Creating the infrastructure

Bureaucracy both presupposes the existence of information - the indis­pensable grist to the administrators' mill - and enables more of it to be generated. One of the earliest and most important steps in this direction was to arrive at an exact definition as to which territories belonged to which ruler.

Until the middle of the seventeenth century, when the Dutchman Willebord Snell (Snellius) started using trigonometry for the purpose, maps capable of accurately representing entire countries or even provin­ces did not exist. Corresponding with Italy's exceptional degree of development, the first attempts to draw such maps were made there during the second half of the fifteenth century.³⁴ In France, a map showing the entire realm was produced in 1472; however, it was merely a sketch intended to give a general idea, without any particular scale and suitable neither for diplomatic purposes nor for administrative ones. In the absence of maps the modern system of representing the shape of a country, let alone measuring its territory, could not be applied. As late as the 1690s the great military engineer Vauban, working for Louis XIV, submitted estimates as to France's area which differed from each other by as much as a third; elsewhere the situation was even worse. The absence of good maps also meant that, whenever war or agreement led to a transfer of land from one ruler to another, the territory in question could rarely be described in cartographic terms.

The first border to be marked on the ground by means of stones was the

³⁴ See J. Marino, ‘‘Administrative Mapping in the Italian States,” in D. Buisseret, ed., Monarchs, Ministers and Maps: The Emergence of Cartography as a Tool of Government in Early Modern Europe (Chicago: University of Chicago Press, 1992), ch. 1. one established between Sweden and Brandenburg at the end of the Thirty Years War.^[146] At the conference of Nijmegen in 1678-9, rivers were used to delimit borders between two states, in this case France and the southern Netherlands. In 1718 a treaty between Emperor Charles VI and the Dutch set another precedent: the written text was accompanied by a map with lines drawn across it marking the new borders.^[147] Credit for the idea that the territories ruled by each monarch or republic should be painted in the same color goes to the Hamburg geographer Johan Hebner (1680-1713). Later during the century the use of different markings to distinguish between international borders and those separating provinces also became standard; still, as late as 1762 the British ambassador to Copenhagen trying to mediate a diplomatic dispute discovered that a map showing the border between Holstein (which was part of the Em­pire) and Denmark (which was not) did not exist. The one he eventually procured contained information that was over 160 years old.^[148]

By this time the British, French, and Austrian governments were all employing professional surveyors in order to produce, for the first time, maps of entire countries that would be based on triangulation rather than on guesswork. Relying on the primitive equipment of the day, the projects took decades to complete.

Once the problem of determining states' borders and measuring their areas had been more or less solved, the next question was to find out what resources, human and material, were available to rulers within each state. From the time of the Domesday Book on, occasional censuses had been held in many European countries; however, it lay in the nature of the decentralized political system (as well as the primitive technical means available for the purpose) that they very seldom kept up with demog­raphic and economic change. In 1516 Thomas More suggested that the problem be evaded by giving all communities, all towns, and all provinces exactly the same size - an idea that would have been useful, even if it was utopian.

On the Continent, where political entities tended to be either larger or more fragmented (sometimes both), the problem of gaining information as the basis for administration was, if anything, even more difficult. During the 1580s, both Jean Bodin and Justus Lipsius had suggested that national censuses be taken in their respective countries so as to make taxation more equitable. Preparing for the Estates General of 1583, Henry Ill's accountants did in fact take some measures in that direction; but so long as the civil wars continued, and disorder remained endemic, there was no chance of the proposal being carried out. Then it was the turn of Louis XIV whose advisers, such as Louvois and Colbert, were well aware of the problem and repeatedly suggested measures to correct it.^[151] According to Voltaire, the Sun King tried to obtain a systematic picture of his realm by way of the intendants; however, he was defeated by the difficulty of designing a standard form that would provide for the very different conditions found throughout the kingdom. ‘‘What would have been most desirable was for each intendant to give, in columns, an account of the number of inhabitants in each district - nobles, citizens, farm workers, artisans, and workmen - together with livestock of all kinds, land of various degrees of fertility, the whole of the regular and secular clergy, their revenues, those of the towns and those of the communities.”^[152]

The first modern countries to hold population censuses were Iceland (1703) and Sweden (1739), both of which were motivated by fear of depopulation.^[153] The French in 1736 set another precedent: all parish priests were ordered to record births, marriages, and deaths in duplicate, keeping one copy and sending the other to the government in Paris.

