Thursday, October 21, 2010

The libertarian ideal

A couple of weeks ago, a news report came out wherein firefighters in Tennessee refused to come to the aid of a homeowner whose house was burning down because the homeowner hasnt paid the annual fee of USD 75.00. (The fire department serviced a particular community for 'free'. For those outside it, they charge an annual fire services fee.) Even after promising to pay whatever fee is due after the fire has been put out, the fire department refused. As a result of this callous act, one family lost their home. Statists from all over weighed in warning that this is what would happen if limited government people, libertarians, anarchists, and Randians had their way. "The free market is evil," they cried. "We need government to provide these services. Only government could be trusted to protect our lives and property."

"The libertarian ideal," said a pal on my plurk timeline. That's what they say this illustrates, implying that those who hold libertarian views are amoral, selfish cranks. But is it the libertarian ideal?

Let us forget the fact that the fire department was a government agency, not a private one. The fee has been in place for 20 years. The fee in question was a government fee and the charging of the fee was government policy. Leaving that aside, why is this being used as an illustration of the 'libertarian ideal'? It is because we grew up thinking that government is good. That's what they teach us in school. So we better let them confiscate a huge chunk of our earnings to spend on whatever it is they deem for 'the common good'. And woe unto those who refuse.

In the libertarian ideal where the market is free, there would be no monopoly. Here was a homeowner who was irresponsible enough to forget to pay for fire insurance. A fire begins to destroy his home. Before the fire does a lot of damage, he calls his fire protection service provider, who refuses to help him. He then promises to pay whatever fee is due. The provider still refuses. In the present system, that's the end of that. His house burns down, his family loses a home. This will not happen in 'the libertarian ideal'. In the libertarian ideal, the homeowner simply calls another fire protection agency and tells them of his plight. This provider wouldnt have refused simply because he would welcome the opportunity to get another customer for his services and wouldnt want the bad publicity of refusing to help a family to get around the market-place. The house would be saved, the provider gets a new customer and adds to his income (and continues to employ firefighters), and after word gets around about how the previous provider refused to aid the family in dire need, they would begin to lose clients to other providers and eventually closes shop. That is the libertarian ideal.

Monday, October 04, 2010

More on the penal code's archaic Article 133

First of all, I apologize if this post is unformatted or looks weird in any way. Im sending it though email and I can't see if it came out right. In fact I can't see if it came out at all. You see Im in a country where blogger is blocked (along with Twitter, Plurk, Facebook, etc. -- a good reason to switch to WordPress which isnt blocked). Chi-cough-na, cough.

Anyway, an interesting piece by well-known lawyer Jose C. Sison came out in the Philippine Star site today in which he defends Article 133 of the Penal Code. He does this by arguing that the law is right in affording special status to religious rites in the eyes of the law so disruption of religious rites, in this case Catholics' view of the mass, is especially reprehensible.

Anyone who disrupts the mass like that Intramuros tourist guide (his name is not worth mentioning) certainly deserves to be imprisoned. His act can never be justified by his deep resentment against the prelates who oppose the RH bill. It is willfully, willingly and feloniously done during a rite most sacred to Catholics and therefore punishable under the RPC. Muslims and Buddhists would also feel offended if such disruption was committed against them. There is no reason why disruption of a Catholic ritual should be treated differently.

First of all, I agree. As a former Catholic, I recognize that the holy sacrifice of the Mass is indeed the centerpiece of Catholic faith and worship -- lex orandi, lex credendi. It is where the bread and wine is changed into the real and actual substance of the flesh and blood of Jesus Christ and where Catholics remember his sacrifice for all mankind. Disrespecting the mass is more than insulting to the Catholic; direspecting the mass is an insult to Jesus Christ himself. As a former Catholic I felt the insult. The Church's outrage against Carlos Celdran's act (he says it wasnt premeditated, let's give him the benefit of the daw) is in my opinion, more than justified; it was absolutely warranted. Any Catholic who wasnt outraged by that act does not deserve to call himself Catholic.

But that is neither here nor there. According to Atty Sison's piece, there is no reason to remove Art. 133 from the Code because religion is special, and that the law should recognize that it is special. I disagree. I believe the law should be neutral when it comes to religion. I do not have to remind anyone that there are different religious and irreligious beliefs in our country and our law guarantees these beliefs and protects the right of its citizens to hold them. That is why there is Article 153 in the Code which punishes any disruption of peaceful assemblies and meetings. But here Atty. Sison is arguing that a disruption of religious service deserves a greater punishment than a disruption of, say, a homeowner's association meeting. Section 5 of the Constitution is clear: No religious test shall be required for the exercise of civil or political rights. No religious test. In looking at a disruption of a peaceful assembly, the law should not ask what kind of assembly was disrupted, whether it was religious or secular. It should not care.

Let us look at the spirit of these laws. Why were the laws created? It is so that the powerless can be protected from the powerful. The citizens for instance should be protected from the abuses of the State, a peaceful man from a violent man. Section One of the Penal Code, to which Article 133 inexplicably belongs, contains prohibitions against public officers and employees. In the comment section of one of his blogposts, Manuel Buencamino (he doesnt think 133 is archaic either) surmised that Article 133 was enacted to protect smaller denominations from disruption by bigger ones; for example, if Catholics disrupted a religious service of Rizalistas. Let's take a look at Carlos Celdran's case. Atty. Sison thinks he deserves to be imprisoned and certainly the letter of the law says he deserves, according to Atty. Sison, imprisonment from 6 months to 2 years and 4 months. (In my previous post, I said the punishment was 6 months. I defer to the member of the Bar. It is up to 2 years and 4 months, which makes it all the more draconian -- a law enacted by tyrants. We'll get to that in a bit.)

But is this a case of the powerful oppressing the weak? Carlos Celdran was one unarmed man in a Rizal costume (Manuel Buencamino said he was in a Charlie Chaplin outfit). He was yelling against a powerful organization. He did not prevent his fellow Catholics from worshiping. Indeed he didnt have the power to. The Catholics' freedom of worship was not harmed one iota. Officers of the State took him away and the Mass went on. What he was guilty of was offending them. Just that. He did not damage Church property, he did not physically harm anybody. Atty. Sison believes this is sufficient reason to take Carlos Celdran's freedom away for 2 years and 4 months. And if the Church leaders do not withdraw the charges, they agree. In fact, 230 bishops think this deserves to have a man lose his livelihood. As mentioned earlier, Manuel Buencamino thinks that the Article 133 is there to protect small sects from bigger sects who might do them harm. I dont know about that. What is more plausible to me is that this law was used to 'protect' the powerful Spanish Catholic hierarchy from being offended by those pesky Indios.

Atty. Sison then turns to the subject of rights:

They may have the freedom to express their own views but they must also respect the customs, practices and the rights of others to express contrary views. They have no right to denigrate, defile and blaspheme those who do not agree with them.

Actually there is an abuse of freedom in our society today. People now think that they have the absolute right to act and speak freely even to the extent of trampling upon the rights of others or of imposing their individual rights over and above the rights promoting the common good.

