The Philippines’ Financial Stink Bomb

Better get down, the nation’s second-largest bank is about to blow up

UNLESS some incredible deus ex machina intercedes, it seems increasingly likely that this jolly nation whose public concerns are limited to things like the fate of forgotten church bells or how many jaywalkers have been ticketed in the past few months will celebrate the Christmas season with a full-scale banking crisis. For a country whose banking industry is routinely judged as one of the soundest on the continent, if not the entire planet, one major fraud scandal every year resulting in losses counted in the tens of millions of dollars seems more than a little ironic. Last year’s RCBC money-laundering scandal was bad enough; this year’s Metrobank disaster will make RCBC look like a teenage girl getting busted for shoplifting by comparison.

As we now know – thanks largely to the Philippine Daily Inquirer, which broke the story last Friday – a certain Maria Victoria Lopez, a Vice President and head of Metrobank’s corporate management services division, embezzled at least P900 million and possibly as much as P2.5 billion from the bank in a scam dating back as far as 2012.

Lopez apparently created loans – two of them have been identified, with amounts totaling P850 million and P900 million, respectively – from a legitimate credit line of P25 billion for Universal Robina Corp. (URC), one of the bank’s biggest customers. Lopez then funneled the loan money into accounts created in URC’s name, from which she paid the interest on the loans (thereby making it appear as though URC was properly servicing its loans) and distributed money to other accounts, some apparently outside Metrobank, where she could withdraw the cash. According to the initial reports, many of the transactions were done in increments of P30 million pesos.

Lopez was caught when she attempted to withdraw P2.25 million from one of the spurious URC accounts via a manager’s check; bank employees apparently grew suspicious because the check was made out to an individual, which it shouldn’t have been if being drawn from that sort of corporate account.

The stench of this story is almost overwhelming.

Lopez now is in the custody of the National Bureau of Investigation (NBI) and faces a multitude of charges, but her arrest doesn’t even begin to answer all the questions about this particular case. Just asking those questions raises all sorts of disturbing implications about Metrobank and the state of the banking industry and regulation as a whole.

Lopez is the only one on the hook for the crime now, although from what little has been said publicly by NBI and BSP officials, there is at least an assumption that others were involved. Putting it that way is a gross understatement on the part of the authorities; the nature of the scam, if what has been publicly reported is correct, suggests an extensive conspiracy within the bank, as anyone with even a basic knowledge of banking operations and protocols would realize.

Although Lopez has been characterized as a high-ranking insider at Metrobank, the title “Vice President” is not all that impressive; Vice Presidents are a dime a dozen in large banks. Metrobank has 402 of them; Lopez’ rank as simply a “Vice President” meant she was five levels of authority below the bank’s president. That is significant, because it strongly suggests the amount of the loans she is known to have created probably exceeded her authorization ceiling. At each level of management, a limit is placed on how large a transaction that manager can authorize on his or her own. There are no universal rules on what those ceilings are, so it is still possible that at Metrobank a VP could authorize a P900 million loan, but common practice as described by managers at other local banks suggests otherwise.

The implication of that is there is a likelihood that there was at least one higher-ranking bank official (at Metrobank, a first vice president) involved in the scheme, albeit perhaps unwittingly.

Second, every transaction in a bank is subjected to some sort of post-transaction review by a different unit than the one originating the transaction, and this is especially true in the case of very large transactions like corporate loans. This is not just a matter of procedure or good banking practice, but a compliance issue – all banks have no choice but to do this, because it is a regulatory requirement. That implicates someone else within the bank as well; and in this instance, probably an entire department. Again, the involvement may have been unintentional; Lopez has been portrayed in the news reports as wielding a great deal of influence within the bank (she worked there for 30 years), and not one whose actions would ordinarily be questioned – an explanation that would be a little easier to swallow if she were not ‘only’ one of 109 vice presidents.

Third, it is standard procedure in every bank that transactions in excess of a certain amount require board approval; the common benchmark among Philippine banks is P100 million. Although there is not a specific rule on this and the amount may differ from bank to bank, the reactions from banking officials I asked about it ranged from “I find it hard to believe” to “no way in hell” the two big URC loans would escape Metrobank’s directors’ attention. The implication of this is that either there was some degree of complicity on the part of Metrobank’s board, or the conspirators were both sufficiently skilled and well-placed to be able to keep the activity from the board’s knowledge.

Fourth, there is the inconvenient little matter of reporting requirements to the Anti Money-Laundering Council (AMLC). Every transaction in excess of P500,000 involved in this scheme, from the loans, to their distribution to the “URC” accounts, to the transfers of money from those accounts to other accounts, to the withdrawal of the funds would have had to be reported to the AMLC.

