Huge deficits in national budgets are so commonplace that it is easy to forget that public debt and sovereign borrowing are relatively recent innovations of modern states to defer the fiscal burdens of excessive spending. In our times revenues rarely match spending. In the premodern world, however, public credit was not common and rulers did not resort to large-scale borrowing. In order to fund expenditures, including considerable expenses such as construction projects, the supply of giant capital cities, and the maintenance of large armies, premodern states relied upon the revenues from tribute, taxes, rents from imperial or royal estates, fees (for instance, from the sale of offices), fines, confiscations, and war plunder, as well as compulsory services such as forced labor, military conscription, and public liturgies. Spending and revenues seem to have been in synch.
The chapters in this volume are excellent discussions of the great variety and wonderful hybridity of fiscal regimes in ancient and medieval states. There were different forms of taxes, including personal taxes levied on people or households, trade taxes levied on goods and services, and production taxes levied on agriculture and manufacturing. There were different mechanisms for collecting revenues, including tax-farming awarded through auction or bargaining, share contracts, and the employment of salaried tax collectors. There were different outcomes of efficiency, as determined in particular by the competition for the available economic surplus between taxes collected by the state and rents collected by landowning elites. There were different types of corruption, such as bribes for the underassessment of assets, overtaxation by tax farmers, and illegal requisitions. This is comparative history at its best, and the chapters on Greek cities, Hellenistic kingdoms, the Roman Republic, and the Roman empire that are probably of most interest to the readers of BMCR are mixed in with chapters on the Inka and Aztec empires, the early empires in China, the Byzantine empire, the early Caliphate, the Ottoman empire, and the domains of early modern Japan.
The best starting point is the penultimate chapter by Peter Bang. The introductory chapter by the editors stresses the value of New Fiscal History, which has investigated the origins of modern fiscal regimes. This New Fiscal Sociology asserts that taxation is the outcome of a process of negotiation, because taxpayers received security and welfare in return. As a challenge to this underlying assumption of collaboration, Bang stresses domination and predation. Because rulers had “superior means of coercion,” they could profit from their monopolistic position. “At heart, the state developed as a predator, and none more so than the vast agrarian and tributary empires of Eurasian history” (543). The only collaboration rulers and their officials worried about was with locally entrenched groups such as elite landowners over the collection of taxes. As a result, these chapters about taxation and revenues in premodern states almost invariably become discussions of waste, corruption, and oppression.
All of the chapters are worth reading for the interpretations and the data. Of the chapters outside Greek and Roman history, the most stimulating are on the extraction of labor services by D’Altroy (the Inka empire) and Jursa and Moreno García (Mesopotamia and Egypt), and on the weaknesses of large empires by Lewis (early imperial China).
Short summaries:
Terence D’Altroy highlights the oppressive oddities in the fiscal regime of the Inka empire in the Andes. Their “taxes” consisted largely of controlling the labor of their subjects, to the extent of resettling colonists on state farms and ranches and transferring artisans to the capital city of Cuzco. “By the end of the imperial era some 3 to 5 million people had been resettled, upwards of a third of the entire populace” (p. 49). Although funding the military was a top expenditure, the Inka state economy was primarily designed to sustain the aristocrats and underwrite the public ceremonies legitimating this harsh social organization. In the early sixteenth century the Spanish conquistadores introduced a new economic regime based on money and markets. As D’Altroy wryly concludes, “the immediacy of the collapse of the Inka fiscal regime…is just indication of the degree to which it was seen as a burdensome, extractive economy” (65).
The Aztec political economy did rely on the collection of taxes. Michael Smith emphasizes the role of both the hundreds of city states in central Mexico, which were governed by kings and nobles, and the Triple Alliance Empire established by three dominant cities in the early fifteenth century. The municipal kings paid taxes to the empire, consisting of textiles, warrior costumes, grain, gourd bowls, and bark paper; cities on frontiers staffed border fortresses. In addition, individual cities collected a portion of the rents paid by local commoners to the landlowning nobles. Commoner households also contributed labor to nobles’ houses and royal palaces, and young men were obligated to serve in the army. Because of their regularity, recurrence, and predictability, Smith prefers to classify these payments and obligations as taxes, rather than tributes.
