[X-Post: Thermidor] Balzac on the tax-gatherer mentality

[Second piece on Thermidor, available here. My shortest so far, but also more succinct and to the point. Covers some of the subjects that I’ll be elaborating on further throughout this blog.]

Honore de Balzac writes:

When it beheaded Louis XVI, the Revolution beheaded in his person all fathers of families. The family no longer exists today; there are only individuals. When they wanted to become a nation, Frenchmen gave up the idea of being an empire. By proclaiming the equal division of the father’s property, they killed the family spirit and created the tax-gatherer mentality! On the other hand, they paved the way for the weakening of the better elements, and the blind impulses of the masses, the extinction of the arts, the reign of self-interest, and opened up the path to conquest.

The family! I repudiate the family in a society which, on the death of the father or mother, divides up the property and tells each member to go his own way. The family is a temporary and fortuitous association, which is dissolved immediately by death. Our laws have broken up our homes, our inheritance,  and the perennial value of example and tradition. I see only ruins around us.

There was once a wretched taxman, Giuseppe Prina, a man of liberal principles who worked as a servant to Napoleon Bonaparte, the self-styled Napoleon I, King of Italy. Lombardy had fallen, and in 1797 a constitution was proclaimed for the newly declared Cisalpine Republic. Napoleon said of it:

Many years have passed away since the existence of a republic in Italy. The sacred fire of liberty was extinguished, and the finest part of Europe was subject to a foreign yoke. It belongs to the Cisalpine Republic to show to the world, by its wisdom, its energy, and the good organization of its armies, that modern Italy is not degenerated, that it is still worthy of liberty.

Eight years later, it was to become the “Kingdom of Italy,” and liberty did indeed follow.

War must pay for war. Accordingly, half of the state budget was devoted to maintaining Napoleon’s Crusaders on Italian soil. In the name of “just equality among taxpayers,” Prina had uniform land assessments imposed for the levying of a property tax, which he placed under direct ministerial control. Church estates were expropriated, and clergy were forcefully turned into mouthpieces for conscription. The Napoleonic Code was imposed, along with an administrative system based on departements, wiping out customary law. Civil marriage was introduced and ecclesiastical marriage made legally void. Tax collection authority was removed from local communes and given to the Finance Ministry. Repressive personal income taxation (originally imposed in much lighter form during Austrian rule of Lombardy) was forced on the rural population. A wide variety of duties were imposed on consumer goods (most notably salt), leading to price hikes on staple foods that burdened the peasantry further. License fees imposed on millers sparked an insurrection in July 1809 that left approx. 2000 dead.

The madness ended on April 20, 1814, shortly before the dissolution of the Napoleonic client state. Prina was hounded by a mob who dragged, beat, mutilated and ultimately killed him as he was subjected to a protracted lynching. The afrancesado had met a similar fate to those that Jacobinism had slaughtered before and that made his career possible in the first place.

If only Prina had known Proverbs 30:33: “Surely the churning of milk bringeth forth butter, and the wringing of the nose bringeth forth blood: so the forcing of wrath bringeth forth strife.”

For as Bossuet noted in Politics Drawn from the Very Words of Holy Scripture, Book X, Article I, the first two sources of riches in a kingdom are to be found in:

A) commerce and navigation (1 Kings 10:26-28: “Solomon accumulated chariots and horses; he had fourteen hundred chariots and twelve thousand horses, which he kept in the chariot cities and also with him in Jerusalem. The king made silver as common in Jerusalem as stones, and cedar as plentiful as sycamore-fig trees in the foothills. Solomon’s horses were imported from Egypt and from Kue—the royal merchants purchased them from Kue at the current price.”);

B) from the princely domains (1 Chronicles 27:29-31: “And over the herds that fed in Sharon was Shitrai the Sharonite: and over the herds that were in the valleys was Shaphat the son of Adlai: Over the camels also was Obil the Ishmaelite: and over the asses was Jehdeiah the Meronothite: And over the flocks was Jaziz the Hagerite. All these were the rulers of the substance which was king David’s.”)

