INTROSPECTIVE
“Lo! unto us a child is born!” Not just any child but a child of a carpenter who would follow in his father’s footsteps (Mark 6:3). Carpentry creates value as it transforms plain wood into a beautiful cabinet. Honest hard work is carpentry’s signature. It is the exact opposite of plunder.
“A date that will live in infamy!” was Franklin Delano Roosevelt’s memorable description of the day, Dec. 7, 1941, when the Japanese Imperial Navy mounted a devastating sneak attack on the US naval forces at Pearl Harbor. The same phrase applies to Dec. 7, 2018, when the Sandiganbayan exonerated Ramon “Bong” Revilla Jr. of plunder in the pork barrel scam. And to August 17, 2015, when the Supreme Court allowed Juan Ponce Enrile to post bail for the non-bailable crime of plunder on the pretext of ill health, which seemed, however, to drain away the moment he stepped out of his confinement. These are sneak attacks on institutions of justice.
Within an hour of the exoneration of Revilla, a panel for Pilipinas Conference 2018 organized by the Stratbase Albert Del Rosario Institute (ADRI) was discussing the near-term prospect of the Philippine economy under the Duterte administration. The link between institutions and economic outcomes was raised in the Q&A. As an example of a broken institution, I cited with a fit not unlike rage the Sandiganbayan and the just promulgated exoneration of Revilla. After blurting “I cry for you, Pilipinas!” I doubled down with a hardly coherent attempt to pin economic failures on broken institutions via Adam Smith (The Wealth of Nations) and Acemoglu and Robinson (Why Nations Fail). Not wrong, mind you; just muddled. Unlike my betters whose frontal cortex sharpens in the face of a furious amygdala, my own frontal cortex did not linger. The issue deserves better.
Why do broken institutions lead to dismal economic outcomes? Economic development is, at its starkest, the growing of the economic pie. When the economic pie grows, everyone’s share of the pie grows — if sometimes, unevenly. But growing the pie requires honest hard work, carpentry as it were. The polity has to put its collective shoulder to the grindstone. Honest hard work anchors value creation and economic progress.
But honest hard work is distasteful to some. It is easier to just hoodwink, steal, or plunder one’s way to a bigger share of
“Honest hard work” and “steal and plunder” are two fiercely conflicting ideas. Which one of them triumphs depends upon institutions, especially the institution of justice.
the economic pie. Isn’t it more tempting to sit by the pool sipping champagne made from the sweat of others? “Honest hard work” and “steal and plunder” are two fiercely conflicting ideas. Which one of them triumphs depends upon institutions, especially the institution of justice.
If institutions reward honest hard work, more and more people will heed the call to carpentry. And if so, the economic pie will grow. If institutions reward plunder, the ranks of plunderers will swell. And the economic pie heads south. This is the Murphy, Shleifer, and Vishny (1991) rent-seeking paradigm: broken institutions force talent to migrate away from honest hard work to plunder as a way of life and as a consequence the economic pie languishes or even shrinks. Its famous incarnation is the “Magee curve,” after Stephen P. Magee, the professor of finance and economics who argued that the greater the number of lawyers per thousand population, the slower is economic growth.
The Sandiganbayan exonerated Revilla of the crime of plunder in the face of the guilty finding on Janet Lim-Napoles and on trusted Revilla subordinate Richard Cambe. In effect, it formulated a new wrinkle in jurisprudence: “sine flagrante delicto non”—without a videotape of the handover, Revilla was just a naive boss of corrupt underlings. Revilla was blameless even if a trusted underling perpetrated a crime using the senator’s nose as springboard. Adolf Hitler would have passed the test of sine flagrante delicto non since nobody saw Adolf pull down the lever of a gas chamber. The Mafia bosses in the US for so long evaded accountability for crimes of underlings by the same excuse. It was the Racketeer Influenced and Corrupt Organizations (RICO) Act of 1970 that plugged that easy pass for Mafia bosses. Under RICO, to be liable one no longer has to be caught flagrante delicto; one has just to head a criminal outfit. As it stands, can anybody blame co-accused Enrile, free on bail due to another legal innovation—this time by no less than the Supreme Court itself (“old age and/or ill-health” theory)—if he is beaming over a massive gift? Can you blame “Jinggoy” Estrada if he is popping champagne bottles? They know the new legal theory applies to them and exoneration is in the mail.
Indeed plunder by the rich and famous not only goes unpunished by the courts, it is also rewarded by the political system. They can now run for office and win on the wings of a powerful subliminal message: “Vote for me; I’m untouchable; I have ‘anting-anting.’” Ferdinand Marcos running on abilidad won a congressional seat after beating the Julio Nalundasan murder rap.
The institution of justice is the mother of all institutions of the land. And in the Philippines, it is broken. “Due process Philippine style” means that common sense is trumped by the littlest of technicalities. The Roman legal principle, viz., de minimis non curat lex (The law is not about little things) is stood on its head. The accused rich and powerful can afford many de minimis options: pay off, intimidate or neutralize witnesses, procure technicalities from judges (“Best judges money can buy”), delay proceedings forever (the Ampatuan massacre), wangle a legal innovation from the courts (the Enrile illhealth and old age), and failing everything else, finagle an absolute pardon from the chief executive of the land (as was Estrada’s by Arroyo). No wonder the poor ache for a salvific autocrat.
When institutions of justice and politics reward plunder, the tribe of the plunderers will increase and rule the land; the tribe of honest hard work will, as the intro to a Sinatra song goes, “… fold its tent and silently slink away.” And economic development has little chance.
But despair need not be our lot this Advent. Rejection of plunder was the message of the Carpenter. He showed the way when he, now in the fullness of age, “entered the temple courts and drove out all who were buying and selling there…” saying, “But ye have made it a den of thieves!” (Matthew 21:12). If true to the message, resist plunder and carpenters everywhere may still inherit the land.
nRAUL V. FABELLA is a retired professor of the UP School of Economics and a member of the National Academy of Science and Technology. He gets his dopamine fix from hitting tennis balls with wife Teena and bicycling.