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Book Review: For Good and Evil

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For Good and Evil: The Impact of Taxes on the Course of Civilization
by Charles Adams (New York: Madison Books, 1993); 530 pages; $29.95.

In 1918, Austrian economist Joseph Schumpeter observed, “The fiscal history of a people is above all an essential part of its general history. An enormous influence on the fate of nations emanates from the economic bleeding which the needs of the states necessitates, and from the use to which its results are put. . . . The spirit of a people, its cultural level, its social structure . . . all this and more is written in its fiscal history, stripped of all phrases. He who knows how to listen to its message here discerns the thunder of world history more clearly than anyone else.”

And some have argued that the burden and harm of taxation have been even worse than war and conquest. “Arbitrary taxation, in despotisms to supply the wants of the ruler, in aristocracies and in oligarchies to supply the state, is perhaps still more destructive to providence than even war,” stated English classical economist Nassau Senior in the 1840s. “The presence of the foreign enemy is occasional and local, that of the tax-gatherer is universal and perpetual. The one can be resisted, the other can be only eluded.”

It has also been insisted that by taxing the wealth and property of those who are the producers of any society, the state merely succeeds in creating a class of non-producers who live off what others have produced and bringing into existence a category of wasteful expenditures for the goods these non-producers consume. “I conclude,” said American economist Thomas Cooper in 1830, “that taxation increases the number of unproductive consumers, and the amount of unproductive consumption; and tends, not to enrich, but to impoverish a nation. Hence, as taxes are an evil, the fewer we have of them, and the smaller the amount, the better.”

And the distinction between those who pay taxes out of their productive efforts and those who consume the wealth of those others was never made more clearly than by the 19th-century American statesman John C. Calhoun, who explained that “the unequal fiscal action of the government . . . divide[s] the community into two great classes: one consisting of those who, in reality, pay the taxes and, of course, bear exclusively the burden of supporting the government; and the other, of those who are the recipients of their proceeds through disbursements, and who are, in fact, supported by the government; or, in fewer words, to divide it into taxpayers and tax-consumers.”

In 1982, Charles Adams published a volume entitled, Fight, Flight and Fraud: The Story of Taxation , which covered the history of taxation from ancient times to the present. He has now revised and expanded that work into a new book entitled, For Good and Evil: The Impact of Taxes on the Course of Civilization . From the ancient Egyptians to modern times, Mr. Adams details both the methods and rationales that governments have used to fleece their subjects. While he hopes that the contemporary reader can learn some lessons from the past about both more harsh and more reasonable systems of taxation throughout the ages, Mr. Adams, in fact, chronicles one unending story of expropriation, oppression and destruction.

Even when governments have instituted tax regimes that did not originally completely suppress all incentives for work, saving and investment, the fact is that the systems have always degenerated into exactly that — engines for economic stagnation and decay. And the only times when governments have, in general, pulled back and lightened the burden and the pervasiveness of its tax regimes has been under threatened or actualized revolts of the taxpayers. But even in these situations, often the lifting of the tax burdens and the moderating of the methods of enforcement have been more illusion than reality. An interesting aspect of Mr. Adams’ research is that from the beginning of recorded history governments have used the same methods of enforcement that dominates our own time: spying, audits of tax records, imprisonment and confiscation of property for failure of proper payment, lies, and deceptions.

Another lesson that can be learned from Mr. Adams’ account is that even in the period since the 18th century, when governments have become increasingly democratic and supposedly a reflection of the will of the people, those governments have continued to impose increasingly higher taxes. The key to understanding this phenomena is the myth of democratic government. Since under democracy, the people are supposed to rule themselves through the representatives they elect, there is the belief that government can never be oppressive, because the people cannot oppress themselves.

But “the people” never rule, even in a democracy. It is always a coalition of groups who elect those who hold office, and a primary purpose of forming such coalitions is to obtain financial support from the state for various purposes at the expense of others in the society who are made to pay for them.

Mr. Adams points out,

Our leaders are still hung up on the desirability of big government and big spending to solve our, and the world’s, problems. There is also a destructive undercurrent of low-key disapproval of “capitalism,” barely perceptible, that has created doubts in our minds about the virtue of free enterprise. . . . Karl Marx’s condemnation of the capitalist [has] done [its] damage despite our avowed rejection of [his] ideas.

And when looking to the future, Adams asks, “Will we end up as citizen-serf-taxpayers like the later Romans? The current direction of our tax system’s penal laws and spying devices makes this a possibility. We can find ourselves shackled to a kind of neo-serfdom to the modern fiscus . If that happens, then the struggle between democracies and dictatorships will enter a new phase in which the choice will be not liberty or bondage but, rather, which kind of bureaucratic bondage.”

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).