In the remainder of this chapter we shall study how Jovellanos applies to specific economic problems the principles elaborated in part from his English sources.
Long-standing dissatisfaction with the state of Spanish agriculture had led the Council of Castile to collect reports and opinions from all parts of Spain with a view to the enactment of an agrarian law increasing the productivity and improving the distribution of the land. At the suggestion of Campomanes, the Economic Society of Madrid undertook to study the resulting dossier or expediente; and to facilitate this task a printed digest, the Memorial ajustado en el expediente de ley agraria (1784), was prepared90. By January 1785 the Society had begun its work (O 2: 314b); two years later it asked Jovellanos to formulate a plan for its report, and in 1788 it entrusted him with the actual redaction of this document. Jovellanos' official duties delayed the task's completion; but his exile to Gijón in 1790 gave him somewhat more leisure, and the finished report was submitted to the Society on 26 April 1794. It was read aloud to the Society, received enthusiastically, submitted to the Council with an indication of Jovellanos' authorship, and published by the Society in 1795 (O 4: 190 ff).
In the preparation of the report, Jovellanos could consult the written opinions of several of his colleagues in the Economic Society, as well as the Memorial ajustado; but he drew little from these sources91. The Informe de ley agraria is, then, Jovellanos' own work; though the fact of its submission in the name of the Economic Society has a special importance. Not every thing could be said or written in eighteenth-century Spain; and still less could this be done when an author was writing in the name of a semi-official body whose standing he did not wish to endanger and whose concurrence he had to obtain. Therefore, while our knowledge of Jovellanos' agrarian proposals is based primarily on the Informe de ley agraria, it must at times be supplemented by recourse to other, less public writings. Even so, the Informe is the work in which Jovellanos most consistently applies liberal economic theory to a major economic question. In it even those problems and solutions which had also concerned his compatriots are discussed in terms of the principles of private property and self-interest which link Jovellanos with the author of the Wealth of Nations.
Jovellanos, while denying that Spanish agriculture is in decadence, does not believe that it has reached the maximum development needed for full national prosperity; and in his report he proceeds to examine, and suggest remedies for, three classes of obstacles to its progress: political, moral, and natural, i. e., obstacles consisting of laws, opinions and prejudices, and natural conditions92. Of these, the first class will most concern us here.
The laws which in Jovellanos' view obstruct agriculture are those interfering with the free exercise of private self-interest, which, as we have seen, he considers the principal stimulus to economic advancement. He consequently rejects a number of proposals in the Memorial ajustado which would interfere with this principle in order to «mandar, prohibir, dirigir, encadenando a un mismo tiempo a todos los agentes de la agricultura para consumar su esclavitud y su ruina» (O 4: 228b). He also attacks existing legislation which inhibits the free action of the individual by restricting the ownership or the use of land.
The Economic Society, he writes, must direct its attention to those laws
|
que sacan continuamente la propiedad territorial del comercio y circulación del Estado; que la encadenan a la perpetua posesión de ciertos cuerpos y familias; que excluyen para siempre a todos los demás individuos del derecho de aspirar a ella, y que uniendo el derecho indefinido de aumentarla a la prohibición absoluta de disminuirla, facilitan una acumulación indefinida y abren un abismo espantoso, que puede tragar con el tiempo toda la riqueza territorial del Estado. Tales son las leyes que favorecen la amortización.93 |
Jovellanos' objections to this increasingly unequal distribution of wealth are not only humanitarian but also economic (LA 2: 98a-101a). The continual reduction in the supply of arable land raises its price, encouraging those who wish to provide for their families to establish entails in turn (a genuine vicious circle) and lowering the yield on capital invested in agriculture94. The effort to increase returns has raised rents to «scandalous» levels (cf. Olavide, 373-375); but like Adam Smith and Ogilvie, Jovellanos complains that the yield is still so low that prudent capital is driven into «otras profesiones y granjerías» (2: 100a) while the amortized land cannot move into those hands best able to utilize it. Thus agriculture does not receive the investments and improvements that could make it prosper. Still the prestige associated with possession of an estate maintains the demand; the new-rich and wealthy indianos try to buy lands and create new entails to perpetuate their families (O 2: 290a-291a). Such purchases made for noneconomic reasons decrease the remaining amount of unentailed land and make it almost impossible for the many marginal farmers to bring their holdings to a viable size.
The growth of large estates encourages absenteeism and such wasteful uses of land as hunting grounds and pleasure gardens. The end product is poverty and depopulation, denounced by Godwin and graphically described by Jovellanos in his diary. A decaying town near León leads him to exclaim:
| (D 2: 29; cf. Godwin, 3: 333) | ||
Both Smith and Ogilvie contrast the unhappy state of European agriculture with the situation of North America, whose prosperity they credit to the easy availability of cheap land; and Jovellanos describes conditions there in a passage which contrasts sharply with his dismal picture of the province of Léon:
| (LA 2: 99a; cf. WN, 539-540; Ogilvie, 64-65) | ||
Amortization existed in two forms, ecclesiastical mortmain and civil entails, the second category being the more extensive. Both had come under attack. Opposition to entails dated from the sixteenth century; and the second half of the eighteenth saw numerous proposals for prohibiting or limiting new entails, regulating their size, and permitting the sale or long-term lease of entailed lands. Entails were forbidden in the agrarian colonies of the Sierra Morena under Olavide's direction. By the end of the century the government, partly at the urging of reformers, partly in order to raise taxes and encourage conversion of entails into government bonds, had moved toward the relaxation of the laws of entail; yet its measures were on the whole ineffective, slightly reducing the size of some mayorazgos but not their number95. The situation with respect to mortmain was similar. This issue involved the conflict between church and state which characterized the Bourbon Spain of the eighteenth century and became particularly acute in the reign of Charles III and his successor. The reformers, generally presenting themselves as devout Christians desirous of restoring the «primitive discipline and simplicity» of the church, took as their manifesto and rallying point the Tratado de la regalía de amortización. (1795), by Campomanes, who painstakingly documented the need for reform and the king's duty and right to effect it. Olavide called for the sale or lease of church lands to small farmers (408-417), and the regular clergy were excluded from the Sierra Morena settlements (Costa, 118-119). Some orders voluntarily renounced the right to acquire land, and Charles III twice forbade their doing so in mortmain. Charles IV, in financial straits, imposed a tax on such acquisitions in 1795 and shortly thereafter ordered the sale of some church lands; but in general progress was slow before the large-scale expropriations of the nineteenth century (see Camacho, 102-116).