Today, the common wisdom has been inverted. Indecipherable and labyrinthian tax codes are considered the fair and just way of financing a realm – err, a nation, since, as Balzac continues:

Authority can only come from above or from below. To attempt to find it half-way is to want to make nations walk on their belly, to lead them by the lowest interest of all, individualism.

There are no more than fifty or sixty dangerous men in a nation, whose minds are on a level with their ambition. The secret of government is to know who these men are, so that they can either be executed or bought.

A feudal aristocracy can be subdued by cutting off a few heads, but a hydra with a thousand heads cannot be subdued. No, unimportant people are not crushed; they are too flat under the feet!

The thousand-headred hydra is now a multimillion-headed hydra owing to universal suffrage. And the hydra screeches: “The rich are not paying their fair share!”

To whom, however? Is there a prince that one can pay his “fair share” to? Who are the rulers of that which is ultimately vested in the dominion of an allod-holding person? We do know that there are many floating individuals, each with their own consumption functions and their utility-maximizing welfare that is aggregated into a social welfare function. By tweaking the knobs of fiscal policy, we can fit the curve of this social welfare function into its optimal peak! A tax credit here, an interest rate hike there… hell, why even pay our “fair share” at all? We owe it all to ourselves, anyway. Here’s an idea: consolidate the Central Bank and the Treasury into a National Bank that can now just send bytes over a wire and print some greenbacks for paying the wage bill so as to completely autonomously finance government expenditures. We’re not far from that, so why not take the next step? Nazis like Gottfried Feder wanted to do this, and liberal progressives like L. Randall Wray and Prof. Bill Mitchell want the same now.

Peasants once revolted against intrusive tax farmers, who had to deal with them personally. Now, the peasants file their tax returns and have their payrolls automatically deducted.

In 1290, Edward I of England passed the Quia Emptores:

Forasmuch as purchasers of lands and tenements of the fees of magnates and others, have many times previously entered into their fees to the prejudice of the same (lords) since to them (the purchasers) the free tenants of these same magnates and others have sold their lands and tenements to be held in fee for themselves and their heirs from the subinfeudators and not from the lords in chief of the fees, whereby the same lords in chief have often lost the escheats, marriages and wardships of lands and tenements belonging to their fees, which thing indeed seemed very hard and extreme to the magnates and other lords, and moreover, in this case, manifest disinheritance; the lord king in his parliament at Westminster after Easter in the 18th year of his reign, viz., in the Quinzime of St. John the Baptist, at the instance of his magnates, did grant, provide and decree that henceforth it shall be lawful for any free man to sell at will his lands or tenements or a part of them; in such manner, however, that the infeudated person shall hold that land or tenement from the same lord in chief and by the same services and customs by which his infeudator previously held them.

No more subinfeudation, no more petty mesne lords! The hierarchy of obligations flattened. Every tenant a freeholder paying cash rents, and every landowner an absolute allod-holder, alienating at his pleasure with no intermediaries. Social economy becomes less familial and more farcical.

Buy cheap, sell dear. This is what liberty means under a regime of contract. To be free is to be prohibited by law from choosing dependence and patronage, unless it’s in prison. All are confined to being either sole proprietors, wage-laboring freehold or leasehold tenants, or as actors in a predefined and regulated joint-stock company. A society founded purely on contractual rights quite naturally doesn’t require a whole lot of labor to sustain itself when it needs just enough to sustain production on the margin, and unemployment is the outcome for the submarginal population. Economic sophists then come up with explanations like “aggregate demand deficiency” and “supply constraints” to pitch their preferred policies, serving only to obscure the observation that “full employment” is intrinsically wasteful. Yet we are too cowardly to actually open up the workhouses and the slave markets again, as illiberal as they are. Your choices are not between liberty and slavery, but between serfdom to a lord or serfdom to a Napoleonic state, and I’ll take His Lordship.

