CHAPTER VII


POLITICAL-ECONOMIC IDEOLOGIES

AND SOCIAL JUSTICE

BENJAMIN T. TOLOSA JR.


What is the relationship between social justice and economics? While the answer might seem self-evident at first glance, in this critical period of Philippine history, this question needs more careful consideration, particularly by students and teachers of economics. In fact, the question can be posed in more direct and urgent terms: how can the study and teaching of economics be made more responsive to the demands of social justice in this country today?

Reflecting on these questions from the standpoint of a teacher of the subject, and drawing on experiences as a student of economics, I have divided this discussion into three main parts:

First: Why it is essential that we recognize from the outset that there are competing ideological perspectives in economics and why there is a need for a comparative political-economic1 approach in the study and teaching of the subject; second, a schematic presentation of major competing political-economic perspectives and their implications for social justice; and third, some trends in political-economic thinking on social justice in post-February, 1986, Philippines, as an illustration of this comparative ideological framework. The focus will be on the social justice and national economy provisions in the 1986 Constitution and on the general policies of the Aquino government.

THE NEED FOR A COMPARATIVE POLITICAL-

ECONOMICAL FRAMEWORK

Two economists, Leon Silk and Dudley Seers, have said:2

Economists have rarely been popular with the generality of people. This is strange, because economists have long insisted that their subject matter is the improvement of human welfare. Nevertheless, their critics have often called them a heartless crew, content with the calculus of more and less within the existing order--while so much of humanity suffers and dies, and the gross sins of society go unstudied and uncorrected. (Silk)

There is so much for economics graduates to unlearn, that unfortunately, the abler the student is in absorbing the current doctrine, the more difficult the process of adaptation. (Seers)

There is a good deal of cynicism in these statements. Certainly these comments seem to belie Paul Samuelson's claim that economics is the "queen of the social sciences". It is not my intention to discourage would-be change agents in the social sciences. But if we are to be serious and successful in inculcating the value of social justice and human rights among students of the social sciences and, particularly, of economics, some amount of "taking stock" is in order. Both student and teacher need to be jolted into a process of critical reflection.

Going back to the two quotations above, it is apparent that the criticisms are directed at a particular dominant tradition of economic theorizing and policy-making. Silk mentions "the calculus of more and less within the existing order". He is referring quite obviously to the marginalist tradition in economics. For many, economics has become a framework for understanding small changes, for making small adjustments within the prevailing socio-political system. But if social justice demands structural changes, e.g., the transformation of property relations, there is a clear inconsistency between the economic framework and the imperatives of social justice. Then perhaps we might agree with Dudley Seers that economics in this sense is best not learned at all. The starting point for making the study and teaching of economics responsive to the demands of social justice is to unearth the underlying assumptions about human beings and society that are rooted in various economic theories--often perceived to be value-free.

This first step will hopefully make us recognize that what we have is not a single "economic" perspective on society (and on social justice) which readily can be adopted to understand and respond to socio-economic issues. What we have are competing perspectives, paradigms, philosophies, ideologies.

Students ought to be disabused of the notion that economics is above ideological and political struggle. There is a common conception of economics as simply a "box of tools"--a "technical discipline" that is pragmatic and problem-oriented. What needs to be stressed is that behind the technical analyses are ideological presuppositions. Many of the solutions proposed for various problems are shaped by the way the problems themselves are defined.3

COMPETING POLITICAL-ECONOMIC IDEOLOGIES

AND THEIR SOCIAL JUSTICE IMPLICATIONS

This is not the place to discuss in detail and in depth the various ideological perspectives in political economy, since that would be subject matter for a semester or even two semester course in economics. I shall confine myself to a schematic presentation of these political-economic perspectives and try to draw out their social justice implications. My aim is to show that each perspective has a notion of what is "socially just" and thus of policy measures to achieve this objective.4

The schema (see illustration) shows the broad spectrum of major political-economic ideologies drawn in a traditional "left" to "right" axis. The schema also tries to illustrate that these ideologies have emerged in history often in reaction to one another.

The classical liberal ideology emerged from a traditional conservatism, with its emphasis on absolutist and paternalist rule by a sovereign who controlled both political and economic power. In that sense, liberalism was a "freedom movement" calling for "individual liberty" in both the political and socio-economic spheres. Liberal democracy emphasized political pluralism and parliamentary competition, separation of powers and civil liberties. Liberal capitalism stressed the right to private property and free enterprise, and the primacy of market forces over the state in making economic decisions; it therefore advocated a minimal role for the state in the economy.

On the left side of the diagram are perspectives which give greater importance to the "social" than to the "individual". It is argued that liberalism fails precisely in its central objective of "freedom" as long as this "freedom" is confined to the political sphere. For socialists, there is no genuine liberty apart from social equality. As democracy is not fully realized if its basic principles and institutions are not extended to the socio-economic sphere, they see freedom and democracy demanding the social ownership and control of the major means of production.