Jovellanos considers entails to be established by positive law and subject to regulation by it96. They may be politically useful by supporting the nobility, but this does not remove economic, legal, and moral objections. Most important of these is the conflict which Jovellanos sees between entail and the purity of property rights. He is not particularly concerned, as are reformers like Ogilvie and Thomas Paine, with the «right» of every citizen to an equal share of land -a right which entail obviously thwarts97. Though he favors a more nearly equal distribution of land and the multiplication of small independent farmers, the Informe de ley agraria is an attempt to suggest practicable reforms to an official body. It is, therefore, not the place for demanding what Jovellanos would consider a chimerical equality. In deed, inequality of fortunes is for him a necessary result of the beneficent principle of self-interest; what he criticizes in amortization is not so much the inequality of distribution as the complete exclusion of amortized land from the channels of trade. Apart from this, entail violates the property rights of heirs and establishes capricious and unjust distinctions:
| (LA 2: 104) | ||
A very similar criticism can be found in the Wealth of Nations:
|
The right of primogeniture, however, still continues to be respected, and as of all institutions it is the fittest to support the pride of family distinctions, it is still likely to endure for many centuries. In every other respect, nothing can be more contrary to the real interest of a numerous family, than a right which in order to enrich one, beggars all the rest of the children. ...[Entails] are founded upon the most absurd of all suppositions, the supposition that every successive generation of men have not an equal right to the earth, and to all that it possesses; but that the property of the present generation should be restrained and regulated according to the fancy of those who died perhaps five hundred years ago. Entails, however, are still respected through the greater part of Europe, in those countries particularly in which noble birth is a necessary qualification for the enjoyment either of civil or military honours. Entails are thought necessary for maintaining this exclusive privilege of the nobility to the great offices and honours of their country; and that order having usurped one unjust advantage over the rest of their fellow-citizens, lest their poverty should render it ridiculous, it is thought reasonable that they should have another.98 |
Both for Smith and for Jovellanos, then, entails are fundamentally unjust, besides hindering the free operation of an enlightened self-interest in agricultural investments; but Jovellanos does not extend the attack to aristocratic privileges in general.
In his Informe de ley agraria, Jovellanos proposes that existing entails be permitted to remain in force, though he would legalize long-term leases, allow the deduction of improvements from the entail, and permit the sale of some entailed land to provide for younger children. New entails should be permitted only as a special reward to the particularly meritorious. These are not proposals for disentail but rather for holding entail in check; nor are they particularly original. The impression which they undoubtedly made must have been due to the clarity and vigor with which they are expressed and to their integration in a reasoned pro gram for agrarian reform, based on the principles of self-interest and private property.
The moderation of these ideas stems in part from the fact that Jovellanos wrote in the name of the Economic Society and wished to frame a practical program, not an ideal scheme; but it does not mean that he had not considered more extreme possibilities. There were voices, such as that of the author of the Cartas político-económicas, that called, albeit privately, for disentail (23); and prior to the publication of the Informe de ley agraria Jovellanos had already taken cognizance of them
| (ltr. to Ponz, O 2: 291) | ||
Such considerations, which in the mouth of Adam Smith have a sarcastic tone, are perfectly serious in Jovellanos'. Although he does not argue for inequality as such, he wishes to maintain the position of the nobility, which he considers a necessary part of the monarchic state, by means of a system of land tenure that must produce inequality. The plan which he then proposes is essentially the same as that later contained in the Informe de ley agraria, with the additional stipulation of minimum and maximum limits for mayorazgos99. Here also, however, Jovellanos is probably writing for publication, addressing himself to Antonio Ponz, author of the Viaje de España.
The other major form of amortization, ecclesiastical mortmain, Jovellanos considers especially dangerous and harmful because of its permanent and inextinguishable character. With respect to it he shares the ideas of Olavide and Campomanes. Referring to the latter's Tratado, he writes to Ponz:
| (2: 291b) | ||
In the Informe de ley agraria we find a sharp condemnation of mortmain:
| (2: 100b) | ||
Like Campomanes, Jovellanos believes that the large holdings of the church not only impede agricultural progress but also violate ancient laws which it is the king's right to enforce for the good of the nation and of the church itself100.
To this end Jovellanos proposes that donations of land to the church be prohibited, the donors being obliged to sell the land and give money or government bonds to the church -a suggestion sure to be doubly welcome to the hard-pressed government of Charles IV. Such a measure would not, however, alleviate the evils, real or imagined, of existing mortmain, with respect to which Jovellanos proceeds with extreme caution:
| (LA 2: 103a) | ||
Though violent hands are not to be laid on the property of the church, it should be encouraged, patriotic as it has always been, voluntarily to divest itself of its lands by sale or emphyteusis101.
His moderation brought Jovellanos criticism even in his own time, and a month after completing the Informe de ley agraria he wrote to Guevara Vasconzelos:
| (O 4: 189b 190a) | ||
No better expression could be found of Jovellanos' essentially practical temperament. While men like Godwin constructed utopias, Jovellanos rarely lost touch with realities -the realities, in his case, not only of politics and economics, but also of censorship and repression. Writing to Jardine he declares that Godwin himself, had he been striving for real reforms instead of constructing a theory, would have adopted another and more realizable program roughly corresponding to libertad, luces y auxilios, After describing this program, Jovellanos adds:
| (O 2: 367b) | ||
In the diaries, which were not available to most of the nineteenth-century students and apologists of Jovellanos, our author expresses himself even more clearly:
| (D 7.viii.95, 2: 149) | ||
The promised explanation is to the best of my knowledge unpublished and probably lost; but we can make an informed guess at the por qué: concern for the role of the nobility, feasibility of reform, Jovellanos' own role as spokesman for the Economic Society, the political and intellectual climate. That the latter called for caution, and not only in Jovellanos' opinion, is seen in another diary entry:
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Tabern lee el papel de L. A.: extraña o, por mejor decir, admira, que yo me atreviese a decir tantas y tantas verdades; admírese de las que callo.102 |
By this time (1797) Jovellanos had read Paine and Ogilvie, in addition to Godwin, whom he already knew before finishing the Informe de ley agraria; and these readings must have strengthened his more extreme and less publishable opinions.
Even as published, however, the Informe de ley agraria aroused strong emotions. Some members of the Economic Society believed «que es necesario oir[lo] de rodillas»103, and when Jovellanos' appointment to the ministry of justice put his star once more in the ascendant, a speaker at the University of Oviedo apostrophized the work:
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Y ¿cómo no habias de merecer [la aprobacion], diré otra vez, Informe divino, en que se halla apurado todo el saber mas profundo, y delineado el plan de nuestra dicha? ¿Infórme nunca basta[nte]mente elogiado, y que separo de mis labios para colocarle en el corazon, ára la mas digna, que todos le hemos ofrecido?104 |
Finally, after the author's death, he was declared Benemérito de la Patria by the Cortes on 24 January 1812, that body also providing
| (Jov. en la R. Ac. Hist., 371-372) | ||
The publication of the Informe had been supported by Godoy, who saw it as useful propaganda for new taxes on amortized lands (Herr, 380-384); but very soon after its publication it was denounced to the Holy Office of Inquisition. The resulting censure not only condemned Jovellanos' opinions concerning the property rights of the church but also saw in his hostility toward entails the dangerous seed of egalitarian ideas. For reasons which are not entirely clear, but which probably had to do with Jovellanos' rise in the favor of Godoy, the inquisitorial process was ordered suspended on 4 July 1797; and the major task set for Jovellanos upon his becoming minister of justice was to begin the sale of the property of charitable institutions, a plan advocated by his friend Cabarrús and favored by Godoy and the king105. In 1825, however, the Informe en el expediente de ley agraria was placed on the Index librorum prohibitorum, where it remained for more than a century.
Apart from entails and mortmain, communal property was the major obstacle to the free circulation of land; and as might be expected in a century which saw economic progress flowing from the free operation of private interest and the accumulation of private wealth, attempts were made to distribute communal lands, though in practice they were either not distributed at all or distributed unfairly106. Compared to some of the proposals of his contemporaries, Jovellanos' stand is in this respect also a moderate one107. He desires the alienation of municipally owned lands through sale or emphyteusis, but he takes cognizance of some of the problems such a step may raise. He therefore urges that the proceeds of sale or lease be employed for local public works and claims that taxation on the increased wealth produced by distribution will supplement municipal income. At the same time, profiting by recent experiences, he urges avoidance of two harmful extremes: distribution of land to those economically unable to make use of it, and the accumulation of vast holdings by the rich. His principal purpose, then, is to strengthen and multiply the class of small farmers who, by intense and careful cultivation of land in which they have a direct and exclusive interest, will enrich themselves and the nation.
