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Originally Posted by $5 submissions
Hi Webby,
Free market reforms are the boogyman here. Take the Power Industry reform Act. It sought to privatize the state monopoly on power and sure enough a shadowy entity with mystery owners sought to take the transmission corporation off the government's hands as the SOLE BIDDER in a murky transaction. Some senators are saying that this is just another ploy to keep power transmission monopolized and centralized in the same hands that keep power rates in Manila the second highest rates in Asia (next to Tokyo!).
Many of the people that complain against economic liberalization are the cement producers, flour millers, car assemblers, and other corporate entities that survive only because of high tarrifs. Almost all are extremely inefficient sippingand are MORE EXPENSIVE than their import competitors (even after slapping on the tarriff!). Of course, to abolish these tarriffs would "destroy" local "industries". Are these really industries? I define industry as some enterprise that survives because of market dynamics not because of market distortions imposed by government fiat and protectionism.
Indeed, in the CONSTITUTION of the Philippines, foreign ownership and participation in certain parts of the economy are severely restricted. End result: monopolistic practices, high prices, crappy selection, and stunted economic growth.
I am not saying that Capitalism fixes everything BUT..... it sure is better than a closed MONOPOLIST system that benefits only a few and erodes and punishes the purchasing power of the majority for the benefit of a minority.
What do you think?
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Hola $5
Your solution (fire insurance) probably says it all. Generally monopolies are better dismantled - they rarely serve anyone other than their owners, and often these "owners" are involved, of have been involved, in governments and managed to swing some deals their way. There are classic examples of that in Latin America - and even when the individuals have arrest warrants out, - they still collect the proceeds from their corrupt deals while on the "chat circuit" with other world leaders.
On a conventional shareholding corp - it's probably equally as bad when they become monopolies, tho can vary. Example.. although we may all moan at Mr Gates and Microsoft, - that was the first corp to establish a "common standard" in operating systems. Up to that time, it was a mish-mash of OS's. (Wether any of the other OS's may have been better as a standard, is another story.)
The flip side is several drug companies ("legalized drugs") who act as tho they are street pushers and dispense solutions for almost every ailment at a grossly inflated price and never actually address any "cure". It's more profitable to avoid going into the "cure business". They earn more out of dealing than drug cartels.
Then there's the ugly side to monopolies - usually with a degree of corruption involved. Example is in South America where the govt sold out water rights to a California-based corp and where the population generally could not afford to pay the ripoff cost of water and started collecting rainwater till there were claims that that also, was chargeable
(They were booted out in the end)
One stage upwards from that is, (and where there are dangers of "free trade") is that governments (of other countries) become the monopoly in a nation. Example being... purchasing the utility services and infrastructure of other countries - soley with a view to a mass ripoff and price increases. That is fairly common in Africa with the US govt and US corps as the "faces".
Overall.. yes, would agree it's vastly superior to open up trading. On average, the benefits exceed all else. At the same time there prob needs to be caution in that having eg six "baby Bells" in total control of a nations telecom system can be abused.
"Free trade" prob also does not mean one-sided trading :-) The idea is all parties benefit. There is a long track record of this being otherwise with some nations and this is where distrust may set in.
In Costa Rica there are moves to dismantle the main utility services from the hands of the government monopoly. They may have served their purpose well initially, but are now totally inefficient, tho prob not excessive in billing.
As a side comment - more amusing than anything else, - the govt here also has a "monopoly" on some local brew. The current President wondered why the government was in the brewing business - so that's another monopoly sipping the last drop out of the glass
From what you said, it does sound like the Philippines is not unlike Latin America and change is inevitable. It is prob also important to have a range of trading partners and not rely on one or two nations.
How is "Imelda The Shoe Lady"? She still in the Philippines or living a life of luxury in a safe haven?
She always reminds me of some past leaders in Latin America - tho the only difference between them and other past leaders is they are more transparent in their corruption
