And then the outbreak of France’s Wars of Religion (1562–1598) all but tore the country apart fiscally, as commanders in the field, Huguenots as well as royalists, simply grabbed and spent any tax money that could be diverted their way. By 1576 the royal debt had climbed to 100 million livres. Cramped without remission by the wars, the kings of France could not beg enough money or credit, however strident their pleas, to send out armies strong enough to defeat the Huguenots and to bring the wars to an end. Verging repeatedly on bankruptcy, their ministers occasionally halted interest payments on rentes, such as in 1585 and nearly so again in 1598. Later there would be outright bankruptcies in 1602–1604, 1648, and 1661, with moments of disabling fiscal strains in the 1630s and 1650s.
Meanwhile, the sale of offices went on, the numbers of proprietary officeholders climbing from 4,041 in 1515 to 11,000 by 1600, then leaping to 46,047 by 1665, with another jump to about 60,000 before the end of the century. Many of these men, such as in the courts, were trained in law and sprang from moneyed, socially ambitious families. But there were also venal officiers in the treasury, in the tax network, in administration, and even at lower levels socially, including some who held office as fishmongers.
Venal officeholders cross the middle of the fiscal scene here, not only because the money to buy office put substantial sums into the royal coffers—in the first half of the seventeenth century, about 28 percent or more of ordinary revenue—but also because they were sometimes forced to make loans to the crown in return for rentes, especially during the middle and later years of the century. They thus became cogs in the country’s public-finance machine. They received an annual income (gages) on the investment made in the purchase of their offices. But fiscal emergencies often suspended the payment of gages, or, if not this, the officeholders might be obligated to accept rentes as payment. In a further twist, they could buy the right to will their offices to heirs by paying an annual fee. Obviously, then, they had a vital interest both in the liquidity of the state and in milking it. The contradiction here pitted war and sovereign debt against the private income, honor, and tax exemptions that came with the holding of office.
Officeholders in Spain, too, would nurse the shadowy contradiction between their seeking to maximize the profits of office while also needing a truly solvent state. In Castile alone, by 1665, the holders of venal offices, especially in the municipalities, numbered about thirty thousand men. This made for a ratio of “one officeholder for every 166 inhabitants.” In France, by contrast, with its 46,047 officiers in 1665, the ratio was “one for every 380 inhabitants.” So that if French owners of office constituted a state within a state, we have to say that the Spanish ratio was far more alarming and pointed all the sooner to an unhealthy body politic.
In the fifteenth century, the great Florentine humanist Leon Batista Alberti accused the members of Florence’s merchant oligarchy of treating the state as though it were their shop: a source of business and profit. He declared—and it was true—that they speculated on the republic’s consolidated debt, intent on using the profits to dower their daughters. Proprietary officeholders in France engaged in a similar, if more complicated, operation. Their privatizing of office ate away at the centralizing potential of the state, but their corporate interests, swinging in a contradictory direction, also made them want a solvent state. In this extraordinary dialectic, the dangers cut two ways. In one direction, the holders of venal office went after as much profit from the state as they could get their hands on; but in the other, they themselves ran risks, such as in being obligated to lend money to the state, or in seeing their income from rentes and from office suspended for the sake of the state.
Taxes, meanwhile—the ultimate font of public income—were skewed to favor the officeholders and to disfavor the many who could least afford to pay the sales taxes, the special war levies, and the ad hoc charges for the billeting of soldiers. Nevertheless, in the seventeenth century, the country’s fiscal pincers would be sharply felt, now and again, by the officeholders too. For the France of Cardinal Richelieu (1624–1642) and Louis XIV (1661–1715) was a chronicle of bigger armies, longer wars, ballooning taxes, awesome public debt, and bristling discontent. In the 1630s and 1640s, the government had to turn its troops against rebellious peasants, and then face a revolt of the nobility, including episodes of civil war from 1648 to 1653 (the Fronde). The causes of these uprisings lay in official corruption, in the violent billeting of soldiers, and in oppressive taxes.
