation is concentrated on the elite rulers who have market power over the country. These people are able to continue working at their private interest and at the same time, influence those who are in political power in order to maintain their economic status. Economic power is very powerful. Placing it in the hands of a small number of people can be very risky for the society. As a popular cliché goes, absolute power corrupts absolutely.