One of the men instrumental in building the modern state that obsessively pursues criteria of social welfare to manipulate, was Johann Heinrich Gottlob von Justi (1717-1771), who transformed cameralism from a set of methods for princely estate management into a universal science for supposedly bringing happiness to subjects of a prince. Quoting from Albion W. Small’s The Cameralists [1909]), on the universities:

It will be enough if we attend to their [the universities] ultimate purpose. This, in so far as they are public foundations of the state, can be no other than that of affording to youth properly prepared in the lower schools adequate instruction in all intelligence and science which will be needful for them, in order that they may some time, as servants of the state and upright citizens, render useful services to the commonwealth, and be in a position fully to discharge their duties. It follows from the foregoing reference to the ultimate purpose of the universities that it should be one of their principal efforts to teach the economic and cameral sciences.

And moreover that: “There are very few positions of responsibility in the state in which expertness in the economic and the cameral sciences would not be the chief matter, if the  duties of the position were fulfilled and good service to the state performed.”

Justi goes further in describing the penetration that Cameralwissenschaft ought to have: “If these sciences are to be taught completely, fundamentally and to real purpose, each of these professors must have time to treat of this or that portion of his sciences in detail in separate courses of lectures, in order that each may have opportunity to make himself proficient in that branch to which he proposes to devote himself. Some will want to make a career in the manufacturing system, some in the bureaus of taxation and revenue, some in forestry, or the forestry bureau, and all must have opportunity to get detailed instruction in the selected specialty. The traditional professorship of politics in the universities should be so filled that future ambassadors and ministers could profitably hear the occupant discuss statesmanship, and so that the doctrines taught would not seem ridiculous to actual ministers and statesmen.”

Justi drove a wedge into the conception of subjects prospering under the rule of a wise stewardly prince and replaced it with that of an activist prince with an army of university professors and civil servants drafting programs and setting targets for social transformation, thus making him a precursor to Wisconsin progressivism. The tax-gatherer mentality had triumphed. The “common good” as an idea went from finding purpose in an ordained hierarchy that built up to a harmonious community of interests, into that of a statistical aggregate to be tweaked by the application of “scientific” public policy.

Perhaps all of this is simply a just and well-deserved punishment for committing patricide.

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11 thoughts on “[X-Post: Thermidor] Balzac on the tax-gatherer mentality

  1. “Buy cheap, sell dear. This is what liberty means under a regime of contract. To be free is to be prohibited by law from choosing dependence and patronage, unless it’s in prison. All are confined to being either sole proprietors, wage-laboring freehold or leasehold tenants, or as actors in a predefined and regulated joint-stock company. A society founded purely on contractual rights quite naturally doesn’t require a whole lot of labor to sustain itself when it needs just enough to sustain production on the margin, and unemployment is the outcome for the submarginal population. Economic sophists then come up with explanations like “aggregate demand deficiency” and “supply constraints” to pitch their preferred policies, serving only to obscure the observation that “full employment” is intrinsically wasteful. Yet we are too cowardly to actually open up the workhouses and the slave markets again, as illiberal as they are. Your choices are not between liberty and slavery, but between serfdom to a lord or serfdom to a Napoleonic state, and I’ll take His Lordship.”

    False dichotomy.

    Freedom of contract would allow for a multitude of different types of human relationships.

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    • I’m aware, yet very few radical classical liberals seem to recognize that full freedom of contract must also permit slavery. Only Robert Nozick and Walter Block seem to have vocally supported this conclusion.

      But this is how *actually existing* contractual liberal societies are, anyway. Most people are going to be wage laborers or tenants of some sort, so hence there is always some dependence, and I affirm that dependence on petty public administrators is the coldest of all.

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      • >I’m aware, yet very few radical classical liberals seem to recognize that full freedom of contract must also permit slavery.

