Saturday, February 13, 2010

The World Needs a New Investment Architecture

The current world-scale recession has spawned a lot of discussions about the need to change the entire world’s financial and investment architecture. Reason: just a few thousand 1st World money managers handle over $150 trillion of the world’s investment funds, and they tend to ‘gamble away’ most of the gargantuan amount in financial markets. The speculation culture has created twenty or so financial crises worldwide since the 1970s, all of them bankrupting thousands of companies, putting millions out of work, and bringing down middle class families to lives of poverty.

One of the solutions forwarded to address such planet-scale tragedy is for world governments and the United Nations to force financial regulation among investment companies. Tactics proposed include new tax impositions on financial movements, high taxes on short-term loans, and prohibitions on certain types of financial trades. Indeed governments and the UN have great potentials to effect international financial reforms, but unfortunately they have very limited ability to drastically restructure the world’s financial and investment architecture. Reason: UN and even World-Bank IMF funds and credit worthiness are in mere hundred-billion dollar levels. On the other hand even in end-1990s, financial instruments controlled by 1st World investment companies were estimated at some $150 trillion. Perhaps 90% of the funds were being used for ‘casino trades’ in stocks, bonds, interest rates, derivatives, commodities and the like. Betting on rise and fall of currencies alone were in the order of $1.5 trillion each day. Then and now, trading is thru computer networks at lightning speed worldwide, which means no state regulators can possibly track all the activities. It is highly improbable that the fund managers who handle the gargantuan amounts and who all too frequently voice an aversion to any form of public control will acquiesce to UN and state efforts at management of world moneys.

Another thing: the betting culture seems to have become a permanent part of money managers’ persona. All billion-dollar wins are popularized; all billion dollar losses are glossed over. Just 1-3% of world funds go to business start-ups due to their long gestation periods and ‘high risk’ reputation. Actually the bettors can hardly be blamed for their habit. There are just too few companies that issue dividends at rates that will give good returns to $150 trillion worth of stocks, bonds and financial instruments. Further, few corporations actually access stock markets for their financing needs. According to 1990s studies, up to 75% of 1st World industrial companies generate new operational funds from internal operations, not from stock markets. Thus there’s a massive glut of capital that somehow must earn something for investors who own them. Investors expect their fund managers to generate profits, but with such low corporate dividend returns, the only way out is to ‘gamble’ away the entrusted funds, using sophisticated computer formulas to raise the favorable odds.

Unfortunately, ‘gambling’ is not all computer logic, and betting activities are in fact controlled more by emotions. Greed, hope, fear, exuberance, dependence on leaders, and herd behavior have created over twenty financial and economic crises worldwide on account of the betting actions of a few thousand 1st World money managers. During the 1998 Southeast Asian crisis, Western fund managers’ herd-like withdrawal of some $100 billion in short-term loans crippled thousands of companies and put millions out of work. Over 50 million middle class Southeast Asians reverted to poverty, all because too few managers controlled too much of the world’s moneys.

So what can we civil societies do? The most logical solution is to raise the number of ‘money controllers’ to the billions, which means all the world’s employees setting up new companies. In the 3rd World, the entrepreneurial employee groups must number by thousands to effect wealth spread-out. Further, every thousand-employee group must engage in a joint venture with a 1st World company to leverage local capital thru foreign cash infusions and equipment loans, thereby creating large corporations instead of the typical micro-scale businesses so prevalent in the 3rd World. The schemes will enable some two billion employees worldwide to gradually draw the 1st World’s trillions in investment funds away from casino plays and into 3rd World and developing country investments (which currently amount to just a few hundred billion dollars). However, such scheme is possible only if companies set up by thousand-employee groups make reasonable profit. Since current bond interest returns are just 2% or less (even below zero in Japan), this is not at all difficult to do.

But who has the persuading powers to move billions of employees to set up corporate groups? Like it or not, we bloggers have to lead. Currently, the only ‘world force’ that has planetary reach and have the ideals and talents to really ‘fix the world’ are blogging nets. We bloggers in our millions have to start the redemption act by setting up model agribusinesses in the 3rd World. The projects must be so profitable that millions of local employees will develop the desire to copy them all. Lacking capital, the employee masses will pressure their politicians to pass a law that funds copycat agribusinesses set up by thousand-employee groups in joint venture with 1st World companies. Joint ventures normally triple local capital thru cash infusions and equipment loans so the law will create thousands of companies and millions of jobs each year, for all eternity. Eventually, all the world’s bottom poor (perhaps numbering three billion) will find good jobs that enable them to afford good education, acquire entrepreneurship loans, and join their brethren in setting up more companies for dividend income, and to acquire fortunes in corporate stock. Translation: 3rd World poverty eventually ended.