Jovellanos' attacks on amortization are also in part attacks on latifundia, which entail and mortmain encouraged and preserved. The physiocrats had taught that efficient agriculture, creating a maximum produit net, could only be achieved by large proprietors (Prados, 252); but Jovellanos, who had resided ten years in Andalusia, the classical land of latifundia, does not share this belief. Though he recognizes that an ideal size for a farm can be determined only by the nature of the land, he is convinced that immense operations are always inefficient and ruinous (LA 2: 84b, 89). They foster absenteeism, thus weakening the beneficial effects of private interest; and they divide the population into rich landlords and landless day laborers. The economic wastefulness of the consequent physical separation of the peasant from the land is criticized in Jovellanos' diary:
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Y he aquí la solución del problema: ¿por qué en nuestros pueblos hay muchos brazos sin tierra, y en nuestros campos, muchas tierras sin brazos? Acérquense unos a otros y todos estarán socorridos. |
| (D 2: 101; cf. O 4: 151) | ||
The objections to large-scale agriculture are not, however, only economic. Classical humanism had long ascribed a moral superiority to country life. Only in the country could man achieve that contented aurea mediocritas praised by writers from Horace to Cadalso; and while eighteenth-century poets everywhere sang the beauties of rural life, social reformers and philosophers also took up the theme. Adam Ferguson called crowded cities the breeding-place of corruption, profligacy, licentiousness, sedition, and a loss of «public affections» (Moral Phil., 244); and Ogilvie declared that «independent cultivators», reasonably recompensed, are the most virtuous, the most honest, and also the healthiest, strongest, and most handsome of men (17-22). Jovellanos likewise saw the ills of Spain's provinces arising from «la ausencia de los propietarios; la consecuencia del lujo; la esclavitud de la Corte», and the solution in encouraging families to settle on the land, permitting them to enclose their farms, and thus keeping them simple, laborious, united, and preserved from the corrupting luxuries of urban life (D 2: 412; LA 2: 90a).
His mentor Olavide, though rejecting as dangerous and confusing the sudden imposition of limits on the size of farms, had earlier expressed his preference for small holdings; and in the agrarian colonies of Andalusia equal-sized «family farms» were established with provisions to prevent their being either joined or subdivided (Olavide, 394-397; Costa, 118-119). These measures show an awareness of another danger besetting Spanish agriculture: the excessive fragmentation of holdings, producing economically marginal or submarginal farms. Jovellanos deals with this problem in his sixth letter to Ponz (O 2: 291b-293a). He declares that the subdivision of land in Asturias, which was originally beneficial and made land accessible to all families, has now been pushed too far by the continual growth of population and the lack of other employment. A law should therefore limit subdivision and establish for each farm a minimum size capable of supporting a family. But what of the «natural forces» of self interest?
Recognizing his departure from liberal orthodoxy, Jovellanos adds:
We have already seen that Jovellanos' faith in self-interest is not as firm as Adam Smith's. Is he here abandoning it? Jovellanos never asks that private interest be entirely free; on the contrary, he repeatedly suggests that limits must be imposed on it for the sake of justice and humanity, which he places above economic dogma. He does believe that a free and enlightened self-interest tends to the good of the individual and of society, but nowhere does he claim that this interest is in fact always free and enlightened. His quarrel with existing agrarian legislation is that it hinders the operation of private interest where such operation could be beneficial. But while the Informe de ley agraria deals with a general situation and proposes nationwide reforms, the letter to Ponz examines a specific case and tries to suggest minimum improvements within the framework of the existing order. The large rural population of Asturias, cut off by amortization from buying farms (see Herr, 94) and unable to expand into trade or manufacturing because of its isolation, pressed heavily -in Jovellanos' opinion, too heavily- on the available land. Jovellanos strives to promote the coal mines of the Principality in order to give it new employment and a salable product. He works to improve education in order to aid mining, manufacturing, and commerce. He labors incessantly for the construction of roads and seaports. He clamors against the laws which favor amortization and land monopoly. And in addition to these long-term measures, he calls for legal steps, if all else fails, to relieve the peasant. When legal restrictions keep the peasant from buying land and his own ignorance prevents him from engaging in pursuits other than agriculture, there can be no question of the free operation of his self-interest. Only under these conditions and in default of universal application of the principle of self-interest does Jovellanos call for a legal remedy. This demand confirms rather than denies his other opinions: it reasserts his desire to achieve the common good through the operation of private interest whenever possible and his willingness to limit or direct this interest if no other way is open.
It is therefore a mistake to assert, as does Costa, that «el fanatismo individualista de Jovellanos se quebranta» and that the letter to Ponz involves «una completa rectificación del criterio en que se había inspirado el Informe [de ley agraria]» (157). The Informe is later than the comments on Asturian agriculture108, and Jovellanos does anything but «rectify» it in the direction Costa suggests. The Memorial ajustado of 1784, which he consulted while preparing the Informe, proposed limiting the size of farms; yet in 1800 Jovellanos includes this idea among «pensamientos... que bastaría adoptarlos para arruinar la pobre agricultura» (O 4: 228). Thus he remains unwilling to accept as a general principle what he has once suggested as a short-term expedient; and he continues to believe that the free operation of enlightened self-interest, if only it can be assured, will produce the desired results. These results include for Jovellanos the establishment and strengthening of a class of independent small farmers living on their land and cultivating it intensely and exclusively -an ideal equally removed from the submarginal farms of Asturias and the vast absentee-controlled estates of Andalusia. The best means of reaching this ideal, Jovellanos consistently holds, is the abolition of those obstacles -legal, moral, and natural- which impede the free activity of the individual in «the pursuit of happiness».
Most of Jovellanos' contemporaries favored long leases, but they disagreed widely on how to get them and how to pay for them. Ogilvie calls for regulation of excessively high rents and excessively short leases, which he believes stifle the industry of the tenant (60). Cantillon considers a fixed money rent most conducive to the rapid adjustment of land uses to demand and price (80-81). Smith sees rents in kind as beggaring the tenant (783), while Condillac deems them the only equitable way of neutralizing market fluctuations (Commerce, 240-241). In Spain, Olavide had suggested laws limiting the eviction of tenants, prohibiting subleases (which encourage fragmentation of land and speculation in agriculture), and providing that rents should be paid in a legally fixed percentage of the produce (399-401). The economists Sisternes and Pereira, on the other hand, favored fixed rents in cash, which the latter believed better stimulated the activity of the tenant (Leonhard, 115-117; Carrera, 3: 644-650). Various proposals for regulating rents and leases are also found in the Memorial ajustado of 1784 (Costa, 163-165; Leonhard, 176-230).
Jovellanos, like Condillac and Olavide, prefers rents in kind, which reduce the pressure on the tenant to 'sells produce, even at a bad price; and he further believes that rents expressed in a proportion of the crop rather than in a fixed quantity create a desirable community of interest in landlord and tenant (O 2: 94b, 293a-294a). One of his objections to absenteeism is precisely that it makes money rents necessary (MSA 2). In spite of this he rejects all attempts to interfere with free contracts (O 4: 228b; cf. LA 2: 93b-95a). Such well-intentioned measures try to further the tenant's interest; but their rigidity may actually harm it, while they are certain to hurt the property-owner. Trusting the free interplay of economic forces to set the only possible just level of rents, Jovellanos rejects all efforts to achieve an abstract «justice» in the relationship between tenant and landlord. All such proposals are
| (LA 2: 94b-95a). | ||
This affirmation of faith in the efficacy of private interest and free contracts presupposes a complete agrarian reform which would allow self-interest to operate, while Jovellanos' comments on land tenure in Asturias assume the maintenance of existing legal restrictions.
