The Origins Of Political Order Part 10

HE WHO KNOWS ONLY ONE COUNTRY KNOWS NO COUNTRIES.

Although I have been speaking about Europe as if it were a single society to be compared to China or the Middle East, the fact is that there were multiple patterns of political development within it. The story of the emergence of modern const.i.tutional democracy has frequently been told from the standpoint of the winners, that is, based on the experience of Britain and its colonial offshoot, the United States. In what has become known as "Whig history," the growth of liberty, prosperity, and representative government is seen as an inexorable progress of human inst.i.tutions that begins with Greek democracy and Roman law, is enshrined early on in the Magna Carta, then threatened by the early Stuarts, but defended and vindicated during the English Civil War and the Glorious Revolution. These inst.i.tutions then spread to the rest of the world via Britain's colonization of North America.3 The problem with Whig history is not that it is necessarily wrong in its fundamental conclusions. In fact, its emphasis on the role of taxation as the primary driver of accountability is broadly correct. The problem is rather that, like all single-country histories, it cannot explain why parliamentary inst.i.tutions emerged in England but not in other similarly situated European countries. This kind of history often leads observers to conclude that what did did happen happen must must have happened, since they are not made aware of the complex concatenation of circ.u.mstances that led to a particular outcome. have happened, since they are not made aware of the complex concatenation of circ.u.mstances that led to a particular outcome.

To give one example, in 1222, seven years after Runnymede, the Hungarian king Andrew II was forced by the cla.s.s of royal servants to concede the Golden Bull Golden Bull, a doc.u.ment that has been labeled an East European Magna Carta. The Golden Bull protected certain elites from arbitrary actions by the king and gave bishops and magnates the right to resist should the monarch fail to keep his promises. Yet the Golden Bull never became the foundation of Hungarian liberty. This early const.i.tution limited the power of Hungarian kings so well that effective rule was placed in the hands of an undisciplined aristocracy. Instead of developing a political system in which strong executive power was balanced against that of cohesive legislature, the const.i.tution that the Hungarian n.o.ble estate imposed on the monarchy prevented the emergence of a strong central executive to the point that the nation was not prepared to defend itself externally. Domestically, Hungarian peasants had no king to protect them from a rapacious oligarchy, and the country lost its freedom altogether to the Ottomans at the Battle of Mohacs in 1526.

Any interpretation of the rise of accountable government thus needs to look not just at the successful cases but the unsuccessful ones as well and derive from these cases an explanation of why representative inst.i.tutions appeared in one part of Europe while absolutism prevailed in other parts. Several efforts have been made to do this, beginning with the German historian Otto Hintze and continuing through the work of Charles Tilly, who sees external military pressure and capacity for tax extraction as the primary explanatory variables.4 Perhaps the most sophisticated recent effort is the work of Thomas Ertman, who looks at a much broader range of cases than most comparative histories and provides plausible explanations for much of the observed variance. Perhaps the most sophisticated recent effort is the work of Thomas Ertman, who looks at a much broader range of cases than most comparative histories and provides plausible explanations for much of the observed variance.5 This literature falls short of being a real theory of political development, however, and it is not clear whether it will ever be possible to generate such a theory. The problem, to put it in social science terms, is that there are too many variables and not enough cases. The political outcome that the theory is trying to explain is not a simple binary choice between representative government and absolutism. As will be seen below, at least five significantly different types of state emerged in Europe whose provenance needs to be explained. The kind of absolutism that emerged in France and Spain, for example, was quite different from the variants that appeared in Prussia and Russia, and indeed, Prussia and Russia differed significantly from each other. The number of explanatory variables that can be empirically demonstrated to have played a role in producing these different outcomes is even larger, ranging from familiar ones like the external military threat and taxation capacity used by Tilly, to the structure of internal cla.s.s relations, to international grain prices, to religion and ideas, and the way that they were received by broad populations and by individual rulers. The prospects of producing a predictive general theory out of this soup of causal factors and outcomes seem to be very slim indeed.

What I will attempt to do instead in the following chapters is to describe several important paths of European political development and the range of causal factors a.s.sociated with each one. From this range of cases it may be possible to generalize about which factors were most and least important, but in ways that fall short of providing a genuine predictive theory.

EUROPE'S EASTERN ZHOU PERIOD Feudal Europe in the year 1100 resembled China during the Zhou Dynasty in many ways. There was a nominal monarch or ruling dynasty, but de facto power was split among a highly decentralized number of feudal lords who maintained their own military forces, kept order, administered justice, and were largely self-sufficient economically. As in China, certain dynastic houses distinguished themselves through greater organizational ability, ruthlessness, or luck, and began to consolidate territorial states over ever wider domains.

Between the fifteenth and seventeenth centuries, a huge political transformation took place in Europe that led to the rise of strong national states, comparable to the state building that had occurred in China from the fifth to the third centuries B. C . A background condition for this change was a large increase in population, particularly during the sixteenth century, and also increases in per capita wealth. This is part of the same global phenomenon affecting the Ottoman Empire that we have already encountered, though its effects were probably more benign in Europe than in the Middle East. Europe's population rose from sixty-nine million in 1500 to eighty-nine million in 1600, an increase of almost 30 percent.6 The monetization of its economy proceeded apace, with large imports of gold and silver from Spain's colonies in the New World. Trade began to grow much more quickly than GDP overall; between 1470 and the early nineteenth century, the size of the Western European merchant fleet grew seventeenfold. The monetization of its economy proceeded apace, with large imports of gold and silver from Spain's colonies in the New World. Trade began to grow much more quickly than GDP overall; between 1470 and the early nineteenth century, the size of the Western European merchant fleet grew seventeenfold.7 At the beginning of this period, most European polities were "domain states," in which the king derived the whole of his income from his own domain, which was but one of many in the territory he nominally ruled. Administrative staffs were small and arose out of the king's household. Actual power was diffused among subsidiary layers of feudal va.s.sals who acted as autonomous political ent.i.ties. They maintained their own armies, taxed their own subjects, and administered justice locally. They owed service to their lord, who might be the king if they were powerful barons, or might be a baron or some lesser lord for lower-ranking va.s.sals. They paid this obligation in blood, either by fighting themselves or with their retainers, rather than in taxes, and indeed, most n.o.bles were exempt from taxation for this reason. The king's domain could be a discontinuous collection of territories scattered across a wide area, and his kingdom a patchwork of subsidiary domains in which the lands of a lord owing service to a rival king could be interspersed.

