is the subject of my Trade Tripper column in the Friday-Saturday issue of BusinessWorld:
Last week I discussed some points regarding the
Philippines’ creeping “entitlement culture,” as well as our long held
paternalistic political culture (some say “maternalistic” but let’s not
get into that right now). This week I’d like to examine how such
cultures and our own psychology as a people might affect our ability to
engage in international trade.
It’s a subject I’ve long been interested in and oft recommended
that people more capable than I take a deeper and more scientific look
into. The premise is simple: if international trade works on the idea of
competition, which doubtless entails making certain demands on its
participants, then how does our culture enable or hinder us in meeting
those demands? Put another way, if international trade requires that a
country gives its best in a concerted and sustained manner, then how
does that square with the Philippines’ seeming entitlement and
paternalistic cultures, where people are encouraged to abandon the need
to think because our government will “take care of them” anyway?
It’s a question worth asking. Because if seniority and not merit is what
counts, or family and connections rather than talent, if promotions are
based not on abilities but on who would least offend the feelings (or
“loss of face”) of those constituting the established order, then how
does that allow us to meet the demands of today’s international economic
First of all, forgetting momentarily the need to compete with other
countries, does our culture even allow us to progress as a country? As Forbes
magazine noted in 2010, “the easiest route to the top is to be born
into the clique of families that have controlled the country for
generations, including under a half-century of US colonialism... Decades
of mismanagement and dynastic rule have left the Philippines, once
ranked second to Japan in postwar Asia, lagging far behind neighbors
like Thailand and Indonesia. Foreign investors chasing growth gave a
wide berth to the Sick Man of Asia, as the country became known.”
Which makes sense. The Philippine’s insistence on seniority (as well as
deference and sentiment) rather than talent resulted in the Philippines
scoring poorly in the Power Distance Index (a standard mentioned in
Malcolm Gladwell’s The Outliers). The Index “measures the extent
to which the less powerful members of organizations and institutions
(like the family) accept and expect that power is distributed unequally.
It suggests that a society’s level of inequality is endorsed by the
followers as much as by the leaders.” Socially and economically
developed countries score well, while the Philippines posted the fourth
worse score (amongst the likes of Panama and Guatemala).
Also, before we think of competing, is the question of whether our
people actually welcome the idea of competition itself. Note that we
don’t have a word for “competitive,” which would’ve indicated we value
that trait akin to ambition, of the need to excel, of elevating oneself
over others, succeeding by merit without having to drag others down. “Paligsahan” (for “competition”) is not really the same as it connotes games more than anything. “Pataasan” (for “competitiveness”) perhaps even illustrates our distaste for the idea, with its rather negative tone.
With this in mind, the findings of Simon Kemp (“Psychology And Opposition To Free Trade,” World Trade Review,
Feb. 16, 2007) are relevant: “... the enthusiasm of the general public
for free international trade might be less than that of the economist.
Six specific reasons are advanced: (1) lay views of utility emphasize
employment over consumption; (2) status quo bias results from loss
aversion; (3) people think altruistically but parochially; (4) people
often consider fairness in bargaining situations; (5) people may hold
inappropriate fixed pie beliefs; and (6) people may misunderstand
Ricardo’s principle of comparative advantage.”
Finally, international trade logically requires that a people trust each
other and their country’s institutions. So ask ourselves: how truly do
we trust our fellow countrymen as Filipinos (rather than merely
regionally) and our institutions? As Karl Kaltenthaler and William J.
Miller (“Social Psychology and Public Support for Trade Liberalization,”
International Studies Quarterly, June 4, 2013) states: “The
level of social trust an individual has will condition the degree to
which an individual wants to open her country to imports from other
countries. Those individuals with lower relative levels of social trust
are less likely to support the notion of freer trade.”
The foregoing should be read in complement with John Nye’s “What
Determines Trust? Human Capital vs. Social Institutions: Evidence from
Manila and Moscow” (National Research University, 2012): “It is now well
established that highly developed countries tend to score well on
measures of social capital and have higher levels of generalized trust.
In turn, the willingness to trust has been shown to be correlated with
various social and environmental factors (e.g. institutions, culture) on
one hand, and accumulated human capital on the other.”
All the foregoing illustrates the first rule of competing in any arena: know oneself.