Jovellanos also protests against all laws and regulations, existing or proposed, which hamper private initiative in the exploitation of land by limiting cultivation or restricting conversion from one use to another (O 2: 93a, 4: 228b; cf. Leonhard, 296-301). His principal complaint is directed against laws obstructing enclosure, which was not definitely legalized until 1813 (Camacho, 44-45). These laws hinder and discourage proper cultivation by exposing land to the depredations of man and beast; they discourage peasants from living on their land and violate property rights which are or should be full and exclusive.
The principal beneficiary from such laws was the Honrado Concejo de la Mesta, the organization of sheep-raisers. Originating in the sixteenth century, it had been granted almost governmental powers by the mercantilists in their desire to preserve Spain's monopoly on fine wool, to increase her exportable production, and to lower its cost. Thus laws were passed prohibiting the cultivation of pastures and fixing the price of fodder at artificially low levels, while free wool prices rose and produced great profits. The Mesta was furthermore given judicial authority in cases involving its members, so that it was in those instances both party and judge, superior to local authorities109. Opposition to these privileges grew in the eighteenth century as increasing demand for grain made the cultivation of pastures more desirable. The Mesta was excluded from the settlements in the Sierra Morena (Costa, 118-119); and after long disputes and investigations, its powers began to be curtailed. The expansion of its privileges was stopped in 1783, though no significant ones were lost. Its judicial powers, subjected to several limitations, were eventually abolished110.
Jovellanos is uncompromisingly hostile to the Mesta. After complaining of its privileges, which he considers harmful to agriculture and injurious to the property rights of land-owners, he calls for its complete abolition and the establishment of a free market in wools and pastures. All privileges except the right to maintain cattle paths are to be abolished (LA 2: 95a-98a). Farmers must be allowed to enclose their lands, a right which has been unjustly denied at the instigation of stock-raising groups. This permission will advance reforestation, produce smaller and more intensively cultivated holdings, and aid in the settlement on the land and consequent moral improvement of the agrarian population (LA 2: 86b-90b). These rather extreme proposals, which were not, however, immediately carried out, could safely be made in the name of the Economic Society, since they attacked some of the most offensive legal restraints on the free pursuit of private interest.
Private interest is, with a few minor deviations, the continual theme of Jovellanos' writings on agriculture. He is confident that if individuals are allowed to pursue this interest free from legal restrictions, legal direction, and legally sanctioned and imposed monopolies in the use or ownership of land, they will achieve not only their own well-being but also abundance and prosperity for the nation. This confidence is expressed more frankly in the diaries and letters than in official documents. It reflects Jovellanos' increasing adherence to the liberalism of Smith and his readings of such radicals as Ogilvie and Godwin.
Jovellanos' agricultural theories and proposals involve not only economic but also political and social considerations. The agrarian law he envisages would strengthen an agrarian middle class of small independent farmers, largely at the expense of three powerful groups: the stockmen, the nobles, and the church. In this way, Spanish society would become less feudal, less rigidly stratified, approaching both the classical ideal of comfortable sufficiency and what may be called an English ideal of an independent yeomanry. At the same time the state, while interfering less directly in the details of agriculture, would be strengthened in two ways. It would create for itself a large base of support in the agrarian middle class, and it would weaken two rivals for power, the church and the nobility. Though the nobility is for Jovellanos an essential part of the monarchic political system, he justifies it only as a part of that system, much as he sees the church as existing within and not independent of the state. Though these political aims are not directly expressed in his agrarian writings, they are in keeping with his political thought. They are increasingly evident in his private writings; and they were seen by powerful segments of the classes concerned, who sensed, even in so relatively moderate a document as the Informe de ley agraria, a threat to the economic basis of their power.
Jovellanos conceives of labor as the property of the working man and speaks of «la propiedad de la tierra» and «la propiedad del trabajo» (LA 2: 82a). Man must live by his work and therefore has an absolute right to work, that is, to dispose of his property (his labor) as best suits his interest. Limitations of this right constitute an encroachment on property and liberty, an unwarranted intrusion of a third party in private contracts (Libre ej. artes 2: 36a). Such limitations may be inspired by the most humanitarian motives, as are restrictions on the labor of women; but even when they are not directly harmful, they are at best useless. There is no sense in prohibiting women from engaging in work not suited to their strength, because nature has already established effective prohibitions; and the same may be said for efforts to determine the kinds of work contrary to the decency of the female sex. Such limits must therefore be abolished; and among «aquellos pueblos donde la naturaleza conserva sin menoscabo sus derechos», i. e., among primitive peoples, women do in fact engage in all sorts of labor from which the misguided zeal of civilization excludes them, to their detriment and that of society (O 2: 33b-34a).
These arguments, like Jovellanos' plan for the employment of nuns (O 2: 355-356), recall Campomanes' efforts to increase the labor force. Believing that wealth is the product of labor, Campomanes seeks the full utilization of Spain's human resources in manufacturing, particularly in the manufacture of cloth, which can employ women and children in cottage industries. The extent to which Campomanes would push employment is illustrated by one of the grand calculations he is so fond of making: in computing the potential labor force of Spain, he excludes only the old, the sick, and, girls under the age of seven. Servants, he declares, could be made to spin in the home in their idle hours; and in this fashion the prudent master could recoup part of their wages or make them serve for less111. Jovellanos does not go so far; he does not move from criticism of restrictions to a vision of regimentation but rather limits himself to the assertion of principle.
If limits on the labor of women are senseless and economically harmful, the same may be said of efforts to regulate the number of artisans active in each craft. Such efforts Jovellanos, like Smith, considers characteristic of guilds, which artificially fix the quantities of labor and capital employed in each craft in order to produce an optimum distribution -a goal which would be more effectively reached through the simple operation of self-interest (O 2: 40a; WN, 118-119). After rejecting restraints on the labor of women, Jovellanos therefore asks:
| (O 2: 34b-35a) | ||
The opposition to regulation of labor, particularly by means of guilds, is then based on considerations both of principle and of practice. In principle, such regulation violates the individual's right to his own labor and to the free disposition thereof and implies a lack of confidence in the efficacy of self-interest. This position, to which Jovellanos subscribes, is most clearly stated by Smith:
| (121-122) | ||
As is always the case when the free operation of private interest is improperly interfered with, the violation of principle also produces harmful effects in practice. Jovellanos' discussion of these effects is an attack on the guild system, following in general the criticisms expressed by Campomanes and Smith. By forcing manufactures to concentrate in large cities, where food and lodging (and consequently labor) are more expensive, guilds hamper the progress of industry in general and make impossible the development of domestic industries in rural areas. Wealth is thus doubly reduced; and since the increase of population can be supported by agriculture only up to certain limits, after which it depends on the progress of industry, guild restrictions effectively restrain population112. They also block the progress of manufactures by resisting the establishment of needed new crafts, the subdivision of old ones, and, in general, opposing the division of labor needed to take advantage of modern methods of production113.