Why agribusinesses as bloggers’ catalyst models? First, agribusiness addresses global warming, which is a 1st World worry. Once our models make good profit (which means greening the world can actually yield enormous wealth), 1st World peoples will pressure their governments to pass laws that finance our models’ copycats. The laws should likewise require investment companies to dedicate 5% of their $150 trillion in capital funds towards long-term lending to tropical agribusinesses. Second reason: agribusinesses require mere Elementary level employees at entry ranks, which is exactly what some three billion 3rd World poor are.

Ok, so what agribusinesses should we bloggers set up and where? First project sites should be in the Philippines, where appropriate technologies and skills already exist. Bloggers may choose from among the following priorities: (1) Hundred-hectare multi-crop multi-livestock farms with managed forest; (2) Thousand-hectare forested ranches with high-protein forage trees; (3) Ethanol distilleries with sweet sorghum plantations; (4) Thickly reforested upland mini-dam hydropower chains; (5) Hundred-hectare forest resorts with camouflaged condos for lease and breeding facilities for threatened animal species. (6) Crab, shrimp and fish aquaculture with mangrove reforestation. (7) Mixed commercial species reforestation (softwoods, hardwoods, hemps, fibrous plants) for paper, cardboard and furniture production. (8) Jatropha and oily fruit forests for (bio-diesel) and forest ranches (for short-term income); (9) Manufacture of machinery and equipment to supply all the agribusinesses mentioned.

These projects can potentially deliver above-market dividends to capital investors, except for one thing: who will finance the start-ups? Fund managers certainly won’t do it, because their decisions are based on ‘minimum risk’ and ‘proven profitability,’ despite the investment anemia such decisions bring to all humanity. Our only real hope for going over investment paralysis in the 3rd World is thru civil societies contributing affordable ‘loose change’ capital. Several hundred-thousand bloggers and friends chipping-in $5 or so can build one of the hundred-hectare projects. A million bloggers and friends pitching-in $10 up each can set up an ethanol distillery or forest resort. All such contributors will likely be surprised at the resultant high dividend returns. For instance, ethanol distillation out of sweet sorghum can yield ‘petrochemical rate’ profits at 80% of sales, according to Brazilian experience using sugar cane as feedstock. Sweet sorghum production volume per hectare is thrice that of sugar cane and at higher brix (sweetness) content, so our ‘bloggers’ distilleries’ should profit even more.

Our projects’ high dividend issues will likely create copycats of our models all throughout the tropics. Over a hundred poor nations will lobby their governments and 1st World peoples for agribusiness financing, thereby speeding up the passage of the twin laws previously described. What should follow is what all humanity dreams about: (1) Financing laws with perpetual effect eventually employ all 3rd World poor. (2) Fortunes in stock shares and dividends flow among 3rd World masses, thereby narrowing the scandalous wealth and power gaps that currently create so much misery in poor societies. (3) New forests and farms absorb millions of tons of greenhouse gases every second, thereby putting a brake on global warming. (4) New planet-scale markets rise for 1st World production, thereby ending the current recession and preventing further business downturns. (5) A new grassroots-oriented investment and financial architecture emerges: employee skills in their billions (instead of a few thousand 1st World money managers) determining where and how much to invest out of the planet’s over $150 trillion in capital funds. It will be impossible for thousands of employee minds to 'gamble away' hard-earned money in the stock markets.

All these can lead to what will really fix the world for good: blogging nets forming a world-girdling e-government that enables peoples to manage public resources (thru laws) instead of perpetually allowing a few politicians and money managers to shape the fates of all humanity.