Following the example set by Sweden as early as 1748, the French National Assembly in 1791 established a proper statistical office, in­dependent of the government ministers and charged with the compilation of regular statistical reports. Its first head was a great scientist, Antoine Lavoisier, whose other achievements as a public servant included the new metric system of weights and measures. From this point on, not only did the state count everybody and everything but, as if to emphasize the extent of its power, it also determined the units in which this was done. As for Lavoisier himself, among other fields in which he had been active was tax-farming. Accordingly, his reward was to be taken to the guillotine and executed.^[154]

Returning to Britain, the first systematic attempt to gain statistical information - known as ‘‘political arithmetic” - on the number, wealth, and income of the inhabitants of the island was made in the 1690s by Gregory King. By profession he was a surveyor, mapmaker, and architect who laid out many of the squares of London and Westminster. In his spare time he wrote Natural and Political Observations and Conclusions upon the State and Conditions of England (1696) which gave the best available picture of any country's population and wealth in history until then. However, the volume remained in manuscript, being of no interest to the general public. No systematic attempt was made to improve the information in the hands of the government. In 1753a proposal for taking a national census was rejected by Parliament as inimical to liberty; six years later the same fate overtook an attempt to follow the French example by having parish priests provide the state with information on all vital events.^[155] One result of this policy was that, in Britain as in other countries, witnesses to the early years of the industrial revolution - 1760-1800 - observing that enclosure was beginning to empty the coun­tryside, expressed the fear that the population was decreasing, whereas in fact it was growing as never before.^[156] Only in 1801 did both Britain and France follow the example of the United States (1790) and hold their first nationwide censuses; but even then it took another half-century before the British government, for one, bothered to register the names of every man, woman, and child in the country.

The most important use to which statistics were put - and which explains why, from the time of King David on, attempts to gather them often gave rise to a storm of protest - was taxation. During the Middle Ages, taxes in our sense of the term did not exist; the king, like any other feudal lord, was supposed to ‘‘live off his own,'' i.e., the rent, fees, and other feudal payments due to him from his tenants and, in theory at any rate, not subject to change without their consent. To supplement his ‘‘private'' income, he might ask the Estates for ‘‘aid'' - especially in times of war or for covering some other kind of extraordinary expenditure, and usually in return for correcting ‘‘grievances.'' So important was this system of voluntary taxation that when Charles V created the first French treasury in 1373 he called it the cour des aides.

To focus on a few landmarks only, possibly the earliest ‘‘national'' tax imposed in any country were the export duties on wool and hides that were voted by Parliament to Edward I in 1275 and which became per­manent from 1347 on. Other rulers tried to follow his example; however, since their domains did not constitute islands, collection was more dif­ficult and they were often frustrated either by the extent of their territories (if they were large) or by the ability of trade to avoid levies by going elsewhere (if they were small). In 1383 Charles V instituted the gabelle, or salt tax, which obliged each household to buy a set amount at prices set by the king; described by Louis XII as ‘‘the easiest, simplest and most straightforward subsidy that could ever be levied,” it soon found imita­tors in Castile, Provence, Florence, Genoa, and the Papal Territories. Next came the taille, or land tax, which Charles VII instituted in 1452 in order to pay for his standing army of compagnies d'ordonance. By forbid­ding the nobility to impose similar levies of their own he simultaneously created the first distinction between rent, which was due to a variety of feudal lords, and taxation, which was the sole prerogative of the king.