That is the job of the AMLA compliance office in Metrobank (or any other bank), and because of the vast number of transactions reported to the AMLC daily, the AMLC largely relies on the banks’ compliance officers to flag suspicious transactions. But, the judgment of what is a suspicious transaction or not is ultimately up to the AMLC, and apparently not once in five years did any of the activity involving the spurious URC loan accounts catch the watchdogs’ attention.

There are two implications here: One is that Metrobank’s AMLA compliance unit may have been in on the scheme. The second and much less speculative implication is that just as in the RCBC case last year, the AMLC has been exposed as being virtually useless when it comes to detecting and stopping fraud and other financial crimes.

Attempt at a cover-up?

Finally, there is the troubling matter of the very obvious effort Metrobank – and perhaps even the BSP – has made to keep the scandal quiet, an effort that more than anything hints at much deeper trouble in Metrobank than anyone cares to admit.

The news of the crime didn’t become public until Friday, July 21, but Lopez was arrested on July 18 (the earlier reports said July 17), which was Tuesday. Presumably, for some period of time – perhaps days – before her arrest, Metrobank officials were aware that, at the very least, something highly irregular had occurred. Per BSP regulations, at that point, Metrobank should have reported it to the BSP; the bank apparently did not. If it had, it would certainly be in its and the central bank’s best interests to report to the public that it did, if only to reassure nervous clients and shareholders that it was on top of the situation as soon as it was discovered.

In addition, as a listed company, Metrobank (MBT) is required by both SEC and PSE rules to disclose to the market anything that could possibly materially affect its stock price – which the arrest of a vice president and department head on suspicion of fraud most certainly would. Yet the first disclosure to the PSE came in the form of a “clarification of news report” on Friday – three entire days after Lopez was arrested – only after the Inquirer broke the story.

It also may strike some observers as a bit odd that a scandal of this magnitude has seemed to attract very little attention from the local media, apart from creating a bit of a stir over the weekend, particularly in light of the extensive coverage given to last year’s RCBC case and recent banking troubles such as BPI’s “computer glitch” and the skimming attack on some of BDO’s ATM machines.

It may just be a case of the rapid atrophy of ambition and competence that seems to afflict the Philippine media these days, occupied as it is with covering the activities of an administration and society that neither grasps nor appreciates anything too complex. But the skeptic might wonder if some influence is being exerted to prevent too much attention to a bank whose management at this point appears to be either criminal or negligent, or both. Revealing further evidence that confirms that would be bad for business, after all, and might not look good for a central bank whose governor is barely a month into the job.

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The Failure of the Philippine Press

THE Philippines is an interesting anachronism in terms of media, in that print media – primarily daily broadsheets and tabloids – are still the biggest media segment in the country, despite having been supplanted by television (which is in turn losing ground to online news) everywhere else in the civilized world.

This potentially puts the press in a position to be a powerful influence in this country, particularly since most newspapers are individually owned, unlike the broadcast media, which is largely concentrated in two or three conglomerates. Unfortunately, the Philippine press, despite its pretensions, is not the fourth estate it ought to be, and is generally regarded as having surrendered any real influence it could wield to the social media.

Although social media advocates consider this a good development, it has been terrible for the country; as a result of the failure of the organized press, people here are less informed. The volume of political expression has grown, but its density has not; despite its pretensions, the alternative/social media has significantly less strength to serve as and check and balance on institutions than its bloated size would suggest. Ironically, media’s “democratization” has enabled greater authoritarianism.

Why has the press failed?

The ownership structure of the Philippine press explains part of the failure, at least for a significant number of the country’s print media outlets. The ownership of every newspaper has considerable commercial entanglements; owners either have a stake in a number of diversified businesses, or a number of business interests are represented on press company boards, or both. Political ties are even more of a factor. While many owners do try to be apolitical, past and present alliances unavoidably call their objectivity into question.

A few of the more obviously politically-connected owners include the Rufino-Prieto clan of the Philippine Daily Inquirer, who are closely associated with the Liberal Party; the Olivarez family of the Daily Tribune, who have been close supporters of Joseph Estrada’s Pwersa ng Masang Pilipino; the Sun Star, which is controlled by the politically entrenched Garcia clan of Cebu; The Manila Times, whose owner Dante Ang and top columnist Bobi Tiglao were both associated with the administration of former president Gloria Arroyo; and the Romualdez family behind The Manila Standard, who, while not as obvious about their connections as some of the others, have been variously connected with both the Nacionalista party and Lakas-CMD.

