Keynesian Economics And Neoliberalism As The Agents For Development In The Philippines
Keynesian Economics and Neoliberalism are two of the prevailing economic ideologies, with the latter being the dominant ideology used by most developing nations today. These two ideologies rely on different foundations – on who the main actors are to achieve economic development – but both are grounded on the importance of market to achieve human progress.
Keynesian economics, as developed to understand the Great Depression, put emphasis on the role of the state to stabilize the downward movement of economy, known as ‘economic recession’. For Keynesian economics, optimal economic performance can be achieved, and economic recessions can be prevented through the active regulation of the state by establishing economic intervention policies.
On the other hand, neoliberalism stands with the function of a market free from state intervention. The state for neoliberalism, is just a small regulatory entity in charge of for the aspects of life, property and external threats of a nation. Thus, it supports deregulation, free trade, privatization, and reduction in government spending in order to enhance the role of private sector in the economy. Neoliberalism attempts to improve well-being by promoting individual self-interests of the people. This can be achieved by having a free space, “free market” that is natural and self-regulating, driven by continuous competition among industries. It promotes individual responsibility to people which is key to self-advancement. This individual responsibility is grounded on the expectation for everyone to participate in the market, compete and interact with others, and make their own fortune. By this, continued economic growth will be achieved that will eventually lead to human progress.
Between these two economic ideologies, I believe that Keynesian economics can be a better agent for development in the Philippines. Although nothing between the two really promotes development grounded on the deeply-rooted conditions of the people because both put capitalism/market in pedestal, I believe that Keynesian economics, having constant regulation from the state, can be flexible enough to solve different economic issues, and can be used to primarily address the needs of the people without committing itself to a single institution. It doesn’t fail to address short-run economic problems while pursuing long-run economic growth.
I believe that while we generally think of the state as having totalitarian tendencies, which may impede the rights of the people while regulating the economy, there is always a possibility of having a state that is free from individualistic leaders and that has sincere concern for the people that will control the economy in the best way that it can genuinely improve the well-being of all Filipinos. On the other hand, a free market guided by powerholders from private corporations are always driven by the need to accumulate wealth because of competition. It will never be separated from the constant tendency of exploiting people and widening inequality that is the opposite of real development for the people.
