Work, not wage increase

BACKBENCHER

Rod P. Kapunan

5/5-6/2012

If it is true that in every commodity produced by the application of labor, capitalists earn their profit by forcing the workers to produce an amount beyond what they are paid for in what Karl Marx termed as "surplus value", then there would be no reason for some businesses to go bankrupt. Maybe Marx was correct, but his theory is more of a general proposition than a realistic assessment on how that theory would work in a system such as ours. This is the same fallacious proposition that has blindly goaded much of our workers to demand higher wages as their defensive mechanism to overcome the inflationary increases in the prices of basic commodities.

Following the same proposition, they are wholly unaware that a general increase in the minimum wage could trigger another round of inflation that often puts to an end that vicious cycle, for then employment comes to an end for many of them. They always tend to focus their demand on wage, which through years of unabated increases, have reared its ugly heads of employment scarcity and consigned the remaining jobs to labor-only contracting, thus effectively shamming their constitutional right to security of tenure.

Many of them could not see the difference between employment and wage or could analyze that the logical basis for any wage increase is employment. In fact, without employment there could be no talk about labor rights or much more for them to collectively organize for their own welfare and protection, including their right to demand for higher wages. But as it is, they want the best of both worlds, envisioning a workers' paradise that even the former Soviet Union failed to fulfil its promise to liberate the workers from the yoke of capitalist exploitation.

For the incessant demand for wage increases, contractualization made a rapid inroad that today, regular workers have been marginalized. Residually, contractualization destroyed the very system that promoted organized labor, and labor invariably lost its clout to bargain for higher wages, better rights and benefits. Unfortunately, the government that has consented to this odd socialist practice of fixing the cost of wage pushed the cost of labor to the limits; that today, the country stands as one of the highest in minimum wage in Southeast Asia but sourly failed to match its productive output.

Yes, many employers will possibly comply with the adjusted minimum wage, but in so doing would resort to the nefarious practice of labor-only contracting. They may comply to give their employees what they are entitled to receive under the law. But that would not allow any of them to stay beyond six months for that would mean their regularization, that by law would compel them to pay incremental benefits due to a regular employee, contribute to the Social Security System, PhilHealth, Pag-Ibig, Employees Compensation, pay for their 13th month pay, and possibly haggle with the labor unions which happen to companies that opt for direct hiring.

It is for these reasons why many employers are scratching their heads on where to get P426 daily to pay the minimum wage. If they will have to include their monthly contributions and pro rata the 13th month pay, that would run to over P500 a day. The sad part is that increased wages did not result in the efficiency of our workers. For our outlandish pricing in the cost of goods, our products have gradually been eased out of the market. This explains why in our time, a worker who is hired for his labor need not always result in him producing a surplus value for the capitalist. Employers now are likely to lose than earn.

Workers have to live up to that hard reality that for them to enjoy their constitutional right to security of tenure, they have to accept that compromise postulate that there is a need to adopt a new wage mechanism by making it flexible. The system of minimum wage in a capitalist system is a US model that has gotten their economy nowhere, and is being imposed here by their minions so for us to suffer the same fate. We have to restudy, not discard, the Marxist theory; that for as long as capitalism prevails, the socialist mechanism of pegging wage would have no place in our system. In fact, treating the value of labor as an intangible commodity is no different from the rest that can be sold and exchanged in the open market. Mass production in capitalism has effectively substituted and reduced labor as a commodity vulnerable to the indefensible vicissitudes of the law of supply and demand.

Only under a regime of deregulated wage could our workers put the economic system in labor back on track. Abolishing the minimum wage would not only unburden the employers of the high cost of wage, but could restore our competitiveness, usher in more employment, which is what we really want, generate more production with an assurance of continuity of employment so they could exercise their right to collectively bargain based on the true spirit of collective bargaining negotiations.

(rodkap@yahoo.com.ph)

ADB and Epira

DIE HARD III

Herman Tiu Laurel

5/4/2012

A lot of hype and drumbeating for the Asian Development Bank (ADB) meet is in the air this week, but we must remember that this is still a financial institution set up by the Western powers to control and exploit the direction of economic development in Asia even if it is delegated for the US' surrogate in the region — Japan.

Highlighting the ADB's exploitative role is the Electric Power Industry Reform Act (Epira), passed under duress from the Western multilateral financial institutions, i.e., the International Monetary Fund (IMF), the World Bank (WB) and the ADB — which all made the passage of the power privatization law a condition for the release of loans. The ADB released the second tranche of its Power Sector Restructuring loan of $400 million upon the signing of the Epira — a law that is now causing the sucking sound we hear on the Philippines' financial and economic resources, transferring massive wealth to foreign financial predators and local comprador oligarchs.