The schema shows also the historical division of the socialist movement into two main tendencies. One, tendency identifies with the legacy of Lenin and the Russian revolution of 1917. It sees the destruction or the "smashing" of the "bourgeois state" as a necessary step in the establishment of socialism. It also views the formation of a "vanguard" party organized along "democratic centralist" lines as a requirement. "Democratic Socialism", by contrast, rejects Leninism as inconsistent with the principles of socialism. It underlines the primacy of democracy in the construction and consolidation of socialism. It argues that the institutions and structures of political democracy are permanent achievements of humankind and therefore must not be destroyed. Socialism is to be characterized by democratic control of both the political and the economic decision-making processes. Democratic socialists believe in political pluralism and workers' socialism as pillars of the alternative society.

Towards the center of the diagram is a perspective which crystallized sometime in the 1930s-40s, particularly in the immediate post-war period. This ideology often is associated with the ideas of the British economist John Maynard Keynes but it can be seen also as the product of the historical and intellectual convergence of some aspects of liberalism

and socialism--thus the term "social liberalism". It is "liberal" to the extent that it upholds the institutions of private property and free enterprise, but at the same time, it questions as did Keynes, the efficacy of the free market in promoting efficiency, stability and equity in the macro-economy. Such a combination of beliefs has given rise to the so-called welfare ideology and the welfare state. But welfarism also emerged out of the political practice of democratic socialist parties, particularly in Europe--as result of both their achievements and their failures. Their commitment to both democracy and socialism found expression in their participation in parliamentary politics--the so-called "parliamentary road to socialism". But in the majority of cases, "socialist victories" were limited to reforms which improved workers' welfare within the essentially unchanged system of capitalist social relations.5

Recently, there has been a trend towards strong insistence on free enterprise and the free market. This revival has sometimes been termed "neo-liberalism". But the new liberalism is at the same also a "neo-conservatism" because while extolling the virtues of liberal capitalism, it increasingly rejects the values and institutions associated with liberal democracy. Political liberalism is seen as a hindrance to economic efficiency and growth. This "New Right" therefore combines economic liberalism and political authoritarianism. It argues that often the price of a "free economy" is a "strong state". The free operation of the market requires order. Conversely, the market itself has a way of ensuring order and thus is an institution of power and authority in society--an idea attractive to traditional conservatives.6

Economic theory and policy therefore cannot be abstracted from these larger ideological debates. For example, neo-classical economics with its conception of the economy as composed of atomistic consumers and producers maximizing their utility or profit needs to be understood in the light of the liberal ideology. Variants of Keynesian economics and Marxist political economy can likewise be located within a certain range in the spectrum of ideologies. Thus, the question of economics and social justice cannot be discussed independently of these ideologies. For example, classical liberal ideology tends to equate individual good with the common good--"individual utility" with "social utility". Social justice is advanced if there is equality of opportunity in the market. What the liberal and neo-liberal models overlook is that there are, to begin with, inequalities in the distribution of wealth and income which foreclose "equal opportunity" and "fair competition".

Economic theories and policies in the "social liberal" tradition believe that markets are basically flawed--that they often lead to inefficiency and inequity. Thus the state needs to intervene in the name of "social justice", i.e., to redistribute the fruits of production towards the poorer sectors of society.

The third general tradition in economics recognizes that economic inequalities are rooted in unequal production relations. Thus both those who adhere to Democratic Socialism and Marxism-Leninism believe that social justice can be achieved only if there is a fundamental transformation in the social relations of production.

Since the Philippines is considered as belonging to the so-called "Third World", it may also be worthwhile to try to locate the main perspectives on development in the political-economic schema used in this essay.7

Under the liberal, neo-liberal, and, partly, social-liberal categories would fall the models which define the process of development as that of "capitalization" and the building of the necessary social and political infrastructure to facilitate modernization. Of course, under this general perspective there is a strand which looks to the private sector as the main engine of growth. Another strand, which typified early development economics and which reflects Keynesian influence, recognizes the central role of the government in productive activity.

In the late 1960s and early 1970s, a perspective emerged in development studies which may be classified under the "social liberal" or even "social democratic" heading. The so-called "growth with equity" model pointed out that the historical record of development in the Third World showed that high rates of growth due to "capitalization" were often associated with deepening poverty and widening inequities. Therefore there was a need for an approach which stressed "distribution" together with "growth" or "capitalization".

Finally, there are the development models which correspond to the left side of the schema. These approaches underline the importance of popular or social control of socio-economic and political decision-making processes in the country. They call for the radical "transformation" of the prevailing socio-political system. Central to their analysis is the unequal relationship that presently exists between the developed "center" and the underdeveloped "periphery". Social justice, therefore, also demands national control of the development process.