Such criticisms of the guild system, while common both among liberal economists and among those who wished to remove all obstacles to complete state control, were not universally accepted. Antonio de Capmany, for one, saw guilds as useful ways of controlling crafts and at the same time giving artisans a sense of dignity and corporate identity within the state. He pointed also to the prosperity of precisely those provinces in which the gremios were strongest114. This argument does not, however, invalidate Jovellanos' contention that manufactures were concentrated in large cities at the expense of the country -a contention also put forth by Adam Smith (WN, 124-128). It only raises the question of whether industry flourished in such centers as Barcelona because guilds were strong there, or whether guilds were strong because industry was flourishing-statements which after all are perhaps not mutually exclusive.
A stronger argument can be made against the opponents of guilds, including Jovellanos, when they blame these organizations for increased prices and the consequent hampering of domestic as against foreign industry. Prices of food and lodging may well have been higher in large cities than in the country; but commodity prices on the whole increased almost 100 per cent in the second half of the eighteenth century, while wages rose by less than 20 per cent. It seems difficult, therefore, to blame the price rise on the workers, who were suffering a decline in real wages (Hamilton, War and Prices, 208, 214, 215, 220). The weakening of the guild system may have contributed to this decline; at the same time, however, this weakening, by breaking down the numerus clausus imposed by some guilds, may have increased economic opportunities for previously unemployed or underemployed workers. This was certainly the effect desired by Jovellanos and also by Campomanes, both of them Asturians and familiar with the problem of a population exceeding the resources of the land. Like Smith, they believed that guilds tend naturally toward monopoly115. In attacking guilds, therefore, Jovellanos attacks what he considers the unjust monopolistic prosperity of the few at the expense of the many; and for this reason he declares to the minister of marine that «el mejor camino de multiplicar los marineros es conceder la libertad absoluta de pescar y navegar, a todo el mundo», a step which implies the reform of the guild system in fisheries116.
Jovellanos' alternative to the guild system is not, however, complete liberty, in spite of occasional lip service to this ideal. Craft registers should be maintained with a municipally appointed syndic to «promote» and supervise each craft. Artisans should not assemble without special permission, and their cofradías or benevolent societies should be suppressed117. These proposals resemble others made earlier by Campomanes118; and in their tendency to substitute one sort of regulation for another, both Asturians differ from Smith. The latter, though he believes that assemblies of the same trade generally result in a conspiracy against the public, would neither forbid nor encourage them; hence also his opposition to craft registers, which will, in his opinion, only facilitate such reunions (WN, 128-129).
Smith also condemns the useless and pernicious apprenticeship regulations of the guilds, which discourage self-interest and private initiative (WN, 122-126). He is followed by Jovellanos, who calls for apprenticeship determined by free contract and thereby departs from Campomanes' ideal of state control of labor relations (Educación, 178, 183, 203-204).
Campomanes' idea of assigning a socio protector from the local economic society to each local craft is taken up by Jovellanos. Since the members of these societies would be more enlightened in their economic views than the old guild officials, liberty -within the limits set for it- would be promoted by this measure. In addition, Jovellanos proposes to aid the laborer by the establishment of schools for training artisans, by the collection and diffusion of information about the various crafts, and by the substitution of workhouses for asylums as relief measures.
Limitation of the power of the guilds was part of the mercantilists' design of a united economy under state control (Prados, 180), and in Spain it coincided with the general effort of the reformers under Charles III to establish the supremacy of the state over all facets of national life. Their position is clearly stated by Campomanes in paragraphs which may be taken as the foundation of his anti-guild campaign:
| (Educación, p. ii) | ||
The regalistas could not abide the existence of a state within a state, be it composed of guilds or of Jesuits.
Jovellanos' position lies between those of Smith and Campomanes. He shares their hostility to the guild system. He goes farther than Campomanes in suggesting its dissolution and thus coincides with Smith; but in replacing guild control with state control, he is closer to his compatriot than to the Scotsman. The registration of artisans, the supervision by syndics, and the added interference of socios protectores from the quasi-official economic societies are all measures establishing an authority over workmen, and not an authority of the workmen themselves. Jovellanos is also readier than Smith to prohibit certain practices outright instead of maintaining the «perfect liberty» envisaged in the Wealth of Nations.
What has become of the principle of private interest in the meantime? Guilds, as monopolistic organizations, operate to the detriment of others; they restrict them in the free pursuit of their interest. In order for the majority to be free, the monopolistic minority must be restrained; and its own members must, in Rousseauan terms, be «forced to be free». We have already seen other circumstances under which Jovellanos is willing to use the authority of government to enforce liberty as he sees it. The idea that the inequality between the individual worker and his employer (though perhaps not so great as today) might make freedom of contract a hollow phrase did not, apparently, occur to him.
Adam Smith includes merchants among the «productive labourers» whose work creates wealth (WN, 341-343), and he thus rescues them from the economic limbo in which they had been placed by the physiocrats' denial that commerce is economically productive. Smith is cognizant of popular prejudices and misconceptions which breed the desire to «eliminate the middleman», but he argues that such a step would also eliminate the benefits of division of labor and would force producers to immobilize a large part of their capital in inventories. Production would consequently decrease and prices would rise (WN, 490 ff). The merchant, far from being a parasite, is then the means of increasing and cheapening production and of making prosperity possible.
At about the same time that Smith was propounding these considerations in the Wealth of Nations, Campomanes in Spain also declared that commerce is necessary for the full utilization of natural resources. Though in his view merchants do not create wealth, they per form a useful function119; and this defense of commerce is noteworthy in a country where long-standing prejudices against it were more deep-seated than in the trading nations of the north.
These prejudices had not evaporated by the time Jovellanos wrote his Informe de ley agraria, since he there finds it necessary to protest against the condemnation of middlemen for buying cheap and selling dear. In terms reminiscent of Smith, Jovellanos argues that if merchants were eliminated, producers would have to sell their own produce, either charging the same prices that merchants now do or selling at a loss. In the latter case, they would soon cease to sell at all and even to produce. Commerce thus makes possible the division of labor among individuals and thereby contributes to increased production of wealth. The same holds true on a larger scale: restraints on internal trade, designed to promote local agriculture (and presumably manufactures), also prevent the efficient division of labor and succeed only in ruining the agriculture of the more fertile provinces by depriving it of markets (production being regulated by consumption) (LA 2: 108b-113b). At least with reference to the domestic economy, then, Jovellanos decries efforts to achieve autarchy. Against them he asserts two principles: that production is regulated by consumption, so that artificially restricted markets will prevent the full utilization of economic resources; and that the division of labor and consequent specialization make production more efficient and thereby increase the total creation of wealth. Free internal trade is the best way to implement these principles and therefore the best way to expand markets, stimulate consumption, promote production, and increase prosperity. The profits earned by merchants are a reasonable price for these benefits made possible by their activity.
Restraints on trade may also reflect a fear of monopoly; but Jovellanos, who condemns monopoly precisely because by destroying competition it removes the stimulus to improvement (O 2: 52b), denies that restraining commerce is the best way to avoid the dreaded evil. On the contrary, such measures only foster secret monopolies and strengthen the natural monopoly enjoyed by the owners of amortized lands, who then become the sole source of supply in their commercially isolated districts. Compared to these potential monopolists, merchants are far less dangerous and oppressive, since by the «spirit of their profession» they depend rather on many moderate profits than on one large one (LA 2: 110-113). The best preventive against monopoly, then, is not restraint but competition:
| (LA 2: 109a) | ||
Jovellanos' remedy is ideal classical competition with many small operators vying against one another. This may entail a sacrifice of efficiency in some undertakings where large enterprises would employ proportionally less labor, but Jovellanos is willing to make this sacrifice not only to prevent monopoly but in some cases precisely in order to increase employment. «Todo comercio», he writes, «toda industria, es tanto más útil a la causa común cuanto más se dividan sus ganancias, pues entonces mantiene mayor número de manos, sin fomentar el lujo ni permitir el monopolio». (O 5: 229b; cf. Campomanes, Apéndice 1: 104 n. 66).