Shady business

Having their wagons hitched to entire herds of sacred cows has made the shift in the media business model – which was originally triggered by the growth of broadcast media, and accelerated with the development of social media – more extreme for the Philippine press: The actual product – news, information, and commentary – is considered merely a vehicle for the primary revenue source, which is advertising. One glaring example of this is the common practice of giving away subscriptions, which should be a newspaper’s bread and butter, as incentives to advertisers.

The press, if it wants to earn profits – which it certainly does, being controlled as it is by people who have elevated rent-seeking to a sublime art – has no choice but to operate on this model, because first of all, the rapid expansion of social media means there are a lot of substitutes for the product. Second, that product is largely undifferentiated; there is a finite amount of news to peddle on any given day, particularly given the dearth of journalistic talent in the country (which is an entire topic in itself).

Of course, individual print outlets still have to find ways to differentiate their product in order to stand out, since audience size is still the metric to attract advertising, so they do so with the only variable resource available to them, which is commentary. Columnists are the only real source of creative talent in the Philippines’ media landscape, so having a roster of good ones does objectively make one’s product better, but commentary is by nature subjective. Any newspaper could strike a balance by presenting a variety of viewpoints, but because of all the sacred cows (see above), the local press tends not to employ opinion writers whose views diverge too far from whatever posture the paper’s ownership adopts.

The upshot of all this is that the press is broadly – and accurately – regarded as biased, and consequently has weakened credibility and sociopolitical influence. It is a situation that is not likely to change, unless owners emerge who are willing to keep the political and commercial spheres at arm’s length, and are not particularly concerned about earning a profit – characteristics that have not applied to any Filipino of more than modest means, ever.

The not-so-simple issue of Philippine ‘slavery’

Published May 20, 2017

(First, a bit of an explanation: Besides my thrice-weekly column – of which this is one installment – I write anywhere from 15 to as many as 25 other articles on six different subjects during a normal work week at The Manila Times. Thus, I tend to get a little jaded; the sheer volume of work means that particular topics or what I might have to say about them rarely lingers in my thoughts. This one, however, which was written at the suggestion of Managing Editor Felipe Salvosa II, is an exception, and one I thought worthy of having its shelf life extended a bit.)

THE late journalist Alex Tizon’s moving and very personal account of “his family’s slave” – the domestic helper who served three generations of his family for 56 years – published in The Atlantic this week has set off a storm of debate, cultural recriminations, and, one would hope, a bit of national soul-searching on both the part of the Philippines, from where both Tizon and his utusan hailed, and the US, where they lived and worked.

The reactions to Tizon’s confession can be summed up in three ways. The US audience, for the most part, has responded with righteous indignation, much of directed at Tizon, but more directed at Filipino culture, wherein stories like that of Tizon’s “lola” are commonplace. The reaction from the Filipino audience has been mixed; some take offense to American judgment, others express some degree of agreement with it.

There are few issues in this country that are as potentially explosive as the role of servants in Philippine society and the economy. To the average American, the concept that anyone but the very wealthy would have servants is completely alien, even though the reality is they are quite common, even in middle-class American society. We think nothing of farming our preschool children out to daycare providers, or hiring assistants for our elderly relatives. Applying servants to normal domestic chores, however, is regarded as flaunting wealth; most of us are raised to have at least a basic ability to manage living functions like cleaning, cooking, and washing our clothes, and accept doing those things as part of normal everyday life.

The big difference, however, between servants in the US and servants here is that they are very much regarded as employees or service providers; our relationship with them is fundamentally transactional – there is a clear exchange of compensation for service. Here in the Philippines, not only is the servant expected to provide a vastly greater amount of service, the relationship between the servant and the served is much more complex.

That complexity is what makes sincere efforts in this country to transform the relationship into an objective employer-employee arrangement difficult at best, and perhaps ultimately futile. Sometimes kasambahays are strangers, hired according to reasonably specific terms, but just as often if not more so, they are beneficiaries; the poor distant cousin from the province with little education and no gainful prospects is almost a cliché. Even if they are not, most servants who stay with a family for any length of time come to be regarded as a part of the family; sometimes that relationship may be no better than the relationship between the household and the family dog or carabao, but often it is something much more.

And yes, it does amount to slavery in many cases. The reality is that many households with domestic helpers cannot really afford them according to the requirements of the law – which stipulates a minimum wage, a certain level of benefits, and standards for working periods and conditions – and it is certain that a great many servants are not being compensated or treated “fairly” according to the law, and some are not being compensated at all.

