THE RECTO READER - Industrialization: The Alternative to Poverty, Part 2C of 6

NOTE: Recto's cited examples were of his time, of course; but realities in our homeland in the present and the foreseeable future are/expectedly much, much worse. Though I am tempted to update them with current issues, it's best to leave them as they are since Recto's paradigms about our much deepened national predicament still ring relevant, valid and true. In short, Recto saw the forest and never got lost in the trees.

THE RECTO READER is presented in several postings.This is the fifth posting. Click below for previous posts:
THE RECTO READER: Nationalism,Internationalism,Ultra-Nationalism, Part 1A of 6
THE RECTO READER: Mission of Nationalism, Part 1B of 6
THE RECTO READER: Economic Independence,Economic Nationalism,Part 2A of 6
THE RECTO READER: Economic Nationalism Means Industrialization,Part 2B of 6
THE RECTO READER: The Fallacy of "Philippines First,"Part 2D of 6


WHAT WE FILIPINOS SHOULD KNOW: (Note: Bold and/or underlined words are HTML links. Click on them to see the linked posting/article. Forwarding the postings to relatives and friends, especially in the homeland, is greatly appreciated).

“ Men fear thought as they fear nothing else on earth -- more than ruin -- more even than death.... Thought is subversive and revolutionary, destructive and terrible, thought is merciless to privilege, established institutions, and comfortable habit. Thought looks into the pit of hell and is not afraid. Thought is great and swift and free, the light of the world, and the chief glory of man." - Bertrand Russell

"Poverty is the parent of revolution and crime” - Aristotle, 335 BC

“They do not easily rise whose abilities are repressed by poverty at home.” - Decimus Juvenalis, 120 AD (CE)

“To be poor and independent is very nearly an impossibility.” - William Corbett, 1830

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Hi All,

In Part 1(A&B), Recto defined and clarified for us what Filipino Nationalism is and what it is not.

In Part 2(A&B), he elucidated the need for economic independence: the "what, why, how, where and when" of economic independence characterized by a nationalistic outlook. He reminded us that economic independence propelled by nationalism is the sine qua non for political independence, domestically and internationally; and clarified what real industrialization ought to be.

In this Part 2C Recto stressed the need to shift from being an agricultural country to an industrial country, if we were to free the native Filipino majority from perpetual impoverishment.

In Part 2D, Recto strongly differentiates between "Philippines First" policy and "Filipino First" policy. In the first policy slogan, the GNP or other econometric/statistical data for the Philippines as a territory may be great but mostly benefiting foreigners, while the native Filipino majority (common tao) still continue to be mired in dire poverty; In the latter slogan, the "Filipino First" policy was designed to alter this historical/perennially distorted economic conditions and results and instead, to make the native Filipino majority the controller of and main beneficiaries of the national wealth.

- Bert

"...there are the enslaved human beings who must accomplish their own liberation. To develop their own liberation. To develop their consciousness and conscience, to make them aware of what is going on, top prepare the precarious ground for the future alternatives....This is our task: our not only as Marxists but as intellectuals, and that means all those who are still free and able to think by themselves and against indoctrination, communist as well as anticommunist." - Herbert Marcuse (1898-1979)

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Industrialization: The Alternative to Poverty

In the present age, economic development is, for all practical purposes, equivalent to industrialization. Stagnation and poverty are the alternative to industrialization.(22)

The clues to a correct and clear understanding of what industrialism means are, first, the circumstance that the finished products consumed are of local manufacture and the conveniences enjoyed are also locally produced, and in factories and plants predominantly owned by the citizens themselves; and second, the fact that most of the people, not just a minority enjoy these finished products and modern conveniences of life. (23)

An agricultural economy, as that term is today universally understood, is an economy where the major, though not the exclusive, economic efforts of a nation, in terms of labor and investments, are directed to agriculture and other extractive pursuits. In such an economy, there are also a few manufacturing and service industries, but these constitute only the minor part and are mere adjuncts of the main economy.

In an industrial economy, on the other hand, the case is the other way around. While there must necessarily be extractive production, the major, though again not exclusive, economic efforts of the nation are directed to manufacturing. In both, all the various sectors of production are therefore present, but they differ in the proportion of economic efforts directed to the extraction of raw materials and to the processing of these raw materials into finished products.

