Sunday, February 22, 2015

Economic Law and Order

The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread. -- Anatole France
Economists forget, at their peril and ours, that "economic laws" are contingent on "The Law," in Anatole France's sense. When the rich find it convenient to house their servants under bridges, the majestic law that forbids both rich and poor to sleep there will go unenforced or be repealed.

The "law of supply and demand" is no exception. Nor is "Say's" law of markets (which I would prefer to call the law that a cheap market will always be full of customers).

The repeal in 1814 of the apprenticeship clauses of the Elizabethan Statute of Apprentices may appear to be of no more than antiquarian interest. From today's perspective, the ancient requirement of seven years servitude to qualify for particular trades would be indefensible. In this case, at least, laissez faire does indeed seem more reasonable than the letter of the old law. But there was a darker subtext to the agitation for repeal. Combinations of workers were illegal; petitioning for enforcement of the law gave tradesmen a legal loophole under which they could conduct a semblance of collective bargaining.

The decisive argument in favor of repeal -- which according to T.K. Derry, "echoed through the debates" -- was the one Serjeant Arthur Onslow, M.P. outlined in a speech of April 27, 1814: ",,,the continuance of this law is highly prejudicial, and affording a color for the most dangerous combinations: nothing would so much tend to unnerve them, as repealing these restrictions."

Viewed in isolation from its historical context and the complex of other legal restrictions, repeal of the apprenticeship clause seems to make "economic" sense. In context, though, it appears as a strategic manoeuvre to suppress a residual avenue for redress available to a politically disenfranchised group. There are no "economic laws" in isolation from their historical and legal contexts.

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