By the end of this period, much of the European political order had been transformed into a system of states. The domain state had been transformed into a tax state, in which the monarchy's revenues were derived not just from the king's domain but also from his ability to tax the whole of his territory. Administration of this system required the creation of much larger state bureaucracies, beginning with chanceries and finance ministries to control the collection and disburs.e.m.e.nt of revenue. The autonomy of local lords was severely diminished. They now owed taxes rather than service, and the central government disrupted their traditional relations.h.i.+ps with their peasants by directly taxing the latter. The domains directly controlled by states increased dramatically as well, since ecclesiastical properties all over Europe were seized and taken over as state lands. The territorial jurisdiction of states s.h.i.+fted from patchworks of discontinuous domains to contiguous blocks of land; France, for example, took on its now familiar hexagonal shape in this period. States increased in size also by absorbing, through conquest, marriage, or diplomacy, weaker and less viable political units. And states began to penetrate their societies to a far greater extent as well, reducing the numbers of local dialects in favor of the one used at court, h.o.m.ogenizing social customs, and creating common legal and commercial standards over increasingly large jurisdictions.

The speed and extent of this transformation was remarkable. It was comparable in many ways to what had happened to China during the Eastern Zhou Dynasty, though at the end of the process there were still multiple surviving states rather than a single empire. Consider taxation. In the Habsburg Empire, taxation increased from 4.3 million florins in 15211556 to 23.3 million in 15561607. Average annual tax revenues in England shot up from 52,000 during the years 14851490 to 382,000 in 15891600. Castile took in 1.5 million ducats in taxes in the year 1515, and 13 million by 1598.8 This enlarged tax take was used to support a bigger and more professional public sector. France in the year 1515 had seven to eight thousand officeholders working for the king; by 1665, the royal administrative corps numbered eighty thousand. The Bavarian government had 162 officials on its payroll in 1508, and 866 by 1571. This enlarged tax take was used to support a bigger and more professional public sector. France in the year 1515 had seven to eight thousand officeholders working for the king; by 1665, the royal administrative corps numbered eighty thousand. The Bavarian government had 162 officials on its payroll in 1508, and 866 by 1571.9 Whereas the early development of European states was rooted in their ability to provide justice, from the sixteenth century on the process was driven almost entirely by the need to finance war. Wars in this period were fought on increasingly large scales and were nearly continuous. The large ones included a prolonged conflict between France and Spain for control of Italy; the effort of Spain to subdue its Dutch provinces; the contest among England, Spain, Portugal, the Netherlands, and France over colonies in the New World; the attempted Spanish invasion of England; prolonged conflict in Germany following the Reformation, culminating in the Thirty Years' War; Swedish expansion into Central and Eastern Europe and Russia; and ongoing conflict among the Ottoman, Habsburg, and Russian empires.

States in the early modern period did not provide much by way of services other than basic public order and justice; the vast bulk of their budgets went to military expenses. Ninety percent of the budget of the Dutch Republic was spent on war in the period of their long struggle with the Spanish king; 98 percent of the Habsburg Empire's budget went to finance its wars with Turkey and the Protestant powers in the seventeenth century. From the beginning of the seventeenth century to its end, the budget of France rose five- to eightfold, while the British budget increased sixteenfold from 1590 to 1670.10 The size of the French army increased proportionately, from 12,000 men in the thirteenth century to 50,000 in the sixteenth, to 150,000 in the 1630s, to 400,000 late in Louis XIV's reign. The size of the French army increased proportionately, from 12,000 men in the thirteenth century to 50,000 in the sixteenth, to 150,000 in the 1630s, to 400,000 late in Louis XIV's reign.11 THE ROLE OF LAW IN EUROPEAN DEVELOPMENT.

Sometime in the middle of the first millennium B.C., China made a transition from warfare based on small numbers of aristocrats riding chariots to much larger ma.s.s infantry armies based on general conscription. A similar technological transition took place in Europe in the twelfth and thirteenth centuries, as horse-mounted, heavy knights were replaced by large infantry armies using bows and pikes. Unlike early Chinese state builders, however, early modern European monarchs did not raise these armies by conscripting ma.s.ses of peasants on their own territories. The great armies that the emperor Charles V put into the field were built around a core of Castillian troops known as tercios tercios but included large numbers of mercenaries hired under contract from both their own lands and foreign jurisdictions. but included large numbers of mercenaries hired under contract from both their own lands and foreign jurisdictions. 12 12 Ma.s.s conscript armies appeared in Europe only in the eighteenth century, but they didn't really emerge as the basis for state power until the Ma.s.s conscript armies appeared in Europe only in the eighteenth century, but they didn't really emerge as the basis for state power until the levee en ma.s.se levee en ma.s.se of the French Revolution. By contrast, Chinese states like Qin went directly from horse-mounted aristocratic warfare to ma.s.s conscription, without pa.s.sing through the mercenary stage. of the French Revolution. By contrast, Chinese states like Qin went directly from horse-mounted aristocratic warfare to ma.s.s conscription, without pa.s.sing through the mercenary stage.13 Why didn't these early modern European monarchs behave like their Chinese counterparts and simply conscript ma.s.ses of peasants living on their territory? And why didn't they pay for these armies by hiking direct tax rates throughout their territories, instead of relying on loans and the sale of offices?

