booty capitalism

Gridlock or greed – a rejoinder

Randy David in his weekly op-ed column for the Inquirer wrote an entry called Between Gridlock and Greed. In it, he constructs a dichotomy between dysfunctional idealism and perverse pragmatism. He writes:

It is difficult to say which is preferable: a party-based politics that sometimes results in governmental gridlock, or a money-based politics that runs smoothly on pork barrel privileges.  America today illustrates the deep-rooted dysfunctions of the former, while the Philippines showcases the perverse pragmatism of the latter.

Prof David’s thesis is that although the gridlock of the US is the price that it has to pay for being a mature democracy, it is still preferable to our situation where the costs of greed in the form of bad policy exceeds the benefits it generates by way of smooth working relationships.

In my view this a false dichotomy. The opposition between gridlock versus greed is in my view not only flawed on the grounds that the United States is a poor example of the former, it is flawed because it assumes that greed or self-interest does not lead to gridlock.

The dysfunctional party-based politics Prof David refers to is the ongoing fight on Capitol Hill over what to do with the government’s fiscal debt and deficits. Tea Party conservatives who comprise the budget hawks, were unyielding to both Democrats and fellow Republicans and forced a temporary shutdown of services by the US government.

In the weeks leading up to the government shutdown, Speaker Boehner was put in an embarrassing position by this minority bloc. What occurred was a breakdown of party discipline, with recalcitrant members refusing to abide by the decision of their leaders. This does not just occur in the Republican Party alone–some members of the Democratic Party, the so-called “Reagan democrats” have on occasion crossed the aisle to side with their conservative counterparts on social issues like gun control.

If this is what Prof David meant by party-based politics, I am afraid that the example does not hold up well. Contrast that with party-based politics in the Westminster system, where there is strict adherence to platforms and positions within parties. Does such strict adherence to party discipline lead to gridlock?

I would use as an example the Gillard Labor government in Australia which was in power from 2010-13. It led a minority government, meaning the ruling the Labor party forged an agreement with the party of the Greens and a few independents to form government.

Some said that this would lead to gridlock. In fact the government of PM Julia Gillard has been shown to be the most productive, passing nearly all of its proposed bills including three budgets on time. I am afraid the problem is more nuanced and complex than the way Prof David poses it in his dichotomy.

The US example actually proves that greed can create gridlock. The wishy-washy Republican house leadership was due to Speaker Boehner wanting to keep his position. He was compelled to pander to the whims of the minority tea party caucus out of self-interest, which trumped the national interest.

In the Philippines, the spending program in the first semester of 2011 was not disbursed on time because the government was afraid that much of it would go to waste. For this reason, growth was held ransom to gridlock. If in the US one tenth of one percent of GDP is the projected cost of a temporary shutdown, in the Philippines, GDP halved from 7 to 3.5 per cent due to fiscal contraction. DAP was the solution, which pandered to self-interest and greed..

In Prof David’s analysis, there is a continuum from feudalism to modernity, and progress proceeds along a linear path from one end of the spectrum to the other. The Weberian state (named after Max Weber) is held up as the ideal against which all others must be measured.

Rather than a dichotomy, I would prefer a typology of development along the lines of Paul Hutchcroft, where you have state strength on one continuum and society’s prime motives on the other. The US is an example of a laissez-faire, regulatory state in which the state is weak compared to business groups whose prime motive is to seek profits under a rational-legal system. Gridlock as one conservative commentator George F Will points out, is not just a feature of its system, it is built in to it.

typology of states

The Philippines on the other hand is a patrimonial, booty capitalist state where the government is susceptible to capture by the elite, who operate on the basis of monopolistic rent capitalism and patronage. To complete this typology, we could consider China, Japan from the 1920s-70s, South Korea, Taiwan and Singapore, developmental states able to co-opt the business elite to serve their nation building agenda, as well as Malaysia, Indonesia and Thailand, bureaucratic states able to withstand pressure from society, but relatively more patrimonial.

Rather than defining progress in terms of a linear path to modernity, I would rather we look at where the Philippines can position itself in the future. The problem is that there is hardly any leader or party at the moment who is thinking in these terms. They either operate on the basis of survival, or seek to shape the Philippines in the image of its former colonial masters in one go.

Often, reformers realise that because they can’t attain that lofty goal, it is better to use patronage to further their agenda. This is where David’s dilemma comes into play. Is it alright to keep that system of patronage in place, to use it for good, when the next government could undo whatever advances are made using that same system?

What is missing is a coherent plan and cohesive party which mobilises a constituency behind that agenda. If Philippine politics had this, it wouldn’t matter if some forms of patronage still remained in some quarters. They would be minimised by virtue of the fact that everyone was on board. The plan, the constituency and party discipline would keep them in check.