As an alternative to the polar opposites of laissez faire Capitalism and atheistic Socialism, both plagued by inherent weaknesses and abuses in recorded history and recent events, it may be worthwhile to contemplate a new economic system – one infused with the core teaching of Christianity. Christianity is a religion of LOVE, defined by Church doctor St. Thomas Aquinas as to “will the good of another” — not only what is good for oneself nor what is evil for another. Thus, Christianomics, a portmanteau for an economic system infused with the spirit of Christianity, can potentially become a new economic order founded on the universal and timeless virtue of LOVE.
From Vicious Cycle to Virtuous Cycle
In the context of the Philippines’ dystopian socio-economic structure that is characterized by severe and worsening income inequality, where the poor become poorer in a vicious downward spiral, imagine if the country’s elite 1%, who are estimated to control at least half of the country’s total wealth realizes that there is only one real way to ensure sustainable growth in their riches.
That is to empower the poor majority to reach middle income status and enable the middle income to become rich, so that they themselves can grow even wealthier. As the 90% poor to low income plus 8% middle class enjoy higher disposable incomes and augment their purchasing power, they will have a higher propensity to buy higher quality and higher priced products and services, consumables and durables, cars and condominiums, jewelry and luxury, health care and education, which will in turn secure an even more prosperous future for succeeding generations.
A larger middle class can afford higher-value telco subscriptions on post-paid plans vs. pre-paid loads; buy bigger bottles and packages vs. low cash outlay sizes and sachets; participate in the formal banking sector vs. pawnshops and usurious “5-6”; and use credit cards in-store and online. They can buy health and life insurance and invest in financial markets to buy stocks and bonds.
This can then trigger a “Virtuous Cycle” of Wealth Creation as aggregate demand expands, attracting businessmen to expand aggregate supply by boosting investments in innovation and equipment, land and factory, that in turn requires even higher employment and fuels higher growth, thus attracting foreign investors. Economists call this phenomenon the Multiplier Effect, but in plain language and simple common sense, we all know poor workers are poor consumers – a labor force paid in low minimum wages is also a consumer market with low minimum budgets.
Christianomics therefore is for the mutual benefit of both the rich and the poor, or for the Common Good, and the Common Good is not reserved only for Catholics or Christians, but for all our common humanity – for Jews and Muslims, Buddhists and Hindus, and yes, even atheists.
Help Our Poor, Save Our Rich
Indeed, this is central to Christianity where the rich help the poor and the poor help themselves. We have all seen that charity as dole-out does not work in the long run because it tends to breed a culture of entitlement; rather it is work that is genuine charity, or what is beneficial for our fellowmen — because it is work that bestows dignity to man, helps him achieve a fullness of life, earn esteem as family breadwinner, and contribute his talent as a productive member of society.
In the beginning, God ordered Adam to “subdue the earth and take dominion over it” (Gen 1:28), meaning man was created to work, not to beg. This exhortation is reinforced in the words of St. Paul in 2 Thessalonians 3:10, “He who does not work let him not eat”. On the other hand, the parable of the talents is often used to justify the tenets of capitalism wherein one uses his talents for profit, but we must also remember that all three servants RETURNED their talents plus fruits to their master. The rich must also recall the moral of the parable about Lazarus, the beggar whose body was covered in sores but went to heaven after death in contrast to the punishment in hell for the rich man who lived in luxury but ignored the destitution and hunger of Lazarus (Luke 16:19-31). In Matthew 25:40, Jesus reminds us whatever we do or not do to the least of our brethren, we do or not do unto Him, and so deserve the consequences at the final judgment.
In the Acts of the Apostles, we were inspired to learn “there were no needy people among them” (Acts 4:34), for the rich would sell some of their property, donating the proceeds for redistribution among the poor. To help inspire Christian businessmen to promote an economy of caring and sharing, the Catholic Church has anointed a Patron Saint for Businessmen in St. Homobonus (“Good Man”), a married layman who became rich and successful as an Italian textile merchant, practicing his business with honesty while giving generously to the poor, up to his own death inside the church. In his speech to the US Joint Congress in September 2015, His Holiness Pope Francis I declared business is a noble profession, for it is ordained towards creating wealth that can improve the world. God would not create a “zero-sum world”, but one where everyone is intended, and expected, to win. Christianomics then, is the 2nd commandment, put to action.
Profit-Sharing NOT Higher Minimum Wages
This is not to advocate higher minimum wages, which already rank among the highest in the ASEAN, rendering us uncompetitive vs. our neighbors except Singapore and Brunei, at US$11-US$12 per day, and will only further burden employers with an increase in fixed overhead costs.
Rather we can encourage 1 Million registered enterprises to adopt a Profit-Sharing scheme for their over 40 Million mostly minimum-wage employees, as profit-sharing represents a variable expense to the company. To encourage profit-sharing on a larger scale, which is a “Best Practice” in Compensation and Benefits among the world’s most successful companies, the government can offer a lower income tax rate (ex. 16% vs. currently 32%) for those enterprises who would allocate at least 33% of their net income for profit-sharing for the benefit of deserving employees.
“Saint Tax” NOT “Sin Tax”
The rationale is simple and compelling. Workers who are part-owners are more productive. They will drive revenues, cut costs and conserve cash all on their own, even without being told. Many including myself have personally benefitted from generous profit-sharing schemes in more progressive foreign MNCs, while I have also experienced the explosive growth in revenues of my local clients where we instituted profit-sharing schemes to boost motivation and performance.
