Tocqueville on the 47 Percent

Romney’s “inelegant” comments about the 47 percent who don’t pay taxes is regarded by the mainstream media as the equivalent of “You didn’t build that,” but one wonders how the argument might come across if it were put more elegantly.  Well, we can turn to the always elegant Alexis de Tocqueville—I was reading him again over the weekend preparing for my Monday evening seminar on American Political Economy at Ashland University this fall—who has this to say in his chapter in Book 1 entitled CHARGES LEVIED BY THE STATE UNDER THE RULE OF THE AMERICAN DEMOCRACY:

It is certain that despotism ruins individuals by preventing them from producing wealth much more than by depriving them of what they have already produced; it dries up the source of riches, while it usually respects acquired property. Freedom, on the contrary, produces far more goods than it destroys; and the nations which are favored by free institutions invariably find that their resources increase even more rapidly than their taxes.

My present object is to compare free nations with one another and to point out the influence of democracy upon the finances of a state. . .

Let us now suppose that the legislative authority is vested in the lowest order: there are two striking reasons which show that the tendency of the expenditures will be to increase, not to diminish.

As the great majority of those who create the laws have no taxable property, all the money that is spent for the community appears to be spent to their advantage, at no cost of their own, and those who have some little property readily find means of so regulating the taxes that they weigh upon the wealthy and profit the poor, although the rich cannot take the same advantage when they are in possession of the government.

In countries in which the poor have the exclusive power of making the laws, no great economy of public expenditure ought to be expected; that expenditure will always be considerable either because the taxes cannot weigh upon those who levy them or because they are levied in such a manner as not to reach these poorer classes. In other words, the government of the democracy is the only one under which the power that votes the taxes escapes the payment of them.

In vain will it be objected that the true interest of the people is to spare the fortunes of the rich, since they must suffer in the long run from the general impoverishment which will ensue. . .

Here we should observe that Tocqueville inclines toward supply-side economics.  To continue:

Again, it may be objected that the poor never have the sole power of making the laws; but I reply that wherever universal suffrage has been established, the majority unquestionably exercises the legislative authority; and if it be proved that the poor always constitute the majority, may it not be added with perfect truth that in the countries in which they possess the elective franchise they possess the sole power of making the laws? It is certain that in all the nations of the world the greater number has always consisted of those persons who hold no property, or of those whose property is insufficient to exempt them from the necessity of working in order to procure a comfortable subsistence. Universal suffrage, therefore, in point of fact does invest the poor with the government of society.

The disastrous influence that popular authority may sometimes exercise upon the finances of a state was clearly seen in some of the democratic republics of antiquity, in which the public treasure was exhausted in order to relieve indigent citizens or to supply games and theatrical amusements for the populace. It is true that the representative system was then almost unknown, and that at the present time the influence of popular passions is less felt in the conduct of public affairs; but it may well be believed that in the end the delegate will conform to the principles of his constituents and favor their propensities as much as their interests.

But then Tocqueville provides the remedy that is missing from Romney’s rhetoric—how opportunity and social mobility, rather than redistribution, is the better road to advancement:

The extravagance of democracy is less to be dreaded, however, in proportion as the people acquire a share of property, because, on the one hand, the contributions of the rich are then less needed, and, on the other, it is more difficult to impose taxes that will not reach the imposers.

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