Friday, February 12, 2010

Let's Bring Down World Food Prices

As if the poverty scourge is not enough, humanity now faces a planet-size feed grains under-supply problem as well. Since the past decades, world production of grains have been lagging behind population growth. By 2030, populations in the Middle East and Africa will nearly double to 1.7 billion. Indians and Pakistanis will number 1.6 billion. Southeast Asians may rise to 700 million. Middle classes in all these regions are rising, and all will compete for increasingly pricier food. All countries in these regions already import 30-60% of their rice, corn and wheat needs. The Philippines has been importing up to half its rice needs for decades, and will keep importing more. Unless grain production rates rise worldwide, China alone may be buying the entire world’s grain output by 2030, which means rising food prices and even worse poverty worldwide. As global warming creates more drought, floods and typhoons and at worse levels, widespread global hunger may precipitate revolutions and wars over scarce resources.

What can we bloggers do to prevent these nightmares from becoming our future? Appealing to politicians is like talking to brick walls, so we better begin to wake up two billion employees worldwide. Reason: employees know how to set up and run companies. They can certainly create and manage agribusinesses that address worsening food problems worldwide. And they can certainly do it at good profit for themselves. The profit motive becomes our weapon.

How may the world’s employee masses start? First they have to pressure their politicians to pass a Grains and Livestock Production (GLP) law. A GLP law channels 2-5% of yearly state budgets towards lending to thousand-employee groups that set up giant grain-related agribusinesses. Examples: (1) Thousand-hectare upland forest ranches with lowland rice, corn, millet, oats and sorghum farms. Livestock are kept in pens under forest trees. (2) Sub-contracting of livestock feeds cropping (grains, forage grasses, forage trees) to small farmers, all cash and equipment needs advanced on loan. The employee group’s livestock feedlots raise cattle, goats, sheep, rabbits, turkey, ostrich, fowls, etc. using sub-contract harvests. (3) Commercialization of low-cost desalination technologies for planting coastal desert edges to sorghum, wheat, corn, millet, oats and rice. (4) Reviving tropical upland stream nets thru reforestation, and supplying lands below with irrigation water to attract corporate-level grain farming and livestock raising. (5) Building huge rainwater catchment basins in the tropical uplands to store normal and abnormal rainfalls caused by global warming. The basins become sources of irrigation water for forests and farms in uplands and lowlands. The system ensures an end to the terrible tropical lowland floods that get even worse as warm temperatures keep raising the evaporation rates of seawater and glaciers, which create continent-size clouds that lead to typhoons.

Now for the crucial question: how do we bloggers persuade two billion employees worldwide into pressuring their politicians to pass a GLP law? It’s not that difficult really. We simply share the profit-making scheme among all the world’s employees, thru blogging nets of course.

Thursday, February 11, 2010

Waterway Resorts vs. Species Extinction

One reads Nature magazines and adds another worry: the world is losing its waterways plants and animals at an alarming rate. Of around 10,000 bird species worldwide, 6,700 are in decline. 1,100 species are nearly extinct or threatened with extinction. The relentless spread of human habitation and destruction of forests especially in the tropics seem to make total extinction of such animals a certainty within a few generations. Waterway plant species are just as threatened. It seems other life species cannot survive wherever man is around.

Somehow a way has to be found to reverse the tragedy. What’s left of birds, fishes, amphibians, mammals and plants that live within and around rivers, lakes, swamps and watersheds have to be conserved. This difficult task has to be performed together with a task even more difficult: address rural poverty around such waterways. Doing so tones down if not totally stops human economic and habitation pressures on such natural resources. We must be reminded at all times: once we lose a species, we lose it forever.

So how do we bloggers begin the reversal act? Most promising tactic may be an appeal to what destroys nature: the profit motive. Since the problem is planet-wide, we initiate a ‘save our waterways’ campaign among the world’s two billion employees. Blogs, websites, pamphlets, lobby groups are some ways. Bloggers’ creativity can be unlimited. We tell all world employees that they can earn a lot of money while preserving their local waterways. How? First by pressuring their governments to pass a Save our Waterways (SOW) law. The SOW law provides 2-5% of yearly state budgets for the following: (1) Gradual state purchase of unpopulated riverside, lakeside and swamp-side lands a thousand meters from water line, on both banks for rivers; (2) Appropriation of SOW budgets towards lending to thousand-employee groups that set up forest resorts and resort-related businesses along said waterways banks; (3) Requiring all such forest resorts to operate facilities for breeding of threatened species (plant, bird, freshwater animals) that inhabit the waterways.