Since raw materials, whether in the world market or in the various national markets, are always of much lower value than the products into which they are processed, it follows that the producers of raw materials always receive much less income than producers of finished products. This is likewise true among nations: an industrial nation is a prosperous and, hence, a strong and dominant nation; while an agricultural nation is a poor and, consequently, a weak and dependent nation. Industrial nations have never wanted other nations that are raw-material producers to industrialize. England tried to prevent or hamper manufacturing in America. This was one of the major causes of the American Revolution.

Because of our rich mineral resources which include petroleum, iron, coal, copper, nickel, manganese, chromite, and other important raw materials -which today are being taken away from our land for the use and benefit of foreign industries- we assuredly can industrialize, despite foreign advice to the contrary. The prosperity of the Filipino people will always be an impossibility if we do not industrialize.(24)

The policy of industrializing the country should be pursued vigorously and sincerely. Many of the industries to which our administrations, past and present, point with pride as achievements of their so-called industrialization programs are nothing more than assembling, bottling, or packaging plants or concerns which import an almost finished product and merely perform the last stage of manufacturing before placing it on the selling counter. 

When we refer to these enterprises as "industries," we are deceiving ourselves. We are contenting ourselves with spreading a thin veneer of industrialism on a backward agricultural economy. Such industries import the almost finished products of foreign labor so that only an infinitesimal amount of labor is utilized here to complete the manufacturing process. This, as I said, is subsidizing foreign labor at the expense of local labor.(25)

Nationalist Industrialization - Not Just "Industrialization"

I need not stress the point that when I speak of industrialization I mean nationalist industrialization, that is, the industrialization of our own economy, the Filipino economy, not merely the industrialization of the Philippines in a territorial sense. As I once pointed out in a Senate speech, foreign direct investments, as distinguished from foreign loans, not only will channel the nation's wealth into foreign lands, but will fail to promote the industrialization of the Filipino economy because it will not help in the formation of Filipino capital.

....We are rich in natural resources, and with such an ample source of readily available labor from which to draw for our industries, having in mind the principle of shift from occupations of lower marginal productivity to occupations of higher marginal productivity, we have every reason to expect that it is within our own capability to develop the national economy at an accelerated pace in the next few decades. The decision is for us alone to make. If we leave it to others because we admit our lack of political authority or of will power to decide on our own economic policy and act accordingly; if we leave it to others because we believe that we cannot refuse their insistence on a joint economic program which can only mean a program geared to their own national interest, then indeed our task of seeking prosperity and strength for our country and people is futile.(26)

When I advocate industrialization I do not have in mind, as certain supposed economic saviors of the country do, only an industrialization incidental to a general concept of economic development based on a rural economy. This concept is diametrically opposed to the views I have espoused the last five years. I advocate a real industrialization program, not one where industry would occupy a minor place in an economy still devoted to the production of raw materials for export, not a plan where industry is merely concerned with the assembly of parts or the bottling or packaging of imported products. I advocate an industrialization which would include heavy industry and from which would emanate progress in all directions, including the agricultural sectors of our country.

Those who would camouflage the colonial nature of their economic thinking advocate industrialization but visualize this only as a result of agricultural development. I stand on the proposition that industrialization is and should be the starting point of our progress and development....

A predominantly agricultural economy garnished with a few minor industries spells poverty, unemployment, and the continuation of our colonial status, whereas industrialization and the eradication of the vestiges of a predominantly colonial agricultural economy is the only way out from underproduction, unemployment and poverty.(27)

....Again and again, we meet with fellow Filipinos pr read remarks of Filipino commentators, that reveal an unclear understanding of the true meaning of industrialization and economic nationalism.

...When some countrymen of ours argue, and I have met many who so argue, that it would be impractical for our country to industrialize because we are by nature an agricultural country, and that anyway we do not have the wherewithal nor the technological know-how to industrialize, we who have been ardently advocating industrialism are naturally pained at such misconceptions.

