Competition, NOT More Government Intervention, Will Protect Customers Better

Yes, Thomas Sowell is a former Marxist. That's probably why commie hippies call him all sorts of degrading names, without otherwise proving him wrong. It's because insults are the losers' tool to win. Fast forward, some people advocate that the government should be the one to provide everything. Groups such as those belonging to the Makabayan Bloc (such as Kabataan Partylist) or IBON Foundation still advocate for the Philippines to "industrialize on its own". 

Others think that the government should continue subsidizing costs, as it was in the "good old" first Marcos administration. Some people talked about how "cheap" things were during the First Marcos Administration, never mind that the country was already sinking due to massive debt. Yes, the First Marcos Administration was a highly protectionist regime. Don't believe what IBON said (and take what they say with a grain of salt) that the first Marcos Administration was neoliberal. No, Marcos was a protectionist through and through! That's why the oligarchs remained strong during the Marcos Years--thanks to economic protectionism!

On paper, having a government that provides you with everything feels good, but is it?

The idea that the government should meet the needs of the people feels good. Who doesn't want a government that would feed you all your needs while you do nothing all day? That's what Communist hippies in the USA feel they'll get under Communism. I remember watching this video above. By the way, Misha Petrov was a former leftist, so she would at least know better. I laughed thinking about people who think Communism means they'll be able to do nothing all day. Well, Lenin wrote, "He who doesn't work, neither shall he eat." I wonder why that's often selectively taken out of Communist hippy language. 

This reminds me of an argument I got with some idiot, I'll just dub as JD. I told him about the need for more FDI. It's because Filipino businesses need more competition than more democracy (read here). Instead, the person assumed that I voted for Naga City Mayor, Atty. Maria Leonor "Leni" Gerona-Robredo. JD even posted a ridiculous meme of Leni as a "rock star" to mock me. It's because this JD voted for President Ferdinand R. Marcos Jr., who probably won because of the Tallaño Gold myth and the promise for PHP 20.00 per kilo of rice. Come on, what happened to supply chain analysis as well as the law of supply and demand? 

 

However, not even governments can go against the fundamental laws of supply and demand. Many tried and still failed. In the past, we have had Mao Zedong's failed Great Leap Forward program. This reminds me that I wrote a post on Venezuela's pride and protectionism. Some idiots like those of the Philippine Anti-Fascist League (fortunately, the new page barely has results) blame the USA for Venezuela's plight. This guy from PAFL seriously believes Vietnam's superpower was developed by state protectionism and state industries. However, things are rather different, in contrast to what that bratty administrator of PAFL wants to think.

As I wrote about Venezuela's pride and protectionism, I need to mention that food shortage is a real result. Was it the fault of George W. Bush Jr., as the late Hugo Chavez would make us believe? In fact, one must even question why President Nicolas Maduro (who looks like Carlos Zarate of Bayan Muna) is so fat while the people are so thin. Hearing how Venezuelans are eating pagpag is disheartening. Pictures of Venezuelan bread lines are disheartening. Is that the kind of future a welfare state has promised? One real problem, Venezuela has hardly any competition, and the state owns most of the resources. That can explain why Maduro could afford to eat an expensive Salt Bae steak, while the people starve! Meanwhile, I still chuckle at how General Secretary To Lam, who can be referred to as the chairman of the Communist Party of Vietnam. 

Venezuela is a cautionary tale of what happens when everything is public domain. Publicly-owned actually means government-owned. If the government owns everything, that means they become the state monopoly. State monopoly is one reason why life is far worse in North Korea than in China or Vietnam. Vietnamese could enjoy having an iPhone or MacPRO. Meanwhile, in North Korea, Kim Jong Un enjoys life at the expense of the commoners! 

On the other hand, competition actually protects consumers better

If there's one thing to think about, it's all about competition. There's a time I thought in my life, "I may never be able to beat him in that area, but I'll learn something." I thought about my former nuisance back in high school. These days, I always thought that I beat him in this area and I beat him in that area. However, there was a time he wrote a simplistic but powerful speech, better than mine. Later on, I started to understand some concepts in mathematics better. By starting to turn away from petty rivalry to friendly competition--we both learned from each other. In the reality, competition builds character. Some say competition will destroy quality. However, let me stress out that competition will force people to either enhance quality or die in the free market!

Sowell writes this in his book Economic Facts and Fallacies, written in 2007:

The more highly competitive the market for labor and for the employer’s products, the higher the cost paid for discrimination and consequently the less leeway the employer has for indulging his prejudices without risking his own profits and ultimately the financial survival of the business. On the other hand, enterprises not subject to the full stress of a competitive market—monopolies, non-profit enterprises, government agencies—have greater leeway.

This is true indeed. What sets the late Deng Xiaoping (although Tiananmen Square Massacre is really a blunder) and the late Nguyen Duy Cong aka Do Muoi apart from Communist hippies, and their predecessors, is how they shifted their views. Deng and Do Muoi both asked for the late Lee Kuan Yew's advice. In contrast to what PAFL thinks, Vietnam didn't succeed through state industries. Instead, Vietnam has become even a more feasible location for FDIs, despite being a Communist country (read here). The CPV still controls Vietnam today. The CPV still has some serious criticism from the Human Rights Watch organization. Locking up Noodle Bae over that parody is excessive. However, FDIs still flock over Vietnam over the more democratic Philippines. 

Vietnam still identifies as a socialist republic. However, what sets it aside from Venezuela, are the business policies. Above is a photo of the Vietnamese Bread Festival in 2025. I wish I went to Vietnam to experience the bread lines! In Vietnam, you'll have a lot of people, including tourists, who will line up for their delicious banh mi sandwiches! In Vietnam, you have people lining up for bread and bread lining up for people. It's a different picture from Venezuela where food scarcity is the problem. Groceries in Vietnam are mostly abundant. It's a far cry from Venezuela. That's why I could cringe at Maduro eating expensive steak while I laugh repeatedly at To Lam doing the same thing! 