But it is not exactly appropriate to condemn a Filipino social phenomenon according to American social standards, because the American perspective will never understand just how complicated or how deeply ingrained in this culture the whole thing is. This society would immediately cease to function if the role of “domestic helper” suddenly vanished.

Yes, we – American or Filipino – can objectively say that if a person’s relationship to a household is primarily one of providing service, then that person should be provided clear terms of employment, fair and regular compensation, and appropriate working conditions, just as any worker has a right to. But in order to impose that and make it what it should be, a fundamental component of the culture, a couple of other fundamental components of Filipino culture – the expectation that everyone is obliged to take care of everyone else, and the consequent diminished importance of “self reliance” in a person’s character – need to be undone. Because as long as those parts of the Filipino culture persist, the relationship between household and servant will always be murky, and not easy to define as either “employee” or “family member.”

For the Philippines, doing away with those aspects of Filipino character would be nothing less than undergoing a cultural lobotomy; realizing that no matter how well I understand this culture, I will always have a transplanted Western perspective precludes me from sharing my own personal judgment about whether that is necessary.

Tizon defined his lola Eudocia’s role in his household as a slave, and telling her story was, as it turned out, his deathbed confession (he died in March) of his guilt for being a slaveholder. He was right, not necessarily because that is how one set of mores or another defines it, but because that is how he defined it.

As much as his last work has encouraged a much needed public debate, it is also a highly personal story, which reminds us that the issues of ingrained classism, entitlement, material poverty, and poverty of the spirit are personal, too; coming to terms with it, becoming better people, and making a better nation and world is not going to be easy, or solved with 140-character Twitter debates or “hearings in aid of legislation.”

A life of numbers

M-THEORY, or whatever a possible refined future version of it might be called, offers a solution, albeit a rather complex one, to the question of what our universe is made of; we say “our” universe, because the theory offers an almost infinite number of solutions, which in turn suggests there are probably just as many universes.

The whole framework, however, only makes sense as a solution if we accept a fundamental component that is rather difficult to conceptualize – the string, the building block of all that exists.

A string is a one-dimensional, vibrating object about the Planck length (1.616229(38)×10−35 m) in size, which moves in 11 dimensions and from our four-dimensional perspective appears to be an elementary particle, one of the possible 34 (the 17 fundamental particles of the Standard Model and their supersymmetric partners) that make up everything in the universe, and in fact, with the confirmation of the existence of the Higgs boson, the fabric of the universe itself.

The Planck length is named for the German physicist Max Planck, the father of quantum theory (work for which he won the Nobel Prize in 1918), and is essentially the smallest distance that still makes any physical sense; at less than the Planck length, the time dimension is indistinguishable from the space dimensions, and it is impossible to distinguish two separate points.

The string exists at this almost unimaginably minute scale, but visualizing a string as a very small object is actually inaccurate. A string does not have a physical form, but is rather an energetic vibration. Picture a guitar string, which vibrates in our four familiar dimensions when strummed – the spatial dimensions are side-to-side, up-and-down, and a form of a wave passing along its length, while the time dimension is measured by the frequency of the vibration. Remove the string itself but allow the vibration to remain, and that is essentially what a “string” is: Its existence is only manifested by a mathematical description that predicts its effects, which in turn can only be confirmed by indirect evidence produced by some of the most powerful, complex machines on Earth.

Further boggling the imagination is that in order for the math to make sense of the interactions of strings-as-particles – for one thing, some have mass (expressed as a function of energy, m=E/c2, according to Einstein’s famous equation) and some do not – we have deduced that the medium of space itself is something called a Higgs Field, named for its discoverer, Peter Higgs. The Higgs Field is composed of Higgs bosons; an understandable, although somewhat flawed, analogy for it is the composition of water. The interaction of this extremely short-lived (something on the order of 10-27 seconds) force carrier on different particles imparts their mass, which, after many orders of magnitude, constitutes the mass of everything. Spotting a Higgs boson, which the Large Hadron Collider was finally able to do back in 2012, has been described as being roughly the same as throwing a grenade at a solid wall and identifying a single particle of dust that gets knocked away from it.

Our entire universe and everything in it is, at the most fundamental level where the difference between mass and energy is irrelevant, is composed of a mathematical contrivance of our own making. It’s not that strings aren’t “real,” because this really happens:

Computer-generated graphic of a 14 TeV collision of protons in the Large Hadron Collider, which indirectly shows the presence of a Higgs Boson by way of its decay into four muons. Really. Image: CERN

It’s that the only way we can make them tangible is through the creation of an intellectual model. We have, in effect, created our own reality; everything we know and everything we are is nothing more than a complicated arrangement of numbers.