Jovellanos' call for free competition and free trade applies to interior commerce. Contradicting the prejudices of mercantilism, Smith had pointed out the unique advantages of domestic trade, resulting from the re placement of domestic capitals and the exploitation of each nation's best market, itself (WN, 349, 352, 851). As early as 1781 Jovellanos likewise urges that preference be given to the promotion of interior trade, which, involving all the inhabitants of a given region, spreads its benefits more evenly and is more generally useful, besides being most easily promoted120.
Jovellanos' proposals for the stimulation of domestic commerce can be divided into negative and positive measures. The principal negative measure, also called for by Smith and by numerous Spaniards, is the removal of legal restraints of trade, such as those of the grain trade. Campomanes had urged nondiscriminatory and free domestic commerce while suggesting various forms of discrimination against foreign products; Sisternes wanted to free the internal grain trade; and Jovellanos' friend Cabarrús asked that all obstacles to interior commerce, including that with America, be removed121. Jovellanos also proposes the elimination of tolls and sales taxes. Tolls can be a legitimate way to finance needed improvements; otherwise they harm fully obstruct internal trade (O 2: 281b-282a; cf. WN, 685-686), as does the much-criticized alcabala or sales tax.
The principal positive measure is the improvement of transportation, a task which Jovellanos, like Smith (WN, 651), assigns to government when it exceeds the capacities of individuals. These public works should avoid the grandiose and concentrate on the practical and the immediately useful, laying a solid base of active local trade for larger scale national and international operations. «El comercio no se adelanta con grandes sino con muchos puertos» (D 1: 313). In addition, Jovellanos has recourse to bounties, which are anathema to Smith (WN, 472-476). Our author asks that the domestic coal trade be fomented by subsidizing shipments of Asturian coal to other parts of Spain (O 5: 229a). He deviates from his usual arguments in favor of private initiative, yet he is trying to support not a necessarily uneconomic trade but an «infant industry». The Asturian coal fields were still in the process of discovery and early development; if they could be given a sizable market, production methods would improve until they could compete successfully and freely with wood fuel and foreign coal.
In another departure from the principle of private interest Jovellanos calls for the encouragement of Spanish shipping by a system of preferences similar to the British Acts of Navigation (O 2: 25a-27b; cf. Cantillon, 319- 322). Such measures may obviously be uneconomic; yet a vigorous merchant marine and a large body of trained seamen had political and military importance for a colonial power like Spain. Such considerations override purely economic ones not only for Jovellanos but also for Adam Smith, who justifies discrimination against foreign shipping because the protected industry is vital to national defense (WN, 429 432).
By such measures Jovellanos proposes to increase domestic production, augment national wealth, and distribute it as widely as possible. He is governed by the same purposes when he turns his attention to foreign trade and comes to deal with three perennial questions: the balance of trade, the protection of domestic industries, and the provision of necessaries for the domestic market.
Jovellanos assumes that a chronically unfavorable balance of trade harms the national economy, though he also realizes that a continually favorable one, leading to a constant inflow of specie, would produce disruptive inflation. He is not very much interested in movements of gold and silver per se; interpreting them as a reflection of other economic conditions, he suggests that an outflow of treasure can be stopped by developing domestic industry (O 2: 140b). These considerations are a sign of modernity and sharply distinguish Jovellanos from Campomanes, to whom they are addressed. Campomanes realizes that money is only a substitute for exchange able goods and that a continually favorable balance of trade might cause inflation. In spite of this, he maintains the curious theory that «cuando las naciones comercian por trueques, no padecen agravio, ni menoscabo en su riqueza», while trade involving money is either «passive» (unfavorable balance of trade), weakening the nation, or «active» (favorable balance of trade), strengthening it. These notions lead him to believe that a state should aim always for a favorable balance of trade, which would increase the national wealth. Forgetting the distinction between money and goods, he applies to foreign trade his tenet that labor creates wealth:
|
Sabida la porcion de mercaderías, que vende un país al estrangero, y calculando las personas, que necesitan para maniobrarse; se conoce facilmente el número de habitantes, que mantiene á costa de los paises estrangeros, que las consumen... De este modo se entiende bien, como un país industrioso puede aumentar el pueblo, y mantenerle á costa de las naciones vecinas.122 |
Campomanes' extreme protectionism is in keeping with this attitude. He advocates prohibiting manufactured imports so that the price of the work involved would remain at home. At the same time, he would encourage imports of raw materials, relieving them from duties, and prohibit the export of any but surplus raw materials (Educación, 323, 327-328, 399; Ind. pop., 77 ff, 120). Thus he seeks to ensure for domestic industry cheap raw materials in the elaboration of which the domestic labor supply could be more fully utilized-one of his main objectives. A similar program for promoting domestic industry, based on similar presuppositions, had already been proposed earlier in the century by Uztáriz and defended by Bernardo Ward; abroad it counted Necker and Cantillon among its adherents, though the last-named is in many ways more penetrating and sophisticated123.
In the fourth book of the Wealth of Nations, Adam Smith demolishes the mercantile idols of protectionism and the favorable balance of trade. The latter concept is absurd; the former favors producers at the expense of consumers. Import restrictions may hasten the establishment of domestic «infant industries», but at the cost of a reduction of the total produce of a country and a consequent deceleration of capital accumulation. This would presumably be the effect of interference with the international division of labor which directs the economic efforts of each country into optimum channels and would involve what for Smith is an unwarranted and immoral interference with private activity and choice (see esp. ch. ii, iii, viii).
Jovellanos' position on these issues is on the whole more liberal than Campomanes', and therefore closer to Smith's. He does advocate protective tariffs, which of all protectionist devices least distort normal trade; and he condemns revenue tariffs as an unjustified tax on the domestic consumer (O 2: 43a, 72, 5: 225a). The outright prohibition of imports is, however, another matter. Like Campomanes, Jovellanos considers imports of Asiatic muslins ruinous to the domestic cloth manufactures and therefore admits that their exclusion might be desirable from one point of view; but he fears that the prohibition of such sought-after luxuries would be unenforceable and would actually harm the state by depriving it of customs revenues and encouraging smugglers. Imports, even though they damage domestic industry, must therefore be permitted at least until a national source of supply can be created in the Philippines. In the meantime, Jovellanos consoles himself with the mercantilist consideration that it is better to increase the wealth and power of distant Asiatic countries than of Spain's neighbors124.
Jovellanos is similarly pessimistic about the prohibition of raw material exports. Instead of forcing foreigners to pay high prices for Spanish raw materials, such tactics merely encourage them to develop alternate sources of supply; and at the same time, by depriving domestic producers of markets, they reduce production to the level of domestic demand. Thus they fail to create the abundance of cheap raw material for domestic industry which is one of their avowed goals. Restrictions of such exports-of wool, for instance-should therefore be abolished, though this does not preclude an export duty to favor domestic industry without discouraging foreigners (LA 2: 113b-114a; MSA 2). These positions contradict Campomanes' views.
