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-----------------------------------------------------------Trickle-down Economics: UP Libertad's Flawed Ideology

Trickle-down Economics has been the most destructive economic force since the Gr
eat Depression which led to the collapse of the housing market in 2008. Adherent
s like Reagan, Thatcher, Ramos, conservatives and libertarians borrow their idea
s from the Austrian and Chicago Schools which advocate for limited government. T
hey believe that regulation hampers economic growth, that taxes prevent business
es from growing, and that the government's actions intrude into their personal f
reedoms. These leaders have made tax cuts for the rich, deregulation for the pow
erful, and wage suppression central aspects of their administrations' economic p
olicy. And it shouldn't surprise anyone that these have dug an even deeper hole
for those who are already struggling to get out of poverty. This combination of
the most naive, selfish, and cold-hearted policies is favored by many oligarchs
and I think that's a sufficient reason to take a deeper look into their pronounc
ements and ask any free market advocate about the implications of unregulated ca
pitalism.
Labor Policies
Trickle down advocates say that when wages go up, employment goes down. It sound
s like legit economics. Although, in reality it's an intimidation tactic masquer
ading as sound economic theory. It's the oldest trick in the businessman's job s
uppression handbook. Nevertheless, as an advocate of absolute free speech, I adm
ire UP Libertad for speaking up about their principles. The best way to prevent
an ideology from reaching the President's desk is by actively talking about them
and I hope that future debates between the far-right and the far-left will give
rise to a labor party that believes in the moderate principles of post-Keynesia
n economics.
Libertarianism has a ___ populist appeal. Anyone who has no knoweldge of the com
peting economic philosophies would find it hard to object to the basic tenets of
libertarianism. On the minimum wage alone, however, there are already a handful
of questions that can put libertarians on the defensive: Do lower taxes for com
panies really favor minimum-wage earners? What incentive will there be for execu
tives to raise the wages of people working in factories when they can pay you wi
th the lowest wage possible and not be threatened with government lawsuits? Why
should they pay workers first when giving their profit in the form of dividends
to shareholders will attract more investors, and raise their stock's price in th
e long run? Do you honestly believe that unregulated executives will think of th
e welfare of its employees first?
One good example is SM. Since 2005, their stock price has grown from Php 198 to
Php 960. That's 385%! Did the salary of minimum wage employees of SM also increa
se by 385% or anywhere near that rate? Of course not! Another example is the US
economy. Since the Great Depression, the US middle class has grown massively bec
ause of welfare programs of Roosevelt, Kennedy, and Johnson. When Reagan came in
, much of the economic growth was concentrated in the upper class because of ass
aults on labo unions, the minimum wage, and on welfare programs.
I agree that the government has spent so much in terms of welfare--welfare for t
he rich, that is. Because of a series of flawed labor policies and lax tax rates
on giant corporations, the government has been forced to pay more in terms of h
ealth care, free education, etc, which should not have happened if companies wer
en't paying their employees with death wages.
In essence, what libertarianism is about is making acceptable the employer's mor
ally callous practices of abandoning its employees for the sake of profits. It
prioritizes the interests of the wealthy to realize its flawed notion of freedom