But is it really our creation, or someone else’s? That, obviously, is a devilish question. All these sophisticated scientific discoveries make a strong case for “intelligent design,” i.e., some form of deity, a Creator with a capital C. There is a compelling school of thought that suggests exactly what that Creator might be.

Famed American physicist John Archibald Wheeler was probably the first (or if not, he was at least the best at it) to collect various notions relating to reality as a function of perception into a sensible form; he described reality as “participatory,” and experiments with his ideas have tended to support his notion that “everything is information.” This gives rise to the idea that, if we have not created the Universe on our own, we may simply be living in someone else’s simulation of it. In recent years, theoretical physicist James Gates Jr. has discovered what appears to be computer code in the complex formulae of supersymmetry – specifically, doubly-even self-dual linear binary error-correcting block codes, which are actually relatively common on our human scale; they’re used to remove errors in computer transmissions, such as in sequences of bits in text transmitted across a wire.

In another sense, though, that doesn’t really answer the Big Question. Our perceptions of evidence pointing to a conclusion that we are living in a big reality simulation are still simply our perceptions; God as a fat, shirtless geek in front of a computer screen in his Mom’s basement, as far as we know and can ever know, is our own creation.

All life and its meaning for us, it seems, boils down to a simple yet maddeningly insoluble proposition: Either we exist because we exist, or nothing exists and we are only figments of our own imagination.

Little wiggly bits

Image: cronodon.com

TWO mysteries – what makes up the universe, and how did it come into existence – have driven scientific inquiry since the dawn of civilization. Within the last 20 years or so, those mysteries have been, if not exactly resolved, at least placed in a context where their solution is inevitable.

As far as where the universe came from, it is generally accepted that it began as a zero-dimensional point of infinite mass and energy, which began expanding (13.799±0.021)×109 years ago in what is referred to somewhat misleadingly as the “Big Bang.” While it might be intellectually amusing to consider where the seed of the universe came from, it is probably also futile; we have no frame of reference from which we can consider it externally, and thus, as Hawking and Mlodinow put it in their 2010 book The Grand Design, “…it would make no sense to create a model that encompasses time before the big bang, because what existed then would have no observable consequences for the present, and so we might as well stick with the idea that the big bang was the creation of the world.”

What the universe is made of has been a little harder to pin down, but science seems to have finally gotten itself on the right track to figuring it out with something called M-Theory, which was introduced to the world in 1995 by a physicist named Edward Witten.

At this point I should offer a disclaimer that what follows will likely make any real physicist reading it cringe at its simplicity, but the beauty of nature is that the horribly complex concepts we use to describe it actually can be distilled to simple terms normal humans (a large subset of our species that even some physicists would agree doesn’t include them) can understand.

If our understanding of nature is correct, the science we use to describe it should be consistent at any scale, from the very smallest particles that make up everything in the universe to the universe itself as a single object. The biggest problem in physics is that our science doesn’t do that, yet.

We know that everything in our four-dimensional universe (three dimensions of space and one of time, all bound up in one medium we call spacetime) interacts through four fundamental forces: The strong force, which is responsible for holding atoms together; the weak force, which is responsible for radioactive decay; electromagnetism, which is responsible for, among other things, my ability to sit at a computer and type this and your ability to read it on the device of your choice; and gravity, which holds everything together in the nice, orderly way we perceive when we step outside and look up at the stars at night, or pour a cup of coffee with the certainty the liquid will stay there until we do something with it.

Quantum mechanics, which, when combined with Einstein’s special theory of relativity, becomes relativistic quantum field theory, describes the action and relationships of three of the four forces, but ignores gravity. Gravity is a bit weird when compared to the other three fundamental forces; it is extremely weak, but works over extremely large distances. Einstein’s general theory of relativity – the application of his special theory to Newton’s theory of gravitation – describes gravity very well on a cosmic scale. A theory that would connect all the forces together would close that big gap and give us a Theory of Everything, one set of rules that describes our entire reality. Witten’s M-Theory (only Witten knows what “M” means – others have suggested it might mean “magic,” “mother,” “membrane,” “muffin,” “matrix,” “mystery,” or maybe “Mets”) might be that Theory of Everything, but more likely is just a solid step in that direction.

M-Theory is an evolution of string theory, which established that elementary particles are not “particles” at all, but small, one-dimensional strings that differentiate themselves into the different kinds of particles by their form (whether or not they are strings or little loops) and the way in which they vibrate. String theory answered a couple of big questions: First of all, it provided an answer to the question, “What are fundamental particles made of?” and most importantly, it provided a potential solution to the problem of including gravity in the Standard Model of particle physics. In the Standard Model, particles can interact at zero distance, but gravity cannot – the math that should describe the graviton, the theoretical particle that transmits gravitational force, becomes a complete mess. If the particle is actually a vibrating string, there is a small distance between the particles, and the graviton works.

