Opinion Sur
The impact of the judiciary on the economy. The economy as a whole needs regulatory elasticity to adapt to external and internal changes.
The ruling classes have created a legal framework, a sort of normative corset, which allows them to condition the functioning of the economic system. It is based on orthodox economic theory, which tends to restrict the action of governments and impose an orientation favorable to the interests of the dominant sectors.
This situation leads to recurrent crises because, as Keynes noted at the end of the third chapter of the General Theory, “it is possible that orthodox theory describes the way we would like our economy to behave. But to suppose that it behaves in this way is to suppose that all difficulties are solved.” Orthodox economic theory is based on an erroneous description of the workings of the economy, which makes its proposals incongruent with reality, and its increasingly evident rejection expresses this insufficiency.
The pretension of judges to intervene in the economic prerogatives and social policies of the Executive Branch and in the laws issued by the legislative branch to favor the interests of the upper classes, of which judges are very often a part, shows that they attribute to themselves a power incongruous with the division of powers in order to unjustly favor a social fraction.
Normative elasticity
The word democracy must be used in the sense of its etymological, historical, and semantic content. That is to say, in an unequivocal way and not in a fragmentary and superficial way as some judges claim. To affirm that the functioning of the economy is as described by orthodox theory and to rule that it should function according to legal norms is to move from a democratic system to a government of judges.
The body of law is petrified and is, in the end, inconsistent with the evolution of the economy and society in which inevitable changes in labor and financial relations take place. The economy as a whole needs regulatory elasticity to adapt to external and internal changes and impacts. The literal interpretation of the law prevents such elasticity and is partly responsible for the economic difficulties and problems that aggravate crises.
The recent statement by the president of the Supreme Court of Justice, Horacio Rosatti, who considered Argentina to be a capitalist country making an unhappy relationship between the existence of private property and the money supply in circulation, is an illustration of this behavior.
To consider with legal arguments from ancient times that the internet connection is not a public service is absurd and at odds with modernity that shows, if necessary, that it is a question of defending the interests of network access providers to the detriment of citizens.
Judges seek to substitute themselves for citizens’ representatives in drawing up or interpreting the content of economic rules in order to favor one type of economic behavior. This situation began to be analyzed by the French jurist Edouard Lambert more than a century ago in the book “The Government of Judges and the Struggle Against Social Legislation in the United States”, where he pointed out the backwardness of social legislation and the prohibition of unions in some states.
Irving Fisher, the father of the formula of contemporary monetarist theory and a recognized orthodox economist, claimed that the concentration of wealth limited the effectiveness of the system. He argued that democracy was in danger because the absence of a tax system that limited the concentration of wealth and the political power it conferred was aimed at the loss of democratic principles.
A global phenomenon
Former Economy Minister Domingo Cavallo established by law (23928) the exchange rate parity of the peso, which can only be understood as a sign of profound ignorance of history and economics, since nothing is fixed in this. In the midst of one of the worst social and political crises that the country has experienced caused by convertibility, in 2001 and 2002, Administrative Judge Martín Garreton granted injunctions in favor of depositors against the “corralito” announced by Cavallo himself, then a minister in the Alliance government.
In 2014, the Supreme Court endorsed and set as a criterion for lower courts, the conversion to peso of deposits of more than $70,000. However, Judge Garreton declared the Court’s passing rules unconstitutional. As can be seen in this juridical vaudeville, the laws were used in an equivocal and fraudulent manner by those who were the guarantors of their fair application.
But this is not an Argentinian originality. In 1936, Franklin D. Roosevelt had to fight to enforce into law the federal minimum wage that had been declared unconstitutional by the Supreme Court and, later, had to prevail again on the Court that opposed the increase in the tax rate on the wealthiest. In this case, the Court held that it was confiscatory and then reversed.
On December 6, 1997, President Bill Clinton vetoed the budget and the law passed by the Republican Party that required budgets to be presented in fiscal balance. The law froze the action of the Executive Branch, which was a clear interference by the legislative branch in its powers. The veto was a wise move, since just 10 years later, the massive crisis in 2008 would have required many laws to repeal the limitation and probably prevented swift action. The catastrophe that could have befallen the world economy is unpredictable.
The judges’ claim to substitute for the legislative and executive branches or both at the same time, and to accompany right-wing parties in imposing laws that seek to block the economic situation, is part of the confusion between the role of law and the social and political dynamics of the economy. They attribute to themselves the power to hinder economic action through legislation.
Posted in Cash October 29, 2023
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