In the Philippines, billions of dollars of SOW funds from all countries should gradually reforest all the country’s sparsely-populated waterway, lakeside, swamp-side and upland watershed lands. Resort personnel reforest the waterway areas and perpetually guard perimeter grounds against encroachers, hunters, subdivision ‘developers’, land price speculators, squatters and destroyers of nature. High resort profits make perpetual care possible. All the while, the world’s rivers, lakes and swamps gradually transform into similar well-cared nature reserves. Reason: good laws take effect forever so billions of dollars in ‘loan capital’ for resort development and related industries flows each year for all time.

How may the resorts perform the delicate balance between nature preservation and destructive tourist pressure? Several ways: (1) The resort builds large plant-camouflaged concrete observation pillboxes connected by camouflaged tunnels along riverside and lakeside stretches. Near-zero level disturbance of the surrounding forested environment ensues. Bird and amphibian feeders near the pillboxes concentrate the resident birds into binocular view. (2) Three-meter high freshwater aquariums display the fish, crustaceans, crabs and turtle species that inhabit the resort. (3) Electric motor powered boats that are camouflaged with canvas tents silently glide along swampland waterways that have feeders in strategic areas. Tourists view the colorful migratory birds thru a binocular ‘window strip’ cut out along the tent. Tourists are encouraged to take pictures, identify species and record bird populations to help in scientists’ conservancy activities. (4) Animal-breeding facilities breed and care for threatened species in full sight of tourists to inculcate among all viewers the need to preserve what remains of our world patrimony. (5) Within every forested resort, multi-story condominiums with ‘flowery cliff’ facades are leased to operators of inns, restaurant chains, retail shops, spas, clinics, hospital recovery homes, retiree residences and serviced apartments. Local employee groups are encouraged to buy inn or apartment spaces for 'sideline income' tourist rentals. The effect are ‘hidden cities’ within hundred-hectare resorts, enabling tourists and residents to enjoy both ‘unspoiled nature’ and all city amenities at the same time. (6) Swimming pools with waterfalls, obstacle courses and airsoft ‘battlefields’, kiddie rides, basketball, volleyball, tennis courts, fiesta street dancing, ballroom dancing facilities, convention halls for rent, and low-cost food encourage tourist groups to stay for weeks or months on end. All facilities are camouflaged by thick vegetation or ‘flowery cliffs’ for a ‘total escape to nature.’ (7) Similar resorts worldwide link by internet to exchange views on profit-based nature conservancy and ways to encourage resort-hopping among the world’s tourist hordes that number 150 million yearly, and rising.

How is the poverty problem addressed? Hundred-hectare waterway resorts all over the world should spawn millions of jobs for rural poor. Supplier and service industries rise up and create millions more jobs. The resorts and industries are employee-owned as a consequence of the SOW law, so billions of dollars worth of stock shares and dividends flow among employee masses, for all eternity. The SOW law’s exemplary effects spawn more laws that finance more employee-owned industries to ultimately redeem all the world’s poor. Tourism industries set up follow our waterway resort model, this time to spawn breeding reserves cum resorts that preserve what remains of the planet’s other threatened life species: ocean-crossing birds, coastal animals, desert plants and animals, grassland ruminants, marine animals, frigid zone mammals, endemic animals and plants, etc. Humans begin to co-exist with all remaining plant and animal species instead of keeping the planet only for themselves. All because our blogger army made the first moves.

Wednesday, February 10, 2010

End Casino Capitalism

At any single time, 1st World investment managers handle $150 trillion in bank savings, stocks and bonds and other financial instruments. Theoretically a mere 20% of the mammoth amount if invested in new 3rd World companies will employ all the world’s bottom poor. Unfortunately no such thing happens. The few thousand handlers of the gargantuan capital use around $1.4 trillion each day ‘gambling’ in the rise and fall of currencies. Concurrently, over $500 billion yearly go to stock and bond speculation. From 1992 to 1998, just 12 First World companies lost $25 billion betting on the rise and fall in the prices of oil, commodities, and interest rates. Obviously capital 'gambled away' in casino-style stock markets produce no new wealth. Old wealth simply transfer from losers to winners.

So why do investment managers 'gamble' hard-earned moneys entrusted to them by the world's companies? Main reason is the scarcity of companies that give good returns to capital. According to studies, the largest companies in the 1st World get up to 75% of 'new capital' out of profitable operations, not from the stock markets. For their part, investment managers are so scared of making bad investments that they dedicate just 1-3% of billion-dollar funds in startups.

