Starting September 8, 2012, anonymous comments -- whether for or against the RH bill -- will no longer be permitted on this blog.

Friday, September 9, 2011

DLSU academic and Metrobank official versus the RH bill: "No to condom economics"

From the website of Business World:

Ildemarc Bautista

The noted economist John Maynard Keynes once said that “practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” One such economist who looms large in today’s policy debates is Thomas Malthus, who advocated limiting population growth by all means necessary to ensure the welfare of the rest of society.

Neo-Malthusians have taken up this policy as well, with the RH bill a prime example of the influence of the man. The problem is that both his views and the framework of the RH bill are, in the end, discriminatory, myopic, scientifically unsound, anachronistic, and patently ill-constructed.

His view is discriminatory because Malthusianism is ultimately biased against the poor; myopic because his vision of society puts Man at the service of wealth and not wealth at the service of Man; scientifically unsound as he fails to recognize that advances in technology can and do readily provide for the needs of an expanding population; anachronistic and ill-constructed because it fails to consider the wealth effect that stabilizes fertility rates.

Thus, the correct framework to use goes the other way -- increase wealth creation and distribution, and fertility rates will be reduced as time and energy get devoted to productive capacity rather than reproductive capacity. This phenomenon is well-documented. It is poverty that drives fertility rates up, and the solution is to address the poverty problem rather than the high fertility rate issue. As countries get rich, fertility rates go down even without government’s having to spend on population programs. Iran is a good example.

Yet here we are, with an RH bill that will require the government to buy and distribute condoms and modern contraceptives, packaging them as a social requirement. This bill thus spouts discredited Malthusian economics favoring the condom lobby, which is pushing for regulatory capture in a classic rent-seeking move to guarantee a revenue stream from contraceptive products. And what better way is there than to have a law that requires not only the government purchase of condoms and contraceptives but also the education of the markets on their use to stimulate higher product consumption, all using taxpayers’ money? In the same way that the tobacco industry did, product marketing will target juveniles via “age-appropriate lessons” to teach our children, their future markets, how to use contraceptive products by law and at our expense. Do we not we see a problem here?

Condoms and non-abortive products are not illegal in the Philippines, and we Catholics respect the rights of those who want to use or produce them. However, it’s another matter to say that we Catholics should subsidize by law what is essentially immoral and wasteful. No, sir, let the producers compete in the market rather than handing them a captive local market on a silver platter, which is what the RH bill will do.

Some will say that there has been market failure especially by the poor to reduce family size, so condoms should be distributed as a government intervention. Well, to a man with a hammer, all problems look like a nail. To people who think that high fertility rates are the problem rather than a symptom, it’s easy to see why condoms are the solution. I agree that there has been market failure, but it’s failure to create more wealth and distribute it better and not a failure by the poor to reduce family size, the latter not being a market issue.

Ergo, rather than an RH bill, the required government intervention is to make laws that expand and tap productive capacity rather than limit reproductive capacity. With rising levels of wealth, fertility rates decline and health levels improve. More jobs, better education, and a real universal health care system, not condom distribution, are what are required to address poverty alleviation.

The condom lobby should not be allowed to extract economic privileges by the hardwiring of condom purchases in our laws, a form of regulatory capture and rent-seeking that distorts the market and diverts government resources to sterile and meretricious pursuits. No, let them compete in the markets and spend on their own marketing. It’s a free country, and they can do it without an RH bill.

No to condom economics. No to the RH bill.

Marc Bautista, CFA, is head of research at Metrobank and teaches in the MS Computational Finance Program of the Ramon V. del Rosario College of Business of De La Salle University. His Web site is

The views expressed above are the author’s and do not necessarily reflect the official position of De La Salle University, its faculty, and its administrators.

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