Reflecting the way in which France had been put together, both the gabelle and the taille were paid at very different rates by different provin­ces. Some, such as Brittany, escaped altogether and continued to do so right down to the Revolution of 1789; in others, the tax-farmers’ de­mands drove the agricultural population to the verge of destitution. Nevertheless, by 1500 these and other taxes were transforming the finan­cial situation of rulers, particularly those whose countries were the largest and in which the differentiation of the ‘‘public’’ sector from the ‘‘private’’ household was, accordingly, the most vigorous. The greater the growth of government, the less important the role played by the monarchs’ private resources in financing it; conversely, the share of taxes went up and up. This led to different results in different countries. In France, a decisive step was taken in 1523 when Francis I published the edicts of St. Blois and St. Germain-en-Laye. A single treasury, the tresoir d'epargne, was established. The distinction between ordinary and extraordinary revenue - corresponding to that between money arbitrarily collected by the king and that which had been voted to him by the Etats genereaux - was abolished; and the basis for royal absolutism was laid for almost three centuries to come. This was not so in England, where Henry VIII, having sold off confiscated church land in order to finance his wars, found himself in a worse situation than his father had been in and became the first king who was entirely dependent on Parliament. The long-term outcome was an equally solid system of parliamentary government, albeit one from which his daughter Elizabeth, as well as the first two among her Stuart successors, did their best to escape.

Regardless of whether the taxes were levied by the king on his own or voted to him by some assembly, the income available to rulers increased relative to that of all other individuals and also in comparison to that of society as a whole. Under Henry VIII it tripled; in France between 1523 and 1600 it quadrupled.⁴⁶ The increase was greatest during the years

⁴⁶ More detailed figures are in M. S. Kimmel, Absolutism and Its Discontents: State and Society in Seventeenth-Century France and England (New Brunswick, NJ: Transaction Books, 1988), pp. 58-9. before 1550, after which it tended to be swallowed up by the so-called price revolution caused by the influx of precious metal from the Amer­icas as well as the increase in demand resulting from rapid population growth. Nevertheless, the reality of the trend is attested to by its persist­ence into the first half of the seventeenth century, a period of bad weather (the ‘‘little ice age”), agricultural disasters, stagnant economies, and low inflation or even deflation.^[157] For example, England's Charles I was able to more than double the income received by his father James I, raising it from £400,000 annually at the beginning of the reign to £900,000 on the eve of the Civil War. By that time even the rulers of small countries such as Bavaria, Prussia, and Denmark were relying much more on taxation and less on their private resources.^[158] This was a trend which their subjects resented but which by and large they were powerless to resist.

In both England and France the reluctance of the population to pay taxes contributed to the unrest, civil war, and revolutions that swept over them between around 1620 and 1660;^[159] however, by the latter date both had largely overcome their difficulties in this respect. England in 1664 became the first country all of whose citizens were equal under the law. The privileges which still existed - specifically the right of clergymen to vote taxes in convocation - where abolished, so that everybody regardless of status paid whatever sums the government sought to levy and Par­liament to grant. In France, the rising prestige of the king's tresoriers received symbolic expression in 1643 when, at the funeral of Louis XIII, their wives and daughters were allowed the same clothing as other magis­trates. It is true that the distinction between pays d'election and pays d'etat remained in force; however, Mazarin and his successors were able to circumvent it to some extent by introducing a whole series of new ‘‘ex­tracurricular'' taxes not covered by the ancient privileges and, therefore, applicable to the realm as a whole. As early as 1670 - i.e., before Louis XIV engaged on the long and costly wars that marked the second half of his realm - Colbert in his Memoire au Roi sur les finances argued that the king was, if anything, collecting too much. According to him, royal revenue stood at 70 million livres tournois annually. The ratio between this sum and the amount of silver in circulation, estimated at 120 million, was 7:12, whereas the ideal ratio was thought to be 1:3.