Companies’ sales revenues, market shares and profits will increase, enlarging the taxable base, and as companies expand they will hire even more workers, further boosting taxable incomes. Rather than fighting over the same economic pie, we enlarge the whole pie as all ships will rise with the tide. Aggregate demand grows, automatically increasing tax collections from the VAT on consumption at the same time attracting businessmen to invest more to increase aggregate supply, thus unleashing a multiplier effect upon the whole economy, and ultimately producing inclusive and broad-based, long-term and sustainable economic growth. This initiative can be called the “Inclusive Incentive” or the “Saint Tax” that can spark the Philippine economic miracle.
From Family Business to Family Economy
Nearly 100% of local firms are family-owned enterprises, both publicly-listed and privately-held. Therefore, owners of family businesses can start to evolve family businesses to a family-oriented economy. Beyond instituting a generous profit-sharing scheme, local businessmen can consider democratizing ownership in the company like what foreign MNCs do in distributing shares of stock as a real and concrete way of sharing the fruits of the labor of non-family workers. Thus, employees will not get obsessed with profit-sharing in the short-term but rather with doing what is right for the business to build long-term shareholder value, now including themselves. This implies employers and employees do not only share in the good times, but even during the bad.
There should no longer be a choice between regulars and contractuals and their fear of ENDOs. Gone will be the adversarial relationship between labor vs. management. Neither should employers reward employees out of blind loyalty even if they lack productivity, but must strike the right balance between professionalizing an enterprise based on meritocracy and humanizing an enterprise like a modern and progressive family business, whose interest is not only the family owners, but the welfare of their “family of employees” and their employees’ very own families.
Businessmen will no longer scheme to get rich at the expense of others, but by enriching others.
Local cooperatives can flourish like the world’s biggest farmers and food producers, banks and lending institutions, retail chains and energy utilities to promote the mutual benefit of members.
From Brain Drain to Brain Gain
This combination of “profit-sharing” by the private sector and “fiscal incentive” by government can also help reverse our chronic hemorrhage of OFW talent whom the world has discovered to be world-class in capability yet paid in third-world wages in their home country. If people are our strongest asset and greatest wealth, why do we export the best of Filipino brains only to enrich foreign companies and governments, instead of exporting the best of Filipino brands? If the greatest triumph of the Philippine economy over the past 50 years has been the OFW diaspora, I believe that the greatest tragedy will be, if their children and grandchildren will continue to be OFWs themselves. Profit-sharing can spark a Brain Gain and minimize the untold social costs of separation between spouses and children growing up without guidance due to absentee parents.
Agricultural Revolution → Industrial Revolution
Christianomics also demands that we immediately revitalize our primary sector consisting of Agriculture-Fisheries-Forestry because the majority of our people live as farmers and fishermen and they also suffer from the highest rates of poverty and destitution, hunger and malnutrition. Neglecting them jeopardizes our food security, and thus, our national security. On the other hand, when fresh food is abundant, our people are healthier and stronger; children can study well and not faint in classrooms on empty stomachs, while our laborers can be more productive in factories and construction sites. Surplus produce can be exported or processed into higher value-added food and beverages to meet the needs of a global market of > 7 Billion consumers.
Only if we spark an Agricultural Revolution can we hope to ignite our Industrial Revolution. This is because the lack of food drives up the cost-of-living and minimum wages, making our workers uncompetitive vs. China and ASEAN neighbors “CLMV” (for Cambodia-Laos-Myanmar-Vietnam).
Reproductive Wealth not Reproductive Health
We do not need a Reproductive Health Law, rather we need a Reproductive Wealth Law, where wealth can beget more wealth because the rich help the poor, while the poor help themselves.
Christianomics can also address the seemingly intractable conundrum of poverty and population growth. We are not poor because we are plenty. Rather, we are plenty because we are poor. The poor do not need condoms and contraceptives, but gainful employment and decent housing, nutritious food and proper health care, good hygiene and sanitation, and quality education as high IQ leads to high income, while low IQ leads to low income. Our work with the poor shows that If the menfolk are provided livelihood opportunities with fair wages, their motivation to work rises and they will have less time and energy for irresponsible procreation. As popular healing priest Fr. Fernando Suarez quipped during the raging battle against the RH Bill, “We don’t have too many people. We have too many sins”- pride & envy, greed & gluttony, lust & yes, sloth.
Metro Manila is overcrowded but the Philippines is not overpopulated. Manila already ranks as the most densely populated city in the whole world with 42,000 people per square kilometer, while the rest of the metropolis’ 16 cities and municipality are among the Top 30. Ironically however, the Philippines is NOT the most densely populated country, far behind Japan and Korea, Hong Kong and Singapore, Taiwan and many first world countries in the European continent.
This is proof positive again that we have simply neglected countryside development, forcing the majority of our people to seek livelihood in urban centers like Metro Manila and Cebu. Fixing our primary sector will surely help decongest Metro Manila while new infrastructure is being built.
One Nation — One Vision
St. Augustine of Hippo defined a nation as a “group of people with a common vision”. Sadly our country has never been blessed with a visionary leader, but perhaps Christianomics is the first step towards replacing the infamous 80-year old curse of a “nation run like hell by Filipinos” with a far more noble dream and honorable aspiration for a “nation run like HEAVEN by Filipinos”.
Christianomics can potentially be the Filipino business model that will spark our long-delayed economic miracle in a massive way and with instantly explosive positive results, as it can unlock the value of the Filipino worker and unleash the power of the Filipino enterprise. Christianomics demonstrates the economy of LOVE and nobility of Filipinos. Christianomics is the “Filipino Way”.