Michael Jursa and Juan Carlos Moreno García survey empires and kingdoms in the Near East and Egypt over more than two millennia before Alexander’s conquests. Agricultural production along the great rivers defined the available resources. For states centered on the lower Euphrates and Tigris rivers, so much manpower was required for maintaining irrigation installations and harvesting crops that “labor service was the single most important contribution that was exacted from the Mesopotamian population by its rulers” (120). Military service was another concern. Under the Achaemenids the “‘taxation system’ was geared primarily toward the mobilization of manpower” (137). In pharaonic Egypt, although taxes of grain were collected from both crown lands and private fields, “the main fiscal contribution of villages was manpower” (150). According to Jursa and Moreno García, “without communal labor, neither the Mesopotamian nor the Egyptian economy could…have functioned” (156).
Andrew Monson measures the effects of political instability on the fiscal regimes of Hellenistic kingdoms. In his analysis the determinants of instability are domestic unrest among subjects and interstate wars, and the indices Monson has constructed suggest that fragmented warring states adopted intrusive fiscal measures. The revenues the Ptolemies collected were six to twelve times higher than the Persians had collected as royal tribute from Egypt, and the Seleucids essentially plundered their subject communities in Asia to maintain their armies. The imposition of Roman rule led again to more cooperation between rulers and provincial elites: “when rulers’ hold on power is secure and their states enjoy unmatched supremacy, they lower taxes rather than raise them” (200).
James Tan argues that the Roman Republic was “a rare example of a state whose rulers were not interested in maximizing tax revenues” (225). In the mid-second century B.C. the Roman state ended direct taxation of citizens in Italy and instead relied on taxes from provincial subjects. But from tax-farming the state received only the contracted revenues. The aristocrats who invested in tax-farming companies or served as magistrates could enhance their own wealth by collecting much more. While aristocrats “preyed upon a peripheral population that lacked the political relevance or military means to resist” (224), citizens were effectively emasculated. This is a fascinating argument. By being exempted from paying taxes, Roman citizens lost their bargaining power with their rulers.
Walter Scheidel argues in a similar fashion that fiscal demands in the early Roman empire were kept low, primarily because of the absence of serious external pressures. Peace did have a dividend. Instead, the significant structural change was the shift from tax-farming to reliance on self-taxing local elites. In this new system of collecting imperial revenues provincial notables may have policed each other, but they also enriched themselves. The army accounted for one-half to two-thirds of total state expenditure. Scheidel describes this spending pattern as “massively redistributive in both spatial and social terms” (249). Revenue flowed from central provinces to frontier provinces, and from peasants and miners to soldiers, residents of cities, and wealthy aristocrats. The fiscal regime of the early Roman empire was “openly unfair” (253).
In the later Roman empire state tax ideology was transformed. Because emperors increased pay to soldiers in order to secure their support, “the budget of the Roman state was no longer balanced” (262). According to Gilles Bransbourg, the reforms of various emperors transformed the later Roman empire into a “fiscal state” that now did maximize tax revenues. By making assessments more transparent, replacing the predatory powers of local elites with an enlarged imperial bureaucracy, and eliminating many anachronistic exemptions (such as the special status of Italy), Diocletian’s reforms “violated many vested interests” (270). But as a result, the tax system of the later empire “became the most comprehensive and rational fiscal regime in the Mediterranean world until modern times” (270).
Mark Lewis’ excellent analysis of the fiscal characteristics of early imperial China highlights weaknesses in the state. In the Han empire (corresponding chronologically to the late Roman Republic and early Roman empire) peasant households paid a land tax and poll taxes and owed labor for government projects and military service. The total taxes seem low, perhaps ten percent of a household’s average agricultural yield. But Lewis suggests that this “so-called ‘low-tax’ regime was actually set at the limits of what was bearable” for peasant households (291). In addition, the government mistrusted its own local administrators. As a result, the court “had no interest in maximizing taxes but, instead, reduced them so as to keep significant wealth out of the hands of potential rivals” (296).
