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Oct 242012
 

The music, “Bayan Ko (My Country)” is attributed to Jose Alejandrino, a Filipino rebel who opposed both Spain and the United States in the late 19th century. These are the lyrics in English:

My country, the Philippines,
land of gold and flowers.
Love is in her palms
that offered beauty and splendour.
And, for her refinement and beauty,
foreigners were enticed.
My country, thou wast enslaved,
mired in suffering.

Even birds that are free to fly–
cage them and they shall cry!
How much more for country so beautiful;
would she not yearn to be free?
My Philippines that I treasure,
cradle of my tears and suffering
My dream
is to see thee truly free!

 Posted by at 2:53 pm
Oct 172012
 

Vice-Presidential candidate Paul Ryan blithely divided the world into “makers” and “takers” of wealth. Ayn Rand‘s glorification of makers (those whom she claimed embody the highest moral purpose by pursuing rational self interests) and her disregard of takers (those who impede the wheels of growth with their demands) have been a well-established trope within certain circles. Rand rejected faith and religion, insisting that reason is the only means of acquiring knowledge. Ignoring Rand’s own appeal to her version of morality, are there reasons why those with wealth should be concerned about those without it?

Measures of Inequality

To frame this question, it’s useful to first look at indicators of disparity between those with and without wealth, for which the Gini Index is often used. A measure of income inequality, the Gini Index ranges from 0 – 1, where  1 reflects absolute inequality. The following two graphs show the U.S. Gini Index in two contexts. [Note: All graphs below link to versions at higher resolution. Data are from the U.S. Census Bureau and OECD. I generated all graphs using R) Graph 1 shows income inequality in the U.S. increasing steadily over the past forty years.  Graph 2 shows how, among more developed nations, the U.S. lags only Chile, Mexico, and Turkey in terms of inequality.

Graph 1

Graph 2

Is inequality a bad thing?

While inequality might be growing, is inequality necessarily a bad thing? Some economists insist that inequality is a necessary by-product of growth. They argue that implementing policies to advance equality–to shift wealth from makers to takers–will remove incentives for growth, therefore hurting everyone in the end. On the other hand, other economists maintain that inequality stifles growth. A broad middle class enhances consumer demand; equality is a bulwark against plutocratic governance that primarily benefits the makers. Whom to believe?

To gain clarity on these complex issues, it helps to distinguish between principles of distribution and allocation. Imagine an ever-expanding family subsisting on pizza.  The matriarch decides how large a  slice of pizza each member should get; that is a distributive issue. As the family grows, the matriarch decides to bake a larger pizza so that all may benefit, regardless of the share each gets. This is an allocative issue.

There is nothing inherently wrong with inequality (a distributive issue), as long as growth translates into higher living standards and more economic opportunities for all (an allocative issue). Inequality is acceptable if a rising tide lifts all boats. Does it?

The following two graphs shed some light on the allocative and distributive aspects of income growth. Graph 3 below shows the share of total, after-tax income in the U.S. (adjusted for inflation), broken down by income group. For almost all groups, their share of the income pie has either held steady or gone down. For the top 5% of income earners, not only have they always had the largest slice of the income pie, but their slice has constantly grown larger in the past 40 years.

Graph 3

What of income’s allocative effects? One way to understand whether a rising tide has lifted all boats is to look at poverty levels, which the Census Bureau defines not by income alone, but by whether families can afford the basic necessities of a comfortable life. Graph 4 shows that poverty levels decreased until the early 1970s. Most recently, poverty levels plummeted in the 1990s, then went up again in the 2000s. Clearly, increasing income inequality has not been accompanied by increasing living standards for all.

Graph 4

But some argue that income inequality is precisely the incentive needed to stimulate the would-be makers–i.e. those NOT in the 47%; those not “dependent on the government;” those who “take personal responsibility and care for their lives.”  I would like to  believe this. I immigrated to the U.S. with nothing but an education and heeded those who urged me to “play by the rules and work hard.” America has rewarded me and I am grateful. But it’s best to separate anecdote from data. Graph 5 below, called “The Great Gatsby Curve,” sheds some empirical light on the systemic impediments to social mobility. On the extreme right of the line are countries like Peru, Brazil, and Chile, about which the data suggest, “If you were born poor, you will likely die poor.” Midway to the left is the U.S., less conducive to social mobility than a cluster of countries, including Spain, France, Canada, Germany, and Japan.

Graph 5

I now return to  the question: setting morality aside–based on rational, self-interests alone–why should the rich be concerned about the poor? Answers to this question are usually based on allocative grounds. It is not irrational for makers to care about inequality if the proposed policy instruments improve the lot of takers without harming makers’ interests. But what if this is not possible? In a scenario where the poor can benefit only if the rich give up some of their wealth, what rational, self interests would motivate makers?

The Huk rebellion in the Philippines presents an extreme answer to this question. The Huks were insurgents, terrorists from the sharecropper class in a feudal nation. By one estimate, at their peak in 1949-51, they numbered as much as 12,000 armed men and women and they controlled a large portion of Luzon, the northernmost island of the Philippines. These “takers”–wielding firearms and waving knives–forced “makers” to take heed in the one way they thought available to them.

