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Globalization is a phenomenon which encompasses the idea and act of dramatic or gradual changes in a certain nation. These changes are meant to affect the actors in the society, for the very reason that it is them who has the capability to permit the said changes. In this hypothetical view of writing, it will focus on one of the effects of globalization, and that is the economic liberalism. Economic liberalism is a practice in a society which focuses on reinforcement of individuals rather than in a collective manner. Meaning, almost all the economic decisions are pursued by individuals than that of organizations. In this analysis, it aims to view hypothetically the different realms which compose the society, referred to as political, social, and economic and will be associated with the Philippines in the later discussions.
Economic Liberalism and Neoliberalism
Economic liberalism and neoliberalism are often associated with one another. These two theories shared a common idea about the separation of the state and the market and this relationship of non-relationship must be neutralized and maintained. As the definition that stands against others who tries to define Neoliberalism, David Harvey in his writing A brief History of neoliberalism, defined it in a wide range as “neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade”. Thus, it is not hard to understand economic liberalism as it has the same objective as neoliberalism. Some writers view neoliberalism as the new form of capitalism -a term that refers to economic liberalism- with a different approach. It does not suggest the rejuvenation of liberalism but replacing the old style with the new one.
One of reason why neoliberalism is related to economic liberalism is that, neoliberalism was urged to exist due to globalization. Neoliberalism often rely on third world countries and as a result to the vulnerability of these uncompetitive nations to the unexpected changes due to globalization.
With the idea imparted by neoliberalism through of its definition and history, the Philippines could not be blinded of what economic liberalism is. Neoliberalism will serve as the benchmark for foreseeing some of the possibilities when having liberalism as the standard for economic development. The interaction of different people through accumulation of ideas with regards to business may one of the ways to implement little by little the economic liberalism in social aspect. Forming a business with another private entity will improve the social life of every individual without the intervention of the state. If there are interventions that the state must accomplish, it is just to make sure that the transactions are valid and legal.
In relation to the objective of this paper, neoliberalism supports economic liberalism in a way that the priority is on individual freedom and emphasizing the rights of individual to private property. It is then emphasized that the pursuance of economic liberalism will rise potentially.
Economic Liberalism in Free-market Society
One thing that serves as an agent in free-market society is through liberalization in the economy. It requires the involvement of people as they are the ones who will be affected by the said phenomenon. Collectivism as opposed to liberalism requires also the participation of different sectors in the society in a collective manner, it is a product of the western world to organize the actors who will act as the main participants in one nation. The reason for the rampant collectivist ideas are viewed by Dr. Razeen Sally as “socialism, communism and nationalism were spread via colonial conquest, trade and Christian missionary activity”. It is described by Sally that these ideas of organizing the actors in the society were originated from the West and suddenly spread worldwide though different means.
As stated above, the way from which liberalism sprung is similar to that of its antipodal system. However, it is a fact that their nature is different. Economic liberalization serves as the most important part in achieving free-market society as it allows individual to decide on their economic interest without the intervention of the state, this thought is based on the readings provided by Prof. Frankel, a Harvard University professor. The society will not achieve the free-market system if economic liberalization will be left behind. It is termed as free-market for the reason that it would allow, for example, if not to eradicate, at least to reduce the tariffs lay on top of goods exported or imported in a certain country. The reduction in tariffs which would also mean free trade, exhibits the economic liberalization in the face of international trade. This act is just one of those many ways wherein economic liberalization shouts its connection to free-market economy.
According to Franz Josef Stegmann, there are four points that describe the idea of classical economic liberalism. These are “The ‘natural’ order of the economy”, “the individualistic idea of freedom”, “altruism of egoism” and “Competition as steering wheel of the economy”. The four ideas explain the importance of economic liberalism in achieving the free-market economy. One described as it is ‘natural’ in a sense for it is under the influence of philosophy of deism. Believing that the state -in relation to liberalism- need not to intervene in its natural system in terms of economic activities, if it happens that the state will force the intervention, surely it will fall into disorder. It is the same as if the state will control the economic freedom of an individual in a free-market society, every individual will be obliged to meet the standard of the state in terms of putting tariffs, prices, its number, etc. in every commodity that will go beyond boarders. Another is the working competition that serves as “steering wheel of the economy”, the need in obtaining monopoly is an example. Due to this “steering wheel”, a classical view of economic liberalism has developed and grew into what is called capitalism.