One of the chief reasons was the existence of a rule of law in Europe. We saw in chapter 18 18 how it evolved out of religious law and spread to a wide variety of other domains. The entire hierarchical structure of European feudalism, which effectively distributed sovereignty and power to a host of subordinate political units, was protected by inherited law. Peasants were bound by a whole range of feudal laws and obligations, primarily to their local lord. The king had no legal right to conscript them; indeed, he might not even have the right to conscript those working directly on his own domains because their duties were specified in great detail and might not include military service. European monarchs did not feel ent.i.tled simply to seize the property of their elite subjects, who would claim ancient rights based on feudal contract. States could impose taxation, but they would have to go through organized estates (like the French Estates-General) by which they justified the imposts to the payers and received their permission. Although absolutist monarchs tried to whittle away the power of these estates, they did this within the overall legal framework on which their own legitimacy rested. Nor did kings feel they had the right to violate the personal security of their rivals by arbitrarily seizing or killing them. (It is important to note, however, that these rules were much less rigorously applied to nonelites like peasants and other commoners up until a much later period in history.) how it evolved out of religious law and spread to a wide variety of other domains. The entire hierarchical structure of European feudalism, which effectively distributed sovereignty and power to a host of subordinate political units, was protected by inherited law. Peasants were bound by a whole range of feudal laws and obligations, primarily to their local lord. The king had no legal right to conscript them; indeed, he might not even have the right to conscript those working directly on his own domains because their duties were specified in great detail and might not include military service. European monarchs did not feel ent.i.tled simply to seize the property of their elite subjects, who would claim ancient rights based on feudal contract. States could impose taxation, but they would have to go through organized estates (like the French Estates-General) by which they justified the imposts to the payers and received their permission. Although absolutist monarchs tried to whittle away the power of these estates, they did this within the overall legal framework on which their own legitimacy rested. Nor did kings feel they had the right to violate the personal security of their rivals by arbitrarily seizing or killing them. (It is important to note, however, that these rules were much less rigorously applied to nonelites like peasants and other commoners up until a much later period in history.) Early Chinese kings exercised tyrannical power of a sort that few monarchs in either feudal or early modern Europe attempted. They engaged in wholesale land reform, arbitrarily executed the administrators serving them, deported entire populations, and engaged in mad purges of aristocratic rivals. The only European court in which one saw this kind of behavior was that of Russia. This kind of unconstrained violence became much more prevalent only after the French Revolution, when modernization swept away all of the ancient inherited legal constraints of the old European order.

It is important to understand, then, that European state development had to take place against a well-developed background of law that limited state power. European monarchs tried to bend, break, or go around the law. But the choices they made were structured and checked by the preexisting body of law that was developed in medieval times.

A FRAMEWORK FOR STATE BUILDING.

To engage in war, a state has to mobilize resources on a larger and larger scale. The need for resources drives higher levels of taxes and novel ways of extending the domain of the tax state to encompa.s.s more of the population and more of the society's resources. Administration of fiscal resources in turn drives increases in the size of the state bureaucracy and an increasing rationalization of that bureaucracy to squeeze the greatest possible value out of it. States need to be territorially large to increase their revenue base, and territorially contiguous for purposes of defense. Pockets of political dissidence can be exploited by enemies; hence the need to impose uniform administration over the entire territory of the state.

Certain parts of Europe-some of the German and Eastern European lands, and geographically isolated areas like Switzerland-did not face early military compet.i.tion and therefore organized modern states relatively late. All of the other major powers-France, Spain, England, the Netherlands, Sweden, Russia, the Habsburg Empire, Poland, Hungary, and others-faced growing demands for military expenditures and thus centralization from the fifteenth century on.14 The story of political development from this point in European history is the story of the interaction between these centralizing states and the social groups resisting them. Absolutist governments arose where the resisting groups were either weak and poorly organized, or else were co-opted by the state to help in extracting resources from other social groups that weren't co-opted. Weak absolutist governments arose where the resisting groups were so strongly organized that the central government couldn't dominate them. And accountable government arose when the state and the resisting groups were better balanced. The resisting groups were able to impose on the state the principle of "no taxation without representation": they would supply it with substantial resources, but only if they had a say in how those resources were used.

The outcome of these struggles was not a bilateral fight for rights between the state and society as a whole. In very general terms, the struggle tended to be a four-legged one among the central monarchy, an upper n.o.bility, a broader gentry cla.s.s (that is, small landowners, knights, or other free individuals), and a Third Estate that included city dwellers (the incipient bourgeoisie). Peasants, who accounted for the vast majority of the population in these societies, were not yet significant players because they were not socially mobilized into corporate bodies that could represent their interests.

The amount of resistance to state centralization depended on the degree to which the three groups outside the state-n.o.bility, gentry, and Third Estate-were able to work together to resist royal power. It also depended on the internal cohesion that each one demonstrated. And finally, it depended on the cohesion and sense of purpose of the state itself.

FIGURE 1. POLITICAL POWER IN AN AGRARIAN SOCIETY.

In the chapters that follow, I will present the stories of four European state-building outcomes and some of the reasons why these outcomes diverged from one another. This selection covers the most diverse set of cases from the most representative to the most absolutist. They are: 1. 1. Weak absolutism Weak absolutism. The French and Spanish monarchies of the sixteenth and seventeenth centuries epitomized the new absolutist state, and they were more centralized and dictatorial in certain ways than, say, their Dutch and English counterparts. On the other hand, neither was able to fully dominate the powerful elites in its society, and a heavier burden of taxation was placed on those least able to resist it. Their centralized administrations remained patrimonial, and indeed the level of patrimonialism increased over time.2. Successful absolutism Successful absolutism. The Russian monarchy succeeded in co-opting both its n.o.bility and gentry, and turning them into a service n.o.bility completely dependent on the state. They were able to do this in part by a common interest all three developed in binding the peasantry to the land and ruthlessly imposing the largest burden of taxation on them. The government remained patrimonial until a late point, which nonetheless did not prevent the Russian monarch from terrorizing and controlling the n.o.bility to a far greater degree than the French or Spanish kings.3. Failed oligarchy Failed oligarchy. The aristocracies of both Hungary and Poland succeeded early on in imposing const.i.tutional limits to the power of the king, who then remained weak and unable to construct a modern state. The weak monarchy was unable to protect the interests of the peasantry from the n.o.ble cla.s.s, who ruthlessly exploited them. Nor was it able to extract sufficient resources to build a state machinery strong enough to resist external aggression. Neither of these states succeeded in building a modern, nonpatrimonial government.4. Accountable government Accountable government. Finally, England and Denmark were able to develop both strong rule of law and accountable government, while at the same time building strong centralized states capable of national mobilization and defense. England's development of parliamentary inst.i.tutions is the most familiar story, but the same outcome occurred in Scandinavia through a rather different political process. By the end of the nineteenth century, one had a liberal state, the other the foundations for a social-democratic one, but the principles of law and accountability were extremely well anch.o.r.ed in both.