Nations and governments do not need these multilateral financial agencies if they want truly sovereign, independent and progressive growth. Although China is now a prominent and powerful member of the ADB, it didn't rely on the lending institution to build up the foundations of its economy and national development.

When Mao Zedong established the People's Republic of China in 1949, the ADB still hadn't been born. Yet even at that time, China was able to extend Official Development Assistance (ODA) loans to its ideologically-kindred countries the world over.

The ADB was only established in 1966 as an extension of the IMF-WB network. These multilateral financial agencies can be helpful to a nation only when that nation clearly knows what financial commitments are really in its interests and is capable of obtaining the just and beneficial terms, where privatization of public utilities, which is never beneficial to any nation and its people, is not included.

The Epira was a historic debacle for the Philippines, making the country the economic basket case of Asia. It destroyed productive industries; dashed employment generation hopes; and spread the kind of poverty that was recently highlighted in CNN's reportage on "pagpag," where people were seen eating and even selling food from garbage bins of fast food restaurants and hotels.

From the "leftover" debt the power privatization program has placed on the shoulders of the Filipino people, we can already see how much has been siphoned out thanks to the Epira: The power sector debt of P1 trillion still has to be paid to Independent Power Producers (IPPs) and creditors after more than a decade.

The profits carted away by the IPPs are humongous. Mirant, which sold off its Philippine IPP operations five years after it started in 2001, is estimated to have carted out $10 billion in profits. Then, in the IPP's transfer to Marubeni and Tepco, the global banks and investment houses earned a huge sum again in securitizing and financing the deal. Now, after five years, the same thing is to be repeated.

An alternative to the IMF-WB-ADB that developing nations may look forward to is the recently announced banking concept that was a fruit of the last meeting of the quintet of emerging world and regional economic powers (Brazil, Russia, India, China and South Africa). The Brics bank, a brainchild of the new alliance in its New Delhi meet, naturally elicited knee-jerk reactions from the IMF-WB.

WB Chief Robert Zoellick, for one, dismissed the idea perfunctorily as difficult to implement, unnecessary, and rivaling Western-dominated banks, only to reverse himself three days later, probably realizing the futility of his condescending attitude.

The Brics bank will be a reality a few years from today, and it will signal the end of Western and Japanese domination of the global financial and credit system. It will allow an alternative for developing nations to run to for development assistance without the usual onerous terms.

Some quarters make a big deal of the ADB being located in the Philippines. These quarters claim that the country benefits economically from the expenditures of the lender in the country. And in the case of the ADB's conference here in Manila, the spending for its 4,000 participants is being touted as a great boon.

The fact is, no matter where the ADB is located, it would still do the same thing — extend exploitative instead of genuinely developmental credit to developing countries.

The kind of economics these "ADB-philes" pursue is the same type we saw during the IMF meeting in the Philippines in 1976 that caused a mushrooming of hotels that subsequently should have boosted tourism but never did in the 40 years that followed — because hotels are a wrong infrastructure for a developing nation like ours.

Truly, there is no durable and long-term benefit from such evanescent "junket" economics. Genuine development requires us to first be sovereign to build national "hard industries," which have all been junked today.

ADB Chief Haruhiko Kuroda announced a $12-billion Special Drawing Rights (SDRs), or money created out of thin air, to be lent out to "Asia's Poorest;" but in exchange for what? Invariably, it will be in exchange for one form of economic subservience of the debtor countries: Privatization; opening up of markets; opening up to genetically modified organisms (GMOs), large scale mining, etc.

With SDRs created out of thin air, they will have nations turn over their physical, material, tangible, and operational assets to foreign corporations. Ultimately, as we have seen in this country, the chances are that loan recipient countries will become poorer and poorer, salvageable only if militantly pro-people and nationalist governments take over — as we are learning from Latin America these days, where privatized state assets, such as Spain's Repsol Oil in Argentina and Red Electrica Plc. in Bolivia, are being restored through nationalization, allowing people to recover just living standards.

(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on "Tampakan anti-large scale mining updates;" visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Scar- or "Share"-borough shoals?

Herman Tiu Laurel

4/30-5/6/2012

OpinYon

Viewing the Scarborough affair from my lighthouse and watching humongous Chinese ships crisscross puny Philippine civilian vessels, I noted that these goings-on were really tiny insignificant specks in the vastness of the China Sea.

Looking northward, I can see Vietnam and all I see are busy surveyor ships with Vietnamese, Russian, and Indian markings plowing through that part of the waters, pausing very frequently to drop what seems like dipsticks, long measuring tapes, sensors, cameras, and other analytical instruments.

