Monday, September 24, 2012

Plato on the Fiscal Limits of Government Penalties and Fines c. 360BC

Excerpt from Plato's "Laws" below where he is writing in dialog format about the point at which economic policy should trump jurisprudence in the levying of "penalties" or what we may call "fines" or "fees" or even "taxes" today:
Touching the exaction of penalties, when a man appears to have done anything which deserves a fine, he shall pay the fine, if he have anything in excess of the lot which is assigned to him; but more than that he shall not pay.  And to secure exactness, let the guardians of the law refer to the registers, and inform the judges of the precise truth, in order that none of the lots may go uncultivated for want of money. But if any one seems to deserve a greater penalty, let him undergo a long and public imprisonment and be dishonoured, unless some of his friends are willing to be surety for him, and liberate him by assisting him to pay the fine.
So we can see here, documentary evidence that the ancient Greeks were fully aware of how their fiscal policy of their 'nomisma' system, or what we call today a system of state currency, could effect economic output.

In this paragraph, Plato is warning that if penalties or fines were called for due to some sort of transgression by an individual, the amount should be limited to only amounts that the transgressor possessed beyond "the lot assigned to him" but no more than that; and futher, the various government officials should take extreme care to make sure that adequate balances should remain in the non-government sector so as to not negatively effect output.

Plato's concern with a fine that would exceed this amount is due to his concern about a corresponding fall in local output "for a want of money" or in half Greek, I would assume "for a want of nomisma".

Fining the transgressor a punitive amount that would render deficient the amount of state currency or "nomisma" in the non-govenment sector required to maintain previous achieved levels of economic output was to be strictly avoided.

Too bad our disgraced morons running fiscal policy today in the west don't know what our Greek ancestors already knew well over 2,000 years ago.


Ralph Musgrave said...

I’m pretty sure Plato also said that democracy wouldn’t work because the people would vote themselves goodies that the country couldn’t afford. Looks like his descendants, present day Greeks, have been doing just that.

Matt Franko said...

I dont know Ralph, it looks to me like present day Greek leadership didnt heed Plato's advice to be extremely careful about maintaining adequate balances of state currency in the non-govt sector to maintain output.

They got into this Euro scheme and now they are suffering from leakages that they seem to not even know what the hell is going on with (morons) ...

They are left with insufficient balances of the new state currency to maintain adequate levels of output and employment.

Plato is probably rolling over in his grave thinking what good was it for me to write all of this up back then if no one ever reads it...


y said...

Ralph, that's not really the reason now is it.