There were important variants and outcomes besides these. The Dutch Republic and the Swiss confederation represented alternative republican pathways to accountable government and rule of law, while the Prussian monarchy developed a strong modern state and rule of law in the absence of accountability. I am not able to cover these and other outlier cases. What is important, however, is to understand the broad conditions that tended to support the emergence of either accountable government or the different forms of absolutism.

23.

RENTE SEEKERS.

How fiscal crisis led to the rise of patrimonial government in France; the intendants and the growth of centralized government; how the French elite understood liberty as privilege, and how they were prevented from achieving collective action; the French government's ultimate weakness and inability to tax or control its own elites

France of the ancien regime presents a highly contradictory picture of both enormous strength and underlying weakness. Anyone who has visited Versailles outside Paris understands why Europeans of the age of Louis XIV held the French monarchy in such awe. Frederick the Great's Sanssouci in Potsdam seems like a mere hut in comparison. Louis's English and Dutch rivals regarded France in the late seventeenth century a bit the way Americans looked at the Soviet Union during the cold war, as an immense, rich, powerful, and ambitious land power that threatened the freedoms of the whole of Europe. The French monarchy was a pioneer in European state building and laid the basis for the modern, centralized administrative state. Alexis de Tocqueville, writing in the 1840s, noted how Frenchmen of his generation believed that this state appeared only with the French Revolution. But as he set out to prove, its foundations had been laid two centuries prior by kings of the ancien regime who "joined hands with modern France across the abyss of the Revolution."

At the same time, the entire edifice of the French state was built on rotten and crumbling foundations. When Louis XIV died in September 1715, his state was completely bankrupt. The royal debt amounted to almost two billion livres, not counting another six hundred million livres of short-term unfunded government paper. France's creditors had claims on future tax revenues stretching all the way up to 1721; debt service alone exceeded antic.i.p.ated tax revenues for the foreseeable future.1 This parlous fiscal state was not something new, though Louis XIV's aggressive foreign policy had greatly added to its scale. For more than a century, French kings had been constructing their centralized state based on a set of unimaginably complex deals with local power holders, who traded various privileges and immunities in return for cash. The state had gradually encroached on the freedom of all of its subjects, but only by mortgaging its own future to a legion of corrupt officeholders in an unsustainable way. It could not move to the higher state of absolutism that had been achieved by the Chinese state centuries earlier. Ultimately, it was normatively bound to respect the interests of the same social cla.s.ses it was trying to dominate, and had to respect the laws inherited from the past. Only after those social cla.s.ses were swept away by the revolution could a truly modern French state emerge. This parlous fiscal state was not something new, though Louis XIV's aggressive foreign policy had greatly added to its scale. For more than a century, French kings had been constructing their centralized state based on a set of unimaginably complex deals with local power holders, who traded various privileges and immunities in return for cash. The state had gradually encroached on the freedom of all of its subjects, but only by mortgaging its own future to a legion of corrupt officeholders in an unsustainable way. It could not move to the higher state of absolutism that had been achieved by the Chinese state centuries earlier. Ultimately, it was normatively bound to respect the interests of the same social cla.s.ses it was trying to dominate, and had to respect the laws inherited from the past. Only after those social cla.s.ses were swept away by the revolution could a truly modern French state emerge.

In many respects, the situation of the French monarchy was very similar to that of certain contemporary developing countries insofar as it regarded the rule of law as an inconvenient obstacle to its purposes. The government was profligate, lavis.h.i.+ng money not on subsidies or social programs, but on war. The resulting budget deficits had to be financed, and the monarchy's desperate search for revenues led it to stretch, bend, and break the law wherever it thought it could get away with it. But it was limited by the fact that in the end it had to go back to the same group of creditors for funds. The only way out of this situation would have been for the monarchy simply to expropriate the holdings of the elite en ma.s.se, which is what the revolution eventually did. But this was beyond the imagination or capabilities of the ancien regime, which therefore found itself stuck in a situation of perpetual economic crisis.

At the same time, the society from which the government sought to extract funds was unable to impose upon it a basic principle of accountability. The reason for this was a lack of social solidarity or social capital among the different economic cla.s.ses. The aristocracy, bourgeoisie, and peasantry, while united at earlier times in their history, came to feel little sympathy for one another and did not believe, like their English counterparts, that they const.i.tuted parts of a single nation. Each of these cla.s.ses was in turn internally stratified into a host of self-regarding ranks. Each rank was jealous of its privileges and more concerned to maintain its status relative to the next rank down than to protect the cla.s.s itself or the nation from being dominated by the state. Liberty was interpreted as privilege, and the result was a society in which, according to Tocqueville, "there were not ten men willing to work together for a common cause" on the eve of the revolution.

Weak absolutism arises when neither the centralizing state nor the groups opposing it are able to organize themselves adequately in the struggle for dominance. The result in France was tilted more toward absolutism, but it was a fragile system that could not withstand the Enlightenment s.h.i.+ft in ideas that based legitimacy on the Rights of Man.

THE BEGINNINGS OF PATRIMONIAL ABSOLUTISM.

When the first Bourbon king, Henry IV, was crowned in 1594, France was very far from being either a unified nation or a modern state. From a power base in an area around Paris, earlier kings had a.s.sembled a realm out of other princ.i.p.alities, such as Burgundy, Normandy, Brittany, Navarre, and Languedoc, but there remained strong regional variations in language and customs. The kingdom was divided between the pays d'elections pays d'elections and the and the pays d'etats pays d'etats. The former const.i.tuted the core of the country in the regions around Paris; the latter were more recently acquired territories at the extremities and operated under different legal rules. In addition, the Reformation had divided the country along sectarian lines. The religious civil war between the Catholic League and the Huguenots was brought to an end only when the Protestant Henry converted to Catholicism and granted the Edict of Nantes in 1598, establis.h.i.+ng Catholicism as the state religion but granting equal rights to the Protestants.

