CAREFUL WITH THE POOR LAWS
The continuous search of the Protective and Welfare State for all by decree and by the mere fact of being, and the selfish Socialist desire to become the greatest national charity organization with the public money collected coercively, are maybe the deepest causes of the prostration and affliction of the current economic situation. This living controversy that extends throughout the whole Spanish geography in an increasing way after the elections, and that moderately confronts the active sectors with the passives, represents the greatest socio-economic problem for our future and uncertain government.
It reminds us of the discussions at the end of the 18th and beginnings of the 19th century in England on the Poor Laws. The consequences on the good running of government finance and economic health of the whole of society must have been important because the great classic economists of the time, no less than Adam Smith, David Ricardo or Malthus among others, dealt with them in depth.
The problem was also united to that which the experts pompously call today labour flexibility and functional and space mobility of the work factor. The exclusive privileges of the corporations and unions hindered movement from one place to another, even within the same sector and employment. The Statute of Learning restricted freedom of movement of the workers although in most factories, even being of different branches, the operations that had to be carried out presented such an analogy that the workers would not have had special problems in changing occupation if those absurd laws did not impede it. Adam Smith considers in The Wealth of the Nations that, where the Statute was in force, many workers had no alternative but to request charitable assistance from the parish and Queen Isabel decreed that all parishes were obliged to aid their poor. Statutes 13 and 14 of Carlos II ordered that whoever resided forty days running in a parish, could obtain residence in it. The picaresque spread like wildfire throughout the Kingdom since the question of certificates was the same as putting in certain people’s hands the ability to maintain many hooked to the waning but necessary state charity.
Things must have been going badly wrong when Smith picked up a quote from the History of the Poor Laws where it says that after a four hundred year-old experience, the moment had arrived to abandon the idea of holding on to a strict regulation that did not lend itself to meticulous limitation. If all the people of the same occupation were to receive the same wages, emulation would end and there would be no margin for industry and genius.
A pre-Marxist, David Ricardo, was clearer and more overwhelming in his theory of value-work in his Principles of Political Economy and Taxation (1817). He declared that in spite of the good intentions of these laws to improve conditions of the destitute, the direct and concrete consequence was that they worsened conditions for the rich as well as the poor. «Those laws are calculated to impoverish the rich and not to enrich the poor and the funds destined to the maintenance of the poor will increase progressively until they have absorbed all the domestic net income, or at least the part of it that the State leaves us, after its constant tax demands for public expenditure are satisfied.»
Ricardo also hints at solutions when he recommends making everyone understand the value of independence, teaching them that they should not look for help in systematic or casual charity, but in their own strength.
The task is arduous because we are not well accustomed, but it is necessary to request the victorious but not because of that less-distressed Felipe González to forget about obsolete ideologies and to truly rectify once and for all, taking the bull by the horns, acting valiantly with a clear conscience and considering general interest. The improvement of many of his voters is linked to this and in the medium term everyone will be thankful. In the very short term the first to be grateful for it will be the Governor of the Bank of Spain.
JJ Franch Meneu
Fundamentos del valor económico – Justicia y Economía. Hayek y la Escuela de Salamanca – Redes y productividad en la naturaleza – Trabajo en red y productividad tecnológica creciente – Crisis económicas y financieras. Causas profundas y soluciones – Dinamismo económico, tiempo y ciencia – Anticipando la crisis desde el TDC – Medios de comunicación y competencia