        They’re whether they realize it, or not, social darwinists. Murray Rothbard realized it:

        “My esteemed libertarian colleague, Professor Leonard Liggio, who has always been out on the frontier of libertarian thought and practice, has of late been ruminating on Social Darwinism. There is no creed over the past century, in fact, with the possible exception of the Nazi movement, that has received as bad an intellectual “press” as Social Darwinism. It is high time that we subject this much reviled Social Darwinism to a re-evaluation. The Liberal stereotype of the Social Darwinist is of a sadistic monster, calling for the “extermination of the unfit.” But in reality the true Social Darwinist is a benign and cheerful optimist, and he arrives at his optimism from a scientific inquiry into the processes of natural law and of cause and effect. For the Social Darwinist is above all a scientist, and as a scientist he sees that the natural law of what is best for man may be violated but never avoided.
        This means, that over the long run, the dysfunctional must come to a bad end, must cleanse itself and wipe itself out, while only the truly function and proper can remain and prosper. Any artificial interference in these beneficent natural processes can only delay and distort the results; hence, we have a powerful argument for non-interference in these natural workings.
        Take, for example, hippie culture and hippie values, with its hatred of reason, its emphasis on instant whim and mystical irrationality, its communalism and repudiation of the division of labor, its scorn of science, technology, work, private property, long-range thinking, and the production of material goods and services. There have been few creeds in human history that have been more dysfunctional than this. Now since men possess free will, since they are therefore free to adopt and act upon any creed they wish, it is possible for masses of men to become hippies; but it is not possible for them to remain long in this condition, because of the built-in “self-destruct” mechanism that the law of cause and effect imposes upon those who pursue this philosophy. Unfortunately, this dysfunctionally has not been as vivid as it could be, because foolish parents and taxpayer mulcted for welfare payments have been around to subsidize this anti-life credo and to maintain it indefinitely. Remove these subsidies, take away their indulgent check filled out by parent or welfare board, and the hippie phenomenon would have died a much deserved natural death long before now. Social cleansing brought about by the workings of natural law would have steered these misguided folk into the proper and functional path long ago.
        At a recent libertarian conference I ran across a man who put his libertarian position on drugs in starkly Social Darwinian terms. He said, in effect: “Let’s legalize all drugs. Then these drug-taking kids will kill themselves off, and the problem will be eliminated.” Harshly and crudely put, perhaps, and of course there are other libertarian grounds for legalization. But again our friend had a keen point: take away the artificial props, allow premises and nature their head, and the law of cause and effect will correct the situation with dispatch. If, as I firmly believe, psychedelic drugs destroy mind and body, then the removal of artificial restrictions will reveal this fact starkly and clearly, and the drug-takers will either fall by the wayside or correct their disastrous path.”
        The great libertarian Social Darwinist William Graham Sumner put the matter very clearly: “Almost all legislative effort to prevent vice is really protective of vice, because all such legislation saves the vicious man from the penalty of his vice. Nature’s remedies against vice are terrible. A drunkard in the gutter is where he ought to be, according to the fitnesses and tendency of things.”

        On the other hand, China, the home of laissez-faire housed slavery, as François Quesnay observed (Admittedly, this was during Qing with its weird property rights, and restrictions on technology, domestic resource exploration, and foreign trade causing Great Divergence. Still Qing dynasty appears to have been relatively successful in spite of the Great Divergence, as there were no famines until drought-caused Northern Chinese Famine, and life expectancy in China was higher than life expectancy in Europe.):
        “However great that empire may be, it is too crowded for the multitude that inhabit it. All Europe combined would not number so many families. […]
        Misery produces in China an enormous number of slaves, or persons who indenture themselves under the condition that they may some time redeem their freedom. A man sometimes sells his son or even himself and his family for a very small price. The government, so attentive in other matters, closes its eyes to these difficulties, and this frightful spectacle is repeated every day. The authority of masters over slaves is limited to ordinary duties, and they treat them like their own children; also, the slaves’ loyalty to their masters is inviolable. If a slave acquires money by his own industry the master has no right to take the slave’s wealth, and the slave may buy back his freedom if his master consents, or if he has retained the right to do so in his indenture.”