From the beginning of the Bourbon line up until the Revolution in 1789, the story of French state building follows two parallel tracks. The first concerns the ever-increasing centralization of the French state and the reduction of the political rights of all the subordinate units that had existed in feudal times. These included all of the princ.i.p.alities and independent n.o.ble houses that had once const.i.tuted the locus of government in France, as well as munic.i.p.alities, guilds, the church, even independent private business organizations that increasingly came under protection and control of the state.

The second track concerns the manner manner in which this centralization occurred. Unlike the early Chinese state, and unlike the German state that was to emerge in Brandenburg-Prussia in the eighteenth century, the centralized French state was not built around an impersonal, merit-based bureaucracy recruited on the basis of functional specialization and education. It was instead thoroughly patrimonialized. Government offices, from military commands to positions in the finance ministry to tax collection, were sold to the highest bidder by a state that was constantly short of cash and desperate for revenue. Government, in other words, was privatized down to its core functions, and public offices turned into heritable private property. in which this centralization occurred. Unlike the early Chinese state, and unlike the German state that was to emerge in Brandenburg-Prussia in the eighteenth century, the centralized French state was not built around an impersonal, merit-based bureaucracy recruited on the basis of functional specialization and education. It was instead thoroughly patrimonialized. Government offices, from military commands to positions in the finance ministry to tax collection, were sold to the highest bidder by a state that was constantly short of cash and desperate for revenue. Government, in other words, was privatized down to its core functions, and public offices turned into heritable private property.2 If the problem of good governance is understood in princ.i.p.al-agent terms, where agents have to be properly incentivized to do the bidding of the princ.i.p.al, then the system created by the French government was an absolute nightmare. It virtually legitimized and inst.i.tutionalized rent seeking and corruption by allowing agents to run their public offices for private benefit. Indeed, the very word "rente" originated in the French government's practice of selling off a public a.s.set, like the right to collect a certain type of tax, that would produce a continuing stream of revenues.3 If modern public administration is about the observance of a bright line between public and private, then the ancien regime represented a thoroughly premodern system. The French state was thus a curious and unstable combination of modern and patrimonial elements. If modern public administration is about the observance of a bright line between public and private, then the ancien regime represented a thoroughly premodern system. The French state was thus a curious and unstable combination of modern and patrimonial elements.

The development of a centralized administrative state and patrimonial officeholding was so intertwined that it is not possible to trace their development separately. The fiscal system of the ancien regime was highly complex, reflecting the piecemeal way it had developed. There were several kinds of taxes, the most important of which was the taille, a direct levy on agricultural output whose burden fell on the peasantry. There were a poll tax and a series of indirect taxes on items like wine and goods transiting from one part of the country to another. There was also a tax on salt manufactured by a state monopoly (the gabelle).4 Later kings imposed a host of other taxes, including the capitation (per capita tax) and the vingtieme (income tax). Later kings imposed a host of other taxes, including the capitation (per capita tax) and the vingtieme (income tax).

Direct property taxes were hard to a.s.sess because the state did not have a system for maintaining an up-to-date census and registration of its population and their a.s.sets the way the Chinese, Ottoman, and English states had done.5 There was natural resistance on the part of wealthy families to any kind of honest declaration of their a.s.sets, since this would simply increase their tax liabilities. There was natural resistance on the part of wealthy families to any kind of honest declaration of their a.s.sets, since this would simply increase their tax liabilities.6 Collection of indirect taxes was made difficult by France's size (when compared, for example, to England) and the dispersed nature of its thousands of local markets. The French economy in the seventeenth century was incompletely monetized, and there was a perpetual shortage of coin in which money taxes could be paid. France was overwhelmingly agricultural in this period, and those taxes that were technically easy to collect, like customs duties, failed to produce substantial revenue. Collection of indirect taxes was made difficult by France's size (when compared, for example, to England) and the dispersed nature of its thousands of local markets. The French economy in the seventeenth century was incompletely monetized, and there was a perpetual shortage of coin in which money taxes could be paid. France was overwhelmingly agricultural in this period, and those taxes that were technically easy to collect, like customs duties, failed to produce substantial revenue.7 But the real complexities of the tax system were driven by a welter of special exemptions and privileges. Feudal France had developed a two-level system of estates in the late medieval period, a national Estates-General and a series of local or provincial estates-otherwise known as sovereign courts or parlements parlements-that the king consulted to get approval for new taxes.8 In order to secure the incorporation of various provinces into the realm, he had granted special favors to the provincial estates, confirming the local elites they represented in their customs and privileges. Tax regimes thus varied from region to region, especially between the pays d'election and the pays d'etat. The n.o.bility used their leverage over weak kings to win themselves a variety of tax exemptions, from both direct taxes and excise taxes for goods produced on their own properties. These exemptions and privileges began to spread outside the n.o.bility, to wealthy commoners in cities, royal officers, magistrates, and the like. The only people who could not win such exemptions were nonelites, the peasants and artisans who const.i.tuted the vast majority of the country's population. In order to secure the incorporation of various provinces into the realm, he had granted special favors to the provincial estates, confirming the local elites they represented in their customs and privileges. Tax regimes thus varied from region to region, especially between the pays d'election and the pays d'etat. The n.o.bility used their leverage over weak kings to win themselves a variety of tax exemptions, from both direct taxes and excise taxes for goods produced on their own properties. These exemptions and privileges began to spread outside the n.o.bility, to wealthy commoners in cities, royal officers, magistrates, and the like. The only people who could not win such exemptions were nonelites, the peasants and artisans who const.i.tuted the vast majority of the country's population.9 The practice of the sale of public offices-venality-began in the sixteenth century under the pressure of the state's need for revenue as a result of its prolonged struggle with Spain for control of Italy. French kings in this period could not cover war expenses from revenues from their own domains and so began borrowing large sums of money from the newly developing financial centers in Italy, Switzerland, and southern Germany. The state's credibility was never high, and it was undermined entirely when the government essentially repudiated its debts to a consortium of bankers known as the Grand Parti in 1557. It also defaulted on debts to those foreign mercenaries fighting its wars, like the Swiss. In 1602, it owed thirty-six million livres to Swiss towns and cantons, and to the Swiss colonels and captains commanding its troops. When the French government reneged, the Swiss stopped fighting.10 The state's solution to its credibility problem was to sell public offices to private individuals through the mechanism of the rente. Compared to an ordinary loan, the rente ent.i.tled its holder to a specific revenue stream that the officeholder controlled. Venal officeholders were put in charge of the collection of the taille taille (land tax) and other taxes, at least in the pays d'elections; since the monies pa.s.sed through their hands, they had greater surety of having interest and princ.i.p.al repaid. Thus was created the system of "inside finance," whereby the chief source of state finance became not private bankers but rather wealthy individuals who were already part of the state apparatus and thus bound to it by prior investments. (land tax) and other taxes, at least in the pays d'elections; since the monies pa.s.sed through their hands, they had greater surety of having interest and princ.i.p.al repaid. Thus was created the system of "inside finance," whereby the chief source of state finance became not private bankers but rather wealthy individuals who were already part of the state apparatus and thus bound to it by prior investments.