. Its stance on many labor issues is based on so many false assumptions that the
Left should do everything to expose the ideas of UP Libertad for what they real
ly are before we end up with policymakers who would replicate the terrible ideas
of Milton Friedman and Ludwig von Mises.
Some of the false assumptions of libertarians are:
1. That for every company that pays the lowest wages, the free market can provid
e another company which would pay higher wages and force the first one to increa
se its own.
2. That allowing foreign companies to run businesses here will prevent mergers.
Some companies already have monopolistic control in some markets. Mergers have
made them more powerful. They can lower the prices of their products anytime to
kill medium-sized businesses, and then raise it when no competitor is left. Allo
wing foreign companies to compete would be great if we want to foster competitio
n. But libertarians want to disband the government. Without the power to regulat
e, we're faced with the possibility of giant local corporations teaming up again
st foreign corporations making it even harder for small businesses to get ahead
or even enter the market.
3. Corporations will do everything to save the environment even if it meant lowe
r (or even zero) profits.
4. Raising the workers' wages is a burden for employers.
5. That having private prisons running our criminal justice system won't lead to
mass incarceration.
6. That opening the Philippine market to foreign competitors will attract more i
nvestors who will raise our salaries.
7. That those running small and medium businesses are angels who will do everyth
ing to protect worker rights.
One can get an even greater idea about the ideology of free market libertarians
by looking at UP Libertad's ask.fm account:
Q: "How can a transition to libertarianism deal with the Philippines' major mono
polies?"
UP Libertad: "In the first place, the major monopolies in the Philippines only e
xist and keep existing because of anti-market government economic policy. Protec
tionist policies, such as the "60-40 rule" in the Constitution regulating foreig
n investment, only serve to protect the businesses of local oligarchs from compe
tition. Excessive labor regulations can be absorbed easily by big businesses, bu
t make it hard for small businesses to hire and fire. Policies like these perpet
uate the monopolies by hindering competition. In a transition to libertarianism,
the major monopolies will actually have to compete by offering good products at
good prices, lest they lose to their competition."
How can the problem of the hegemony of local oligarchs be addressed by allowing
other oligarchs to run our country? Doesn't that make it more difficult for smal
l businesses to compete? This is where the weakest assumption of libertarianism
becomes apparent. Its vision of private corporations is that they're run by ange
ls who do what's right even without the government telling them to. Thousands of
lawsuits can prove that's not the case. Corporations exist to make profit. Peri
od. Anything it does is intended to generate more money. Allowing foreign corpor
ations to get in would force local oligarchs to make merger deals because they w
ouldn't want a foreign company taking away their share of the market. Although I
agree that too much protectionism hurts the economy, I think the opposite would
be equally catastrophic.

Q: "Mula sa pagkakaintindi ko, ina-advocate niyo ang free market kung saan hindi
nireregula ng gobyerno ang mga negosyo. Ngunit sino ang magpo-police sa mga pra
ctices nila? Self-regulation lang talaga? Tingin niyo hindi sila aabuso? Ngayon
ngang nireregulate ang businesses andaming abusadong kapitalista"
UP Libertad: "Una, ang ibig-sabihin ng "free market" ay hindi nakikialam ang gob
yerno sa supply, demand, at kalidad ng mga produkto at serbisyo. Ang mga abuso n
a lumalabag sa karapatan ng mga tao at empleyado, tulad ng pagdaraya, ay bawal p
a rin.
Ang mga negosyo sa isang free market ay mananagot sa kanilang mga customer, empl
eyado, at kalaban sa negosyo. Kompetisyon sa negosyo ay ang paraan ng pananaguta
n/accountability sa mga negosyo. Hindi dadayain o aabusuhin ng mga negosyo ang k
anilang mga customer at empleyado kung maaari silang lumipat sa kalabang negosyo
.
May mga abusadong negosyo kahit na may regulasyon dahil ang mga malalaking negos
yo ay ginagamit ang regulasyon para tumakas sa kompetisyon. Sino ba ang enforcer
ng regulasyon? Ang gobyerno, na puno ng mga crony ng malalaking negosyo. Dahil
dito, ginagamit ang regulasyon para patayin ang kompetisyon: ang mga small and m
edium businesses. Para sa amin, ang kapantayan at katarungan ay makakamit sa pam
amagitan ng pagtanggal ng kapangyarihan ng gobyerno na makialam."
My response:
It's best to analyze these responses one-by-one.
Point 1: "Ang mga abuso na lumalabag sa karapatan ng mga tao at empleyado, tulad
ng pagdaraya, ay bawal pa rin."
Point 2: "Kompetisyon sa negosyo ay ang paraan ng pananagutan/accountability sa
mga negosyo."
Point 3: "Dahil ang mga malalaking negosyo ay ginagamit ang regulasyon para tuma
kas sa kompetisyon."
Point 4: "Ang gobyerno, na puno ng mga crony ng malalaking negosyo. Dahil dito,
ginagamit ang regulasyon para patayin ang kompetisyon: ang mga small and medium
businesses. Para sa amin, ang kapantayan at katarungan ay makakamit sa pamamagit
an ng pagtanggal ng kapangyarihan ng gobyerno na makialam."
Response to Sentence 1: In what way is it not allowed? Morally? Yes. Legally? C
ertainly not!
If the government no longer has the responsibility to regulate product quality,
how can consumers hold abusive corporations accountable? How can they file lawsu
its against the company's executives if there is no legal basis for their compla
ints? Wala kang standards set by a central institution, so the only way you can
seek justice is by telling other people not to buy from them. Move on nalang. Be
en using lead-contaminated products for months? Buy from another company. That's
the libertarian response. Move on and hope that their building burns down.
Response to Sentence 2: They admit my previous point. It is competition that wil
l bring down an abusive corporation, not the government. What does that mean for
consumers? It means that they will release defective and substandard products i
nto the markets first and make huge sums of money before the people find out and
simply start buying from other companies. And it means that the double-dead mea
t of company X that you've been eating will continue to be sold until someone sp
eaks up.
Response to Sentence 3: True. I think the solution is to reform the government a
nd set-up institutions that will prevent corrupt regulators instead of removing

