A history of economic doctrines : $b from the time of the physiocrats to the present dayGide, Charles
History
A history of economic doctrines : $b from the time of the physiocrats to the present day
Gide, Charles
Economics -- History
In reply to this the Physiocrats would point out that the mere
application of their fiscal system would result in such an increase in
the net product that the yield from the tax would progressively grow. We
must also take account of the economies resulting from the simplicity of
the tax, and the almost complete absence of expenses of collection. But
the most interesting point of all is that they thought the State should
adapt its needs to meet its revenue, and not _vice versa_. The great
advantage of the Physiocratic _impôt_, however, was that it was regulated
by a natural norm, which gave the amount of the net product. Without
this, taxation becomes arbitrary.[107] At bottom the system affords a
barrier against the autocracy of the sovereign—a barrier that is much
more effective than a parliamentary vote.
One of the disciples of Quesnay put the theory to the test of practice.
The Margrave of Baden had the advantage of being a prince, and he
proceeded to experiment on his own subjects. The system was tried in
three communes of his principality, but, like most social experiments,
failed. In two of the communes it was abandoned at the end of four years.
In a third, despite its evil effects, it was prolonged until 1802.
The increase in the land tax caused a veritable slump in the value of
property just when the remission of taxes upon consumption was resulting
in the rapid multiplication of wineshops and beerhouses.[108] It is
unnecessary to add that the failure of the experiment did nothing to
weaken the faith of the Margrave or his fellow Physiocrats. An experiment
on so small a scale could not possibly be accepted as decisive. This is
the usual retort of innovators when social experiments prove failures,
but we must recognise the element of truth contained in their reply.
But if we wish to see the real results of the Physiocratic system we must
look beyond the private experiments of a prince. Elsewhere the effects
were much more far-reaching.
The fiscal aspect of the French Revolution owed its guiding inspiration
to their ideas. Out of a budget of 500 million francs the Constituent
Assembly decreed that about half of it—that is, 240 millions—should be
got out of a tax levied upon land, equal to a tax of 2400 million francs
nowadays; and the greatest part of it was to be raised by direct taxation.
Distrust of indirect taxation, and of all taxes on commodities, is also a
consequence of the Physiocratic system—a distrust that is bound to grow
as society becomes more democratic. Most of the arguments in favour of
direct taxation are to be found in the Physiocratic writings. But the
chief one employed nowadays—namely, that indirect taxes often bear no
proportion to the amount of the revenue, but weigh heaviest upon those
who have least, is not among them. This concern about proportionality,
which is merely another word for justice, was quite foreign to their
thoughts.[109]
Public-domain text, read in full here on John Shaqi.
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