It turned out that even the credibility of these rentes was low, since the government soon turned on their holders and asked for retroactive renegotiations of their terms. Under Henry IV and his finance minister, Sully, the state came up with an innovation in the early sixteenth century, the paulette paulette, by which a rente holder could convert his office into what amounted to heritable property by bequeathing it to his descendants in return for a fee.11 This return of outright patrimonialism was rooted in reforms of an earlier period, when the Catholic church had set a precedent for modern administration by dividing the beneficium from the officium (see chapter This return of outright patrimonialism was rooted in reforms of an earlier period, when the Catholic church had set a precedent for modern administration by dividing the beneficium from the officium (see chapter 18 18). The former was a claim to economic rents whose heritability was limited by the celibacy of the priesthood; the latter was a functional office held at will under control of a bureaucratic hierarchy. Once nonecclesiastical commoners began staffing state bureaucracies without the promise of benefices or feudal domains, they too started looking for ways of guaranteeing their jobs and taking care of their children. The French government in turn saw the incorporation of these commoners into the state system as a useful means of counteracting the influence of the old n.o.bility. The single largest source of demand for offices came from the bourgeois members of the Third Estate, who hoped to better their condition through purchase of an official t.i.tle. Full-scale patrimonialism had thus reinserted itself into the heart of French public administration.

The adoption of the paulette did not end the French state's machinations with regard to revenue. The state sold the right to collect indirect taxes to tax farmers who, in return for guaranteeing the state a certain fixed return, could keep any excess tax revenues for themselves. It also sold off the right to collect the new droits alienes droits alienes, surtaxes that soon dwarfed the traditional taille. In addition, the state could simply increase the number of offices for sale, which had the effect of depressing the price of existing offices and thus diluting the property rights of their holders. The constantly rising demand for offices surprised even the creators of the system. Pontchartrain, the controller general for Louis XIV, was asked by his king how he succeeded in finding new purchasers of offices. Pontchartrain answered, "Your Majesty ... as soon as the king inst.i.tutes an office, G.o.d creates a fool who will buy it."12 The inefficiencies and opportunities for corruption that this system fostered were huge. The venal post of intendant of finance, usually bought by a private financier, could be very valuable because it would give him a leg up on his compet.i.tion in knowing in advance what bids the French state was likely to make. The finance minister presided over a regular burning of money orders and other financial records in order to prevent later scrutiny of his accounts.13 While England developed an advanced theory of public finance and optimal taxation, elucidated in Adam Smith's While England developed an advanced theory of public finance and optimal taxation, elucidated in Adam Smith's Wealth of Nations Wealth of Nations, French taxation was opportunistic and dysfunctional.14 The gabelle, or tax on salt, for example, was unevenly applied across France, creating an artificial "salt boundary" that encouraged smuggling from lowto high-cost regions. The gabelle, or tax on salt, for example, was unevenly applied across France, creating an artificial "salt boundary" that encouraged smuggling from lowto high-cost regions.15 Most important, the French fiscal system deliberately encouraged rent seeking. Wealthy individuals, instead of investing their money in productive a.s.sets in the private economy, spent their fortunes on heritable offices that could not create but only redistribute wealth. Rather than focusing on technological innovation, they innovated with regard to new ways of outwitting the state and its tax system. This weakened private entrepreneurs.h.i.+p and made its emerging private sector dependent on state largesse, just at the same moment that private markets were blossoming across the English Channel. Most important, the French fiscal system deliberately encouraged rent seeking. Wealthy individuals, instead of investing their money in productive a.s.sets in the private economy, spent their fortunes on heritable offices that could not create but only redistribute wealth. Rather than focusing on technological innovation, they innovated with regard to new ways of outwitting the state and its tax system. This weakened private entrepreneurs.h.i.+p and made its emerging private sector dependent on state largesse, just at the same moment that private markets were blossoming across the English Channel.

The French fiscal system that developed by the late seventeenth century was highly regressive, taxing the poor in order to support the rich and powerful. Virtually every elite group, from high aristocrats to guild members to bourgeois towns, had succeeded in securing for itself a tax exemption, leaving the greatest burden to fall on the peasantry. This naturally provoked a long series of peasant uprisings and revolts. Tax increases to support the wars of Louis XIV were met with revolts in 1661, 1662, 1663, 1664, 1665, 1670, 1673, and 1675, the last being the large and serious uprising of the Bonnets Rouges.16 All were violently suppressed; for example, in the tax revolt of 1662, government troops took 584 rebels captive. Those over seventy and under twenty years of age were pardoned; the rest were condemned to the galleys. All were violently suppressed; for example, in the tax revolt of 1662, government troops took 584 rebels captive. Those over seventy and under twenty years of age were pardoned; the rest were condemned to the galleys.17 Taxes were levied to pay for armies, but troops had to be pulled from the frontiers to coercively extract taxes in a self-defeating manner. This underlines a central lesson of tax policy, which is that extraction costs are inversely proportional to the perceived legitimacy of the authority doing the taxing. Taxes were levied to pay for armies, but troops had to be pulled from the frontiers to coercively extract taxes in a self-defeating manner. This underlines a central lesson of tax policy, which is that extraction costs are inversely proportional to the perceived legitimacy of the authority doing the taxing.

THE INTENDANTS AND CENTRALIZATION.