        It’s interesting that he calls it a ‘frightful spectacle’ when slavery is a perfectly natural phenomenon, very much consentient with the natural law that Enlightenment liberals like him suposedly advocated, but actually perverted. Alas, Enlightenment liberals had some wrong, and rather bizzare assumptions… like that men in the mythical “state of nature” are free and equal, and that industry and commerce are “barren” (the irony here is that they would’ve been right at home with agrarian socialism-loving reactionaries, Jefferson’s famous “Those who labour in the earth are the chosen people of God, if ever he had a chosen people, whose breasts he has made his peculiar deposit for substantial and genuine virtue.”), and only agriculture productive (the first version of Quesnay’s Tableau économique, based on economic principles got it right, but because Quesnay was ideologically convinced that it could not be so, that commerce and industry must be “barren”, he remade the table in his ideology’s image, getting it wrong… very reminiscent of Einstein’s “biggest blunder” thingie with cosmological constant).

        Gustave de Molinari, the father of anarcho-capitalism (he invented it in reaction to The Revolutions of 1848), later abandoned anarcho-capitalism for a bit more reactionary views, considering majority of mankind unfit for liberty… towards the end of his life he advocated condition of serfdom he termed “tutelage” for women, non-whites, and working-class whites (for at least as long as until eugenics doesn’t make them fit for bearing personal responsibility).

        Hans-Hermann Hoppe also seems to advocate some form of slavery:

        “A member of the human race who is completely incapable of understanding the higher productivity of labor performed under a division of labor based on private property is not properly speaking a person… but falls instead into the same moral category as an animal – of either the harmless sort (to be domesticated and employed as a producer or consumer good, or to be enjoyed as a “free good”) or the wild and dangerous one (to be fought as a pest).”

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        • Rothbard seems to be really stretching the definition of “Social Darwinist” here. Now, admittedly, it was largely popularized as a slur against laissez-fairists by Richard Hofstadter, but he perverted the term. Graham Sumner was *not* a Social Darwinist. In fact, his theory of “folkways” was actually one of the first treatises on non-racialist cultural anthropology, a genre that has since been attributed in a negative fashion to Franz Boas thanks to the influence of Kevin MacDonald and others.

          There did exist actual Social Darwinists. Most were also Nietzscheans. These were people like George Chatterton-Hill and Benjamin Kidd, now mostly forgotten. Both regarded capitalism as dysgenic.

          Molinari may have drifted into a reactionary position, although it’s worth noting that another early anarcho-capitalist that was his contemporary, Julius Faucher, came over from national-liberalism and later from Stirner’s egoism.

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          • I don’t think he’s stretching it, not exactly… there does seem to be two mutually exclusive traditions of “social darwinism,” libertarian one, coming from Herbert Spencer, and the managerial one, coming from Francis Galton.

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            • Of course, you’re right that use of “social darwinism” for Spencer and classical liberals was a slur, and that it’s not what term meant originally, during Spencer’s lifetime.

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  2. Today, the common wisdom has been inverted. Indecipherable and labyrinthian tax codes are considered the fair and just way of financing a realm….

    I gather that this may be an indirect reference to the U.S. federal tax code. If it is, then I have a comment.

    Owning an S-corporation in the U.S., I do something slightly unusual: I prepare my own tax returns. I also write my own (very modest) payroll, make my own state unemployment tax filings, etc.

    I strongly disagree that the U.S. federal tax code were indecipherable or labyrinthian. It is not.

    Treasury regulations especially are well organized and easy to read—or, rather, are as easy to read as their fundamentally complex subject will admit. Treasury regulations are extensive, but are the very opposite of labyrinthian.

    As a building-construction design engineer, I deal daily in the building codes. Not everyone agrees that building codes are prudent and just (for there does exist a principled libertarian position to the contrary), but if you would grant for the sake of argument that building codes may serve a practical purpose insofar as these codes lend the public confidence that the buildings they enter are unlikely to collapse or burst into flame—if you would grant this, then [a] in my experience the building codes, with the partial exception of the electrical code, are fairly well and wisely written and yet [b] the tax code is more straightforward and easier to understand than the building codes are—even for someone like me, who has attended six years of engineering school and not a day of accountancy.

    Taxes are unpopular. I get that. I don’t like paying them, either. However, the oft-repeated charge that the U.S. tax code is unnecessarily labyrinthine is simply not true.

    I don’t blame you for making the charge. The charge is very commonly heard! The charge is just false in my view; that’s all.

