When we are alive, we are all equal in the eyes of the Law. As living and breathing humans, each of us is (in principle) a priceless member of society and all equally entitled to the same human rights, respect, and sanctity enshrined in the set of fundamental principles that underlie most modern democratic societies.
That all changes when we die. Human rights, respect, and santity no longer matter when you’re dead. And when you strip away the emotional component of dying, we get back to the simple economics behind it all. The answer to the morbid question I used as a title for this piece is quite simple:
You’re worth a lot to your next of kin if you had the foresight to take out life insurance or, even better, had accumulated a trove of assets to pass on as an inheritance to them.
Recession is kind of like a slow death on a national scale. We are in the midst of one that will be unfolding over the better part of 2009 most likely well into the Fiesta Election Year of 2010.
The Philippines faces a foreseeable future of unemployment to the tune of more than a million of it citizens. A quick stocktake of the possible carnage (notably the 500,000 OFWs that stand to lose their jobs) is laid out in my latest piece Substance Matters in an Economic Crisis where I make this point:
The biggest challenge facing returning OFWs and laid-off workers is coming to terms with what exactly they will be coming back to.
What does Philippine society have to offer its citizens when the commercial activity upon which their employment depends grinds to a halt?
Fear not! As the answer can be gleaned from a few brilliantly simple diagrams I came up with:
This is how we can represent prosperous bustling times…
… and this is how I’d represent how a depression and the resulting contraction in the value of business activity can change the nice picture:
Quite revealing in terms of where one sees a society such as the Philippines fitting in such pictures. :D
============
Join us on Facebook!
Popularity: 1% [?]
How much are you worth dead? It depends. If you get cremated and your urn is placed in a Church run columbarium, your heirs may get billed in the thousands.
You wrote: The biggest challenge facing returning OFWs and laid-off workers is coming to terms with what exactly they will be coming back to
Fair dinkum mate! At least when you get redundant in the Big Smoke, you can always find a job in Outback Queensland!
Capital base also shrinks in depressions. Does your diagram allow for black holes? ;)
The blind leading the blind.
“How much are you worth dead?”
Who cares. When you’re dead you’re dead, kaput!
When you are worth a lot dead, you have to worry about your spouse and/or your spouse’s toyboy.
A term used in optics comes to mind: circles of confusion
Thus is exhibited here the extent of Pinoy-class insight. :D
It’s a circle of tough love :)
Coming from another non expert ( i will just ignore for now the blind leading the blind comment) Just correct me if i am wrong.
true you have represented the capital labor ratio in your diagrams.
But we all know the problem we are having is a result of imaginary assets; that distorts your capital intensive and labor intensive comparisons because imaginary assets can make it look like a capital intensive business activity.
Another thing: you think that the car manufacturers,had not thought about that capital intensity driven business activities,look at where they are now?
offshoring and outsourcing as their solution, to window dress their capital labor ratio. .Sure paying less dollar amounts to their labor force overseas may increase their capital intensity. Same with outsourcing, another window dressing way to make it appear that one company is capital intensive.
So what is nice about that?
I have no question about what you think about the situation in the Philippines.
I just don’t think it is just about comparing capital intensive and labor intensive economies.
It all boils down to supply and demand.
No demand no business activity.
Kung me pangbili ka,ibulsa mo lang that is the same as no demand,no business activity.
just the same kung wala kang pambili no demand pa din, still no business activity.
perhaps you ought to consider the pecularities of what goes on at home. for example, whatever happens, a very big portion, what is it, 1 in 5? people are employed, in one way or another, by the government, the total magnified by their dependents in turn feeding from the public trough, essentially. of these, a goodly portion are immune to changes in regimes though another goodly portion becomes redundant, potentially, whenever there is a change in regime. but the reality in the end is that they are immune to fluctuations in the economy since they get their salaries from the state and there is no real incentive to pare down government.
economists have been talking of the effect the last presidential campaign had on employment and other figures. this is a well-known, artificially boosting effect of elections, which is why their regular scheduling is so important to so many. accompanying elections are the trickle-down effects of campaign spending though i’ve heard that with the dominance of television this trickle-down is occuring on a smaller and smaller scale, the lion’s share going to the networks. this ties in with how political behavior has changed -no more ocho-ocho as you like to put it, because the era of the miting de avance has passed.
the other thing is that what we consider to be The Economy is basically what’s reported and reflected in official statistics, which may or may not be believable or relevant, because data-gathering, management, etc. has just so thoroughly fallen apart. This means a hell of a lot may simply be unknown, underreported, not fully understood, etc. You have to factor in the tinge culture, the microeconomy, which is impervious to larger trends, in a sense. We have generations of experience in this, the Japanese Occupation and the collapse of the economy in he 1980s are within living memory and ther habits acquired then -buy and sell, etc.- are deeply ingrained, and transmitted.
these are coping mechanisms that have emerged and become entrenched because of an absence in government foresight, etc. they address the entrepreneurial insticts of an ever-growing population where as you pointed out, capital is trapped in a few hands that are inclined to be conservative, if not lazy, and who prefer state coddling to actual risk-taking. but then again risk-taking has not been fully explored or rewarded has it, not just in the philippines but in southeast asia, has it? after all the criticisms you make have been slathered on with an even wider brush by critics of southeast asian economies like joe studwell.
Karl, for a “non-expert” you certainly have a way of making this thing complicated.
It’s as simple as this:
When your business fails, would you have some tangible assets to sell, even after all the business activity surrounding said assets had ground to a halt?
I read once that the name Coca Cola alone is more valuable than all of the physical assets of the company that owns the brand. Even then, physical assets can be sold for scrap.
mlq3, I agree the “microeconomy” is immune, in the same way that cockroaches are immune to (in fact they are oblivious of) the aversities that impact the quality of life of human beings.
It depends on where you aspire to play. If playing among cockroaches just so we see ourselves as immune to global trends is your kinda thing, well, then we may as all stop measuring ourselves using globally accepted measurement systems and shut ourselves out of the world — just like the best way to avoid being killed in a car accident is to not drive or ride a car at all for the rest of your life.
True these, “entrepeneurial instincts” exist. But as you said, they are all micro, exist at a micro level, and have aspirations that do not go beyond the micro level. They may have been forged in the crucibles of war and economic collapse, but even when the smoke clears (as it usually does), the habit remains entrenched – as you had pointed out yourself.
Look around. Lots of ocieties pick themselves up after devastating wars and rise to up to achieve wondrous things instead of cowering under “entrenched coping mechanisms”. ;)
Crawling back to Arroyo
Excerpt:
Sayaw, Pinoy, sayaw… :D
Read you loud and clear benigs.
Thanks.
More pathetic developments as da Pinas slides into wretchedness:
RP eyes Obama as savior of OFWs
Pinoy nga naman talaga. :D
Those diagrams scared the excrement out of me. I think my “speaker of the house” just took a big gulp and refrained from making any speeches. Constipation is the word.
All those people, whats going to happen to them? How are they going to avoid.. discovering. Discovering a second family, that the education the kids got was “it”, discovering that your brother and sister are not who they are, discovering that the car belongs to the bank. Discovering that your on your own.
An insurance man asked me “that” in 2004. I told him I had no idea and added that he can die first and then await for me so we can talk about it.
OWWA is bullocks.