One doesnt have the right to be free from being offended. On the contrary. The freedom to express views comes with the license to offend. One may use or not use that license as one sees fit, but the license is there, the license to denigrate, defile, and blaspheme. Imagine how offensive Rizal's writings were to the Spanish authorities or indeed Jesus' words were to the Pharisees and Sadducees. If the freedom of speech did not come with a license to offend, if we only spoke agreeably, if we dont have the license to satirize and insult, if we only had the right to speak in a politically correct manner, then speech wouldnt have sparked revolutions that set us free. The powerful can insult us, denigrate us, and blaspheme our beliefs. We the weak must have the right to do likewise to them. Rightly or wrongly, this is the right that Carlos Celdran claimed: that of the weak speaking to the strong. Of course common decency behooves us to behave with respect towards our fellowman and the views they hold, no matter how disagreeable they or their views seem to us. But common decency cannot be legislated without curtailing freedoms as well. And yes, freedom of speech has its limits. There's this famous saying by that famous Greek philosopher Anonymous that goes, "Your freedom ends where my nose begins." Freedom of speech should not cause harm to one's person. Shouting "Fire" in a crowded theater for example. Everything else is fair use of rights.

Im with Atty Sison's view of religion. Religion in society at its best is important and it is indeed special.  While it is true that -- to paraphrase Christopher Hitchens -- religion poisons some things, at its best it allows the flowering of our society. Our rights and freedoms came from the grand notion that God createdl Man in his own image and are therefore all equal and have inalienable rights, a patently unscientific belief. It is atheism -- the idea that no authority is higher than the authority of Man -- that poisons everything. The only reason to trust secularists today is because they have been imbued with ideals that came from religious faith. Once they unshackle themselves from these 'irrational' beliefs, that is the time we can view them as the enemy of society. Carlos Celdran is not the enemy, and he does not deserve to go to jail, no matter what the letter of the law says.

Friday, October 01, 2010

The aberration that is Article 133

When I heard that Carlos Celdran of the walking tours fame was arrested for disrupting an ecumenical service at the Manila Cathedral by protesting, I thought it would be an interesting case study. I heard about it via a plurk pointing to a tweet from @inquirerdotnet from before any details were available on the news sites. It just said Celdran yelled 'Politics' in front of the altar during an ecumenical service.

Surely, I thought, he wasnt arrested for protesting. Speech is protected in this country. Unless he did it in a disruptive manner in the middle of the mass in which case he'd be running smack dab into the 'disturbing the peace' provisions of the penal code. Chapter 5 of the Revised Penal Code says
Art. 153. Tumults and other disturbance of public orders; Tumultuous disturbance or interruption liable to cause disturbance. — The penalty of arresto mayor in its medium period to prision correccional in its minimum period and a fine not exceeding 1,000 pesos shall be imposed upon any person who shall cause any serious disturbance in a public place, office, or establishment, or shall interrupt or disturb public performances, functions or gatherings, or peaceful meetings, if the act is not included in the provisions of Articles 131 and 132.
Arresto mayor as defined in the Code is imprisonment of from one month and one day to six months so a medium period would be somewhere in the middle of that timescale. As details of the protest came online, it became clear that Celdran might have behaved in a disruptive manner, parading in front of the altar with a placard with the word Damaso on it and screaming at the top of his voice while the ecumenical service was going on. In his words:
"I started screaming, ‘Stop getting involved in politics!’ I kept screaming until I could not scream anymore, then they took me away."
That mustve been some pretty loud screaming. But Carlos Celdran is such a harmless bloke that I was expecting he would be kept in prison til he cooled down, reprimanded, then sent home lesson learned. And besides, this is the Church, arguably the most powerful non-government organization in the country with a membership numbering in the millions. What can a lone tour guide do against a force like that? His continued detention depended on the Church filing a complaint. If there is no complaint, then he would be released. One word from Cardinal Rosales wouldve ended it yesterday and the Cardinal and his buddies would have a good laugh about it. But apparently, he was to be made a lesson. He spent the night in jail and is still in jail as of 1:00 pm today, 1 October.

That's the law. But wait! It turns out that he wasnt charged with disturbing the peace or disruption of public order. He was charged with violating Article 133 of the Revised Penal Code which is -- seriously -- offending the religious feelings.
Art. 133. Offending the religious feelings. — The penalty of arresto mayor in its maximum period to prision correccional in its minimum period shall be imposed upon anyone who, in a place devoted to religious worship or during the celebration of any religious ceremony shall perform acts notoriously offensive to the feelings of the faithful.
It's bad enough that 'disturbing the peace' can get you in jail for over about 3 months minimum as per Article 153 of the Code which covers what Celdran did, a draconian punishment just for being an annoying prick, but the Code has to have a special provision against religious feelings -- religious feelings! -- with a jail time of six months.

Now the Penal Code is supposed to be a list of crimes against person, property, public order, and State. Article 133 is under the general heading of Section One. — Arbitrary detention and expulsion, which covers Articles 124 to 133. If you'll notice, Articles 124 to 132 covers prohibitions against state officers or employees. Article 126 for instance says
Art. 126. Delaying release. — The penalties provided for in Article 124 shall be imposed upon any public officer or employee who delays for the period of time specified therein the performance of any judicial or executive order for the release of a prisoner or detention prisoner, or unduly delays the service of the notice of such order to said prisoner or the proceedings upon any petition for the liberation of such person.
Here's Article 132.
Art. 132. Interruption of religious worship. — The penalty of prision correccional in its minimum period shall be imposed upon any public officer or employee who shall prevent or disturb the ceremonies or manifestations of any religion.

If the crime shall have been committed with violence or threats, the penalty shall be prision correccional in its medium and maximum periods.
Section One contains prohibitions against public officers and employees except inexplicably Article 133.

Article 133 covers everyone, and this is the provision thrown against Celdran. Notice that Articles 124 to 132 protects citizens from actions of employees of the State while Article 133 protects religious feelings which runs perilously close to the Church and State clause of the Constitution. Article III, the Bill of Rights says
Section 5. No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof. The free exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever be allowed. No religious test shall be required for the exercise of civil or political rights.
So Article 133 of the Code is on its face unconstitutional and in light of Article 153, totally not needed. And one more thing, the principle of free expression, along with the liberties recognized by the Bill of Rights transcends any written law or constitution. We do not have these rights because the constitution says so. We have these rights because we are human. The State is there supposedly to protect the defenseless members of our society. When the law is used to protect a powerful institution such as the Church from being offended by a peaceful albeit disruptive protest, something is fundamentally wrong with the way the law is implemented, but such is the society we live in. Article 133 is an affront to a free society since propriety is supposed to be society's own sense of right and wrong imposed not because of the threat of penalty but because decency demands it if one is to live with other people, some of whom may not share the same beliefs. Carlos Celdran's act, for which he has already apologized, did not do a whit of harm to the Church's private property nor to its members; they just didnt like his message. That Article 133 is still there as part of the law of the land is a sign of the weakness of that society.

