Booty capitalism

In what we call "electoral democracy", the oligarchy perpetuates itself by "investing" in candidates in order to lock in policies favorable to the distortions that mar our economy. These distortions stunt the growth of independent entrepreneurs, raise the costs of doing business in the country, promote unemployment and conserve widespread poverty.

It is funding from vested interests groups that keeps our political parties weak and our policy structure permeable to special interests. It is that disproportional volume of funding from vested interests that produces the spectacle of incompetents emerging as "presidentiables" and arrogant demagogues posturing for power.

Economic Planning Secretary Romulo Neri created a stir the other day when he revealed that taipans and tycoons have managed to hold hostage vital financial and economic reform measures because they dangled large campaign contributions before the politicians. That ability by vested interests to block reforms was what exasperated Finance Secretary Isidro Camacho, who resigned last month pleading emotional and financial exhaustion.

Neri knows whereof he speaks. He served for years as director-general of the congressional planning and budget office. The House of Representatives is one of the main arenas where the preponderance of vested interests is most visible.

Neri is likewise a member of the Foundation for Economic Freedom, a band of economists and policy advocates pushing for a truly democratic society driven by open competition and the free play of market forces untrammeled by oligarchic politics.

He speaks on a matter we know all about it in our guts but about which politicians would rather not dwell on.

Elections are unduly expensive in this country. They often drive up the inflation rate. They definitely push up consumption during the campaign period. They have created an impoverished political culture where voters see candidates as a source of transient income. Even the armed communist movement partakes of this warped culture of elections, collecting hundreds of millions through extortion from candidates.

And after elections are over, the "investors" who staked good money on bankable candidates, much like gamblers stake their money on racehorses or on a roll of the dice, come in to collect. They collect either in the form of scandalous public contracts or by winning assurance policies beneficial to their monopolies will remain.

The phenomenon produces the sort of highly politicized, inefficient and perpetually stymied economy that we have. Analysts have described the Philippine economy as "booty capitalism" – a condition where profitability is a function of political connection.

Neri thinks that public funding for the political parties might help alleviate the situation. If government subsidizes the political parties, as many European nations do, that might reduce dependence on "electoral investors" and bring down the level of corruption induced by campaign spending.

There is a point to that. For years, Neri and House Speaker Jose de Venecia have been advocating state subsidies for the political parties. But the response has not been overwhelming. Perhaps, if we shifted to a parliamentary form, more conducive to the strengthening of the political party system, public subsidies might work.

There is merit in the observation of Bill Luz, executive director of the Makati Business Club, that public subsidies for the political parties might not cure the malaise that afflicts our electoral democracy.

Given present circumstances, there is nothing that will prevent candidates from availing of the subsidies and then collecting funds from "electoral investors." In which case, concludes Luz, the politicians will simply have more money to play with. A part of it, sadly, will come from the taxpayers’ pockets even if ordinary taxpayers have little interest and little means to influence the shape of our economic policies.

Luz’s observation is true if things remain the same, if our electoral politics continues to be based on weak political parties and our political elites elevated to power on the basis of mere popularity.

No doubt, there is much work to be done. We have to comprehensively reinvent our political culture if we are to progress.

Perhaps we have reached the depths of our malpractice of democracy.

Last week, three senators were heard threatening to withhold the budget of the Department of Transportation and Communications if a functionary at the Civil Aeronautics Board was not taken out of his post. That functionary caused no grief to the three senators. But he has stood firmly on behalf of airline consumers against the self-serving demands of a known airline tycoon.

That airline tycoon, a Marcos crony who survived the fall of the dictatorship, has a well-deserved reputation for "investing" in electoral war chests. It is no coincidence that politicians scramble to cross party lines to be at his beck and call. It is no coincidence either that even leftist groups – as they have recently done through expensive paid advertisements – allow themselves to be used as front-liners to fight for this crony’s interest.

There is much that needs to be done to repair the damaged democracy we practice with relish. The most urgent reason for such repair is to prevent the oligarchy from perpetuating itself by maintaining the political class in its grip.

It is the distorted economic policy structure, shaped by oligarchs "investing" in elections, that keeps our choices hampered and our people poor. It is this warped culture and this warped politics that makes our people vulnerable to false prophets and to stray ideologies.

Neri touches on a point that might seem simple at first glance. But it is profound and complex. It is deeply rooted and intertwined with many of the other things we do in our national life.

None would conclude that Filipinos get the politics they deserve. Nor that they get the economy that treats all justly.

In the circumstances we must put up with, it is easy to be lured by demagogues promising instant salvation. Demagogues who make political hay by blaming foreigners or the sitting president for all the obvious ills we endure.

Electoral seasons are, unhappily, not the best circumstances to deal soberly with the complex problems we must solve and the comprehensive solutions we must choose. The messy facts are snowed under the glitz and carpeted over by campaign slush funds.

But we must thank the lonely voices, nevertheless, for reminding us that the reality we must all deal with eventually remains the same no matter how garnished the speeches of politicians might be.