In the U.S., home to less extreme inequality and to a more stable public infrastructure (and yes, you–individual you–didn’t build that infrastructure), we are confounded when takers in dire, desperate straits rationally pursue their self-interests by resorting to means that are violent and disruptive.

I had once thought that endemic inequality, such as existed in the country I emigrated from, was anathema to the country I immigrated to.

(Below: Incarcerated Huk militia. Photo from 1950s Life Magazine.)

 

 Posted by at 3:32 pm
Oct 132012
 

I am writing this blog–and my novels–as a means to explore belief: how we gain it; lose it; impose it on others; and sometimes use it to justify our base actions. To guide my explorations, I rely on history’s markings, particularly the history of the United States occupation of the Philippines. It is a period that offers untapped, fertile field for narrative fiction.

When I think about belief, my thoughts converge on one man’s life. Born to privilege, Bobby Gana devoted his considerable legal skills to represent low-income Filipinos. In 1998, on his way to help farmers gain ownership of their land, Bobby’s plane crashed into the mountains on the southern island of the Philippines. I dedicate Under a Tropical Sun to him. He reminds me that when a man integrates his beliefs and his vision of the world, magical things can happen.

 Posted by at 1:52 pm
Oct 052012
 

When the Suez Canal opened in 1869, travelers between Europe and Asia–freed from having to round the Cape of Good Horn–cut their  travel time from four months to four weeks. The poet Walt Whitman recognized the canal’s significance and wrote:

Passage to India!
Lo, soul, seest thou not God’s purpose from the first?
The earth to be spann’d, connected by network,
The races, neighbors, to marry and be given in marriage,
The oceans to be cross’d, the distant brought near,
The lands to be welded together.

Sensing the wondrous opportunities created by the canal’s opening, the enterprising Marques de Comillas of Spain acquired a number of steamships from England to establish the shipping line, Compania Transatlantica.  Among these was the 8,500 ton steamer, Isla de Mindanao (featured in the photo below), which embarked on its maiden voyage to the Philippines in 1882.

On board this maiden voyage was a Manuel Villalba, who wrote to his brother about his impressions pulling into Port Said, Egypt, at the mouth of the Suez Canal:

I look to land and barely see the huge lighthouse of Alexandria, surrounded by huge palm trees. It is ten to six and the sun, which looks like a huge balloon surrounded by a clear band, plunges to that blessed land we call homeland. You will enjoy it even more in an hour….It’s seven fifteen and now, although very faint, we begin to feel the reverberations of the lighthouse of Port Said. I can see the lighthouse well, and although it is very blurry, I see the strip of land on which sits Africa and the great port of the future. I close this letter and ….I feel calm and with great courage…. Fear not for me. God bless and long live Spain!

“The earth,” as Walt Whitman put it, is “to be spann’d, connected by network.”  The flow of travelers–as well as the exchange of the latest ideas–went in either direction, from west to east and back again. Because of the Suez Canal, young, upper class Filipinos from Asia were finally able to attend European universities. Among these was Jose Rizal, a Jesuit-educated intellectual. Seeing the Suez Canal for the first time in 1882, he wrote:

“It is not straight throughout its length; it has curves but small ones; sometimes it flows into a lake; where it is  narrowest it is believed Moses passed  though while wandering in the desert.  It crosses three lakes in its course. On both banks. which are all yellow and white; where it is a real jewel to find grass, are erected some telephone stations at regular intervals.” 

Spurred by his exposure to European notions of liberty and freedom, Rizal came to realize that the Philippines was bedeviled by a “double-faced Goliath”: corrupt Spanish friars and an oppressive Spanish colonial government. With the collaboration of other European-educated young men, Rizal became the foremost voice in a Filipino revolt against colonial Spain.

(From left: Jose Rizal, Marcelo del Pilar, and Mariano Ponce.)

 

Oct 052012
 

 

Can the American public be manipulated into supporting a needless war and the invasion of foreign soil?

On February 15, 1898, the U.S.S. Maine exploded in Havana Harbor, Cuba. Two days later–a month before a naval investigation issued its finding that it was “unable to obtain evidence fixing the responsibility for the destruction of the Maine upon any person”–the New York Journal drew its own conclusions: “Destruction of the War Ship Maine was the Work of an Enemy.” Newspaper Publishers William Randolph Hearst and Joseph Pulitzer understood that a war with Spain would both sell newspapers and elevate them to positions of national prominence. They stoked the public’s hunger for war with their cry: “Remember the Maine. To Hell with Spain.”


When the U.S. officially declared war against Spain on April 25, Commodore George Dewey, commander of the American squadron in Hong Kong, received orders to attack the Spanish fleet in Manila, Philippines. Among the Spanish ships was the Isla de Mindanao, a transatlantic passenger steamer that had been requisitioned by the Spanish navy.

By dawn’s early light on May 1, Commodore Dewey directed his captain, “You may fire when you are ready, Gridley.” Within six hours, with the loss of only one American casualty, Dewey had either sunk or captured the entire Spanish fleet.

File:USS Olympia with Dewey at Battle of Manila bay DSCN4191 at Vermont State.jpg

(Battle of Manila Bay, 1 May 1898 Commodore George Dewey directing the battle from on board USS Olympia. Painting by R.F. Zogbaum, 1899. This painting had formerly been owned by Admiral & Mrs. George Dewey.)