Industrialism of course roughly refers to a state of culture and manner of producing and consuming goods of a national society wherein industries and industrial processes predominate. To give a simple illustration of the several parts of the definition just made, one may say that if in a nation the general level of living is such that most of the people eat, say puff rice and cream for breakfast, and both the puff rice and cream are finished products of the country, and when heated just before serving, these are placed on an electric range all parts of which are of local manufacture, and the majority of grown-ups who eat the breakfast earn their livelihood working in factories owned mostly by their fellow citizens or in business enterprises that are also mostly owned by fellow countrymen, then that nation may be said to have attained a failry high degree of industrialization. It is already living in a culture of industrialization.(28)

From the early days of the American occupation up to July 1946, it was inevitable that America should control the economic policy of our country. The American Tariff Act of 1909 establishing a so-called "free trade" between the United States and the Philippine, was a bilateral preferential free trade intended to protect American business interests in this country. Its net effect, as everybody now knows, was that, because of the immediate profits it derived from certain privileged export articles like sugar, hemp and copra, the Philippines has to this day remained a producer of primary or raw materials for export to the United States, depending entirely on the American market for said export products. Whatever thoughts of industrialization cropped up now and then were soon discouraged. That policy, whatever the intention behind it might have been, has proved disastrous to our economy.

The proclamation of independence did not alter the chartered course. On the contrary, more effective measures to implement the existing policy were adopted. The Bell Act, which the American Congress passed in 1946, not only continued gearing the agricultural economy of the Philippines to the industrial economy of the United States, but it gave parity to American citizens in the nation's natural resources and public utilities as a condition sine qua non to entitle Filipino war sufferers to receive war damage payments, and deprived us of the power of independent action in sundry economic matters. The Agreement has been revised and certain restrictions affecting our sovereignty have been removed, but parity rights for the Americans were not only maintained but extended to all fields of business activity.(29)

A distinguished American writer said, in the course of a general discussion of Philippine-American relations, that "as the economies of the United States and the Philippines are largely complementary, and not competitive, both countries profited but especially the Philippines." It is true that the two economies are complementary in the sense that the United States is essentially a manufacturer of finished products a portion of which is exported to the Philippines, while our country is in the main a producer of raw materials which she exports mostly to the United States. 

But to say that the two economies are complementary is not to say that the relationship has been beneficial to both in the same degree. In such a situation, the United States, as the manufacturing nation, has been always the gainer and the Philippines, the agricultural nation, always the loser. That is an unassailable postulate. Indeed, there is no case in history where an industrial nation was ever a colony of, or subject to, or even on the same footing economically with an agricultural country. The industrial nation has always been the dominant nation and the agricultural, the subservient.

"No economist would say," according to that American writer,"that free trade with the United States for half a century has not been enormously profitable to the Philippines and of permanent benefit because it made the past progress possible." Of course what he meant was that no American economist would say such a thing. 

But surely, no true Filipino economist will admit that a reciprocal free trade between an industrial and an agricultural nation has ever been beneficial to the latter as to the former. Such arrangement, in effect, prevents the industrialization of the nation that exports raw materials and imports processed goods, and will keep it poor and backward indefinitely.(30)

References:
22. Nationalism and Industrialization, July 30, 1957.
23. Ibid.
24. Short-Sighted Economic Goals, September 3, 1957.
25. The Role of Labor In Our Economic Emancipation, September 9, 1957.
26. Industrialization, the Only Cure for Our Economic and Social Ills, June 24, 1955.
27. Nationalism and Industrialization, July 30, 1957.
28. Industrialism and Economic Nationalism, October 3, 1959.
29. A Realistic Foreign Policy for the Philippines, August 18, 1956.
30. Our Raw Material-Export Economy, June 26, 1957.

"Do not fear to be eccentric in opinion, for every opinion now accepted was once eccentric." - Bertrand Russell

"...there are the enslaved human beings who must accomplish their own liberation. To develop their own liberation. To develop their consciousness and conscience, to make them aware of what is going on, top prepare the precarious ground for the future alternatives....This is our task: our not only as Marxists but as intellectuals, and that means all those who are still free and able to think by themselves and against indoctrination, communist as well as anticommunist." - Herbert Marcuse (1898-1979)

"This, his message, valid as it was in his lifetime, is even more timely now. For there are still those among us, devoid of sufficient faith in our potentialities, who would in their attitude and thinking, in effect reject the gospel of national dignity, national pride, and the national responsibility of self-reliance. The words of Claro M. Recto may, it is fervently hoped, occasion a change of mind and of heart."
 - Justice Jesus G. Barrera.

TO BE CONTINUED........Next ..THE FALLACY OF "PHILIPPINES FIRST"  (versus "FILIPINO FIRST").. Part 2D of 6