In the 1980s many of such small startups eventually became billion-dollar corporations. The many concurrent failures however got more media attention, for the 'top courageous' startup financier M. Milken was jailed for supposed fraud, a victim of ambitious politicians. However Milken has been hailed by many people as a hero because he started a culture of selling stock shares and bonds to ordinary US employees. To date, the culture has enabled half of US families to become major shareholders in over half of US companies. Small startup companies taken together created a lot more jobs than the old majors. Investment courage enriched the US masses.

Our anti-poverty lesson thereby becomes obvious: why not jack up 1st World investment courage and use a major percentage of 'gambling capital' towards building new world-scale companies in the 3rd World? Since private investment managers won't do it, world governments have to step in. It takes just two laws to redeem the 3rd World poor this way, and at good profit to redeemers. 3rd World governments pass a Loans for Mass Entrepreneurship (LME) law. An LME law channels a major portion of yearly state budget towards lending to thousand-employee groups that set up joint ventures with 1st World corporations. Concurrently, 1st World governments pass an Expand World Markets (EWM) law. An EWM law dedicates a major portion of yearly state budgets plus 5-10% of investment companies' funds towards lending to 3rd World joint ventures arising from LME laws.

What happens next may be a matter of course. Since laws are forever unless repealed, the twin laws will routinely build thousands of joint venture companies and create millions of jobs for 3rd World poor every year, for all eternity. Trillions of dollars in repaid LME/EWM loans (becoming stock shares) plus dividend issues build fortunes in the hands of 3rd World employee masses. The new 3rd World joint ventures should learn to conduct joint planning to avoid market overcrowding that bankrupts industries and creates investment scares. A high percentage of resultant successes builds and cements the investment trust that channels increasingly larger portions of the world's over $150 trillion in investment capital. Stock market 'gambling' that at times results to trillion-dollar destruction of wealth held by investing publics tones down.

Now for the critical question: who persuades world governments to pass the twin laws? At this stage, only blogging nets have the worldwide reach to do it, initially by popularizing the 'sideline income' dream among two billion non-blogging employees worldwide.

Tuesday, February 9, 2010

Capitalism, Socialism, Populism: Which is Best?

Capitalism means varying degrees of rule by the oligarchy and the wealthy classes. Socialism is rule by the state bureaucracy. Both can benefit or scourge the masses depending on the character of the rulers. Populism is direct rule by the populace thru the internet, and currently it does not exist.

If the populace indeed rules, what happens? First the skilled masses (employees) will determine programs and laws, so state funds, assets and credit-worthiness get to be used for mass benefit. Second, employee masses all need ‘sideline income,’ so they will tend to use state assets towards formation and expansion of world-scale companies that are owned by thousand-employee entrepreneurial groups. Corporate formation translates to creation of jobs for bottom poor. Third, good laws are perpetual, so corporate formation and job-creation goes on forever, eventually employing all the populist society’s poor. Employee ownership of companies also means profit dividends and stock shares worth trillions of dollars perpetually flowing among the masses instead of bottling up within the tiny oligarchy as in capitalist societies. As one may see, what capitalism and socialism failed to do (democratize wealth and political power), populism have the potential to attain.

But what are the seeds of populism? Potentially, they already exist in the form of blogger nets. Bloggers already democratize information. By simply spreading populist ideals worldwide, they can eventually redeem all the world’s poor while acquiring stock shares and dividend incomes for themselves.