On a personal note, I disclose that I am a non-Catholic Christian but I have been on record on the internets in defense of the Catholic Church, especially its right to participate in discussions of public political issues. Separation of Church and State does not take away the church leaders' right to express their political opinions in the public sphere and to try to influence public policy. Celdran is wrong in using separation of Church and State this way. Indeed trying to influence public policy is what we all are trying to do in our own ways and we should not begrudge the Church this right. They do contribute something to the public sphere. Suppressing their views no matter how wrong we think they are narrows our democratic space by that much and we will rue the day when their stand on issues is silenced. No religious test shall be required for the exercise of civil or political rights, and this includes the rights of the Church's leaders as Filipinos.

One more thing before I close. The God I believe in does not need me to defend him. I do not take offense at the incredulity, even the 'blasphemy', of others against my faith and those who share it, and to the God who is at the core of that faith. I will defend my views and my person when attacked or challenged but if anyone expresses disrespect for God himself, I'd rather stay out of the way. God can very well take care of himself. That an institution such as the Catholic Church would seek the protection of the State from somebody like Celdran (or at one time the gay party Ladlad) shows some kind of crisis of confidence they have in the God they serve.

Update 1 Oct, 6:26 pm: Carlos Celdran posts bail.

Monday, September 27, 2010

Barristers injured by pillbox during bar ops

Pinoy English FTW

(with updates -- 28 Sep 2010)

By now you would have heard of the explosion outside the DLSU last 26 September injuring several people during the Bar examinations. If you havent, here's a link. This post is only tangentially about that tragedy.

The title of this blog post is remarkable because anybody who is not from these islands would find it incomprehensible. The words are recognizable as English, sure, but they do not mean what a non-Pinoy would think it means. It is in fact Pinoy English.

A barrister for instance means a lawyer in the UK and several other mostly British Commonwealth countries, whereas here it is someone who is taking the bar exams. This is the word as used in a Malaya report.
Initial police investigation showed that the blast took place between 5 and 5:30 p.m., just after the bell signaling the end of the examinations, and as the barristers were preparing to leave the school premises.
I started seeing the word used in this manner last year in mainstream media. I dont know if it was used in this way prior to that, although Ive seen references to it in blogs and other online material. So as far as new word adaptations go, this one is pretty new. (Update: a link is provided below, dated February 2004, to a Supreme Court resolution wherein the term 'barrister' is used for bar examinees.)

This is what a barrister looks like outside the Philippines
(Photo nicked from the Wikipedia article Barrister)

And this is what barristers looks like here.
(Photo nicked from Philstar.)

As for pillbox, outside of our islands, it can refer to several things: a small box for pills, a small brimless hat usually worn by ladies, or a concrete bunker that usually houses a machine gun or two. See below. (Photos below nicked from their respective Wikipedia articles.)

This is a pillbox.

So is this.

And so is this.

In the Philippines, a pillbox is a small homemade bomb. I first heard of these devices as a child growing up during Marcos's time (70s -- yes I was already around at that time) when student protesters hurled them against riot police. Here's the word as used in a Philippine Information Agency report from an incident in 2008:
The blast, believed to have been from a pillbox, tore at least three middle fingers of the arresting officer, PO3 Alfonso Villamil and wounded him in other parts of the body. An unidentified barangay tanod who helped bring in the suspect, Albert Alvarez, for investigation and custody was also slightly injured as he stood nearby.
And here's one from 1970 from a Philippines Free Press article:
By then, their brothers in militancy were ramming Gate 4 open with a commandeered fire truck whose driver they had first mauled. They set fire to another parked car inside the gate. They threw Molotov cocktails, pillbox bombs, and stoned the windows of the Malacañang clinic.
Notice that the 1970 article called them 'pillbox bombs' which is probably the proper term since these were small explosive devices the size of pillboxes but colloquially they were simply referred to as 'pillbox'. Later, 'pillbox' was showing up alone in written pieces in media without the 'bomb' and the device was called simply pillbox, and although they are still referred to as 'pillbox bombs' in reports today, that is slowly giving way to the shorter term. Here for instance is a Supreme Court decision referring to the device as 'pillbox'.
That on or about the 21st day of December, 1994, in the Municipality of Las Piñas, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused...with intent to kill and without justifiable motive and evident premeditation and by means of treachery and use of explosive (pillbox), did, then and there willfully, unlawfully and feloniously attack, assault and throw a Pillbox to one Jose Mesqueriola y Labarosa, thereby inflicting upon the latter serious and mortal wounds, which directly caused his death.
I coudlnt find a picture of one but I could describe how we used to make them. But I won't. Suffice it to say theyre very dangerous and we were very, very stupid for making them and actually using them as noisemakers for New Year's. You hurl it in the air as high as you can and run the heck away as fast as you can. It explodes on impact. It usually doesnt need more shrapnel than the stuff that's already in there to make it explode but people actually put more stuff in there to make it more lethal. That's what those crazy/stupid college kids did to their device.

Which brings us to bar ops. Here's a Supreme Court resolution, dated 2004, that uses the term (it uses the term 'barrister' as well):
Bar Ops are the biggest activity of the fraternity every year. They start as soon as new officers of the fraternity are elected in June, and they continue until the bar examinations are over. The bar operations consist of soliciting funds from alumni brods and friends to be spent in reproducing bar review materials for the use of their ‘barristers’ (bar candidates) in the various review centers, providing meals for their ‘brod’-barristers on examination days; and to rent a ‘bar site’ or place near De la Salle University where the examinees and the frat members can convene and take their meals during the break time.
I suspect this is another one of those uniquely Pinoy traditions you won't find anywhere else and would leave even a Pinoy scratching his head in wonderment. I havent found anything on the net as to when the tradition started though. In bar ops, during bar exams conducted over four Sundays, law schools and law fraternities each send a delegation to the exam venue and cheer the examinees on with parades and such. The atmosphere is festive and is indistinguishable from the hoopla that accompanies college sporting events like the UAAP or NCAA. Different schools and fraternities stake out different areas surrounding the exam venue while the bar examinees -- the barristers -- take the exams. No other professional licensure examinations have this (although I suspect engineers and accountants would want one too after seeing how much fun the law fratboys are having). That's what we see, we meaning those of us who generally dont give that much of a hoot. It's all good, clean fun. The ole college spirit. Hip, hip, hooray! There are even moms there.

But there's another side to the fun and fanfare as reported by several sources on the web. Lawyer Connie Veneracion writes this in her blog:
The boisterous celebration is often accompanied by beer (champagne, for the more affluent groups). The males, especially members of fraternities, would occasionally get doused with beer. All in jest. But, sometimes, the jesting went too far. There were occasions in the past when these cheerers and supporters — drunk by the time the last exam is over — would hurl beer bottles right in front of the gate of the exam venue. I know. As a law student waiting for friends who took the bar exams, I have witnessed a few of those.
But there is a darker, more sinister side to the bar ops. Apparently, and this is spoken of only on the QT, part of the 'ops' is the distribution of 'tips' that law school or review school operators give their examinees, and these tips sometimes are the actual exam questions illegally obtained. Bar exams have been controversial in the past because of these tips such that the Supreme Court which supervises the exams have ordered results to be nullified and a retest be taken. To be fair, there are no reports of leakage (another Pinoy Englishism, btw -- other English-speaking countries just use leak) in the 2010 exams. The Supreme Court has announced new security measures to the exams starting 2011.