In the second half of the seventeenth century, taxation was probably lightest in England which, though already engaged on the construction of a regular navy, had neither a standing army nor a paid bureaucracy to look after. It was heaviest in Prussia where the sums collected by the Great Elector, Frederick William, often with considerable brutality, were used to create a standing army of 30,000 men and thus change his domains from a motley assembly of provinces into a medium-ranking European power. Though comprehensive statistics are hard to come by, other countries must have stood somewhere in between. In many of them, as long as the ancien regime lasted, the real problem facing governments in their attempt to increase revenue was not so much the depressing effect this had on the economy as the tendency of the sums collected to get lost on their way to the central treasury. For example, out of 8,277,166 livres raised in Languedoc in 1677, 34.5 percent remained in the hands of various provincial notables. Of the remaining 65.5 percent, half- in fact, 50.3 percent - was tied to royal expenditure in the province itself. Thus only 33 percent, or just under one-third, ever reached Paris and could be used by the king to cover the expenditure of the state, which at that time consisted mainly of the army on the one hand and the court on the other.^[160]

In spite of these limitations, between 1689 and 1714, France spent no less than 5 billion livres - or £300 million. This almost equaled the sums spent by its three principal enemies, England, the Holy Roman Empire, and the Netherlands combined, thus justifying Louis XIV's proud boast of being nec pluribus impar.^[161] The screws of taxation had been turned to the limit. Unable to tighten them still further without risking a revolt, the king and his advisers resorted to borrowing. Here the fact that the administration was a venal one could be turned to advantage, since the list of persons entitled to receive tax-money as a reward for the offices that they held read like a who's who of French society. In return for allowing its officials a share of revenue the state demanded that they advance it money. Having been extensively used during the wars of religion in particular, the system was anything but new, but under Louis XIV it grew to monstrous dimensions. In 1714, the year that the War of the Spanish Succession ended and the one before the king's death, the government's debt stood at thirty times its annual income and the resulting payments consumed nearly the entire state revenue. By comparison, in 1994 the US national debt - the one considered so intolerable that it led to the Republican victory in the elections of that year - amounted to only three times annual revenue.

Thus, so long as it remained ‘‘absolute” the power of the French state found its fiscal limits.⁵² Its debts to its own officials continued to increase, the problem being not so much the country's inability to pay as the inequitable distribution of taxes, particularly the taille from which almost everybody except the peasantry (including, in particular, large landow­ners in the form of nobility and church) was exempt. Collection con­tinued to be by tax-farming, tax-farmers being employed by the central treasury, the provincial estates, and the municipalities, all of whom deducted what was due to them before sending the remainder to the receveur-general in each of sixteen collection districts. Not only did tax­farmers make themselves thoroughly hated - during the Terror many of them were put to death - but the ultimate result was that the state slid slowly into bankruptcy. In 1750, in a desperate attempt to tap the hitherto exempt resources of the upper classes, a 5 percent tax was imposed on all landed incomes; however, it was a case of too little too late. Meanwhile trust in the government's ability to meet its obligations, and with it progress toward a modern financial system, suffered.

When the break finally came, it was radical indeed. As the National Assembly put it in the Declaration of Rights (1789), for the maintenance of the public forces and the expenses of administration a common con­tribution was indispensable; but henceforward this contribution was to be equally divided among all citizens in proportion to their means. The entire vast system of exemptions and privileges was abolished at a stroke. With it went the ancient customs duties that still separated one province from the next, thus for the first time turning France into a single market (and state) of 30 million people. From this time to the reemergence of so-called free trade zones during the years from 1975 on, customs duties were something that one paid upon passing from one state to another, not so long as one remained inside its borders. Under Napoleon the yield from property taxes alone increased from 80 million to 200 million livres; but he also added a whole series of new taxes to the existing ones. Among them were an excise - which in time came to be hated almost as much as conscription - a levy on salt, a state tobacco monopoly, and a system of external tariffs that was destined to remain in place for the rest of the nineteenth century. Even more important, taxation became truly nation­al. Not only did all revenues - including those extracted from other

52

SeeJ. B. Collins, Fiscal Limits of Absolutism: Direct Taxation in Early Seventeenth-Century France (Berkeley: University of California, Press, 1988). countries in the form of booty or reparations - accrue to a single treasury, but the system whereby part of the sums raised in each province could only be spent in that province came to an end, thus for the first time giving the government full control over all its funds.