These are two contrasting approaches to the territorial rows of two different countries with China--the Philippines and Vietnam. While one seems to be creating a scar over the surface of the sea, the other is creating an atmosphere of broader cooperation with many countries that even China will eventually have to accept and join.

Vietnam is engaged in the "share-borough" approach, having joint oil exploration pacts with India and Russia, both members of the BRICS (Brazil, Russia, India, China and South Africa) alliance, with whom China would not want to have conflicts with.

The Philippines has so far opted to take a testy route in navigating its spat with China which appears both foolish and stupid to most analysts--though the BS Aquino III administration may believe this is earning patriot points (which I doubt).

The BS Aquino Foreign and Defense secretaries have been openly announcing to media that they are on a trip to Washington toward the end of April to bring up the problem of China's claim to the Scarborough shoals, which smacks to everyone watching as the crybaby running to its big brother. Pitiful, to say the least.

With the approach the BS Aquino government is taking in this dispute over the shoals off the coast of Zambales, the Philippines will be tied to US interests, practically committing our country to tie up on any exploration ventures only with the US and its traditional partners, such a Britain (as in the Malampaya gas-to-power project with Shell and Chevron-Texaco, which gives the Philippines only a 10% share). Is this the template the Philippines will have for all its future oil projects? It doesn't look good at all for the future of the Philippine energy picture and its national economy.

Conversely, the Vietnamese template is ideal: Deal with all countries with the capital and technology to tap underwater sea resources right now! China will not be able to resist for long to join the oil exploration bandwagon, and with its huge dollar reserves it can offer a great deal to beat the others to the punch--but, that is, if the Philippines is talking to it which up to this time it is not.

The Chinese complain through the grapevine that polite offers to talk tikoy or turkey have been met with stone silence from BS Aquino III. Could the reason for the Great Wall of Dedma (patay malisya) be his fear of US displeasure?

At the Diliman Book Club lectures where Filipino China expert Chito Sta. Romana spoke for five hours (aided by 85 Power Point slides), the discussion on the Scarborough shoal issue was the liveliest. The number of Tsinoy tycoons there insisted that they are aware of the overtures China have made to the BS Aquino III government on cooperation with fantastic "you can't refuse" propositions, but Aquino just won't respond. Many are convinced it is his fear of Uncle Tom in the embassy on Roxas Blvd. that stymies him.

The US plan for the Asia-Pacific, as announced by Obama last December when he spoke during a visit to Australia, is to bring US military focus back to the region. That has just begun with the deployment of the first contingent of 2,500 US Marines to be stationed in Darwin, Northern Australia--the base of McArthur during World War II. This time, the US seems to be preempting any possibility or maybe preparing to position first-strike capability. The announced missile defense deployment in the region using the North Korean "threat" as an excuse has similar implications. In all, the Philippines seems to be playing into this game plan.

From the lighthouse we can see many things, and we can issue the warnings. As I said in the Diliman Book Club discussion, the Filipino intelligentsia has the obligation to remind the people to always "Remember to remember" and teach the old truisms, such as "Power corrupts, absolute power corrupts absolutely," which describe the likely consequences of US and NATO drives today to regain absolute power over the world. I added, it is the obligation of the intelligentsia to help promote the multipolar world, which is the only likely guarantee that US-NATO unilateralism can be stopped.

Multipolarism is a fundamental policy the world must maintain today in order to prevent a reversion to the unipolar world of the last two decades, which led the US under Bush and the neocons to dream and implement the so-called Project for a New American Century that created the 9/11 inside job to launch invasions into Iraq, Afghanistan, and now expanding to the rest of the World.

Only multipolarism, with BRICS at the helm, can stop this. China understands this; and that's why the Vietnamese template is the best and most promising direction for PH-Sino relations over the China Sea disputes.

But can we hope for rational, intelligent, courageous, independent, imaginative and truly nationalist and patriotic actions from a leadership that is bred in the tradition of collaborating with the ruling colonial master?

When the lolo is a collaborator of the Japanese; when the father admits to working "with the Americans;" and the mother one was the one who gave away Sabah, a true national patrimony, what can we expect from the present Aquino-Cojuangco on the throne?

Still, hope springs eternal. Perhaps efforts to enlighten them may find the mark at some time, so we can only keep trying.

The day sinks down the horizon and from this lighthouse the darkening skies are quiet and beautiful. There are no dark clouds over Scarborough shoals and the star lights peep out one by one. The sea is clam; there are no scars on the surface… yet.

(Tune in to 1098AM, DWAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on "Anti-Large Scale Mining Update: Tampakan;" visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)