Connie Veneracion laments the fact that those involved in the violence during the bar exams are future lawyers. She didnt go far enough. The Law profession is the King Kong of all professions in the Philippines because it is usually from their ranks that congressmen, senators, justices of the Supreme Court, and presidents come from, and that, my friends, is a scary thought indeed.

In any case, Filipino English marches on. Mabuhay!

(Updates include references to 'pillbox' and 'bar ops' in Supreme Court documents and other sources.)

Thursday, September 16, 2010

This isnt funny

We're in the middle of a deadly dengue season and I've come across several reports pointing to a local herb called tawa-tawa (Euphorbia hirta) as a 'cure' for dengue hemorrhagic fever (DHF). Apparently, it's supposed to raise the platelet count in patients afflicted with DHF. This report by Reggie Aspiras for instance quotes former DOH secretary Jaime Galvez Tan saying, “The first evidence that it increases the platelet count came from doctors in Cebu.” (I must note here that the article linked is not a scientific article. It was written by a chef writing a food column. No citation was given for this alleged claim by Dr. Tan.)

Another article, this time by renowned poet Krip Yuson recounts his experience with tawa-tawa. His son was stricken with dengue and he attributes his recovery to several herbal remedies, including tawa-tawa. "There should be no harm in trying tawa-tawa capsules," he writes. This popular blog (Jessica Zafra's) also extols the virtues of tawa-tawa, claiming that it is a hemostatic. Again it must be noted that neither Mr. Yuson's article, nor the blog post by Ms. Zafra, is a scientific article so aside from the odd mention of the internet, they provided no citations for the claims in the articles. As such they offer anecdotal support for the claims of its anti-dengue properties.

This is amazing, I thought. Could we be on the verge of a medical breakthrough? Can a lowly little native weed hold the key to licking this killer disease? I had doubts that it could kill the virus that causes dengue, but maybe it did something. Maybe it did help raise platelet count. I did some googling of my own.

According to this study, a feature of DHF in its acute phase is the inhibition of platelet aggregation. Platelets are cells in our blood responsible for clotting. From the abstract of the article Platelet function during the acute phase of dengue hemorrhagic fever, Srichaikul T, Nimmannitya S, Sripaisarn T, Kamolsilpa M, Pulgate C.:
Platelet aggregation, plasma betathromboglobulin (BTG) and platelet factor 4 (PF4) were studied in 35 children with dengue hemorrhagic fever. The suppression of platelet aggregation was demonstrated during acute phase of DHF in both shock and non-shock patients. Simultaneous with abnormal platelet aggregation, there was increased release of BTG and PF4 from platelets into plasma during the acute phase which lasted only 3-4 days after shock or subsidence of fever.
I'm not a virologist, nor am I an epidemiologist, nor any other -ist that has any relevance to this subject, but if there's anything I know it's that suppression of platelet aggregation = bad. The platelets have to be able to cause blood to clot and they do this by aggregating. That suppression of platelet aggregation is a feature of DHF in its acute phase indicates to me that suppression of platelet aggregation isn't what you want when you have dengue. So, is tawa-tawa a hemostatic as claimed in that blog post by Ms. Zafra? I went to the International Center for Science and High Technology - United Nations Industrial Development Origanization (ICS-UNIDO) website and looked up Euphorbia hirta. It does have a lot of medicinal properties:
It is regarded as medication for gastrointestinal disorders, particularly intestinal parasitotosis, amoebic dysentery, diarrhoea, and ulcer. An aqueous decoction is used for the treatment of acute enteritis and dysentery. The plant is also used in bronchial and respiratory disorders including asthma, bronchitis, and hay fever. Other uses are in diseases of the urinary system for example as diuretic; diseases of the genital apparatus (metrorrhagia, gonorrhoea, urethritis, agalactosis). It also has lactogenic properties. In ocular diseases, the plant is used against conjunctivitis and corneal ulcer. The latex of the plant is used for warts and cuts.

Other uses of the plant are affections of skin and mucous membranes (scabies, tinea, guinea-worm), as sedative, antipyretic and anti-inflammatory indications. For externally painful stings of the large brown scorpion, Bambara in Mali alleviate pain by applying the pulverised leaves. The plant has a reputation as an analgesic in severe headache, rheumatism, pains in pregnancy etc.
Nothing there about it being a hemostatic. Dengue isn't even mentioned. Then it goes on to say this under the Pharmacological Studies section:
Additionally extracts exerted an inhibitory effect on platelet aggregation and depressed the formation of carrageenin induced rat paw oedema.
citing this study. Influence of some traditional medicinal plants of Senegal on prostaglandin biosynthesis, A. Hiermann, and F. Bucar. (Abstract only. The full paper has to be purchased.)

It turns out that components in tawa-tawa actually inhibit platelet aggregation. This could be useful in other diseases, but this isnt what you want when you have DHF. You want your platelets aggregating. It may be fortunate that the decoction of tawa-tawa given to DHF patients doesnt have the concentrated amount of the platelet suppressants that the extract form contains, or else it may have done more harm than good.

Like I said, the evidence for the efficacy of tawa-tawa presented in the articles by Aspiras and Yuson, and the blog post by Zafra are anecdotal. Although I do hope that there is indeed something in tawa-tawa that alleviates the symptoms of DHF, at this time I strongly suspect that the evidence presented are of the post hoc ergo propter hoc variety. Person had DHF, person takes tawa-tawa tea, person feels better. Ergo, tawa-tawa cures DHF.

Last year, when I was in Jakarta, my daughter contracted DHF only we didnt know it was DHF at the time. My mother just told me that my daughter was running a fever and has lost her appetite. She asked my daughter if she wanted to go to the doctor and she said no, she's fine, so we didnt think it was anything serious. My mother was giving her paracetamol and I told her to keep my daughter hydrated. This went on for a few days. She developed stomachaches which my mother attributed to the fact that she wasn't eating that well. My daughter told her she was fine but my mother brought her to the hospital anyway. The doc ran a blood test and the diagnosis came that she had DHF. She had rashes all over her body and the doctor said this was a good sign that the disease was in its last legs. In other words, my daughter was able to recover from the disease on her own.

Now imagine that instead of just keeping her hydrated with water and soup, etc., my mother gave her a decoction of tawa-tawa since she saw this on TV or read it in a blog somewhere, and my daughter recovered (as she was going to do anyway). She would have attributed her recovery to the tawa-tawa. (Instead of the super-fantastic dengue-busting genes she got from me. Heh.) That's what I think is behind all this tawa-tawa hype.

Bottom line is: Be careful. Don't believe everything you read. Investigate. Try to develop an internal bullshit detector. I have to say mine is pretty acute and I wish they taught bullshit detecting in school, but it's one of those things one has to develop on one's own, since school is oftentimes just a giant bullshit factory... but that's another story.