Having already gone through its revolution a century or so earlier, the British state was governed with the consent of the upper classes and thus in a much better position to squeeze the pips without risking too much opposition. In particular, the series of anti-French wars of 1689-1714 represented an extraordinary achievement for a country of perhaps 5.5 million people which had long been located on the fringes of civilization and had only recently broken into the ranks of the great powers. The wars were financed by an entire series of new taxes, such as a property tax, a tax on beer, and a tax on windows which was imported from the Netherlands; a similar one was imposed on the American colonies and, as can be seen in Charleston, South Carolina, to this day, led to the construction of narrow, elongated buildings facing away from the streets. In 1692 Britain became the first country to abandon tax-farming in favor of paid collectors, leading to a sharp reduction in the percentage of revenue that got stuck on the way. The upshot was that Britain handled its finances much better than France. By 1714, although the gover­nment’s debt had grown to three times annual income, interest rates were actually falling.

Around the middle of the century the British state was draining away perhaps 20 percent of the country’s wealth. Its main instrument for doing so consisted of indirect taxes which brought in two-thirds to three- quarters of all sums collected; as Prime Minister Robert Walpole (1721­42) once explained, people who would otherwise have squealed like slaughtered pigs allowed themselves to be fleeced like sheep.⁵³ A series of efficiency measures, such as the establishment in 1787 of a single con­solidated fund into which the entire yield of customs and excises was paid, continued the transition toward a modern state with a centralized national treasury. Since it did not have to share its revenue with its office holders, Britain with a much smaller population than France found the resourcestowage a whole series ofworldwars (1740-8, 1756-63, 1776­83), subsidize any number of continental allies, and easily carry a growing debt, albeit one that did lead to moderate inflation. In 1799 the younger Pitt, faced with the need to finance the war against France, felt strong enough to introduce an income tax of 5 percent on incomes over £200 per year. Considering that a fully employed unskilled laborer could make

⁵³ P. Mathias and P. O’Brien, ‘‘Taxation in Britain and France, 1715-1810: Comparison of the Social and Economic Incidence of the Taxes Collected for the Central Government,” Journal of European Economic History, 5, 1976, pp. 601-50.

about £25 a year, and a skilled one double that sum,⁵⁴ this was not too much to ask. However, the tax was the first of its kind imposed in any country and a clear harbinger of much worse things to come.

By way of a final illustration of what a well-administered modern state could do to rob its citizens and concentrate financial power in its own hands, consider the development of Prussia. The country, such as it was, was incomparably smaller and less fertile than either Britain or, a fortiori, France. Around 1700 its population, numbering perhaps 1 million souls all told, stood at only 6 percent of the French; and, to make things worse, was scattered in a number of discontinuous provinces some of which were only barely recovering from the Thirty Years War. Even as late as the accession of Frederick the Great in 1740 the yield of the royal domain, amounting to one-third of all Prussian land and farmed with ruthless efficiency by the soldier-king, his father, accounted for half of his revenue. By the end of the reign further rent-racking had increased the income from this source from 3 to 7 million thalers, but this did not prevent its share as a part of all state revenue from falling to one-third. During the same period total revenue rose more than threefold, a feat achieved mainly by increasing indirect taxes.⁵⁵

In the 1750s Frederick’s income - including all kinds of services and corvees which continued to burden the peasantry - probably swallowed around 34 percent of the Prussian national product, a figure much higher than that attained in any other country at the time and which was soon augmented by massive British subsidies.⁵⁶ As in France, the most impor­tant single tax was the Kontribution, a levy on landed income which fell mainly on peasants since the nobility was exempt. While the system was far from uniform and riddled with inconsistencies, compared to France the Prussian state under Frederick the Great enjoyed several advantages. From 1723 on tax collection was concentrated exclusively in the hands of paid personnel. This meant better control over corruption, less loss along the way and, most important, no need to pay interest on loans made to the state by its own officials. Thanks partly to the efficiency of the bureauc­racy, and partly to the king’s own efforts, much better information was available on economic conditions in the various provinces and the income that could be expected from them. Moreover, the longer the century went on the more Prussia tended to follow the French example by imposing state monopolies (on coffee as well as tobacco and salt) and the British

⁵⁴ P. Deane, The First Industrial Revolution (Cambridge: Cambridge University Press, 1965), p. 262.

