Thoughts on the mechanism of societies

by marquis de Charles Casaux

It would be a difficult matter to trace out, with exactness, the progress of the taxes; but it appears to me, that whatever be the mode of establishing them, there is not a subject who does not contribute his share sooner or later, unless nature should annul the burden, even before the clashing of private interests should have succeeded in settling the division upon equitable principles.

The downfall of England was foretold at her very first loan. This prophecy did not destroy the means of funding, on a very solid basis, in the year 1762, that part of the national debt, till then unfunded. Now I would ask the man, whom I should know to be most intimately persuaded of the dreadful effect that must be produced by a debt of 64,234,595l. incurred from 1754 to 1762, in addition to a still heavier one, contracted since the time when the total amount of the landed revenue was rated at 32,000,000, and the value of the lands only at 320 millions, that is to say, at about double the value of the whole national debt as it stands at present: I would ask that man, I say, whether, between the years 1763 and 1775, he has been able to discover in any parts of England, one single symptom of decay, either in agriculture or commerce, any diminution of public or private enjoyments, or less insolence amongst the common people, by which one may surely judge of the alterations which may happen in their circumstances. This general observation may suffice to make us look on the period of 1775, as presenting a state of things, which, supposing it had been prolonged, could not have held out any alarming prospect. Every one worked or enjoyed, and every body was paid. All this, methinks, might have continued on the same footing to the end of the world, without any alteration on the former or subsequent fortune of any one, such only excepted, as industry, activity, imprudence, and foresight, must occasion in all countries where justice is blind, and has but one scale.

I readily acknowledge, that at that period a grievous war broke out, which did not conclude till 60 millions, nominally 100, had been added to the old debt, or, to come more directly to the point, till the nation had been loaded, or, if you please, crushed under the enormous weight of three additional millions interest to be paid annually. But in what manner will those three millions, so heavy, so dreadful, affect the interested parties? In my judgement, it will be the same with this additional burden, as it has been with the six millions which the said parties were wont to pay before the last war. It certainly must have been felt at first by every body, except the trading part of the nation, whose first operation ever was to add to the price of the taxed commodities, both the amount of the tax, and the benefit of the advance to the consumer. (and this is strictly consonant with Justice.) Now these consumers are of two sorts, viz. the proprietor of lands, and the proprietor of money: the latter must also be considered under a two-fold point of view, as a capitalist for himself, or as a dependant who receives the money from either of the two proprietors. The proprietor of money, from the nature of this instrument of trade, is a being merely passive; twenty shillings, which he is paid for interest, can currently enable him to purchase such articles only as currently sell for 20 shillings. If the taxes had increased, by one tenth, the price of all the commodities which he used to consume before the war of 1755, it is clear, therefore, that in 1763 he had lost one tenth of all his possible enjoyments: I say possible; for the monied man, I speak in general, saves enough, annually, to strike an advantageous balance against the inconveniences inseparable from his capital; I mean that progressive and unavoidable depreciation of money, so long as there will be mines opened, and taxes to discharge. But he can effect it with the greater ease, as his stock often returns 5 per cent. whilst the capital of the landed proprietor brings him in hardly four, and often less.

The dependent proprietor of money had also his resource; he, by degrees, obtained an increase of salary; (and this is strictly consonant with justice.)

Neither was the landed proprietor without his resource: he gradually raised the price of his goods, and would have increased it to the level of the whole amount of the produce of industry; (and this would have been strictly consonant with justice.) But nature very often anticipates the execution of that very equitable measure, by another operation which is as infallibly the consequence of peace, as taxes are the effect of war, ever since the abolishing of personal service. The 10, 15, 20 millions, which government had borrowed during the war, were nothing more than a part of the capitals which in happier times might have been laid out in the improvement of cultivation and industry. Peace brought them back to their destination; an increase in the quantity of the produce of lands was the consequence; and an equal increase in the demands of the productions of industry, occasioned by the former, kept up the price of every thing, by facilitating to the one, the means of purchasing what the other wanted to dispose of, and by presenting an increase of resources to that increase of population, which as certainly results from peace and plenty, as mortality does from war and scarcity.

I now return to the three millions interest brought upon this nation by the last war; and I demand, what reason can prevent similar effects resulting from similar causes?

Yet, in order to obtain a complete idea of the whole burden of this formidable debt, we must suppose that the full amount of it was contracted during the last war; and then we shall see how many millions of guineas it would really cost England to pay off for ever the interest of all her successes and miscarriages from the beginning of this century, if the 9 millions of taxes should be now established in order to supply the interest of the debt of 238 millions.

It will appear hereafter, that 9 millions of taxes laid on the articles of consumption, would increase, by about 14 millions, the price or nominal value of the whole produce of industry, rated upon supposition at 56 millions. Now it seems to me equally unjust and impossible, that the total amount of the produce of agriculture should not thereby be increased in the like proportion: I beg to be allowed this supposition, until I assign my reasons for it, and bring proofs sufficiently positive to ascertain the fact.