the government altogether. For Filipino libertarians to conclude that the govern
ment can never function properly, they must have seen government go through all
kinds of reforms first. We've never done that. There's so much that needs to be
done, from political party reform to campaign finance reform. Despite the many f
laws of government, it has helped poor people to some degree. And so, to simply
assume that the problem stems from the mere presence of government and not from
the way it is organized is logically untrue.
Response to Sentence 4: Puno daw ang mga crony ang government? What's the best s
olution according to he libertarians? Let them roam free by removing the governm
ent's ability to regulate? Who would put them in jail? Private prisons? Any kind
of private prison? Pano pag nakatakas? Just hope that Adam Smith's invisible ha
nd magically creates a more secure prison cell for them.
UP Libertad: "Contractualization occurs because government regulations and manda
tes make it too expensive to regularize workers. "Banning contractualization is
not a solution. Doing so will only throw people out of work, make it even harder
for the unemployed to find jobs, and raise prices on goods and services."" - UP
Libertad
No, contractualization occurs because corporations can save more money through i
t. Lowering taxes and limiting the government's ability to regulate will not rem
ove contractualization. It will just strengthen it. Digong is right for appointi
ng a Joel Maglungsod, vice-char of KMU, as head of DOLE. While the Communists ar
e just as objectionable as the free market capitalists, I think we need their ra
dicalism to revitalize our labor unions, who despite their imperfections work to
provide employees with better working conditions.
Free Education
"We believe in less government, not more, and that also applies to educational i
nstitutions. Institutions of higher education are hampered by excess regulation
and dependence on the state. Therefore, we believe that universities must have f
iscal, administrative, and operational autonomy in order to be free from governm
ent influence. If subsidy is necessary, then it should be the students who are s
ubsidized directly, not the institutions." - UP Libertad
This is probably the craziest idea of the libertarians. To defund the Department
of Education/CHED, and eventually privatize our entire education system would m
ake Filipino education completely inaccessible to minorities and the poorer clas
s. It would blow up student debt and enrich the lending companies at the expense
of poor students. Laboratories and classrooms will improve but the biggest trad
e-off would be higher tuition rates. Further, letting private institutions run o
ur universities would drastically change the curriculum in favor of business-fri
endly courses. Who cares about physics and calculus when you can replace them w
ith marketing and sales courses? Even researchers would be at the mercy of this
ideology, because it would subject their research to the whims of ____. Since n
oone would find the Higgs Boson profitable, no businessman would ever fund it. I
n fact, only those researchers who are working on industry-relevant studies woul
d get private funding.
Environment
The US Libertarian Party wants to defund the Environmental Protection Agency (EP
A) and the Department of Education--two of our best hopes to save the environmen
t from further corporate assaults. Imagine privatizing our education system and
having Exxon Mobil offer free education for students. The top promoter of climat
e change denial would fund our education and is free to change its curriculum ac
cording to what suits its business model. This kind of practice is not unique to
the oil industry, it is true for every other company that wants to deny the tru