String theory was gradually refined into superstring theory, which resolved some problems by establishing that every particle (fermions, which transmit matter, and bosons, which transmit force) has a massive partner of the opposite type – in other words every fermion has a complementary boson, and vice versa. The only problem was, there were five superstring theories, all somewhat incomplete, but as far as anyone could tell, all equally valid despite expanding the realm of quantum physics into 10 dimensions – the four we know, plus 6 more dimensions of space.

By adding one extra dimension and including a previously abandoned idea called 11D Supergravity (the “D” is for “dimensions”), Witten found a way to show that all five theories were simply different ways of looking at the same thing; they were in effect just special cases of one unifying theory – a practical, although extremely complex, example of overlapping, valid world-pictures in Hawking’s and Mlodinow’s model-based realism.

M-Theory has its critics, and even its proponents acknowledge that large parts of it are, as they say, topics for further study – for one thing, it is far more complex than most scientists, philosophers, or philosophical scientists think a good theory should be. But so far, no one has been able to definitively dismiss it, nor string theory in general, which has been evolving for close to half a century at this point. Whether M-Theory has got the mechanics quite right or not is something the “further study” of several thousand physicists will determine, but for whatever comfort the knowledge might bring, we can say with a fair degree of confidence that everything that exists – us, our world, the stars, the very fabric of the universe – is nothing more, or less, than a collection of little wiggly bits of string, arranged and interacting among themselves in ways we are quickly coming to understand, which leaves us with just one really bothersome question:

What’s a string?

Reality: It’s all in your head

Image: Uwi Heine Debroedt

ONE of the most fundamental questions of philosophy – a fundamental question of human existence, actually – is whether or not there is a reality that exists independently of our perception. Even though it is a profound question, it is in a sense a relatively easy question to answer. But of course, that hasn’t stopped generations of philosophers of every stripe from grappling with it.

There are two basic ways to view reality. Realism, which can be broadly categorized into metaphysical or scientific realism, is a thesis that objects, properties, and the relationships among them exist independently of our perceptions or beliefs about them. The difference between the two forms is that metaphysical realism does not necessarily entail that those constituents exist in the forms defined by science. Anti-realism is the opposite: Reality is not independent of our conceptions or perceptions of it; for all intents and purposes, anything that we cannot imagine or measure does not exist. Realism, specifically metaphysical realism, among other things is the basis for religious belief.

Between the two, anti-realism is the only one that makes any sense. After all, the very definition of “reality” is a human construct; reality relies on our relating to it in some way, which we do, even if we take a position that “reality exists independently of the human mind,” we are still describing it in a human-relative way.

But anti-realism is still imperfect; we have several millennia of human history in which our knowledge of the world has broadened and evolved as we have discovered new things that we did not know before as evidence of that. Up until a little over a century ago, that history tended to support the realist perspective. Quite obviously, our discoveries did not cause the genesis of things, but rather revealed to us things that had always been there; electrons, for example, did not suddenly spring into being when J.J. Thompson figured out cathode rays must be made up of individual electrically-charged particles (which happened in 1896, for those of you keeping score at home).

Or did they?

As physics has advanced into the quantum realm and we have drilled deeper to find the fundamental constituents of…well, everything, we have gone far beyond the extreme minimum scale at which we can tangibly detect something with our natural senses. We can’t see an electron – or a quark, or a boson, or a neutrino, or a photon, any of the 17 fundamental particles which, as far as we are concerned, make up everything in this universe. We can build sophisticated, powerful equipment to detect the presence of electrons, create streams of them, or trap a single electron; some years ago, scientists in Sweden even managed to create a video of the motion of an electron. But we can’t actually see the electron; the best we can do – and as far as we know, the best we will ever be able to do – is to see its effects, and infer its existence and properties from those.

Put another way, what we are detecting or creating beams of is a something of our own design – an electron is what it is because we walk backwards from the effects of its presence to define it in terms of various mathematical formulae. The cognitive model thus created agrees with the effects we observe, the models we’ve created at larger scales (such as the behaviors and properties of atoms), and the effects we expect from experiments. Ergo, electrons exist and are a part of reality, even though we will never actually see one or know exactly what it is based on our own five senses.

