The first time I heard an expert on liberty talk about this topic was 30 years ago, at the Philadelphia Society – a kind of American Mont Pelerin Society, founded in 1964, which I had the honor of presiding over last year. The expert was Eric Mack, a philosophy professor at Tulane University. His argument was that we do not have a genetic predisposition against the poor, but that our ideas of how poverty is overcome can make us less sensitive to the suffering of others in the short term. The way some of us use macroeconomics to prove that if we do nothing – laissez-faire, laissez-passer (“let do and let pass”) – in the long term, we will all be better can make us appear as Keynesians in reverse. Keynes wrote that in the long term we will all be dead; we say that in the long term, we will all be well.
Another issue concerns trade with totalitarian countries in which their prices are totally artificial. One famous example involved communist Poland, which had no golf courses yet began exporting motorized golf carts at predetermined artificial prices that threatened all U.S. producers. I imagine that several in the audience would have recommended that the U.S. government do nothing. After all, the consumer will benefit. In the long term, we will all be better.
Juan de Mariana was not indifferent to the poor. The invisible hand of the market was not enough. He would have liked people to give generously to support the poor and create enough charitable organizations to assist all the poor and homeless. But since he doubted this would happen, he recommended forming various forms of institutions to help orphans, the elderly, the homeless, and the sick. Like John Locke and many authors held in esteem by those who love liberty, he recognized that God created the riches of the world for all, but that after Original Sin, private property was essential.
Juan de Mariana shared many moments with friends of considerable wealth. But he clarified that one of the functions of the prince was to ensure that economic power and riches are not accumulated in a few hands. To this end, he did not propose wealth redistribution but the strengthening of commerce and industry by an economic policy of low taxes, fewer obstacles to production, and healthy companies.
He was very concerned about corruption and favoritism. He said:
- “How sad it is for the republic, and how hateful for the common good, to see many enter the administration of public revenues poor, without any income, and see them after a few years happy and opulent!”
- “What is said, and what is seen, is miserable. It is said that in recent years there is no office or dignity that is not sold by the ministers with gifts and bribes, etc., up to the royal courtrooms and bishoprics. It must not be true, but it is miserable that it is said. We see the ministers out of the dust of the earth in a moment charged with thousands of duchies of rent. Where did this come from but from the blood of the poor, from the entrails of businessmen and suitors?”
To stop some of these abuses, Mariana recommended that all the officials of the king present the inventory of their assets before taking office. Public officials should be audited frequently, and the inventory would serve “so that at the time of the visit, they would often realize how [the officials] have won the rest” of their fortunes.
This problem came about, in part, because those who held public office came to power so indebted that they felt obliged to unjustly favor those who “secretly greased their palms.” Corruption was so great (“the bribes and swindles would not be counted,” Mariana said) that, of each peso destined for the royal treasury, only half reached the hands of the king. Since each note passed through many hands, it would “leave something in each part.”
Close to the subject of corruption is cronyism: capitalism (or socialism) restricted to cronies. Cronyism usually leads to unjust inequalities, often brought about illegally. These most often consist of immoral actions that will shut out competitors who have more talent but less access to political power.