The story of war finance in France, particularly under Louis XIV, has far too many intricacies to present here. Summaries must suffice. The Nine Years War (1689–1698) and the War of the Spanish Succession (1702–1714) saw French armies of 320,000 and 255,000 soldiers take the field. These colossi required sums of money that no degree of ramped-up taxation could find, even with soldiers camped on the backs, so to speak, of their own civilians or of those in occupied foreign territory.
To meet the unforgiving need for money, Louis’s finance ministers looked beyond taxes and turned to stratagems that brought in hundreds of millions of additional livres. They marketed streams of new rentes and life annuities; they debased the coinage; and they employed syndicates of financiers to sell patents of nobility, to invent and sell numerous new offices, and to extract “forced loans … from existing officeholders.” In addition, they halted payments on rentes, lowered interest rates, and even slashed the capital sums involved in runs of old rentes. Officeholders now saw themselves truly hounded, and in the eighteenth century their obstructionism would often hobble the crown’s ability to finance wars.
At the beginning of the seventeenth century, annual revenue amounted to about 98 million livres. By midcentury this tally had risen to more than 500 million livres. The frontier provinces—e.g., Provence, Languedoc, Dauphiné—had been hammered into line and were now paying much of the take from their taille into the royal coffers. With the help of a new poll tax, the rise in revenue continued, but there was no increase in the net usable income. By 1714, Louis XIV’s wars had cut this revenue to 27 percent of what actually came in. The rest vanished in “servicing” the debt, in alienated revenue, and in special administrative costs, such as salaries for venal officeholders. On Louis’s death in 1715, France saw itself saddled with a debt variously estimated at between 1.7 and 2.5 billion livres.
Russia—to take a sidelong comparative glance—had a variety of direct and indirect taxes, including taxes on land and capital. In the 1670s and 1680s, more than 60 percent of the tsar’s income went to the army. Heavy billeting and forced peasant labor for military purposes were not included in that figure. If paid for, those services would no doubt have claimed more than the whole sum of tsarist income. The bottom line was that the tsar’s army “lived to a large extent ‘off the land’ at home and abroad.” Rather along similar lines, earlier in the century, Gustavus Adolphus, in knocking together a military empire, burdened Sweden with very little debt relative to costs. His armies in Germany had no choice but to live mainly from plunder, above all from “contributions” in cash and in kind, and from the subsidies offered by allies. It was a predatory solution imposed by Sweden’s sparse population and rivulet of revenue. In the 1630s, the Swedish treasury could seriously fantasize a “war budget of 4,377,732 riksdaler,” when the real figure was likely “to be anywhere between twenty and thirty millions.”
In view of Sweden’s agrarian economy and material poverty, Swedish victories in the Thirty Years War have something freakish about them. The country’s armies, however, were led by brilliant generals: Gustavus Adolphus, Johan Banér, Gustav Horn, Hermann Wrangle, and Lennart Torstensson. Even their major victories were the work of German and other foreign mercenaries, not of their relatively small numbers of Swedish soldiers, who served for the most part in garrisons. Nothing like this would be seen again.
IF SERIOUSLY TOUCHED BY THE Thirty Years War, no German prince or city emerged from it without a crippling overload of debt. In many cases, the debtor sim
ply defaulted and suspended or repudiated interest payments on it. In other cases, repayment was carried over into the eighteenth century, with some payments to heirs still being made in the nineteenth century! In the war’s financial crunch, towns and local assemblies had been coerced into paying huge sums of protection and ransom money to Imperial or Swedish forces, and they were forced to borrow the sums to be paid out. Cities usually issued interest-bearing bonds, thereby weakening themselves for the coming struggles with their own princes. They were soon to feel the tightening noose of princely absolutism and the rise of standing armies under the control of princes.
After the war, many princes also found themselves steeped in debt; but their estates or Reichsstände (representative assemblies) were frequently bullied into paying it. One of the foremost magnates, for example, the elector of Saxony, Johann Georg, had been driven to default on 10 million florins of due interest, and he was still in debt for the sum of 25.2 million florins on his death in 1656. The astounding size of this debt—about 16.8 million talers—may be appreciated by noting that in 1649, just after the war’s end, the costs of the Swedish army in Germany (63,700 soldiers) ran to 500,000 talers per month, giving rise eventually to a bill for 15 million talers.