Monday, February 8, 2010

Networking As Anti-poverty Strategy

Networking is a subject not taught in Philippine schools, yet it is the essence of successful business and is a highly effective way towards mass wealth. Teaching Networking success stories and building a networking culture from High School up can be effective ways to minimize competitive tensions among students while building a ‘mass’ of future graduates mostly oriented towards building ‘mass’ wealth. Case examples:
(1) High School teachers encourage all students to join or form as many school-approved clubs and associations inside and outside the campus as schedules permit. This builds important social skills and a habit of making and keeping friends. The advantages of networking especially as future road to wealth have to be stressed in appropriate school subjects. ‘Networking for future wealth’ becoming part of students’ sub-conscious mind quenches bullying tendencies, develops cooperation instead of competition, and builds a team-building habit. The culture can build a ‘world-scale business’ view thru study of societies, companies, innovators’ biographies, research and development systems, and international marketing strategies that all created wealth thru local and international networking. Such business models can become powerful motivators for building a culture of entrepreneurship among students. Students must be made aware that after High School and College, old friendships are most helpful in getting jobs, building professional networks, joining political organizations to access state programs that lend capital to employee groups, and forming new companies with thousands of employees for ‘sideline income,’ thru use of state loans as capital.
(2) University teachers require all students to form innovation teams in their area of scientific interest. Fundamentally, Philippine science universities must develop a specialization culture coupled with an inventions requirement and subjects on commercializing and marketing of technologies. No student must be allowed to graduate unless he has invented and licensed at least five technologies, with or without a team. This is not as difficult as it sounds. The US Patent Office alone has over six million technologies on file that students may access to produce improvements or derivations based on international market needs. This culture requires State to set up laboratories for hire in every scientific area. The labs have to include prototype-making facilities. All labs have to be managed by scientific associations to avoid political corruption. The innovation culture also requires state to pass laws that grant entrepreneurship loans to thousand-employee groups that set up companies to translate inventions into commercial products that sell worldwide. An endless flow of new technologies from universities and research labs coupled with endless capital formation thru the state financing law assures perpetual creation of new companies and new jobs for bottom poor. Under such conditions, student teams with five or more inventions become millionaires thru corporate licensing, franchising and royalty income. The camaraderie of long and productive team research develops a habit of invention among the masses, making post-graduate teams ‘perpetual inventors.’ Such habit makes sure all redeemed poor never revert to poverty because there are always new products and services available to companies when old industries' markets become saturated.
Currently, these cultures do not exist in the Philippines and the rest of the 3rd World. Consequently no inventions emanate from 3rd World masses and few local-technology 3rd World companies have made it to world-class status. 3rd World companies are typically mere sellers of 1st World products in local markets, or assemblers of imported components for sale to tiny local markets. Result: micro-scale production and sales, few jobs, small profits, subsistence-level salaries, or in short, mass poverty. The imperative thereby becomes clear. If 3rd World peoples want to rise to the 1st World, they have to develop several critical cultures: (1) thousand-employee entrepreneurship thru state loans; (2) scientific specialization; (3) student team invention and innovation, and (4) development of a networking culture from school age and onwards till death amid wealth.

Sunday, February 7, 2010

Anti-poverty Weapon: The Confucian Concept of Family

Kung Fu Tzu (Confucius) of ancient China collated his time’s prevalent relational culture as follows: The family first. Then comes the clan, the clan’s social network, the tribe, the village. All are one’s own families. Last comes the state which is everybody’s family, with the emperor as father. In dealing with all these families, one has to work for social harmony at all times, for harmony redounds to common good. To attain social harmony, everyone has to know his place and his limitations within his organizations and within society. The focus must be on Duty, not on Rights. The common good must always prevail over individual benefit.

From 1860s when Confucian Japan began to adopt Western-style corporations as weapons against poverty and industrial backwardness, Kung Fu Tzu’s culture asserted itself. The Japanese corporation became ‘family.’ Whenever possible, the biggest Japanese companies took in employees for life and showered them with benefits as the ‘corporate children.’ The gaps in salaries between ranks and between managers and their worker teams were not wide. Workers performed as teams, their managers as true ‘big brothers’ evidenced by their willingness to accept such small differences in pay between ranks. Managers and workers routinely studied production systems and made suggestions on improvements without expecting ‘instant reward.’ Reward came for everyone thru improved sales, profits, and bonuses that at times were given four times a year. The various hierarchies of line-level and managerial teams constantly searched for improvements in product quality, production process, world-scale marketing, building of corporate groups, and planning with state ‘fathers’ for conquest of world markets. The entire Japanese employee population became one ‘family’ struggling against 1st World economies in competitive business.

One sees the effects of this Confucian culture today. Overseas Chinese control 40%-70% of non-Confucian Southeast Asian nations’ economies. Overseas Chinese residing in various Southeast Asian countries form mutual help associations and business chambers that become members’ sources of business information, contacts, merchandise credits and cash loans. ‘Good name’ association members are able to access part of the $4 trillion in stock market capital and bank deposits in Hong Kong, Singapore and Mainland China. Hardly any ‘native’ Southeast Asians are able to directly penetrate such networks. In 1987, Overseas Chinese were first to open joint venture factories in Mainland China. Today China is poised to become ‘top dog’ worldwide in Gross Domestic Production come 2050 or so.