TRENDS IN POLITICAL-ECONOMIC THINKING ON SOCIAL

JUSTICE IN POST-FEBRUARY 1986 PHILIPPINES

After outlining the major competing perspectives in political economy and their social justice implications, we can inquire into the current state of the ideological debate on the issue of social justice that has taken place since February, 1986. It is logical to begin this inquiry with the 1986 Constitution, and to focus on the general state policies enumerated in that document and its key articles on social justice and the national economy. What are the ideological underpinnings of the Constitution? It has been repeatedly said that the 1986 Constitution is a product of the February Revolution and thus can be understood only in the light of the socio-political forces and processes which led to the rise of the new government. The "ideology" of the Constitution reflects the "ideology/ies" of the groups behind the Aquino regime.

I would note three major ideological tendencies (with varying degrees of strength and coherence) which were represented in the political forces behind the February 1986 events and which permeate the present Constitution.

First, a clear anti-authoritarian sentiment was evident in the popular revolt against the Marcos dictatorship. There was therefore something in the Aquino government's rise to power akin to a liberal reaction to absolutism mentioned earlier. There is really no need to belabor the point that many provisions of the Constitution enunciate what is at the core of political liberalism: separation of powers, public accountability, respect for civil liberties and human rights.

Second, there are political groups who have continually called attention to the "unfinished character" of the February revolution. They argue that democracy cannot be fully consolidated unless basic social reforms are enacted to redress the problems of poverty and inequity in the country. Such groups remained largely outside or peripheral to the regime, but nonetheless their ideas have influenced the government and particularly the Constitution, in which at least a "social liberal" tendency is evident. The Social Justice Article, for example, is a manifestation of this redistributive ideology.

Third, there is a tendency which I consider to be quite problematic. An important component of the anti-Marcos coalition was anti-authoritarian because the dictatorship was seen to be "interventionist" and "crony capitalist". These groups therefore tended to equate political liberalization with economic liberalization--reminiscent of classical liberalism. The Constitution thus contains provisions which give primacy to the "private sector" in the area of the national economy and which mandates that the government protect and enhance "free enterprise". This tendency is quite problematic because as in the case of the neo-liberal model explained earlier, the advocacy of economic liberalism today is often associated with ideas more consistent with political authoritarianism than political liberalism. It is apparent therefore that the Constitution contains tendencies which may run contrary to one another, especially in the long run. Inevitably, a dominant ideological position will emerge.

A closer look at the Constitution will show the ideological trends which co-exist uneasily with one another. The politically liberal character of the document is clear enough. The Bill of Rights article is the strongest statement of this commitment. On the question of social liberalism, the Constitution says that "the state shall promote social justice in all phases of national development".8 But, of course, one has to ask what is the concept of "social justice" implied in this statement. In this section, as will be repeated in the national economy article, the government is called upon to intervene to foster distributive justice. The Constitution also "affirms labor as a primary social economic force" and underlines the duty of the State to "protect the rights of workers and promote the general welfare".9 In the same article, however, it says also that the "state recognizes the indispensable role of the private sector, encourages private enterprise and provides incentives to needed investments".10 This section illustrates the liberal economic tendencies of the Constitution, which on closer examination may conflict with the section on workers' rights.

The Social Justice Article as a whole, as earlier pointed out, embodies the general "social liberal" tendency of the Constitution, with its focus on labor rights, urban land reform, housing, agrarian reform, etc. There are also some sections in the National Economy Article which tend to reinforce this perspective. For example, a redistributive philosophy is behind such statements as "the use of property bears a social function"11 and the right to free enterprise as "subject to the duty of the State to promote distributive justice and to intervene when the common good demands."12 Nowhere in the Constitution do we find a statement on the "social nature of all property", but at least, the emphasis on individual rights is balanced by statements on social rights. Nevertheless, the article says that while the promotion of a "more equitable distribution of opportunities, income and wealth" is one of the goals of the economy, "expanding productivity" remains "the key to raising the quality of life for all, especially the underprivileged".13

These contradictory ideological tendencies were manifested also in the Aquino government and its policy thrusts. In its desire to preserve the ruling coalition of individuals and political forces, the government tried to maintain an uneasy balance among conflicting perspectives and demands: between a view which emphasizes greater political liberalism and pluralism, and another which calls for political order and stability; between its desire to redress poverty and inequity and its commitment to promote free enterprise. There was some truth to the government's description of itself as "centrist" in the sense that it tried earnestly to balance off these contradictory political strands and claims.