Update, 17 September: Trawling the internet for testimonies, I came upon this one from last year. Dengue Can be Treated by a Herbal Remedy
A nurse on duty in the ICU connives with us on the use of this plant [tawa-tawa]. She even gave us instructions on how to do it, although she reprimanded us not to show our doctors we’re giving it to the patient because a patient on NGT should not be given something orally.
Also known as snake weed or cat’s hair, tawa-tawa has shown promising results based on the initial tests conducted by the health department.
It is interesting that tawa-tawa was given to the patient with the tacit approval of a health professional (the nurse), even doing so despite the fact that a "patient on NGT should not be given something orally." The nurse apparently did so presumably because the attending physician wouldnt have approved. There is also an allusion to an uncited study ostensibly conducted by 'the health department'. The blog post goes on to narrate how the mother administered the decoction.
In my case, I dip a cotton ball into the decoction, and slowly pinch the cotton ball and drop the liquid into her mouth. Perhaps she was very thirsty, the first time I drop off the liquid into her mouth, she grabbed my hands to ask for more.
The patient, thank God, recovered after being given a transfusion of platelets. As you can see, despite the sureness of the declaration in the title of the blog post, the effect of tawa-tawa was inconclusive. The patient was receiving other medication at the time and even a blood transfusion. It is probably a case of post hoc ergo propter hoc with the mother attributing her daughter's recovery to the herbal decoction.

This blog post from 2 years ago (Herbal Cure for Dengue?) was written by a doctor and expresses the same sentiment I do in this blog post: Caution. It ends with this (emphasis in the original):
In spite of its hype and anecdotal popularity, I still think drinking Euphorbia hirta extracts and concoctions is not safe.
I echo the doctor's frustration that studies have not been conducted as to the efficacy of this herb as a cure for DHF despite the fact that we have some of the highest number of dengue cases in Asia. So far the only study I have located with regards to Euphorbia hirta and its effects on platelets is the Hiermann and Bucar one linked above in which they used an extract of the plant, which to my layman's understanding indicates they used a more concentrated form of the plant's ingredients than one prepared in a decoction. Perhaps smaller doses have a different, more beneficial effect. We just don't know.

Monday, August 30, 2010

Mind. Blown.

Ive read about the genetic code and how DNA uses nanotechnology to copy itself and read instructions in the code to make proteins. It's pretty impressive, but actually seeing it represented in computer animation... It's mind-blowing! From the folks at Dolan DNA Learning Center.

I know the prohibition of the use of 'design language' is de rigueur around the biological sciences but one can't help it. Those tiny proteins that are doing what they do -- reading instructions and carrying them out -- look like and are behaving like machines. Not only machines, but programmed machines. It's what prompted Nobel Prize winner Sir Francis Crick, after taking a look at the genetic code, to remark, "Biologists must constantly keep in mind that what they see was not designed, but rather evolved. " Biologists must keep reminding themselves, despite what their instincts and common sense are telling them, that these intricate processes occurring in cells are a result of random chance and necessity. But even his resolve about this wavered a bit when he advocated some sort of directed panspermia.

DNA Replication

DNA Transcription

DNA Translation

Code, transcription, translation. There's no way around it. One has to use the language of computer programming and information technology to talk about this stuff. The genetic code is a set of specific instructions written using a 4-character alphabet (A,C,G,T) much like a machine code is written in binary. Then nanomachines read and translate the four-character machine code into a higher level code composed of 20 characters (the amino acids) which is then used to make proteins: enzymes, blood vessels, skin, hair... It's like translating this:
01010100 01101111 00100000 01100010 01100101 00100000 01101111 01110010 00100000 01101110 01101111 01110100 00100000 01110100 01101111 00100000 01100010 01100101
to this:
To be or not to be
so it can be performed on stage by Patrick Stewart. And of course to do that youll need something like this. Even ignoring the obvious chicken-and-egg problem this presents, the origin of the genetic information is already a doozy for scientists and is probably getting them very excited.

Some guy called Bill Gates, who I heard knew something about computer code said, "DNA is like a computer program but far, far more advanced than any software ever created." ( In this book. Not to misrepresent Mr. Gates though. I bet he'd rather keep reminding himself that what he sees in DNA was not designed but rather evolved.)

Oh, and for the record, that idea that all those nanomachines in the cell are the result of random events that somehow fell together? I think it's BS.

Tuesday, August 24, 2010

Real wages

As countries continue to reel from the financial crisis, the Asia-Europe Peoples’ Forum (AEPF) has a proposed solution: Raise real wages. Their words.
Charles Santiago, Member of Parliament of Malaysia and AEPF co-coordinator in Asia, proposes a solution to the crisis that has a much longer effect: Raise workers’ real wages.
“Government is subsidizing business when it bails out banks using the stimulus packages. The money should go directly to the people. This is a more sustainable option.”
How sustainable is it? First of all, the AEPF is proposing an increase in workers' nominal wages: mandating perhaps an increase in the minimum wage of workers across the board. This is fine, but does that translate to an increase in real wages? Often, it does the opposite.

How are real wages increased? Real wages are increased when workers' wages can buy more stuff. For example, a worker's 100 pesos used to buy 2 kilos of rice, then later his 100 pesos can buy 3 kilos of rice of the same quality. His real wages have effectively increased even if his nominal wages remained the same since the money he has can buy more stuff. When does this happen? It happens when more products are produced such that the demand for these products do not exceed the supply disproportionately. Does increasing workers' nominal wages lead to an overall increase in the production of goods and services? That's the theory. Here's Mr. Santiago again:
Give underpaid workers their real wages and what will they do with it? They will spend all of it. They will buy food, clothing, creating a demand for goods and services. The effect on the economy would be very fast, similar to the stimulus packages,” he said in a news release.

“Except that unlike giving money to the rich, who may buy paintings and other luxuries that create nothing, the poor will 100 percent buy useful things that create local demand for goods and services available locally.
Giving workers "their real wages" could mean allowing the market to determine their wages. The nominal wages can go up, or they can go down. This is not what Mr. Santiago means. He means only raising nominal wages even if we have an oversupply of labor.

Most likely, this is what happens when the nominal wages are increased in this environment with a labor surplus: An increase in the wages is an increase in production costs. The price of products go up naturally and as they rise, the demand for them goes down. To stay profitable, that is, to stay in business, the business owner will lower prices up to the point where he can still make a profit, but as soon as he starts losing money he'll start laying off workers or cutting their work time or close shop. A general increase in nominal wages also means that prices of production inputs also increase. There will be a general increase in prices such that the worker's 100 pesos, instead of being able to buy 2 kilos of rice, can buy only 1 kilo. The effect is a decrease in the real wages in spite of the increase in nominal wages. And since businesses are cutting costs to make a profit or closing down, there will be an increase of workers working, say, 4 hours instead of 8 as well as an increase in the ranks of the unemployed since a lot of businesses won't be able to hire workers at the mandated wage. There will be a general slowdown of business activity and a general deflation as businesses default on their loans and banks tighten up.

So no, increasing the nominal wages does not mean an increase in the real wages. To increase real wages, we need to get more people working, and more people producing stuff. We need to stop destroying the value of our currency by inflationary 'stimulus packages'. We should let deflation happen instead of fighting it. True, deflation might create a downward pressure on nominal wages but if it results in an increase in the purchasing power of the workers' peso, then that's a good thing. Mr. Santiago is correct in saying that government stimulus packages only help the banks (and government crony corporations, I might add), but mandating businesses to increase worker wages also has a detrimental effect on real wages. Businesses will be happy to bid up the price of wages if workers were in short supply, but that is not what we have.