In their 2010 book The Grand Design, Stephen Hawking and Leonard Mlodinow introduced a concept that explains all this, an idea they called model-dependent realism:

“…the idea that a physical theory or world picture is a model (generally of a mathematical nature) and a set of rules that connect the elements of the model to observations. This provides a framework with which to interpret modern science.”

All we can know of reality is what the network of these world-pictures that we have created tell us. The concept of model-dependent realism does not require that a particular world-picture be unique or even complete; two different theories that explain observations of the same thing equally well are equally valid. This is a form of ontological pluralism (one that becomes very important in the next part of this series) that Hawking and Mlodinow neatly explain with an amusing analogy:

A few years ago the city council of Monza, Italy, barred pet owners from keeping goldfish in curved bowls. The measure’s sponsor explained the measure in part by saying that it is cruel to keep a fish in a bowl with curved sides because, gazing out, the fish would have a distorted view of reality. But how do we know we have the true, undistorted picture of reality?

The goldfish view is not the same as our own, but goldfish could still formulate scientific laws governing the motion of the objects they observe outside their bowl. For example, due to the distortion, a freely moving object would be observed by the goldfish to move along a curved path. Nevertheless, the goldfish could formulate laws from their distorted frame of reference that would always hold true. Their laws would be more complicated than the laws in our frame, but simplicity is a matter of taste.”

The concept of model-dependent realism doesn’t explicitly reject metaphysical realism – the notion of reality independent from the human mind – but rather asserts that our reality is fundamentally conceptually relative:

According to the idea of model-dependent realism…our brains interpret the input from our sensory organs by making a model of the outside world. We form mental concepts of our home, trees, other people, the electricity that flows from wall sockets, atoms, molecules, and other universes. These mental concepts are the only reality we can know. There is no model-independent test of reality. It follows that a well-constructed model creates a reality of its own.”

Expressed a slightly different way, there is no such thing as a reality that we cannot conceptualize; even if such a reality were possible, it would be completely irrelevant to us, forever existing beyond our infinite potential for imagination.

Life, the universe, and everything exists, in the only way that matters, in that wonderful place we call the human mind. Our reality is one we create, which grows and evolves as our capacity to grasp and define its complexity expands, but ultimately can never be bigger than we are.

Bloody Confusion

drug-dealer-philippinesTO characterize President Rodrigo Duterte’s savage campaign against the people who use, distribute, manufacture, and profit from illegal drugs as a source of national discomfort sounds like a tremendous understatement, but it really is not.

The number of people who are unequivocally convinced it is completely wrong, should be stopped at once, and the country returned to something resembling the status quo before May 9 of this year is actually quite small. And for many of those people, their dissent is less about morality and more about their disappointment at having their preferred political order dismissed with prejudice at the polls, and quickly mocked and forgotten in the aftermath of the election.

For everyone else, even those who are otherwise properly horrified by what is going on – as of now, about 1,900 people have been killed in Duterte’s “war on drugs” – the national atmosphere is contradictory and confusing. No decent person wants the drug trade to continue to flourish, and continue to contribute to the general lawlessness and corruption that afflicts the country. No decent person wants the sun to rise on 10, 20, 30 freshly bullet-riddled corpses every day, either.

Especially not when some of those corpses are tragic collateral damage – a 5-year-old girl killed when the ubiquitous “unknown assailants” targeted her grandfather, who was on a drug “watch list,” a 15-year-old girl killed when her companion at the mall, the attorney of a wanted “drug lord,” was also targeted by hit men – and not when the campaign is recklessly pursued on the basis of flimsy evidence. A word by a disgruntled personal rival to the local barangay captain or police is enough to get one put on a “watch list,” and that’s enough to get one killed. How many of the victims 1,067 “unexplained” killings – the figure given by National Police Chief Ronald Dela Rosa in Senate hearings this week, describing deaths not attributable to police action – were not actually “drug personalities” but people on the wrong side of a personal dispute will probably never be known, as all but a handful of the drug-related killings have involved the faceless masses, people for whom the story, and any available evidence to support it, tends to die with them.

One gets a sense of the contradiction when talking to business people or the more objective members of the media community. The general perspective seems to be an inclination to look at Duterte through binoculars, with one eye shut: On one side is the whole drug “thing,” and that’s a mess, so let’s disregard it for the time being at least, and focus instead on the other things that are happening under his nascent reign, all of which is interesting, and some of which shows a lot of positive potential. But in every conversation like that, there is an undercurrent of discomfort – the “drug thing” is the elephant in the room and everyone knows it, and there is an unspoken recognition that sooner or later, it’s going to become too big to ignore.