In some instances, however, restraint of exports reflected a policy not of protection but of provision. To avoid scarcity of vital foodstuffs without forever depriving possible surplus products of a market, Spain had established a system of trade controls based on price. Imports were permitted if the price rose beyond a predetermined level, and similarly a floor was set beneath which exports were allowed. One commodity so regulated was olive oil, with regard to which Jovellanos reported from Seville in 1774. Even at this early date, his report criticizes the restrictive measures. The price floor is so low that in spite of the existence of a surplus no exports are allowed. Jovellanos as scribes this fact to the special importance attached to oil; but in an implied protest against the attempt to fix «just» prices by law, he calls for the abolition of restrictions:
Should the general good demand restrictions in violation of this principle (a hypothesis which Jovellanos advances but does not defend), care must be taken to fix the price limits in such a fashion that they permit the exportation of surplus oil. Otherwise production will adjust itself to consumption, i. e., will decrease to match its artificially restricted market125. Fifteen years later Jovellanos is willing to allow the free export of coal, a nonessential product, with no regard for fears of shortage (O 2: 466a).
The most important commodity with regard to which the fear of scarcity made itself felt, in Spain as else where, was grain. After more than a century during which foreign trade in grain was theoretically prohibited and in practice licensed, Spain in 1765 established the principle of price floors and ceilings to regulate this commerce. During the period of rising prices extending through the remainder of the century, this system operated to prevent grain exports; and the fear of scarcity led to continual restrictions on the grain trade126. This fear was strong enough to lead so liberal an economist as Cabarrús to declare that foreign trade, especially in agricultural products of great necessity, must be controlled by the state (Cartas, 130-131). It also influenced Jovellanos.
In the Informe de ley agraria, Jovellanos declares that since Spain has no surplus of grain, exports are neither necessary nor desirable; and therefore they should not as a rule be allowed even under the system of price limits. His doctrine that expansion of markets will increase production leads one to expect that free exports of grain would increase domestic production without depleting the domestic market, which would be the most advantageous one for the domestic producer. In his argument, however, Jovellanos gives great importance to the psychological factor in grain prices Leonhard's Angstkoeffizient. The possibility or actuality of exports awakens fear of scarcity, which, even more than real scarcity, will so raise the price of grain as to upset the entire price and wage structure. For a period of eight to ten years, therefore, grain imports should be allowed, as should exports of grains other than wheat, rye, and maize. In exceptionally productive years, even these should be exportable, while imports would be restricted. In the meantime, a thorough study should be made of the production and consumption of grains (LA 2: 114b-117a).
This position is inconsistent with Jovellanos' principles and even within itself. If we distinguish between the real supply and demand and the imagined supply and demand in the case of grains, can we not make the same distinction for any other product? Do not buyers and sellers always act on the basis of what they believe to be the true situation, without necessarily knowing what it is? The fact that grain is the most essential commodity may justify our treating it in a unique way, but not our inventing a theoretical basis for this treatment. In addition, if a study of production and consumption remains to be made, how can we now assert that there is no exportable surplus? As a matter of fact, Jovellanos abandons this position almost immediately, since he calls for grain exports in exceptional years. His program thus frustrates the aim of ensuring a cheap supply by cutting off exports and at the same time fails to establish any criteria for determining what years are exceptional.
Jovellanos is evidently compromising with public fears, hoping perhaps that at the end of ten years the public may be more enlightened. He is not, at any rate, fully expressing his views, as a passage in the diaries, already cited above, makes clear:
| (2: 149) | ||
In some Apuntes para una memoria económica, unfortunately undated, Jovellanos attacks precisely the arguments he advances in the Informe de ley agraria. The prohibition of foodstuff exports, he maintains, is designed to prevent scarcity; but its effects are very different. It reduces production to the level of domestic consumption; and, by limiting the market, it forces small producers to sell rapidly for fear of finding no buyers. Thus grain finds its way into the hands of rich speculators; and the prohibition ends by fostering monopoly, high prices, and the scarcity it is intended to prevent. If, however, consumption already exceeds production, prohibitions are pointless, since producers will naturally find their best market at home. The estimates of consumption and production which Jovellanos calls for in the Informe he here declares impossible, observing further that, if permission to export must await such calculations, it can never come in time to avoid monopoly. In short, exports cannot be regulated intelligently and therefore should not be regulated at all (O 2: 50-52).
This is the classical doctrine; and Jovellanos could find it enunciated in the Wealth of Nations, whose author, recognizing the special importance of psychological factors in connection with a commodity of prime necessity, blames them for the unreasonable systems designed to ensure an abundance of grain. Such schemes, Smith writes, compromise with popular prejudices but cannot alter the fact that if exports are forbidden production will shrink until even the domestic market is undersupplied (WN, 504-507). In addition, Jovellanos knew Condillac's defense of liberty as the best preventive of monopoly and scarcity, and Ward's praises of the free export policy of England127. In spite of this, his first intention when preparing the Informe de ley agraria was to leave the problem unresolved and undiscussed; and what he eventually published draws heavily on his reading of Necker's essay Sur la législation et le commerce des grains128. We can only assume that he is here himself compromising with popular prejudices, unwilling to shock the public or embarrass the Economic Society. The authority of the Apuntes and above all of the diary allows us to conclude that contrary to what he declares in the Informe, Jovellanos favored an unregulated international trade in grain, and if in grain, then presumably in other commodities of lesser importance as well.
«Minas de carbón y canales, son las dos llaves de todo», wrote the Marqués del Campo to Jovellanos in 1790 (Huici, 191). Jovellanos, though laying greater stress on education, shares this enthusiasm for material progress. In several informes he deals with the coal mines of Asturias and the road across the pass of Pajares to León, and in the Informe de ley agraria (2: 126 ff) he sketches a fuller program of public works river and canal projects to provide irrigation and cheap transport, improved port facilities to aid domestic and foreign trade, local and national roads to strengthen the cultural and especially the commercial ties of the country. Added to the already considerable regular expenses of the government, such a program would raise questions of public finance and tax policy. By today's standards Jovellanos was a fiscal conservative, believing that the means of the taxpayers, not the objects of expense, must determine the limits of the state's budget129; but this still leaves the question of how to obtain the necessary funds.
With a dual purpose in mind, Jovellanos suggests that the proceeds of the sale or lease of communally owned lands be applied to public works (LA 2: 133 134); and in addition, he asks that public funds be diverted from wasteful enterprises to necessary and useful ones. «Dediquemos a conquistar nuestras provincias lo que gastamos en invadir las ajenas», he writes to Ponz, envisioning a great system, of roads and canals restoring the prosperity of Castile (2: 276a). Elsewhere he suggests using troops to work on public projects (LA 2: 132b). Though an admirer and connoisseur of the fine arts, he prefers economically productive undertakings:
| (LA 2: 132b; cf. Cabarrús, Cartas, 139 ff) | ||
Since economies do not, however, eliminate the need for taxes, Jovellanos must deal with the tax system, which he would construct on two principles: that every one, without exception, should pay, and that all should pay in proportion to their ability (LA 2: 133a). Thus he protests against the privileged position enjoyed by several groups, particularly the clergy. It is true that the clergy paid special taxes levied only on them; but Jovellanos, who wants them to be taxed neither more nor less than any other social order, believes that this equality can best be achieved by levying the same taxes on all130. Uniformity should likewise be established among the provinces and kingdoms of Spain, which were governed by very different tax laws and whose contributions varied accordingly131.
The second principle, that all should pay taxes in proportion to their abilities, is one of the standards for proper taxation set up by Adam Smith (WN, 777 ff), and enshrined in Article XIII of the Declaration of the Rights of Man. Clear as it may seem, it does not tell us how ability to pay should be determined. Is wealth the best indicator, or is income; or does ability to pay increase more rapidly than either income or wealth? Smith evidently believes that it does when he declares it «not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion» (WN, 794). In other words, the decreasing marginal value of income makes a progressive income tax most closely proportional to the ability to pay. As we shall see presently, Jovellanos seems to recognize the justness of this principle but to ignore it in practice.