The fiscal crisis experienced by France in the first half of the seventeenth century under Louis XIII and his minister Richelieu, and then by Louis XIV and Mazarin, paved the way for administrative centralization under the tutelage of a new inst.i.tution, the intendants. They were usually young officials with careers still to make who, according to Tocqueville, "did not exercise [their] powers by virtue of election, birth, or purchase." What was critical was that they lacked ties to either local elites or the hierarchy of venal officeholders responsible for administration of the fiscal system. The intendant was usually a recently enn.o.bled man; his immediate subordinate, the subdelegate, was a commoner. Unlike the venal officeholders, both officials could be dismissed at will by the ministry in Paris. The French had discovered the same system used by the Chinese to staff their commanderies and counties, or the Turks to run their sanjaks. Tocqueville continues:

These all-powerful officials were, however, eclipsed by the remnants of the old feudal aristocracy and virtually lost in the radiance the aristocracy still projected ... In government, the n.o.bility surrounded the king and made up his court; they commanded the fleets, directed the armies; they were, in short, that which most struck contemporaries' eyes and too often monopolizes posterity's attention. One would have insulted a great lord by suggesting he be named an intendant; the poorest gentleman of rank would have generally refused to accept the position.18

Prior to the middle of the seventeenth century, the intendants were dispatched without any systematic plan in mind. They were simply ad hoc representatives of the central government on specific issues.19 They were increasingly used to collect taxes, particularly the taille, which traditionally had been supervised by local officials. Their usurpation of this role was the background to the const.i.tutional crisis at midcentury. They were increasingly used to collect taxes, particularly the taille, which traditionally had been supervised by local officials. Their usurpation of this role was the background to the const.i.tutional crisis at midcentury.

The princ.i.p.al struggle over the allocation of powers between the central government and other regional and local actors concerned the role of the sovereign courts, or parlements. There were, as already noted, two levels of such traditional bodies, one representing each province (the most important of which was the Parlement de Paris), and the national-level Estates-General. In the late medieval period, French kings had called on the Estates-General periodically to approve taxes, in the manner of the English Parliament. But the ability of kings to rule without them was seen as the hallmark of absolutist power, and no Estates-General was called between the regency of Marie de Medicis in 1614 and 1789, just prior to the revolution. Any understanding of why representative inst.i.tutions developed in England and not in France has to revolve around the question of why the sovereign courts failed to develop into powerful inst.i.tutions in one country but did in the other.

The provincial sovereign courts, which represented the interests of local elites, were primarily judicial bodies. They met much more frequently than the Estates-General and could potentially act as a check on the king's power. When the king wanted to enact a new tax, it was brought before the court for registration. The sovereign court usually held a public debate, often quite heated when it turned on matters of taxation, and then could register the legislation unaltered, amend it, or fail to register it. Unpopular legislation was subject to oral or written remonstrances by local officials to the king's court. The power of the sovereign courts was limited, however, by the fact that the king could convene what was known as a lit de justice lit de justice after a parlement's failure to register legislation and force the law through anyway. after a parlement's failure to register legislation and force the law through anyway.20 The sovereign courts could do little more than embarra.s.s the crown through their remonstrances. The sovereign courts could do little more than embarra.s.s the crown through their remonstrances.

The system faced a grave crisis after the Peace of Westphalia in 1648 when the acc.u.mulated arrears of the Thirty Years' War led the government to attempt to continue wartime levels of taxation in times of peace. The refusal of the Parlement de Paris to register new taxes initially led Mazarin to back down and withdraw the intendants from most provinces, but the subsequent arrest of the parlement's leaders sparked a general insurrection known as the Fronde.21 The Fronde, which unrolled in two phases between 1648 and 1653, represented the ultimate sanction that both traditional local elites and the n.o.bility held over the monarchy: armed resistance. The civil war could have gone either way, but in the end the disparate social actors made unhappy by the government's policies could not combine to produce a military victory. The Fronde, which unrolled in two phases between 1648 and 1653, represented the ultimate sanction that both traditional local elites and the n.o.bility held over the monarchy: armed resistance. The civil war could have gone either way, but in the end the disparate social actors made unhappy by the government's policies could not combine to produce a military victory.

The defeat of both the parlementaires and the n.o.bility paved the way for a much more thoroughgoing centralization of the French political system. In the second half of the seventeenth century, Louis XIV and his controller general, Jean-Baptiste Colbert, deliberately turned the intendants into instruments by which the Royal Council extended its authority in a uniform way over the whole of France.22 They were reinserted into each province, and their powers increased. They began to recruit and supervise local militias, they took over the management of public works, and they became responsible for general public order. The feudal aristocracy had long since given up its obligation to help the local poor; this too became a function of the central government through the mechanism of the intendant. They were reinserted into each province, and their powers increased. They began to recruit and supervise local militias, they took over the management of public works, and they became responsible for general public order. The feudal aristocracy had long since given up its obligation to help the local poor; this too became a function of the central government through the mechanism of the intendant.23 Among the freedoms that were extinguished in the process of state building was that of towns and munic.i.p.alities to govern themselves. The general population of French towns exercised the right to hold democratic elections for local magistrates up through the late seventeenth century. They were frequently supported by the Crown in the a.s.sertion of their rights as a means of weakening the local aristocracy.24 But elections were abolished for the first time in 1692, and the magistrates' positions turned into offices controlled from the center. Tocqueville makes the following comment about this transformation: But elections were abolished for the first time in 1692, and the magistrates' positions turned into offices controlled from the center. Tocqueville makes the following comment about this transformation:

And what deserves all the contempt that history can bestow, this great revolution was accomplished without any political purpose in mind. Louis XI had limited munic.i.p.al freedoms because their democratic character frightened him; Louis XIV destroyed them without being afraid of them. What proves this is that he returned their liberties to all the towns that could buy them back. In fact, he wanted less to abolish their rights than to buy and sell them, and if in fact he did abolish them, it was without intending to, purely because it was financially expedient; and oddly enough the same game went on for eighty years.25

Tocqueville makes a fascinating comment that the New England town parish that he so admired as the basis for American democracy and the medieval French town both had their origins in the same local feudal inst.i.tution, and yet they diverged by the eighteenth century as a result of the efforts of the central state to buy the loyalty of individuals.26 The government of the towns in France came to be controlled by a small oligarchy who increasingly came to hold their offices through purchase. They sought office to distinguish themselves from their fellow townsmen; the solidarity of the community was undermined and those outside of the officeholding elite fell into apathy. The government of the towns in France came to be controlled by a small oligarchy who increasingly came to hold their offices through purchase. They sought office to distinguish themselves from their fellow townsmen; the solidarity of the community was undermined and those outside of the officeholding elite fell into apathy.