Just to put things clear, free-market economy does not totally hinder the intervention of the state. Let us put it in an example, an economy that is capitalist has a huge free-market system that is based on the “free price system” and “private property”. Nevertheless, the support from the government is largely needed to promote competitiveness of the market internationally and to address the inequalities which serve as an outcome of a free-market system. Thus, to neglect the role of the state in the free-market society is not advisable for this solely reason. The intervention of the state is not totally banned or unneeded, only it has its limitations when it comes to the system an economy practiced.
It is observed that the state and free-market system has been connected as it is with economic liberalism. It is sufficed to say that, whenever there exists free-market economy there would always be economic liberalism that fly around the corner that causes it to happen.
How Philippines view the Free-market economy
As described in the prior paragraphs on what is free-market society, it is now time to look on how the Philippines, a third world country, view the free-market economy which capitalist society has. There are some people argue that, Philippines is on its way to possess free-market economy. However, there are people who still view the Philippines as far from it. One of these people is Joseph J. Bautista, in his writing he argues that the Philippines is way too far from being Capitalist and viewed Philippines to have mixed economy for three definite reasons. The country has “Punishing tax-rates”, “anti-competitive market conditions”, and third is “weak private property rights”.
The tax rates in the Philippines is undoubtedly high based on the 2017 analysis of Joseph Bautista. It is because of inflation why the tax rate become even higher, because of this, the power Philippine peso become week as the time pass. In other words, the value of your hundred-peso bill today may not be the same for the value of hundred peso after 20 years. Using this analysis to tax rates, even if an individual has gross income of fifteen thousand per month this year and seven thousand per month fifteen or so years ago, it has the same purchasing power. Meaning, it could be viewed deceivingly that you receive bigger amount of money today than many years ago, yet you still have the same economic status for this span of years, nothing has changed. This is the reason why most of the ordinary Filipinos never did encounter an increase in terms of economic status and have nothing to do but to follow what is being offered by the society.
A country will not meet free-market economy if it has these three aspects. It definitely opposes the qualities that free-market society is trying to possess. No matter how other people insist that the Philippines is now a free-market society, the truth will just slap and will awaken every single person that it is impossible to happen for now, but the hopes of making it as a capitalist society has not been put to the corner.
Possibility of Economic Liberalization in the Philippines
In a hypothetical manner, economic liberalization could rule the Philippines in just a snap of one’s finger. It is surely possible to implement this kind of economic system. However, the questions are, what will be the benefits of the Philippines when it possesses free-market system? Is the Philippines ready for dramatical adjustments in terms of social, political, and especially in economy? To answer these questions, from here on forth, the view will be then hypothetical. All the information that will be given is based on solely assumptions and in hypothetical manner. It will be written for the reason of justifying what this paper is trying to suggest.
Given the fact that the Philippines has no single economic system, it is really hard to shift to something in no time. However, we must not belittle the country for it used to adjustments and adaptations. For example, the Philippines is used to adapt different cultures from different parts of the world. In this sense, this served as the preparatory stage to adapt economic liberalism. Another example is the adaptations of laws from different countries to meet the universal standard and to be classified as competitive globally.
Being a member of Association of South East Asian Nations, Philippines practice globalization. In this fact, we could form an assumption that Philippines will embrace economic liberalization willingly and easily as economic liberalism is being brought by globalization somehow. ASEAN nations also trade goods to the country (Philippines) and from the country due to its bond as member of one association.
Through facts about what the Philippines have now, it is really possible that economic liberalism will come at some time in the future. as it is one of the nations affected by globalization, there is no single impossibility of not possessing economic liberalization even if some economist from the Philippines view economic liberalization as an agent that has been prevented unconsciously with the economic activities practice by the country.
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