Adam Smith requires that a tax be collected easily and with a minimum of vexation by tax-gatherers; and in pursuit of the same aims, Jovellanos prefers local collection, each province compounding with Madrid for its fair share (O 2: 528).
Another of Smith's guidelines, that taxes should not discourage economic activity, is also applied by Jovellanos; and a portion of the Informe de ley agraria (2: 117-120a) specifically deals with fiscal impediments to commercial and agricultural prosperity. Most obnoxious is the sales tax or alcabala, with its surtax, the cientos (sales tax in excess of 10 per cent). The rate of this combined tax varied according to the product taxed, the political subdivision in which it was levied (another instance of inequality), and the time, since changes and reforms were not infrequent; but on the whole, it ranged from 2 per cent to a drastic 14 per cent with 4 or 5 per cent as an average. It was imposed on all sales at every stage of manufacture or trade, thus repeatedly taxing the same product; and it is therefore not surprising that almost every economist of consequence should loudly denounce it. In the eighteenth century, Uztáriz and Campomanes blamed it for price increases which, they believed, were inhibiting manufactures; and Adam Smith, basing himself on Uztáriz, held it responsible for the decline of Spanish manufactures and agriculture. Among figures less eminent but also important for us, Alexander Jardine singled it out for special attacks; and the author of the Cartas politico-económicas deemed it a barbaric remnant of feudalism132.
Jovellanos joins this angry chorus, calling the alcabala «siempre digna de su bárbaro origen». He finds it especially oppressive when levied on the sale of land, because it then becomes in effect a tax on investment, the subsequent product of which is also taxed. Since agricultural capital is discriminated against by the alcabala, investment in agriculture is discouraged. Jovellanos seems to assume that the buyer cannot shift the tax onto the seller; hence also his supposition that small properties especially must be made almost unsalable by the tax load. This assumption contradicts Smith's belief that since land is usually sold by necessity and bought by choice, taxes on its sale are borne by the seller (WN, 813); it is, however, in keeping with Jovellanos' picture of high prices and unsatisfied demand for agricultural land. If the alcabala discouraged investment in land, other factors more than compensated for it; but this does not mean that while some capital was attracted to agriculture by considerations of prestige and similar noneconomic factors, the most enterprising capital was not repulsed. Another of Jovellanos' objections is unquestionably valid. Since only sales of land were subject to the alcabala, all amortized and entailed lands were forever exempt; and thus the greatest and richest landowners paid nothing while smaller and more active ones bore the full burden of the tax (LA 2: 118b-119a).
All taxes, Jovellanos believes, should be levied on surplus income and not on what is necessary to support a family. He therefore finds that taxes on consumption are unjust, since they are proportionally heavier on the poor, who use a greater share of their income than the rich for the purchase of those necessaries which are most commonly taxed (LA 2: 117b-118a). This assumes that the buyer pays the tax; according to the Informe de ley agraria either buyer or seller may ultimately pay, depending on the condition of the market133. Later, however, Jovellanos declares that since the seller of cattle will, under any given market conditions, charge all he can get, the amount of a proposed tax must always be subtracted from his profit (D 2: 318). This argument may hold true for sales of cattle, but not for any commodity the demand for which is inelastic; and since this is liable to be the case of necessities, taxes on such consumption will fall on the buyer. For this reason Adam Smith considers taxes on the necessaries of life a cause of higher wages and consequently higher prices of manufactured goods, unless an elastic demand for labor allows employment to decrease (WN, 822 823; cf. Condillac, Commerce, II: viii). Cabarrús also points out the inequality involved in such taxes, since they consume a greater proportion of the income of the poor than of that of the rich. Evidently he also believes that the buyer pays these taxes134. Among the defenders of taxes on consumption, one of the bluntest is the author of the Cartas político-económicas, who, admitting that his views may appear a «political heresy», argues that such taxes are easily collected and equally distributed. Furthermore, they stimulate economic activity: taxation of necessaries (mantenimientos ordinarios) forces the taxpayer to work more, since he must eat!135
Jovellanos rejects such arguments; but although he condemns taxes on consumption in theory as disproportional and unjust, he accepts them in practice at least in some forms and under some circumstances. He is particularly fond of the salt tax, which he considers equitable because it is paid by everyone in proportion to his ability (LA 2: 133a). This statement immediately follows Jovellanos' declaration that taxes should be imposed on all «con proporción a sus facultades». A salt tax, however, is a near-perfect example of a tax on a necessity; and the nature of the demand for the commodity on which it is imposed precludes its being proportional. Either Jovellanos had only the vaguest notion of what is meant by a proportional tax, or he considered the salt tax a light enough burden to be accepted in spite of its being almost a model of a regressive tax. In the latter and more likely case one wonders why he should feel called upon to offer a theoretical justification. The salt tax, at any rate, remains a favorite with him; he repeatedly urges the application of its proceeds to various public works and far from calling for its abolition even suggests an additional levy on salt136. In addition, Jovellanos approves of taxes on alcoholic beverages. If these taxes are sufficiently low, they will not seriously burden the consumer; and they may, as Smith also claims, serve a moral purpose by discouraging drunkenness (O 2: 518b; cf. O 2: 399a, §11; WN, 823-824).
Jovellanos' principles of taxation -universal application, proportionality, taxation of surplus, minimum interference with trade- should have led him to propose a national survey of wealth, perhaps especially of its most conspicuous form, land, and the imposition by the provinces of a tax on wealth or income. His friend Cabarrús advocates a single tax on the value of real property (Cartas, 137 ff; Memoria), and the author of the Cartas político-económicas would finance most governmental expenditures with land and head taxes (232 ff). The physiocrats wished to tax only the income or produit net of landowners137. Jovellanos does not arrive at any of these positions. He might have favored a tax on wealth as a spur to economic activity and rejected an income tax as a deterrent; on the other hand, he might reject the former as a tax on capital and prefer the latter as falling more certainly on surplus in proportion to ability to pay. Like Adam Smith he is pragmatic; rather than draw up a scheme for total reform, he is willing to work within the existing system, improving it as much as possible. Thus he denounces those taxes which he considers most harmful to trade and economic activity, but he not only accepts but even tries to defend some taxes on consumption.
Jovellanos also envisages the use of public credit to obtain needed public works. The main advantage he finds in this practice is that it lets such projects be paid for by their future users. In addition, he shares Smith's view that the public debt can stimulate the expansion of trade: «Es un medio de circulación y reproducción, y un principio de movimiento y actividad, y un suplemento para toda especie de capitales y valores» (O 5: 412; cf. WN, 276 ff, 863). Jovellanos is here speaking of the vales reales, interest-bearing government bonds circulated as paper money; though on another occasion he warns against their inflationary potential, he now seems to assume that public works would generate sufficient economic activity to absorb the new money without inflation.
On the whole, Jovellanos is more intent on combating practices which he considers inimical to economic development than on inventing a new and better system of public finance. He shares Adam Smith's standards of ideal taxation and agrees with him on the uses of public credit. Neither man is doctrinaire; in Jovellanos' case it is not hard to find contradictions between practical proposals and theoretical positions. He does not write a treatise, but a series of relatively short tracts, most of them reports dealing with specific practical problems. In attempting to solve these problems, Jovellanos tries to achieve a working balance among at least three considerations: the demands of equity which underlie his principles, the need to stimulate or at least to interfere as little as possible with private economic activity, and the need for revenue.