Alberdi and the wealth tax

Member of the Academic Council of Libertad y Progreso.
PhD in Administration from the Catholic University of La Plata and Professor of Economics at the Faculty of Law and Social Sciences of the UBA. His research has been collected internationally and he has published books and scientific and outreach articles. He has served as Rector of ESEADE and as a consultant for the University of Manchester, Konrad Adenauer Stiftung, OAS, IDB and G7Group, Inc. He has received awards and scholarships, including the Eisenhower Exchange Fellowship and the Freedom Project of the John Templeton Foundation.

INFOBAE – While we all believe that there is a fierce internal in the ruling alliance, the laws that do the most damage to the economy come out. The wealth tax is nearing approval. Everything has already been said, difficult to add something new, in such a way that, if something is to be said, perhaps that old adage in the history of economic thought should be followed: “For novelties, the classics. In this sense, what would Juan Bautista Alberdi have said in relation to this? Something like that:

“Who makes the wealth? Is wealth the work of the government? Is wealth decreed? The government has the power to hinder or aid its production, but the creation of wealth is not its doing. Wealth is the daughter of work, capital and land; and how these forces, considered as instruments of production, are nothing more than faculties that man puts into exercise to create the means to satisfy the needs of his nature, wealth is the work of man, imposed by the instinct of its conservation and improvement , and obtained by the faculties with which he is endowed to fulfill his destiny in the world. In this sense, what does wealth require from the law to be produced and created? What Diogenes demanded of Alexander; let it not be overshadowed ”.

“Compromise, seize property, that is, the exclusive right that each man has to use and widely dispose of his work, his capital and his lands to produce what is convenient for his needs or enjoyment, and with this you do nothing but to take away its instruments from production, that is, to paralyze it in its fruitful functions, to make wealth impossible. Such is the economic significance of any attack on property, work, capital and land, for those who know the game or mechanism of property rights in the generation of general wealth. Property is the motive and stimulus of production, the incentive of work, and a remunerative term for the efforts of industry. Property has no value or attractiveness, it is not wealth properly when it is not inviolable by law and in fact ”.

“Are private incomes small? – This is how public income will be … What depletes and destroys private wealth is not the contribution, because on the contrary it defends and preserves it; it is the dispossession, the pillage that despotism does, not for its expenses, but for its excesses ”.

“… The resources contrary to the economic guarantees that the Constitution establishes in favor of all the inhabitants, are precisely contrary to the increase of the national Treasury; that is to say, they are opposed to the Constitution in two respects, as hostile to the country in its wealth, and as hostile to the government in its parasite Treasury of the treasury of individuals ”.

“The contribution, as a public expense of each individual, must come from where their other private expenses come from: from income, from the utility of their funds, not from the funds that produce it because in this way you reduce the funds originating from income, you impoverish to individuals, whose collective wealth forms the wealth of the Nation, of which the treasury is parasite. He who spends his principal to live, walks to poverty: it is necessary to live on earnings; and in order to have profits, it is necessary to make the funds that produce them work. The State is included in this natural law of wealth: it must subsist on the collective income of the individuals who form it, not on their funds. This is the seat of every judicious contribution: of every contribution that serves to enrich the Nation and not to impoverish it”.

“Whatever the Argentine authority that must know of the contentious in point of contributions, the invariable rule of its jurisprudence must be: in any doubtful case, decide in favor of the taxpayer, that is, freedom. Minister Turgot increased France’s income in favor of this principle, which belongs to the economic doctrine on which the Argentine Constitution rests”.

“The power to create, manage and invest the public Treasury, is the summary of all the powers, the most arduous function of national sovereignty. In the formation of the Treasury, the country can be looted, private property unknown, and personal security trampled; in the choice and quantity of the expenses the public wealth can be squandered, brutalized, oppressed, the country degraded”.

“How to prevent the government from incurring in such excesses when exercising the sovereignty of the country delegated to create the Treasury and apply it? Are there guarantees applicable to the remedy of these abuses? How to ensure that the economic and income principles of the Constitution prevail in the laws and in the acts of the government, charged with enforcing the Constitution?”

“Limiting the government’s spending power and leaving it to its discretion to set the value of the tickets would be to expose the public wealth to the weight of exorbitant burdens, and the country’s freedom to the abuses that can be the result of an unlimited amount of funds, which amount to an unlimited amount of power, left without purpose in the hands of the government”.

The quotes are from the “Economic and Rent System of the Argentine Confederation according to its Constitution of 1853”.