By John H. Power: Sen. Jose W. Diokno lectures Gerry Sicat on political feasibility of economic policy proposals

Many at the UP School of Economics learned incidentally of the demise of John H. Power last May at the age of 96.

An imaginary drama on national economic policy-making. John was an American visiting professor from the University of Wisconsin who possessed powerful economic insight. He helped contribute to the understanding of the shortcomings and mistakes of Philippine industrial policy that have, however, taken long to correct.

John was a legend at the UP School of Economics and at the University of Hawaii Department of Economics. Early in his career, he taught at Stanford (where he earned his PhD) and at Williams College in Massachusetts.

From Williams, the University of Wisconsin decided to hire John and sent him to the UP-Wisconsin Training Program in Development Economics, sometime in 1966.

I was his co-author in an important study, Economic Industrialization and Trade in the Philippines, which was published by Oxford University in 1970. It was part of a comparative study of many industrializing countries around the world commissioned by the World Bank that was coordinated by Ian Little and Bela Balassa, well-known international economists of that period.

When I learned of John’s death, I remembered the dialogue that he had written after listening to a public discussion between Sen. Jose W. Diokno and myself 48 years ago.

Sen. Diokno, then the foremost economic nationalist and inheritor of the mantel held by Sen. Claro M. Recto, was the author of the Philippine investment and export incentives laws which were supposed to promote our industrialization. Their many restrictive provisions caused foreign direct investments to shy away from coming fully into the country for decades while they flocked to our developing neighbors.

John wrote this drama the night after he heard an afternoon seminar that I delivered some 48 years ago. Senator Diokno gamely consented to give his comments on the subject. The next morning, John wrote the script and asked his secretary to type it pronto on an IBM Selectric typewriter and deliver it me just before I was to attend my class lecture that day.

Because it was a precious memento to me, I placed the now yellowed typescript between the folds of my PhD thesis which I wrote at MIT in 1963. It was together with four other important little treasurable pieces that I had planted there for safe-keeping.

Since John did not give a title, I believe today’s column headline is appropriate, perhaps modest enough than the alternative titles I could have chosen.

The drama is reproduced as he had written it below, except the polite references to the senator as a sign of respect in “my” answers.

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(Written after hearing the lecture of G.P. Sicat, “Incentive Policy for Industrialization” on Dec. 9, 1969 and the comments of Sen. Diokno (as well as later discussions between Sicat and Diokno). Imaginary drama written by John H. Power.)

Some time after Dr. Sicat became convinced that Sen. Diokno was right in insisting that economists take political feasibility into account in making policy recommendations, the following conversation took place.

Sen. Diokno. Well, Gerry, we did it. Your proposal was passed by the Senate today. We’ll have no trouble in the House, either.

Dr. Sicat. I’m glad to hear that. Congratulations, senator, on pushing it through.

Sen. Diokno. You’re the one to be congratulated. The proposal had real political sex-appeal. You got my point about political feasibility, alright. This measure should really do the economy some good, huh?

Dr. Sicat. Well, maybe. At least I hope so, senator.

Sen. Diokno. What do you mean you hope so? It was your proposal wasn’t it?

Dr. Sicat. Of course. And as you said just now it had political appeal. The trouble is that it may not really increase employment very much, and there are a number of possible bad side effects.

Sen. Diokno. What! You mean that’s the kind of measure that I put my name on – The Diokno Employment Act! What have you done to me, Gerry?!

Dr. Sicat. Well, senator, actually I have five or six alternative proposals that I’m sure would give far better results, but I wasn’t sure of their political feasibility and you said ….

Sen. Diokno. Never mind what I said! I’ll make the political decisions. Just give me the straight facts, please.!

<curtain>

Dr. John H. Power. Dr. Emmanuel de Dios, distinguished professor and former dean at the UP School, said of him, and I quote:

“John Power played a crucial role in the formation of the School and in the great work of analyzing Philippine protectionist policies. His volumes with Gerry Sicat and later Romy Bautista and others were a rare example of solid intellectual effort that later led to momentous policy changes. Their work also provided the framework for many theses and dissertations and launched the careers of some of the school’s prominent graduates (e.g., Chat Manasan, Linda Medalla, Celia Reyes).”

The words above were the immediate reaction of Noel de Dios upon learning of John’s passing from Dr. James Roumasset, himself a renowned star of Hawaii’s economics department. In his letter, Roumasset mentioned John Power’s important contributions to the economics profession. But I mention those points related only to his relevant contributions to Philippine economics (and I also quote below):

“… Along with Max Corden, (John Power) pioneered the study of economic protection and industrialization. This led to his two books about the nature and consequences of policy distortions in the Philippines followed by a major project on the nature, causes, and consequences of Philippine agricultural policies.”

The above quotes come from a recent exchange of e-mails at the school for which I apologize to publicly reveal. I was motivated by an effort to enlarge good and useful knowledge about the contributions of one important to our growth as a nation, but is not much known to a wider world.

There is not much space for me to elaborate here on the specific contributions that John Power has made to Philippine economics. They are many. I plan to do that in the near future. Others will, too.

My email is: [email protected]. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/