Keynesian View vs Conservatives:
The Great Debate of the ’50s
According to Dr. Salvador Araneta, a nation that cannot provide food on every table, a decent home for every family, clothing on everybody, and education for children is a nation that lacks the required prerequisites of freedom and democracy.
To achieve this end, he was at the forefront of the Keynesian approach for economic development. Araneta proposed this when he was the Secretary of Agriculture and Natural Resources.
Together with Oscar Ledesma, then Secretary of Commerce and Industry, and Alfredo Montelibano, who would become the Administrator of the Office of Economic Coordination, they were known as the “freewheelers” or “cheap money.”
Taking the lead for the conservatives, there was Central Bank Governor Cuaderno, accompanied by Filemon Rodriguez, who at that time was head of the National Economic Council. This group was more concerned with a balanced budget rather than full economic progress and development.
It was at this point in history where the “Great Debate” took place.
When Araneta was Secretary of Agriculture in 1955, Federico Mangahas wrote an article in Kislap Graphic about him.
Mangahas saw Araneta as a person “whose sense of dedication, if not considered Christian, is complete and absolute.”
Furthermore, Mangahas saw in him the moral strength that helped him push through with his plans.
Araneta himself made it clear that no one can criticize him, unless the critic has a viable plan to meet the objectives placed before him.
This does not mean that he was close-minded. In fact, he would gather young and brilliant economists to listen to their views and defend their arguments. Some of them were Alejandro Lichauco, Benito Legarda Jr., Armand Fabella, Amado Dalisay, Jose B. (Jobo) Fernandez, and Filemon Rodriguez, among others.
Mangahas likewise observed that Araneta’s colleagues found him “disconcerting” and would wish to “take him down.”
Mangahas also caught the spirit of Araneta that remained undaunted and personified the proverb “if there is a will, there is a way.”
Araneta remained unfazed and called for “decisive and bold measures” if President Magsaysay wanted the expectations of the public to be met.
With two million people unemployed, there indeed was a sense of urgency to bring about employment and production.
Magsaysay gave Araneta five days to come up with an economic plan. This he accomplished. (To be continued/PN)