It's because Vietnam has competition running on, with both private businesses and state industries running. Sadly, banking in Vietnam is still stuck among the most restrictive sectors. It should also be mentioned that Vietnam's economic protectionism is purely through legislation, not hardcoded in their Constitution, which I dub as their "Communist manifesto". Vietnam could easily adjust things. Hopefully, Vietnam will allow banks to own 100% ownership of corporate shares, which in turn, will help encourage more FDI.

The Global Asia could even write this about Vietnam:

FROM ISOLATION TO PROSPERITY

 

By the mid-1980s, the development model Vietnam had borrowed from the former Soviet Union and its East European allies had revealed numerous flaws and was proving outmoded. On the political and diplomatic front, tense relations with China, the heavy burden of Vietnam's troop presence in Cambodia and strict sanctions imposed on it by the US placed Vietnam in a difficult bind. On the one hand, the country was blocked from cultivating new relations with other countries; on the other, it had become ever more dependent on the Soviet Union for political support and economic and military assistance. 

The turning point came with a dramatic reduction in Soviet economic and military assistance after the mid-1980s and the economic hardship this caused. For the sake of the country's survival, Vietnam's leaders were forced to adopt economic and political reform, or Doi Moi. In essence, Doi Moi in its early stages was focused mainly on the removal of self-imposed barriers to progress and the utilization of various market-oriented measures, including liberalization of the domestic market, encouragement of foreign direct investment, or FDI, and the private sector, and reduction in subsidies to state-owned enterprises (SOEs).

These steps quickly brought positive results. From a country faced with perpetual food shortages, Vietnam in 1989 for the first time exported 1.4 million tons of rice. It has since remained a rice exporter. In 2008, it exported 4.7 million tons, becoming the world's second largest rice exporter after Thailand. Indeed, Vietnam's exports were instrumental in stemming the threat of a severe international food crisis in early 2008.

What impresses most, however, is the continuous high economic growth rate that Vietnam has recorded in the 20 years since the introduction of Doi Moi. Vietnam recorded average annual economic growth of 6.5 percent over that period, one of the highest rates among developing countries. And with annual per capita income of $1,000 in 2008, Vietnam was removed from the list of the world's least developed countries. The high economic growth rate in turn helped reduce Vietnam's poverty rate from 70 percent in the mid-1980s to 37 percent in 1998 and 19 percent in 2007.

This would also be true for the Philippines' public services

As I remember arguing with a certain JD, I would like to address the real issue of supply and demand. We need to put a common sense test. I don't need a degree in Electrical Engineering or any related course to understand this. The Philippines has 7,107 known islands vs. only a few telecommunication companies, can provide faster Internet? We have a thing called the bottleneck in operations management. It reminded me of using some form of calculus to figure out certain bottlenecks. I enjoyed operations management subject, although the finals part had a sudden burst in difficulty. However, I don't need to be an engineer to figure things out. Having too few providers vs. too many Filipinos makes having more affordable Internet that's faster impossible.

If we need to look at it, the Filipino First Policy is unfortunately too much government intervention. By setting protectionist measures hard-coded into the "sacred" 1987 Constitution of the Philippines, it becomes difficult to amend it. Sure, there's Article XVII, but how often do lawmakers really amend when it's necessary? Even worse, some die-hard people would have this attitude, "I will never listen to a foreigner when it comes to legal matters." Some people would not listen to any source, maybe except if it's lawmakers from the Makabayan bloc (and these guys are third world minded), the Catholic Bishops Conference of the Philippines, or the framers of the "sacred" 1987 Constitution of the Philippines. These framers include the outdated-minded people such as Atty. Hilario Davide Jr. and Atty. Christian Monsod. 

It makes me laugh how groups like Kabataan Partylist demand better services but don't want to let FDIs come in. Do they really expect that excessive government intervention all the time, will be the best bet to protect consumers? Such economic neanderthals need to take a vacation in Vietnam, to see for themselves if Vietnam really developed through self-industrialization. Kabataan Partylist should seriously get an economic lessons whopping from the Ho Chi Minh Communist Youth Union aka Vietnam Youth Union (read here)! The Vietnam Youth Union would probably dispel the myths that Kabataan Partylist has been perpetuating for years!

The real solution is that Filipino businesses need to face more competition. Did LKY even wait for Singapore to be rich first, before opening it to foreigners? In contrast, LKY himself dismissed the idea and said this:

Our job was to plan the broad economic objectives and the target periods within which to achieve them. We reviewed these plans regularly and adjusted them as new realities changed the outlook. Infrastructure and the training and education of workers to meet the needs of employers had to be planned years in advance. We did not have a group of readymade entrepreneurs such as Hong Kong gained in the Chinese industrialists and bankers who came fleeing from Shanghai, Canton, and other cities when the communists took over. Had we waited for our traders to learn to be industrialists we would have starved. It is absurd for critics to suggest in the 1990s that had we grown our own entrepreneurs, we would have been less at the mercy of the rootless MNCs. Even with the experienced talent Hong Kong received in Chinese refugees, its manufacturing technology level is not in the same class as that of the MNCs in Singapore. 

Sadly, some people only quote LKY when it comes to berating the Marcoses (read here). When will Filipinos start to accept and apply LKY's economic advice for the Philippines, than just quote him about the Marcoses? When will people see that life during the Marcos Years was so bad, not just because it was a dictatorship, but also because of economic protectionism? That's what Filipinos need to ask themselves. Are we going to continue listening to third-world minded economists or listen to first-world economists?