Kent Gang Deng extends the discussion of Chinese empires into the early twentieth century. Confucian ideology established the ideal of a benevolent state “aimed to run a small and balanced budget with a light tax burden on the population” (308). Successive dynasties of rulers even seemed to compete over the golden rule of “light taxes and undemanding corvée.” But pressure on the northern frontiers from raiders, such as the Mongols during the thirteenth century, forced the Song dynasty to increase taxes. By the mid-nineteenth century the Qing rulers finally resorted to foreign borrowing: “public debt was the norm in government finance” (332).
John Haldon discusses both the early Byzantine empire and the early medieval Frankish kingdoms in western Europe. Although he stresses the competition between rulers and aristocrats over the control of resources, his account is primarily a survey of the institutional details of taxation.
The early Islamic caliphate preserved many late Roman and Persian institutions. Rather than rewarding their Arab soldiers with agricultural lands in Iraq and Egypt, the early caliphs instead settled them in garrison towns. For these hundreds of thousands of settlers they also established hereditary payments, derived from the continuing collection of the old Roman or Persian taxes on agricultural land. Hugh Kennedy concludes his excellent argument by emphasizing how this fiscal system promoted the development of urban life in Iraq and Egypt. “The revenues may have been collected as taxes on agricultural land but they were disbursed in cities” (402).
Metin Coşgel likewise investigates the question of how conquerors taxed newly conquered regions. The Ottoman empire grew enormously to include several predecessor states, including the Byzantine empire. The new subjects in these various regions sometimes reacted to higher tax rates by switching to lower-taxed crops, for instance “by converting a grain field to a vegetable garden” (417). Another political constraint was the concern about legitimacy. To prevent revolts, Ottoman sultans granted tax revenues to tribal leaders and local landowners. Political expediency trumped fiscal efficiency.
In medieval Japan civil wars during the fifteenth and sixteenth centuries initiated a transition from a national fiscal regime to regional control of taxation. Even when local leaders pledged allegiance to overlords, they retained fiscal control and invested resources in land reclamation and irrigation. Because there were no foreign wars or invaders to face, they also had few military or defense expenditures. Regional leaders hence had no incentive for building a central state. As Philip Brown concludes, “The onset of peace removed a major stimulus for Japanese leaders to create and strengthen a national fisc” (460).
The cities of the classical Greek world can be included in this volume when viewed as independent (city-)states. Their comparatively small size provides a pointed contrast to the large empires discussed in the other chapters. In empires rulers and their magistrates decided on fiscal policies; in contrast, as Emily Mackil emphasizes, “[t]he citizens of these [Greek] cities had a direct influence on their own revenue strategies” (472). Her excellent overview demonstrates that while the citizens of Greek cities were willing to levy direct taxes on their own land and its produce, they preferred to collect revenues from indirect taxes, such as harbor taxes on imports and exports. They also expected revenues to be used for specific public services such as security and welfare. To meet elevated expenses, such as extended warfare or shortages of grain, cities would sometimes borrow from wealthy citizens. The constant negotiation over taxation that Mackil stresses was essentially among the citizens themselves.
Athens was atypical in the classical Greek world because of its large size and considerable wealth. After summarizing and quantifying both expenditures and revenues in the high-performing Athenian economy, Josiah Ober highlights the “social equilibrium from which neither relatively wealthy elites nor the masses of ordinary citizens had reason to defect” (517). In large empires taxation and other fiscal policies often reinforced great disparities between wealthy elites and poor peasants. In independent cities like Athens wealth and income distribution were notably more egalitarian.
David Stasavage explains why long-term public borrowing first emerged in the “economic backwater” (523) of medieval and early modern Europe. States might consider the option of public credit when they faced expenditure shocks such as warfare, when they could not conscript their own subjects as soldiers without payments, and when they had a consistent stream of monetary revenue for repayments. The best guarantee of repayment was pressure from representative assemblies, because in autonomous cities the merchants who dominated assemblies also purchased public debt. Monarchs then piggybacked on the success of municipal institutions by having cities issue annuities that were used for royal finances.
In the final chapter Edgar Kiser and Margaret Levi survey some of the important themes of comparative history. Their most interesting comments highlight the possibilities for taxpayers to limit tax rates or evade tax payments through noncompliance and desertion. Their chapter also illustrates a significant contrast between sociological analyses and historical interpretations. Political science is apparently timeless: this chapter mentions no dates.