But clearly the dominant tendency has not been "social democratic" or even "social liberal".14 The Aquino administration increasingly made political and ideological choices in the direction of the business sector and military interests. While on the surface, such a trend may be reconciled with a commitment to liberal democracy, such a situation, as noted earlier, is at best problematic. In the interest of political consolidation the government gave in to military demands, particularly with respect to the insurgency and the law and order issues. The government pledged an all-out privatization policy as an incentive to would-be investors--local and foreign. Moreover, the administration sought alliances with provincial political clans in an attempt to widen its power bases on the local level. In the process, the government has distanced itself from earlier emphases on human rights, popular consultation and empowerment, and basic social reform.

Thus, it would be ultimately misleading for the government to continue to describe itself as "centrist" unless, of course, the range of ideological options is redefined to exclude some perspectives. Indeed, a question that needs continually to be posed is: where is the ideological "center of gravity"? A keen awareness of "ideological room for maneuver" is crucial in this precarious period of democratic transition.

CONCLUSION

Going back to the question of how social justice can be integrated into the teaching and study of economics, it is clear that a necessary first step is a certain of "ideological consciousness". We witness not only technical debates in economics, but also debates which have serious political and ideological ramifications for social justice. What is needed is a comparative approach to the teaching of economics. Students have to be exposed to the range of available political-economic perspectives and alternatives. The problem is that for years students have not been keenly aware of these competing paradigms. Such an anomalous situation must be corrected if we are to produce agents of change--students who are critical of the status quo and able to propose alternative solutions to the many socio-political problems faced by the country.

Secondly, while we must be conscious of the range of perspectives on "social justice", ultimately, we have to make individual and collective choices on which paradigm or ideology to adopt. What is involved is not simply academic discussion and debate. In these critical times when the character of Philippine "democracy" is being shaped, many crucial political battles are being waged on the cultural and ideological plain--battles to mould popular consciousness. Various political forces are seeking to analyze problems and define the terms of debate according to their particular perspectives and interests.

We cannot therefore remain indecisive, especially with regard to questions like "social justice" and "democracy". Indeed if we firmly believe in a particular conception of social justice, we must seek to appropriate the term. My own view is that a genuine commitment to "social justice and human rights" as enunciated in the Constitution implies a firm commitment to both political and socio-economic democratization in the country.

Finally, since I have stressed the positive role that ideological thinking plays in providing a general framework for understanding problems and proposing solutions, perhaps I should also warn against the danger of ideological rigidity and dogmatism. Ideology has an important critical function. But in the analysis of concrete socio-political events, there is a need to go beyond ideology. History is convoluted and often ambiguous.15 It requires an openness to the unexpected. It demands humility. Our experience of the February revolution should serve as a constant reminder of the uniqueness of concrete situations and the infinite possibilities of the present moment, both of which require flexibility in our perspectives and approaches.

Such an idea is not alien to Marxism. As Dr. Francisco Nemenzo often points out, dogmatism is incompatible with the true practice of dialectical materialism.16

For Christians, such openness is inextricably linked with the belief that the world is constantly being renewed and recreated--by human action, true, but only as a response of co-creators to the continuing call of the God in history. Action informed by political-economic ideologies ultimately demands an openness to grace.

Ateneo de Manila University

Manila

NOTES

1. By "political-economic" approach, I mean the use of a general framework which takes as starting point the integral link between wealth and power; between economic and political relations.

2. Leon Silk, The Economists (New York: Basic Books, 1976), p. 243; Dudley Seers, "The Limitations of the Special Case," Bulletin of the Oxford Institute of Economics and Statistics, 25 (no. 2; May, 1963), p. 80.

3. Cf. Joe Holland and Peter Henriot, Social Analysis (Washington, D.C.: Center of Concern, 1983).

4. Cf. Ken Cole, John Cameron and Chris Edwards, Why Economists Disagree (London: Longman Group Ltd., 1983) for an example of a textbook which takes a comparative approach to economic theory.

5. Adam Przeworski, "Social Democracy as a Historical Phenomenon," New Left Review, no. 122 (July-August, 1980).

6. Ruth Levitas, ed. The Ideology of the New Right (Cambridge: Polity Press, 1986).

7. Cf. Charles Wilber and Kenneth Jameson, "Paradigms of Economic Development and Beyond" in Charles Wilber, ed., The Political Economy of Development and Underdevelopment (New York: Random House, 1984) for a discussion of competing perspectives in development studies.

8. The Constitution of the Republic of the Philippines, 1986, Article II, section 10.

9. Ibid., Article II, section 18.

10. Ibid.

11. Ibid., Article XII, section 6.

12. Ibid.

13. Ibid., Article XII, section 1.

14. Cf. Benjamin T. Tolosa, Jr., "Constraints on Democratic Consolidation and the Economic Ideology of the Aquino Government," Budhi Papers (no. 8; 1987).

15. Wilber and Jameson, pp. 20-23.

16. Cf. Francisco Nemenzo, "Commentary," Pulso, 1 (no. 2; 1985), 289-97.