    The problem is that accurately assessing taxable income—when rational private actors like me will naturally do whatever they can do, within the law, to creatively account for cash flows to minimize taxability—is an astonishingly difficult technical task for the IRS. You hear some political candidates talk of replacing the unpopular tax code by a “simple” national sales tax or the like. In my opinion—an opinion which may be mistaken but is, after all, backed by a certain limited amount of actual experience—the political candidates in question are speaking of that which they simply do not understand.

    The tax code is complex because the schemes by which business owners (quite properly) avoid paying taxes are complex. Existing state sales taxes for nonmerchandise are already a mess, because it is nearly impossible to adequately define what constitutes a nonmerchandise sale. Federalizing that would not help.

    I understand that few small business owners have the time or inclination to prepare their own tax returns. Those owners are right, I’m an odd bird, and I don’t blame them for resenting the fees they pay their CPAs; but the problem of tax law is fundamentally a hard, hard problem. As far as I know, no first-world country has adequately solved it.

    Also, beware small business owners who complain too much. In my experience, they’re just disorganized, which is why they have to pay their CPAs so much. Eliminating the tax code wouldn’t fix what ails them.

    Yes, there are problems with the tax code. For example, the Alternative Minimum Tax needs to be abolished. Related to this, insofar as the tax code is going to be progressive, there should exist more tax brackets for incomes far higher than $200k. Still, overall, ours is a pretty good system. If you’ve never had occasion to work out, with your own pencil, the so-called “accumulated adjustments account” (which sounds like technical gobbletygook but actually isn’t) on federal form 1120S, schedule M-2, then you wouldn’t understand the system’s purpose; but the system does have a purpose and there it is.

    The rest of your article is well taken. I merely wanted to comment on this one point. Four and eight years ago, there was a reason Mitt Romney stood almost alone among Republican presidential contenders in defending the existing tax code. Almost alone, Romney had sufficient practical experience to teach him what the tax code was actually for. Almost alone, he knew whereof he spoke.

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    • I wasn’t referring to any specific country’s tax code (I should point out I am not an American), but I really thank you for that informative digression on the taxman in the USA. Anti-tax is not exclusively libertarian, it’s a staple of peasant revolts and even of ultra-royalist writers.

      > The tax code is complex because the schemes by which business owners (quite properly) avoid paying taxes are complex.

      And almost none of it matters. The country could simply abolish all direct and indirect taxes (minus inflation, of course) and replace it with some flat rate tied to the inflation targets of the central banks, so as to remove just enough money from circulation such that NGDP can more-or-less continuously absorb the immediate effects of public debt. I’m of course not advocating that this be done, for it would almost certainly unleash the biggest pork-barrel hell on earth if not much worse, but it can.

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    • >these codes lend the public confidence

      Well, according to libertarians exactly this, in addition to protecting the big business from the small, is one of the biggest reasons why regulations are bad. Namely, the existence of regulations lends the public confidence that everything is fine and dandy, thus creating moral hazard, for indeed, things are many times not fine and dandy (whereas public is convinced that they are). That is not to say that no regulations means no regulating. They believe that regulating should be done via law system and personal liability.

      >The tax code is complex because the schemes by which business owners (quite properly) avoid paying taxes are complex.

      Murray Rothbard used to argue against simplification of tax code for that very reason.

      >the problem of tax law is fundamentally a hard, hard problem

      The modern states are utter swines. Despite the fact that we are nominally “free” we pay taxes that would’ve sounded insane to a Medival serf. In my country, for example, over 70% of a paycheck goes to Leviathan, yet “state services” are so bad as to be unusable (for example, if you have a need for medical care, you go to a “free” state clinic and after failing to do anything, you go to a private clinic and pay cash to actually do something). Yet many reactionaries think that abandoning libertarianism entails abandoning sound economics, and that “socialism can work when WE do it.” I would be fine with it if they actually advocated outright slavery, instead of saying platitudes about “the greater good” (a good rule of a thumb is that if someone is pitting “greater good” against the markets he’s trying to rip you off).

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