Thursday, August 19, 2010

"The banking system is a crime"

When I was in Jakarta last year, the subject of gold came up in a conversation with a Muslim colleague. I asked him if it were easy to buy gold coin. He said yes. These weren't issued by the government but these coins are good and are guaranteed by the coiner. He said they were a very good investment. I never thought about it again because back then one coin the size of our one-peso coin costs around 1,000,000 rupiah (around 5000 pesos) and I couldnt afford it. It probably costs about 1,500,000 rupiah now. Little did I know that the minting of gold and silver coin and the use of these as currency are deeply rooted in Indonesia's Islamic culture.

As I remarked to another colleague there, looking at the vibrant economic activity in the capital, I said I thought that Indonesia could be the next economic miracle after China and India. The next video reinforces that as the Indonesians themselves, in a repudiation of their central bank, are slowly moving towards a commodity currency. Indonesians are beginning to realize that the present system of fiat currency is on the brink of collapse and they need to return to the sound economic principles rooted in Islam. It really is about freedom and justice.

See also this post on commodity currency.

Friday, June 18, 2010

Football is Meh

Outside the building where our office is, a gaggle of guards are gathered around outside a small window and looking in. One doesnt need to peek at what they were looking at to know what that was all about: Game 7 of the NBA finals was on -- Lakers vs. Celtics. That's all you hear in overheard conversations everywhere. Meanwhile for the rest of the planet, the World Cup was on, the biggest sporting event on earth. Now I like basketball. I played it when I was younger. I was on the team when the Manggahan Floodway Project decided to hold a league amongst all the construction companies working on the floodway. (I played a few games but -- damn you, coach, I couldve nailed that three-pointer that wouldve won us the championship -- I didnt play in the finals.) I rooted for the mighty, grand-slam winning, Ramon Fernandez led San Miguel Beer team of the late 80s. But that interest waned. Basketball became boring. It was too easy. I think the turning point came when an all-pro, all-star Philippine team was sent to the Asian Games in 1990. This was the Dream Team! Fernandez, Samboy Lim, Alan Caidic, Benjie Paras, Hector Calma. We were supposed to be the best in Asia...and we were trounced by China. I lost interest in the PBA after that. They were just a bunch of overpaid losers to me. And with that, I lost all hope that our country of short people could ever hope to produce a world-beating basketball team. Really, it's amazing to me that the PBA continues to exist!

Anyway, back to football. There has been a lot of reasons put forth as to why we havent taken to the beautiful game like the rest of the world has, and demonstrate no interest in joining the worldwide party that the World Cup is, but none of them sound plausible. "We dont have enough football fields," they say. How is that a problem? When I was in Bangkok, the kids were playing in whatever space was available: on the streets, under the bridge, on any unused lot, it doesnt matter. When I was in China, the Chinese colleagues played during the lunch hour in the small open field behind the office building, with tiny bushes as goal. How about "Equipment is too expensive"? Right, and basketball equipment isnt? Kids in our neighbor countries play football barefoot. Much like kids play basketball barefoot here. Or in tsinelas at least.

"We were colonized by the Americans so football never took off here." Ah, there. The USA was never a football nation. They had their own version of football such that they called regular football soccer to differentiate it from the helmet football variety they invented. We call it soccer too because of that even though we have no local version of football with which to differentiate it. We were under Spain, one of the giants of the modern game, but by the time football was developing into the world game that it is, Spain's power in the islands was waning. But wait! In the Visayas, especially in Negros and Iloilo, they still play it. But for some reason, despite the large Visayan population in the National Capital Region, football is practically dead in Metro Manila. It seems that only basketball-loving Visayans migrate to Luzon.

Paulino Alcantara of Iloilo, all-time leading scorer
for FC Barcelona. Yes, that FC Barcelona (Photo nicked from Wikipedia.)

I noticed something else though. True, we are a basketball-crazy nation, but not that crazy. We dont have basketball fans driven to fervor by the game. We go to the stadium separately, watch the game, and go home in an orderly fashion. When I was in Jakarta, football night is traffic night. Fans for one team arrive in droves, together in rented buses so packed that some sit on the roof. They dress in team colors, waving banners, banging drums, and singing. They were everywhere causing monstrous traffic jams as convoys of buses head home after the game and everybody accepts this as a minor inconvenience simply because it's football. It could be that basketball doesnt foster the tribal feelings that football does, but it could be something else: we are a forgiving people and we dont like war.

Football night in Jakarta. Yes, that's a moving bus.

In his article for the Project Syndicate website, Football is War, Ian Buruma, Professor of Democracy and Human Rights at Bard College writes
Even when football doesn’t lead to actual bloodshed, it inspires strong emotions – primitive and tribal – evoking the days when warriors donned facial paint and jumped up and down in war dances, hollering like apes. The nature of the game encourages this: the speed, the collective aggression.
War dances, warrior paint, war drums... that's the football fan right there. He continues
It helps to have traditional enemies, old hurts, and humiliations that need to be redressed, if only symbolically. It would be hard for Americans, who are neither very good at soccer, nor cursed by great historical hatreds, to share the joy of the Dutch, say, when the Germans were defeated in 1988, or that of the Koreans when they defeat Japan.
And there you have us, the Pinoy. We have no enemies whom we wish to get back at. We dont wish to get back at Spain, America, or Japan for what they did to us when they came over for their respective extended stays in these islands. On the contrary. We admire our former conquerors. We wish we could be like them. We therefore have no interest in participating in the World Cup wherein we, a country of no technological advantage to speak of, can wage war with our former masters as equals. We're just not that kind of people. While the Chinese still harbor resentment for the Japanese for what they did such that a Japanese history textbook could offend the Chinese, we just go, 'Meh, whatever'. We have no desire to settle scores with Spain, the US, or Japan on the pitch. We have no desire to beat Malaysia even though they appropriated Sabah from the Sultan of Sulu. We just dont feel competitive with them. (There was a time when they felt competitive with us when we were their rival in intellectual and economic fields in Southeast Asia, to which we responded with our usual 'Meh', instead of 'Oh yeah? Let's settle that on the pitch.' But those days are gone. Malaysia won that fight long ago and now have no desire to beat us at anything anymore.)

Maybe we have no desire to do battle with other countries. We just want peace. We're that kind of a people and that is good. It's either that or we're a people who can't be passionate about anything. So what if we can't develop a passion for soccer? At the end of the day it's really just a game, right? Maybe it isnt and we're missing one hell of a party and we're not showing interest in wanting to join. Besides, I want to play and I can't find anybody to play it with.

Update: An officemate pointed me to this post on a new book on basketball in the Philippines. Pacific Rims by Rafe Bartholomew. It sounds like an interesting book that tries to explain the inexplicable: Why basketball?