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IN MATTERS OF PUBLIC FINANCE and the storms of war, the Dutch Republic also faced an internal enemy that was always the same: debt.
For much of the seventeenth century, according to an expert on the matter, “almost 90 per cent of the [Dutch] Union’s budget was devoted to warfare,” first in the struggle for independence from Spain, and then, from the 1670s, in fighting off the French and the acquisitive designs of Louis XIV.
Up to about 1648, the armies of the Dutch Republic ranged in size from forty thousand to seventy-five thousand men, most of them foreign mercenaries. Average yearly war costs, in the final decades of the war with Spain (1621–1648), totaled about 24 million guilders. But the mountain of debt rose, and Holland alone, the richest of the seven United Provinces, saw its share of the expenses climb to the yearly sum of 16,527,948 guilders, in spite of the fact that its annual revenues brought in far less: only 10,847,690 guilders.
Although the many details varied from one Dutch province to another, the bulk of tax receipts came from sales taxes on salt, beer, soap, bread, meat, fruit, fish, vinegar, grain, coal, beans, milling, wool, and even building materials, dice, playing cards, and firewood. If the Dutch had a reputation for paying their mercenaries on time, it was also the case that, like others, they paid wages that amounted to about half or even less of what unskilled workers might earn. Moreover, contrary to many a claim, they could be very late in paying, particularly, as often happened, when some of the United Provinces failed to pay their share of the agreed sums for the maintenance of soldiers. Units of Scottish and English soldiers issued a bitter stream of complaint against their Dutch paymasters.
In 1648, at the end of the war with Spain, Holland alone carried a debt in excess of 125 million guilders, and interest on this sum claimed more than 53 percent of revenue. But luckily for the Dutch, generally speaking, interest did not rise above 6 percent, because investors in the debt had confidence in the collective financial decisions of the United Provinces and their Council of State.
THE STATE
The European “sovereign” state came out of a dense scatter of medieval microstates and half-states: mini-kingdoms, lordships (feudal fiefs), tiny principalities, and cities. The larger and more enterprising of these—Venice, say, or Capetian France—absorbed neighboring “statelets” by the force of arms, by means of defensive treaties, or by political claims, heredity, and the rites of marriage. It was a process of seizure and acquisition, leading to the ascent of the modern state in the period from the fourteenth to the sixteenth centuries.
But the process left a trail, a spoor. For the state can be a monster, above all in war, and it often struck contemporaries this way: Maurus Friesenegger, Alexandre Dubois, and a host of Huguenots. In this embodiment, supreme political authority has a history with a multitude of visages. Our own day is not a stranger to the spectacle of monstrous states.
The monstrosities of the early modern state were most visible in Europe’s great powers. They put huge armies into the field, as we have seen, but could not afford to keep them there, save by means of theft and violence against their own people, not to speak of what their armies did to other peoples. They tended to treat their ordinary soldiers like the scum of the earth, broke every contract with them, and yet demanded their loyalty or were ready to see them flogged, mutilated, branded, shipped out as galley slaves, or hanged when they deserted. Using the poor, the unemployed, and the marginal, including common criminals, as cannon fodder, they can be said to have pursued a politics of social cleansing. They depended upon entrepreneur officers for the raising of their armies, thereby abandoning critical elements of control over numbers, quality, and costs. The besieging of cities, the most sustained and shrill of all acts of war against civilians, was the norm of warfare for them. When their armies went unpaid or hungry, the plunder and ravaging of rural communities was also a norm for the great powers. And they often proved to be largely worthless in their efforts to handle the mortal questions of wartime logistics.
The early modern state strained to find more revenue for war, but put the collection of taxes into private hands, thus opening the doors to profiteering, corruption, and thuggery. It made tacit contracts with its own people, promising the periodic payment of interest on their investments in the public debt, but then proceeded, time and again, to break those contracts by the abrupt withholding of payments. It was driven to seek out short-term loans from bankers, then maneuvered to conceal the alarming interest rates from the responsible diets and assemblies. In Spain, the Empire, France, Poland, and England, acting in a frantic quest to pay its debts, the early modern state was capable of debasing its coinage by melding base metal into its silver coins, thereby wreaking inflationary havoc in the marketplace. And it sold government offices, converting into private property that which more properly belonged to the order of public administration and politics.