The impact of political centralization was far reaching, producing the more h.o.m.ogeneous nation that we know today. The revocation of the Edict of Nantes in 1685 made Catholicism hegemonic and led to the emigration of many entrepreneurial and skilled Protestants to other parts of Europe as well as to places farther afield like North America and South Africa. The central government had much greater power to declare new taxes without opposition from the now-cowed sovereign courts; differences in the application of taxes across the country were reduced. Especially after their defeat in the Fronde, the n.o.bility lost their bases of power in the countryside and were brought to court. There they could lobby directly for subsidies and exemptions, and could be manipulated through control over access to the king. The famous levee of Louis XIV, by which ancient n.o.bles tripped over one another to attend to the monarch's early morning bathroom functions, is one example. The n.o.bility retained their social status at the expense of real political power and wealth.27 The one area in which the n.o.bility retained their power was in their continuing control over seigneurial courts, which as we saw in chapter The one area in which the n.o.bility retained their power was in their continuing control over seigneurial courts, which as we saw in chapter 17 17 had early on come under royal control in England. The French thus got uniformity in all the wrong places: the loss of local political autonomy to make decisions on issues of interest to the community, yet an uneven system of justice still under the dominance of local notables, which undermined belief in the fairness of the existing property rights system. had early on come under royal control in England. The French thus got uniformity in all the wrong places: the loss of local political autonomy to make decisions on issues of interest to the community, yet an uneven system of justice still under the dominance of local notables, which undermined belief in the fairness of the existing property rights system.

THE LIMITS OF CENTRALIZED POWER AND THE IMPOSSIBILITY OF REFORM.

The increased power of the French state by the early eighteenth century led it to trample on the rights of individuals, their property rights first and foremost. But it did so in a typically European way, through manipulation of the legal system rather than through the extralegal use of pure coercion. The abrogation of customary rights and constraints had to be argued at length and politically contested within limits set by the old feudal legal order. Thus the crus.h.i.+ng of the power of the parlements took the better part of a century to accomplish. Whereas French kings were brutal toward peasants who resisted their power, they treated elite actors with remarkable respect. After suffering defeat in the Fronde, the two insurgent n.o.bles who led the revolt, Turenne and Conde, asked for and received Louis XIV's forgiveness. Had they been Chinese aristocrats, they and all their families would have been summarily executed.

The death of Louis XIV in 1715 left the monarchy with crus.h.i.+ng debts. In order to reduce this burden, the state resorted to what amounted to a protection racket. It summoned special courts it controlled called the chambres de justice chambres de justice and then threatened creditors with investigations into their personal finances. Since virtually all of the creditors were corrupt in one way or another, they agreed to reduce the amount owed the government in return for calling off the investigation. and then threatened creditors with investigations into their personal finances. Since virtually all of the creditors were corrupt in one way or another, they agreed to reduce the amount owed the government in return for calling off the investigation.28 The tactic of the selective use of anticorruption investigations to raise revenues and intimidate political opponents is still very much in use today. The tactic of the selective use of anticorruption investigations to raise revenues and intimidate political opponents is still very much in use today.

Under a new finance minister, John Law, the state tried another novel approach to getting around its creditors. It created a national bank in which the state committed itself to exchange specie for banknotes at a fixed rate and coerced citizens into converting their specie into notes at this rate by threatening them with criminal prosecution, house searches, and seizure of their property. The bank then reneged on its commitment to repay and repeatedly reduced the value of the notes in terms of specie, trying in effect to force down the rate of interest it had to pay on its debt. Law a.s.serted that all property held by individuals belonged to them only insofar as it was used in a manner deemed useful by the king, leading Montesquieu to label Law "one of the greatest promoters of despotism yet seen in Europe." Law's system, however, proved unenforceable and soon collapsed.29 Like many dictators.h.i.+ps in more recent times, the French monarchy found it could not create investor confidence or repeal basic laws of economics by political fiat. Like many dictators.h.i.+ps in more recent times, the French monarchy found it could not create investor confidence or repeal basic laws of economics by political fiat.

During the eighteenth century, there were some important s.h.i.+fts in the balance of power between France's different social and political actors. The growing capitalist world economy increased levels of productivity and led to the growing material wealth and size of France's bourgeois cla.s.s. But these economic s.h.i.+fts were far less important than the intellectual developments that took place in this period, with the sudden victory of Enlightenment ideas about the Rights of Man and equality that spread rapidly all over Europe. When the convening of the Estates-General was brought up again during the 1780s, the justifications given were entirely different from previously: the right of the estates to limit the power of the king was based not on their ancient origin in feudal custom but rather on their ability to represent a broader public consisting of equal individuals with rights. There was a general recognition that the fiscal system of the ancien regime had grown hideously complex and unfair. The proposals of earlier generations of finance ministers to keep the system going through ever more novel ways of fleecing creditors and defaulting on obligations was replaced by a view that taxation ought to be made uniform, equitable, and legitimated by the French people through their representatives.

The story of the French Revolution and the coming of democracy is a familiar one that I will not deal with at great length in this volume. I bring it up here for a different purpose. When a generation of French politicians under the influence of these new ideas in the 1770s and '80s tried to change the old system through peaceful reform, they were completely stymied by the degree to which entrenched interests continued to have a lock on political power.

There were two such efforts. The first took place beginning in 1771 under Louis XV and his minister Maupeou. Maupeou initiated conflict with the parlements by forbidding them to have contact with one another or to go on strike, and when they refused to go along, he reorganized the entire judiciary, taking away much of the jurisdiction of the Parlement de Paris. Most important, he abolished the sale of judicial and official posts, and replaced venal officials with new magistrates to be paid directly by the Crown. A new and more equitable tax, the vingtieme, was to be made permanent and imposed t