Sunday, April 25, 2010

At a political rally

Candidates are expected to dance on stage. Or sing at least. It's a requirement, especially for local government positions: mayors, vice mayors, councilors. It has evolved into a ritual, something done to fulfill all requirements of righteousness. The candidate goes on stage, introduces his or herself, highlights credentials and qualifications, outlines plans and programs when in office, trying hard by means of flowery speech or sheer bombast to stick in the minds of voters, and perhaps inspire them even -- who knows? Then the candidate hands over the microphone to the emcee or whomever, the music is cued, and the candidate dances. No matter how stellar the candidate's credentials are, no matter how well the candidate has spoken in front of the voters, the candidate dances.

Someone who looked like a veteran in local politics was the first to step on stage to speak. You can tell he's done this before by his relaxed demeanor. He has mastered the art of political speechifying in front of this kind of audience of low-income workers, housewives, and students, alternating between a conversational tone and rallying cry. Rights of workers! Minimum wage! Protect the jobs of workers and give priority to the city's residents in hiring! I listened to him and I just knew he was going to dance. He did. He called his lovely family onstage with him and they danced together. "See how I dance for you. See how my family and I exist for your pleasure." By dancing they are offering themselves up as a sacrifice at the altar. The dance seals the deal.

Next on the stage, after the obligatory song-and-dance numbers from local groups and singers to keep the crowd from leaving (except for the pros, the singers and dancers are from the neighborhood, I reckon), the next candidate goes up the stage. She wasnt a surefooted on the platform as the first one, and her speech had none of the bombast. Her credentials were impressive enough and she was a prim and proper mom type. I just knew she wouldnt dance. She didnt need to. Voters like good-looking mom types with impressive credentials. She wound up her speech and I thought that was it, but she handed over the microphone to the emcee, the music was cued, and she danced. Jai ho!

The next one... I didnt even listen to the next one, but he sure didnt look like he could stay balanced on the stage if you propped him up with guy wires. He didnt have the stage savvy as candidate number one either. He didnt connect to the crowd. So I thought he won't dance. Surely he wouldnt be so foolish as to attempt to try to dazzle the crowd with his terpsichorean skills. But as sure as day follows night, he signals the deejay and Louis Johnson's immortal bass lines come flooding out of the speakers. He was going to dance to Michael Jackson's Billie Jean. If youve ever seen FPJ's version of Billie Jean on TV, this was exactly like that in dance form.

The next candidate arrived with his family. He has a lovely wife, a former artista, I heard, and good looking kids. He was also disabled. He arrived in a wheelchair, and got up on crutches. By this time, I have given up trying to predict who would dance or not. Surely candidate number four would not dance. He could barely walk and had to be helped on stage, and he didnt look like he watched Glee. But he had his family with him and they would do the dancing for him. I turned to a friend and said, "You know what music they'd dance to? Footloose." Ha ha ha!

Guess what. Kenny Loggins's guitar licks come out of the speakers.




Sinong mayor mo?

Philippines' next top model? Yan ang pose.

These are the real dancers. As in they get paid to do this.

Kids get a kick out of getting their pictures taken.

Work it.

Once more with feeling

More photos here.

Wednesday, March 10, 2010

In which I present a case for commodity money for our friend cvj (and for whomever else that happens by)

This post was borne out of a discussion cvj and I had over at plurk, and although I like plurk, the 140-character limit doesnt allow me to do stuff like this.

The choice is between the status quo, in which the State issues money by fiat out of nothing, and a free monetary system in which the market determines what their medium of exchange is. For centuries, that market seems to have chosen gold as their universal medium of exchange until the State put an end to that and forcibly imposed fiat money, something the market hasnt chosen. But first,

a little history. How did gold get to be the erstwhile medium of exchange?

No one person decided it. Not one all-powerful monarch declared by royal edict that henceforth gold shall be the medium of exchange in all dealings throughout the realm. It was chosen by the market itself. It came about like this:

When people began trading for goods and services, at first they did so by direct exchange. Juan the fisherman wants butter, but all he has is fish. Pedro the dairy farmer has butter, so Juan goes to him and offers his fish in exchange for butter. If Pedro wants to eat fish today, he'll trade his butter for Juan's fish. This is barter or direct exchange. If you have a product A and you want product B, all you had to do was go find someone with product B and see if they want product A. Easy. (Let me digress a bit to disabuse you of the notion that if Juan trades two fish for a pound of butter, that means to Juan, the value of the two fish equals the value of a pound of butter, and since Pedro traded his butter for fish, Pedro also thinks the same. This isnt true. For Juan, the pound of butter is worth more than the fish, and to Pedro, the fish is worth more than the butter. If they were equal in value, why make the exchange at all? In this kind of free trade, both men are trading for things they value more. This is the subjective theory of value.)

Later, Juan wants a chair and so he goes to Jose the carpenter to see if he wants fish in exchange for a chair and so he prepares to negotiate how much fish Jose wants for the chair. But it turns out Jose doesnt want fish at all. What he wants is butter in exchange for the chair. What does Juan do? Does he go home chairless? No. He knows Pedro has butter and Pedro likes fish so Juan asks Jose how much butter he wants for the chair. He then goes to Pedro, trades his fish for butter, takes the butter to Jose, and goes home with the chair. This is indirect exchange.

After numerous transactions of this sort, everyone finds out that a lot of people like butter and almost everyone would accept butter as payment for whatever goods or services theyre offering. Butter then becomes a medium of exchange. Soon people begin storing butter in their larders not to eat it, but to use it for trade. It has turned into money. Butter is a convenient medium since 1) people accept it, and 2) it is easily divisible so one can easily cut it into the proper weight that another wants in exchange. But they have this nasty habit of melting or turning rancid in the summer, and no one wants rancid butter. Butter therefore isnt a good store of value. (Let me remind you that Im only using butter as an example. It could very well have been any other commodity like bat guano.)

Eventually, after numerous trials wherein different media of exchange were tried in the marketplace (salt, cowrie shells, copper, silver, etc.), the market settled on gold. Gold, according to the market, is perfect since 1) People accepted it for some reason, (maybe because it's so pretty -- who knows?); 2) It's divisible and malleable and can be formed into convenient shapes; 3) It's durable -- they dont corrode for instance; 4) It's relatively rare, that is, you can't just pick them off of the street or manufacture it, and the rarer something is, all things being equal, the more valuable it is in the market.

So for centuries gold was the medium of exchange and all was well until some royal frassum-wassum decided that it would be a good idea for him to have a monopoly on coining such that only 'government-issued' coins were accepted. And as is their wont, kings waged war on their neighbors mostly because of some property dispute* and gold being rare, they had this good idea to mix it with some other metal like copper, while stamping it with a number that fixes its value. So this coin is Five Florins or whatever no matter what its weight is or its gold content. And it all went downhill from there. Even if governments turned 'democratic' after the WWI, the government monopoly continued. First they gave us the gold standard wherein they issued paper redeemable in gold. Then they gave us the gold exchange standard wherein only governments were permitted to redeem their paper in gold, then finally to the full fiat currency, where the government forces you to accept their paper currency with nothing to back it up. Thus freed from their commodity tether, governments can print money at will, and with the electronic age, they didnt even have to do that; they can create new money with a few keystrokes thereby dooming us all to an endless cycle of booms and busts until, inevitably, the currency collapses. When private individuals do this, it's called fraud. When governments do this, it's called monetary policy.