th about its products. And if that's not outrageous enough, listen to what Dr. M
ary Ruwart has to say:
"Obviously, owners make better environmental guardians than renters. If the gove
rnment sold its acreage to private ranchers, the new owners would make sure that
they grazed the land sustainably to maximize profit and yield.Indeed, ownership
of wildlife can literally save endangered species from extinction. Between 1979
and 1989, Kenya banned elephant hunting, yet the number of these noble beasts d
ropped from 65,000 to 19,000. In Zimbabwe during the same time period, however,
elephants could be legally owned and sold. The number of elephants increased fro
m 30,000 to 43,000 as their owners became fiercely protective of their "property
." Poachers didn't have a chance!
Similarly, commercialization of the buffalo saved it from extinction. We never w
orry about cattle becoming extinct, because their status as valuable "property"
encourages their propagation. The second step libertarians would take to protect
the environment and save endangered species would be to encourage private owner
ship of both land and animals."
Another stupid idea from the libertarians. And it's not just stupid, it's outrag
eous! Sometimes I wonder why the logo of free-market libertarians is not a huge
dollar sign. Greed is at the heart of the libertarian movement's policies. Every
thing they advocate must be profitable for giant corporations, cause who cares a
bout the oxygen you breathe when your bank account is full of cash? Take the buf
falo's case. Dr. Ruwart wants to legalize owning of elephants as well as defund
the EPA. In other words, let them have different owners. Don't worry about abus
ive owners. Expect Adam Smith's invisible hand to punch them in the face if they
ever subject the animals to harsh conditions. And I love how she's so implicit
about treating endangered animals as livestock!
Additionally, keep in mind that it's not just a portion of our country that woul
d be under private control. Every single island would be owned privately. It's n
ot enough that businesses are already a huge gamble for libertarians as well as
our education system, they want to gamble the environment too! Under a free mark
et system, our best hope for saving our forests and oceans is if a kind billionn
aire offered to buy them and did not touch any of the trees and animals. But if
some evil billionaire like Charles Koch happens to buy them, let the free market
run its course and expect Adam Smith's invisible hand to bring back to life the
dead animals.
This is one tactic of the libertarians that shows that their entire ideology is
based on one giant red herring and an irrational fear of a non-existent threat:
point out cases corruption of the government and use it to prove that it can nev
er do anything right. Indeed, the number of elephants in Kenya declined because
of a corrupt government. But what about the countries with efficient governments
like those in Europe? Should they defund their environmental agencies too? A ca
se of corruption in Kenya is not a general statement about the nature of governm
ents.
"In a libertarian society, individuals are responsible for themselves. They have
the right to bargain and negotiate for a job, which includes the pursuit of job
security." - UP Libertad
This is the crux of the libertarian movement--the belief that poor people should
be left to die in the street because they're "free." As Bill Maher puts it, som
e libertarians give libertarianism a bad name by being such selfish pricks.
Still, it's fair to point out that libertarianism spans the entire political com
pass, left to right. There are socialist and centrist libertarians. What I'm war
y of are the free market libertarians who want unregulated capitalism. This is o

ne of the most dangerous ideologies because it wants to deregulate the economy t


o maximize profits for the wealthy. Oh, and don't worry about people who are bor
n poor. Their 'freedom' would take care of that.