THE PRESENT IMPORTANCE OF THE CLASSIC POLITICAL ECONOMY

It is highly significant and instructive to briefly review the fundamental ideas of the ‘Classic Political Economy’ because we find formulas and advice whereby their current application in countless countries, after the historical failure of real socialism and Keynesianism on its last legs, would be enlightening and comforting given the institutional parallelism in which those ideas were gestated. How many lost decades and how much misery could have been avoided!

The Classic Economy acquires its greatness when pointing out the importance, in economic thought, of the innate force that market institutions have implicit for its completeness and interdependence. Faced with less relevant secondary errors, I believe that their fundamental success is in the scientific and widespread insistence of these economists in emphasising the beneficial effects of freedom, property, exchange, competition, specialization and opening up of aims in markets that are more and more open. Maybe without being too aware of where those forces came from, they were dazzled by their power and insisted diligently in their defence and establishment. These forces are so ingrained in the nature of things as well as in human nature that, if we leave them to act, they correct many errors that could be made. Their innate capacity to unify and understand with regard to human objectives the Earth, Work and Capital instruments capitalized with the previous saving, makes their establishment in society produce advantageous effects on the wealth of its members.

In those societies where these principles have been implanted in a certain stage of their history, the results have been rapid in terms of increase of welfare and prosperity. The classics considered their system, based on these principles, as something very superior in its implications for human happiness to the restriction, regulation and mercantilist control system that prevailed in those times. In the concrete historical framework in which their doctrines moved they had a marked reformist character. Their fundamental goal was to protect and strengthen these principles. According to their system of economic freedom, it was not enough to simply recommend non interference, but rather their task consisted of eliminating everything that meant an obstacle or antisocial impediment in order to liberate in this way all the immense potential of pioneer free individual initiative. Their practical proposals went, in this sense, against the privileges of companies and regulated corporations, as well as against restrictions of movement or imports or the markedly uneconomical state privileges.

The classic economists were the vanguard of this general movement to liberate the originality locked in human nature through the spontaneous and joint cooperation of the market. The defence of their principles not only brought them up against the mistaken state interventionism, but also against those who infringed them, whatever their function and whatever state they belonged to. In short, it was not their theory to defend the privileges of the managers. A. Smith speaks about the majority of his convictions in front of anyone. He will criticise the managers especially their attempts to reduce competition for their own benefit, looking for privileges that allow them to collect an additional tax in their favour from the rest of the citizens. It is not correct to apply popularisation of the principle of non-State interventionism to the Classic Political Economy. The government should act and it should intervene, but creating the conditions for the social development of the basic institutions of the market. Western liberal civilization has not developed without this vision of the classic economists with regard to the role of the State in the economic sphere. The Classics asked the State not to meddle in that which, free and peacefully, the citizens could carry out; but at the same time they impelled it to open a secure and open path to traffic. I do not want the State to tell me what my authentic interest is, my authentic purposes–since nobody knows them better than me – but I do demand that it creates the appropriate conditions to declare and reach those goals voluntarily.

In a system where freedom, property and exchange have priority and all of them are interconnected, mutually advantageous interrelations arise for individuals. These interrelations are superior to those of alternative systems. It is necessary to create the conditions for their development and to eliminate the bad tendencies of own selfish interest by means of appropriate institutional restrictions. The creation and development of those conditions is a task assigned to the State government and it is much more important than the performance in the merely mercantile sphere and in production, however efficient that is, through those public companies that always end up bureaucratised. The functions assigned by Smith to the sovereign are not only wider than it is habitually thought, but rather they are fundamentally much more important and more decisive for the cause of economic value, since they are orientated to the creation of a necessary infrastructure for the development of forces more directly related to it. The present importance of all these recommendations for Europe in general and Spain in particular I believe is obvious.

 
Joseph John Franch Meneu         
 
                                   

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