Oil and water

I'm glad Manolo brought up the example of the Oil Prize Stabilization Fund. With deregulation now in place, the consuming public (a phrase I hated on sight, when I was editing copy in an economics think tank, but which even I must admit has its uses) has learned to contend, or at least to accept, "market forces" at work. Yes, as Manolo pointed out, some subsidies are still part of the mix, but by and large it's the market that now dictates pump prices in the Philippines. But does this partial success ---- and I think it must be considered a success, because the government no longer needs to run up an enormous bill merely to cushion the public from oil price fluctuations ---- mean that the public no longer sees a role for the government in oil price setting? Last Saturday, I saw the usual man-on-the-street interviews the TV networks run when presenting an economic story; in this instance, the story was about a new increase (an average of 50 centavos) in oil prices. The various people interviewed for their reaction had the usual things to say: a number of them, however, complained that there was no adequate advance notice. The increase took them by surprise, they said; they should have been warned in advance. Their answer struck me (and this was hours before I wrote my first response to Manolo's thesis in "Cult of the Market"): It seemed to me that, instead of market-savvy consumers, the "men" on the street the TV reporter spoke to were still government's co-dependents, under the influence of what I have called, perhaps inappropriately, the "Myth of the State." Advance notice? For some reason, I cannot imagine that the various interviewees were referring to the oil companies; I seem to remember that the companies have on more than one occasion given several hours' warning. What I heard them saying, and what I responded to when I saw the news report, was an indirect appeal to the government to sound the alarm, to advice the public, to, well, do something. Of course, this was only one set of consumers, and their testimony amounts to nothing more than anecdotal evidence. But then, and correct me if I'm wrong, Manolo's original thesis was based on anecdotal evidence too. My own thesis, that in fact Filipinos are still insufficiently market-oriented (CVJ has an excellent summary of our positions, as well as a provocative take on the issue; Jemy Gatdula has raised similarly compelling points) is itself based on anecdotal evidence. What the news report (called an MOS, in producer-speak) seems to indicate, at least to me, is that the Filipino's understanding of the market at work, even in a matter as practical, as regular, as oil price fluctuations, is still seen through government-issue glasses. Some of the anecdotal evidence I have found intriguing, over the last several years, involve policy stands taken by leftist spokesmen. A quick search for something relatively recent led me back to Bayan Muna party-list Rep. Teddy Casino's privilege speech last February on the P200 security fee levied by the Manila International Airport Authority. I have no quarrel with his conclusions; some of his premises, however, strike me as either deliberately or subconsciously founded on the Myth of the (paternalistic) State. The third paragraph of his speech begins:

It is primarily the government’s duty to provide modern facilities and accessible services for public use that include our country’s airports, both domestic and international.

Is it, in fact, primarily the government's duty to do exactly that? I suppose that the universal right to travel imposes on the government some obligation to enable its citizens to practice the right. I also suppose that, given the state of business and tourism in our part of the world, the government is under some obligation to provide "modern facilities." But is it in fact the government's duty to do so? To put it another way, if for some reason or another the Arroyo administration failed in the last six years to construct a modern airport or improve an existing one, is it therefore derelict in its duties? Casino also says:

This Representation holds the view that the MIAA is the government agency that should continue to shoulder the burden of financing the security needs of the airports, not the airplane riding public who already pay so many fees for the upkeep and development of the said State facilities.

While in practice this is something devoutly to be wished, in theory this view is unnecessarily constricting and somewhat dangerous. Does this mean that, say, a road user's tax will never be a general policy in the country, because it imposes an additional burden on the motoring public? I think this view leads to many problems; I also think it is quite representative of what many Filipinos actually think. The government as Big Brother? More like Big Daddy. PS1. The public's growing dependence on the largesse of media (encouraged, unfortunately, by my colleagues in the biggest TV networks) is the exception that proves the rule: Those who need immediate medical attention but cannot afford it, those with complaints against neighbors or public officials, or those who simply want to be heard, run to ABS-CBN or GMA ---- precisely because they've already tried asking for help from the government, or believe government help is a dead end. The media, then, as Big Momma. PS2. CVJ and Jemy offer excellent arguments, pro or con. My response, in my next post.