⁵⁵ A. Zottmann, Die Wirtschaftspolitik Friedrichs des Grossen (Leipzig: Deuticke, 1929), pp. 21ff.

⁵⁶ D. Stutzer, ‘‘Das preussische Heer und seine Finanzierung 1740-1790,’’ Militargeschich- tliche Mitteilungen, 2, 1979, p. 30. one by relying on indirect taxes, including, besides the usual ones already enumerated in connection with other countries, a tax on all kinds of meat except pork.

At the time he died in 1786, Frederick the Great, though he had waged two major wars (1740-8, 1756-63) plus a minor one (1778-9), left a treasury of 50 million thalers, equal to about two and a quarter years of revenue. He also had an army of close to 200,000 men, which besides being Europe's fourth largest (after those of France, Austria, and Russia) was considered the best of the lot. Basking in his achievement and perhaps fearing the consequences if they persisted, his successors chose to relax the pressure a little. They canceled some of the royal monopolies, sent the French experts who administered them packing, and adopted a more generous policy in regard to the unfortunate tenants of crown lands. Within four years the surplus had disappeared; but the Prussian state remained solvent and, a remarkable feat, maintained its ability to pay even during the extremely difficult years that followed its defeat at the hands of Napoleon. Still, its modernity should not be exaggerated. For example, the establishment of a single treasury responsible for all pay­ments and receipts had to wait for the reforms of von Stein and von Hardenberg, while internal customs frontiers between the various provin­ces persisted and were abolished only in 1818.

To summarize, the period here under consideration was characterized above all by the creation of the instruments that would enable the state to do away with various intermediaries and squeeze its citizens as never before. As part of the process, borders had to be marked, maps drawn, and statistical information of every sort gathered; including in particular such as pertained to population, property, production, and incomes. As government expanded both in terms of the number of bureaucrats that it employed and the tasks that it undertook, the importance of the ruler's private resources vis-à-vis the country's overall budget naturally declined; until, sooner or later, it sank into insignificance. The change was reflected in the way that financial obligations were handled. Erasmus, assuming that the expenses of the court were responsible for a sizable fraction of the fiscal burden borne by subjects, had urged his Christian Prince to live modestly. Louis XIV on occasion was still reduced to selling plate (in­cluding a cherished set of 5,000 silver toy soldiers) to pay for his wars. But in 1689 William III of England, having just arrived from the Netherlands, could not be expected to step into his predecessor's shoes; accordingly he became the first monarch in history who could not be held personally liable for his government's debts. In 1770, the final step was taken and the total separation between king and country achieved.

Under the new system, the Post Office - established by Cromwell in 1652 and operated as a royal monopoly from the time of the Restoration on - as well as the remaining crown lands were taken over by the state. In return, King George III began to receive an annual stipend of £800,000 which was voted to him by Parliament and which was used to defray the expenses of running the court. This reform was subsequently imitated by other countries, including France (after the Revolution) and Prussia (where it took place in 1820).⁵⁷ Here it is worth adding that, although the link between the ruler's private property and that of the state was severed, the former usually remained substantial and, in most cases, enjoyed privileged status. For example, it was not until 1993 that the queen of the United Kingdom, the richest person in the realm, began paying income tax like anybody else.

The history of taxation itself was marked by a gradual switch from indirect taxes to the harder to collect, but much more remunerative, direct ones. To this should be added the growing profits derived from state monopolies, including, in many countries from the 1830s on, the railways. In one country after another the system was extended, exemp­tions abolished, and additional provinces brought into the network. Meanwhile internal customs borders were abandoned, central receiving funds established, and privileges of every sort canceled - albeit in some cases it took either a bloody revolution or defeat in war to accomplish that feat. Between 1760 and 1820 alone, the nominal value of taxes collected by the treasury increased fourfold in Austria, fourfold in France, and more than sixfold in Britain.⁵⁸ Needless to say, none of this would have been possible had the administration not been reformed, venal offices replaced by salaried ones, and professionalism - more and more based on university education - substituted for class, property, and connections as a means for advancement. To make good on its pretensions the state had to increase the instruments of violence at its disposal until there was nobody left capable of talking back - a subject to which we shall turn in the next section.