Distributive Justice: The Right and Wrong of Our Present Distribution of WealthRyan, John A. (John Augustine)
PhilosophyChristian
Distributive Justice: The Right and Wrong of Our Present Distribution of Wealth
Ryan, John A. (John Augustine)
Economic history; Income distribution -- Moral and ethical aspects; Wealth -- Religious aspects
If, however, we assume that no considerable amount of evil would
follow, or that the balance of results would be favourable, the
question of the proper action of the State becomes somewhat complex.
In the first place, interest could not rightfully be suppressed while
the private taking of rent remained. To adopt such a course would be
to treat the receivers of property incomes inequitably. Landowners
would continue to receive an income from their property, while capital
owners would not; yet the moral claims of the former to income are no
better than those of the latter. In the second place, the State would
be obliged to compensate the owners of existing capital instruments
for the decline in value which, as we have already seen, would occur
when the item of interest was eliminated from the cost of reproducing
such capital instruments. It would likewise be under moral obligation
to compensate landowners for whatever decrease in value befell their
property as a result of the abolition of rent.
Nevertheless, the practical difficulties confronting the legal
abolition of interest are apparently so great as to render the attempt
socially unwise and futile. In order to be effective the prohibition
would have to be international. Were it enforced in only one or in a
few countries, these would suffer far more through the flight of
capital than they would gain through the abolition of interest. The
technical obstacles in any case would be well nigh insuperable. If the
attempt were made to suppress interest on producing capital, as well
as on loans, the civil authorities would be unable to determine with
any degree of precision what part of the gross returns of a business
was pure interest, and what part was a necessary compensation for risk
and the labour of management. Should the State try to solve this
problem by allowing the directors of industry varying salaries to
correspond with their comparative degrees of efficiency, and different
rates of insurance-payments to represent the different risks, it would
inevitably make some allowances so low as to discourage labour and
enterprise, and others so high as to give the recipients a
considerable amount of pure interest in the guise of profits and
salaries. Should it fix a flat rate of salaries and profits, the more
efficient undertakers would refuse to put forth their best efforts,
and the more perilous enterprises would not be undertaken. The
supervision of expenses, receipts, and other details of business that
would be required to prevent evasion of the law, would not improbably
cost more than the total amount now paid in the form of interest. On
the other hand, if the method of suppression were confined to loans it
would probably prove only a little less futile than the effort to
abolish interest on productive capital. The great majority of those
who were prevented from lending at interest would invest their money
in stocks, land, buildings, and other forms of productive property.
Public-domain text, read in full here on John Shaqi.
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