Thus, of key importance: A person with few means can take less advantage of his liberties than a person with more means. A person with insufficient means might be regarded as not free at all. This brings us to the economic amendment to Montesquieu’s heritage.
There appears to be a clear link between Montesquieu and Adam Smith. In his preface to his edition of Smith (1776; 1974), Skinner explains that Smith used the historic method to provide him with empirical input (rather than econometrics). Quite fittingly, Skinner writes:
“(…) it was Montesquieu rather than Voltaire who provided the most important impetus to their studies. Montesquieu was widely regarded as the ‘greatest genius of the present age’ and his Esprit des Lois came to be enjoy a considerable vogue in the circle of Smith’s friends. But while Montesquieu’s work provided an important stimulus, the Historians in general, and Smith in particular, went well beyond the teaching of the master. In the words of one of their number: ‘The great Montesquieu pointed out the road. He was the Lord Bacon of this brand of philosophy. Dr Smith is the Newton.’” (p30)
The limitations of the Trias Politica with regards to economics are a well-known theme. Marshall’s “Principles of economics” opens with the painful story of poverty - as Mankiw unfortunately waits till p421.
David M. Kennedy (1999:245), “Freedom from Fear; The American people in Depression and War”, quotes Roosevelt in a special message to the US Congress on June 8 1934:
“(…) ‘the interdependence of members of families upon each other and of the families within a small community upon each other’ provided fullfillment and security. But those simple frontier conditions now had disappeared. ‘The complexities of great communities and of organized industry makes less real these simple means of security. Therefor, we are compelled to employ the active interest of the Nation as a whole through government in order to encourage a greater security for each individual who composes it.’ The federal government was established under the Constitution, he recollected, ‘to promote the general welfare,’ and it was now government’s ‘plain duty to provide for that security upon which welfare depends’. (…)”
5. The economic record of the 20th century
Unemployment and poverty can be seen as indicators for the quality of the management of the state. They are social phenomena, and thus depend upon the rules that society defines. When they exist, then apparently something is wrong with the management.