Why a commodity-backed currency is better than fiat currency

We'll get to that in a bit, but first I'd like to acknowledge that cvj is making a good point when he says there really is no difference between commodity money and fiat money if both are issued by the State. I agree. Whether or not the State-issued money is backed by a commodity or not is irrelevant if the State continues to have a monopoly on its issuance. States, for whatever reason, but war being its most egregious reason, routinely inflated its currency even when they were nominally backed by gold. So having the State have a monopoly on the issuance of money, whether backed by a commodity or not, is practically the same thing. The solution therefore is to institute free banking. But even with commodity money being a monopoly of the state, it's still better than fiat money. Ive written on the effect inflationary government policies cause the business cycle here.

cvj in one of his plurk comments said "and if a person accepted fiat money, then same principle applies" meaning a commodity-backed currency is no different from fiat currency since people accept fiat currency. This is wrong. Let us ignore the fact that people are forced to accept fiat currency. (In fact rejecting government-issued fiat currency is a crime.)

An untethered fiat currency allows the government to increase the money supply at will. What's wrong with that? In fact, cvj, in one of his comments makes the surprising assertion: "An economy can grow only if the money supply expands." Gold is too rare, he implies, to allow for an expansion of the money supply. What is wrong with that is an increase of a supply of something lowers its value. I think cvj is coming from a Keynesian-Friedmanite mindset which seeks to steer the economy by monkeying around with the money supply. This view puts a premium on nominal value and ignores real value. (Mandated minimum wage, for example, does this. It increases nominal wages while reducing real wages due to the inevitable higher prices, as well as tending to increase the ranks of the unemployed.) Increasing the money supply means that the 100 pesos I have could buy less stuff today than it did before the government increased the supply of money. The money I have in the bank is now worth less than when I deposited it, and the money I put away for my retirement would be worth less when I finally decide to retire. With untethered fiat money, value is destroyed. It punishes savers and rewards borrowers thereby discouraging savings and enticing people to get things on credit. (On the other hand, if I put away one ounce of gold 10 years ago, it's still one ounce of gold now.)

Granted, even with a commodity-backed money, governments, evil as they are, can still inflate. In fact governments routinely did this especially when they waged their wars, but the commodity provided a check on the extent governments inflate. For example, in the government of Engkantasia, one ounce of gold is worth one Engkantasian dollar (ED), but it was at war with its neighbor Kosmekistan and so to finance the war it inflated its currency such that there were now twice the amount of EDs for every ounce of gold they had. They used the EDs to buy weapons and other war materiel. The holders of the EDs, many of them foreign governments, when they try to redeem the EDs for gold, will find out that there is not enough gold to cover their EDs and so will try to redeem their gold while it's still available; a sort of bank run. When news of Engkantasia's financial situation gets around, no one would be willing to trade with Engkantasia using EDs. Perhaps theyll demand to be paid in some other sound currency depleting Engkantasia's foreign reserves, or they could demand to be paid in gold bouillon. Either way, Engkantasia and the ED will be screwed. Knowing that, they will limit the extent to which they inflate if they want to continue to trade with other countries. (It must be noted that in the real world, most if not all countries have the US dollar as their reserve currency and the US dollar is backed by nothing tangible except the hard work of the Americans whose government routinely confiscates their earnings in the form of taxes and inflationary monetary policies and uses these confiscated earnings to bail out financial institutions that couldnt survive in the free market and to invade other countries.)

Freed from central banking or State monopoly, commodity money is even more powerful as a regulator. Free banking is when private banks can issue tradeable paper by themselves. (I believe Hong Kong did this once.) If for example Bank A has assets worth 1000 ounces of gold they can lend out, they can issue paper representing that 1000 ounces and anybody holding this paper can redeem it for gold. Dispersed in this way, if in case some rogue bank were to issue paper in excess of how much assets they have, the resulting malinvestments (boom-bust cycle) are local and will not cover the whole country or indeed the whole world. And other banks can check the extent to which Bank A has over-issued paper when they redeem Bank A paper deposited with them by their clients.

Financing with fiat money

cvj also has put forth an interesting premise: "Without finance, there won't be capitalism. Finance preceded capitalism." And by finance Im assuming he meant people willing to lend money to other people at interest. Let's not quibble over the details of whether or not capitalism would have happened if it werent for finance and assume it is true for the purposes of this blog post.

I have already discussed the dangers of fiat currency on the economy in the post linked above but to reiterate, government increasing the money supply lowers the interest rates artificially making people invest in things they wouldnt normally invest in if the interest rate were allowed to go to their true levels. And with inflation destroying the value of stored or saved money, people are less inclined to save. This is tragic because savings is the only legitimate source of investment.

A fundamental difference

The fundamental difference between my position and his I suspect is this: I tend to trust people's decisions on what they think is good for them, while cvj thinks that government (or any enlightened authority figure -- scientists, academics, whoever) knows better or at least is necessary in the cycle of people's decision-making. Whether Im right and he's wrong or vice versa is beside the point. Maybe people are idiots who'd sooner poke themselves in the eye if you hand them a butter knife so they need the government to hold their hand and tell them what to do. Or that the primary motivation of Homo economicus is to screw his neighbor out of all his wealth and so government is needed to protect man from his fellow man. But the fact is, government cannot be trusted to make economic decisions, not because theyre evil or because theyre stupid, but because they can't know everything. Information is dispersed throughout society. Millions of brains making individual decisions and value judgements, and the only thing coordinating these individual decisions is the market. And the market is all of us.

*Kings waged wars for real estate mostly, and they were limited wars. Wars waged by democratic societies tend to be bloodier and waged for such reasons as 'spreading democracy'.

Wednesday, March 03, 2010

Paputok. Mall of Asia Pyro-Olympics 28 February 2010

"Why can't we go to the waterfront?," I asked the guard. The walkway toward the beach was closed off. It was filled with tables and chairs in a snooty restaurant setting.

"May pyro Olympics, sir," he answered.

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Thursday, February 18, 2010

Sunday, February 07, 2010

Hayek vs Keynes rap throwdown

LOLness. A great video from the guys at EconStories. 

Keynes has been the dominant force in world economy since the 1930s with his General Theory and his legacy is deeply felt today: the Bangko Sentral, NEDA, and various government economic institutions and regulations. Hayek on the other hand believes you can't plan an economy. Information is dispersed thoughout society; millions of people making individual decisions on what theyre going to do next. As we can see, Keynes has won the debate by acclamation and very few people know who Hayek and Mises are. For Keynes, the boom-bust cycle is caused by 'animal spirits' (which is academic-speak for 'I dont have a clue'). Hayek on the other hand says it's caused by artificial low interest rates caused by government manipulation. The cure for the boom-bust cycle? Keynes: increase aggregate demand -- if consumers stop spending, the government should pick up the slack. Stimulus packages and bailouts are Keynesian solutions. Hayek's solution is to prevent the boom in the first place by letting interest rates go to their natural levels: what each individual making individual decisions determine the price of credit to be with no intervention from the State. No stimulus packages, no bailouts. If a company can't survive in the free market without government help, the government should not use public money to save it as this creates a moral hazard. Anyway, enough of that. Here's the video.

See also an earlier blog post: Boom!