Confucian Japan had an even brighter success story. In 1860s Japan quickly industrialized thru government importation of entire factories, industries and technologies from US, German and UK companies. The industries were later sold at low prices and on installment to the Japanese oligarchy. State-business synergy enabled Japan to challenge Western imperialist powers and beat them in their own game of building huge Asian markets thru 'diplomatic threat' and use of military force. The expensive game (in massive losses of wealth and lives) ended in Japanese military defeat in 1945. However the ‘conqueror’ (USA) quickly allowed Japanese industry to rise again. Reason: UN forces were losing the Pacific Rim to China’s Communist army and only Japan had the industrial might to help hold the Capitalist frontier. Japan used the consequent billions of dollars in US reconstruction loans to begin a conquest of market niches all over the world. By 1960s, Japan had risen to second richest nation worldwide (the USA was No. 1), beating by a wide margin the long-standing European imperialist powers. In the 1990s despite world recessions, Japanese ‘mass capital’ was largest worldwide at $12 trillion in bank deposits and investment instruments held by the thrifty Japanese public. These days the Japanese masses are actually wealthier than US masses, considering the far narrower Japanese wealth gaps (due to small differences in executive and worker pay). In the USA, executives earn an average of 40 times the salaries of line workers. Additionally, US masses are nose-deep in debt while Japanese citizens’ savings, stocks and bond holdings are still the highest worldwide.

What are the lessons for hapless non-Confucian 3rd World economies? The Philippines for one has a tiny economy at a mere 1/40th of Japanese production. Bank savings and stock market assets come up to less than $100 billion equivalent. The production of all Philippine businesses does not even approach the sales of just one major Japanese conglomerate company. The Philippine ‘family’ is blood family and nothing more. The society as ‘family’ and politicians as ‘fathers’ are laughable concepts, for unlimited corruption is a state tradition. The Philippine governmental system of checks and balances among state bureaucracies and political parties has become a model of government paralysis, as Party interest has become the guide. Politicians consider the business sector as milking cow and nothing more, a tradition that creates economic paralysis and widespread poverty. Regime planning focuses on how to spend taxes and state loans on showy projects that earn contractors’ commissions for top-to-bottom bureaucratic signatories. ‘Standard’ skim-offs have risen from 10% in the 1960s to 60% these days, divided among national-level politicians down to village-level officials. State-business planning for production and mass wealth is not possible, for the two sectors distrust each other.

The Philippine populace cannot become ‘family’ either, for they are perpetually embroiled in all manner of religious and political debates. Winning arguments is much preferred over winning friends, customers and future business. Companies fight tooth and nail over tiny local markets. There are hardly any corporate mergers to access international markets. Trust is a scarce currency among Philippine entrepreneurs. Every agreement has to be written down to the fine print, so unlike Chinese business culture wherein word is bond, and ‘face’ is enough to get unsecured credits.

Philippine oligarchs for their part will never stomach the concept of workers as ‘family,’ for tradition teaches that employees are mere tools for acquisition of more wealth. Further, Philippine rich-poor gaps are so stratospheric that the rich have a world of their own that is so strange from that of the masses. ‘Gods’ and ‘slaves’ cannot be ‘family.’ Workers have retaliated for decades thru strikes and work stoppages that scared away foreign investors. Lately, companies have used job scarcity as an effective tool to minimize wages and employee benefits thru contractual employment, outsourcing, and endless recycling of ‘trainees.’ Not one Philippine entrepreneur seems to think that raising employee incomes results to larger markets which means more sales and profits. ‘Each to himself’ is the prevalent culture.
All these considered, one way out of poverty becomes clear for the Philippines and the rest of the 3rd World: create mutual help and social harmony among all sectors of society by adopting the Confucian concept of ‘family.’ The 3rd World can even improve on the Confucian culture by passing laws that grant state loans to thousand-employee groups that set up joint ventures with 1st World corporations. Such laws will enable employee masses to earn high ‘sideline income’ (dividends) while acquiring fortunes in stock shares. Employee part-ownership of companies thru state loans will fast-track the development of a Confucian culture while building what the 3rd World sorely lacks: economic democracy.