The question of accountability comes up.
Was it the case that the kings of France and Spain, or that German and other princes, were absolute rulers, answerable only to their consciences? Not in the least. In every case, their authority was checked by one or more bars: custom, representative bodies, councillors, the law, or even the threat of rebellion.
The power of taxation was the one most ringed in by restraints. Representative bodies of one kind or another nearly always claimed the right to levy taxes, and in these matters the prince had to negotiate with them. This was the case in Spain, France, England, Sweden, Denmark, Poland, most of Italy, and in the world of German princes. But at the end of the middle ages, and more pressingly so in the sixteenth and seventeenth centuries, relying on the turmoil of war, princes were able, more and more often, to intimidate and manipulate representative assemblies into providing some of the revenue needed for armies. Never all of it. The strongest arguments in favor of military funds hinged on security concerns and dynastic claims.
For Germany, public finance in the electorate of Brandenburg provided a pattern of things to come. Here the epidemics and barbarities of the Thirty Years War eliminated half of the population, and many farms remained wasteland for years after the war’s end. Brandenburg’s elector was able to use force majeure to levy taxes and to raise a little army without the approval of the provincial diet. Then, after 1648, Brandenburg returned briefly to traditional fiscal procedure. But in 1653, with the Northern Wars (1655–1660) on the horizon, and after much haggling, Frederick William, the Great Elector, got the estates to fund a small army for six years, in exchange for which he extended aristocratic privileges. These included the tax-exempt status of nobles and the freedom to impose the worst kind of serfdom (Leibeigenschaft) on the Brandenburg peasantry. Later, in his campaign to take Pomerania and Prussia, he ignored his provincial
assembly, imposed taxes unilaterally, increased the size of his standing army, and even used his soldiers to force the payment of taxes. In twelve years (1660–1672), his army went from seven thousand to twelve thousand men. But by the time he died, in 1688, Brandenburg-Prussia had a standing army with a European reputation. Running to between twenty and thirty thousand men, its size was strikingly out of “sync” with the principality’s modest economy and small population. Annual tax revenue had trebled to about 3.4 million talers. The period’s most ambitious state was here in the making, but it was also one of the most heavily taxed in Europe.
That the early modern state retained its bellicose features for so long was a fact connected with the surrounding material world. Leading princes had emerged from the late middle ages as warlords, as the foremost official thugs; and the whiff of this armed background long persisted. Menace and swagger were a part of the political landscape, imparting an air that clung to certain princes—to Henry VIII of England, Henry of Navarre, Gustavus Adolphus, and to many northern noblemen. But more important, the alleged rights of dynasties, fiercely defended by princes, were turned into the engine that powered European foreign relations. And meanwhile, princely nagging for more revenue, more soldiers, more rights never ceased.
FOR ALL ITS CLERKS, AGENTS, secretaries, and field officials, the administrative apparatus of the early modern state was porous. Ties of patronage, special interests, inexperience, privilege, and the ownership of office foiled the better execution of tasks in the stickiest areas: war and public finance. Tax collecting and the recruiting of soldiers, each at the parish level, too often lay beyond the resources of government. By contrast, courts of law, or the job of legislating, presented no comparable challenges. The emerging state thus shied away from collecting its own taxes, and was unable to discipline its swelling armies. We have seen this ad nauseam. Ministers were aware of their failures. The French crown introduced a web of “fiscal intendants” (intendants des finances) whose job was to monitor the provincial administration of taxes. But in the seventeenth century, they were frequently alleged to be notoriously corrupt, and it has been suggested that the whole of France’s “central financial administration was involved on a permanent basis in a conspiracy to commit fraud.” Two of the most powerful first ministers of the age, cardinals Richelieu and Mazarin, ended with private fortunes that beggared belief: the first with 22 million livres, and Mazarin, a greedier courtier, with 37 million. Their way of life was unlikely to inspire honesty in their subordinates.
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