Duterte himself encouraged this kind of bifurcated thinking by presenting his critics with a rhetorical choice: Which should he defend, the peace and safety of communities, or the lives of criminals? That may be melodramatic, but it is not quite the false dichotomy Duterte’s detractors make it out to be. The vast majority of the population (present company included) that finds unrestrained killing and uncontrolled drug trafficking equally distasteful, or nearly so, realizes that on some level, and finds it difficult to either condemn or reject completely. And so the elephant in the room continues to sit there, quietly growing fatter.

Ideally, none of the 1,900 or so who have been killed so far should have died. The government ought to have been able to aggressively investigate, pursue, and capture “drug lords,” their networks of corrupt officials and police who cover for their activities and profit by doing so, the local pushers, and the irredeemable users who commit petty crimes to support their habits. For the redeemable ones who fell into the habit through bad luck or poor choices but have harmed no one but themselves, the government ideally ought to be able to provide effective intervention and care for what is, in those cases, a public health problem and not a criminal one.

Things don’t go ideally in the Philippines.

The menace of methamphetamine hydrochloride – what we call crystal meth in the US and what is commonly referred to as “shabu” here – in the Philippines is hard to overstate. Cheap and relatively easy to produce in quantity from readily-available materials, it is a perfect drug for a market like the Philippines, which has a vast impoverished population – the target market for almost any sort of drug trade, human nature being what it is – because it is powerful and addicting even in small amounts. It is everywhere in the Philippines, has been for years, and anyone who has even the vaguest awareness of what goes on in the world beyond his front door knows it.

No one can really “handle” shabu; if it doesn’t kill you immediately because it’s poison – manufacturing skill and quality control are not big priorities in shabu production – it is incredibly destructive to the human body and mind, and addiction is financially and socially ruinous as well. The great tragedy of the shabu epidemic here in the Philippines is that it preys on the least healthy and poorest part of the population; that is not a unique situation, but because that part of the population is proportionally so much bigger here, so is the problem.

In a sense, then, there is an effective rationale behind the strategy being employed by Duterte, brutal though it may be. The lower reaches of society are the least able to defend themselves against the campaign, and are the easiest targets; by swinging at the lowest-hanging fruit, Duterte is cutting off the market for the vast network of profiteers above it – the “drug lords” and those who protect and even actively participate in their trade, and who have always been much tougher to bring to heel.

It’s almost brilliant, and maybe the only way to handle a situation that has gotten completely out of control. For all the ululations against extrajudicial action, one inconvenient truth cannot really be avoided: Sometimes, circumstances grow to become so unmanageable that they transcend legality. A friend and mentor who works with me at The Manila Timesand who happens to be one of the most peaceful men I know, and finds the killing morally objectionable – gave a thought-provoking analogy: The murder of Osama bin Laden was, by definition, an extrajudicial killing. Yet very few if any complaints were made about it for that reason, because Osama bin Laden was a universally-acknowledged evil and enemy of mankind. While he believes the killings are wrong, the intent behind the anti-drug crusade is sound; given that pervasive impunity and corruption of every sort are the biggest obstacles to the country’s development, destroying one of if not the largest single sources of that impunity and corruption is entirely rational.

Be that as it may, the anti-drug campaign does not necessarily require that people die, and the fact that so many have is a bitter indictment of its one glaring flaw: The instrument Duterte must use to carry out his campaign is its own enemy. There are far too many police involved in the drug trade for that force to be trusted to carry out the strategy faithfully and efficiently. It is, to use another, duller analogy, much the same as giving the accountant who has been embezzling for years the job of auditing the company’s books; his priority is not going to be conducting an honest audit, but covering his tracks.

And so it is with the police: The ones who have the ‘intelligence’ on who the drug traffickers are and where they can be found are most likely those who are involved in some fashion. To be fair to the PNP, they represent a tiny minority of the whole force; but that tiny minority is the one the rest must rely on to tell them where to go and who to look for. PNP Chief Bato Dela Rosa has made a great show of arresting a few officers on the wrong side of the law, and few have even gotten themselves killed after being cornered and fighting back; several hundred others whose reliability is suspect have been reassigned, usually to terrifying areas in the Muslim parts of Mindanao; and in his typically colorful fashion, Bato has sworn that the “unexplained” killings – many supposedly carried out by police-directed assassins, as this recent BBC article suggested – will be investigated and appropriate consequences meted out.

And yet the killings continue – according to my news feed, in the time I’ve taken to write this, four more have died, including one not far from where I live. It has to end; at some point Mr. Duterte will have to decide that he has delivered the message he intended, and put a stop to the mayhem. He can serve both purposes by cleaning the PNP’s house, because the efforts that are being made now are clearly not enough.