Drums beat time for fiscal fiddles

The European Science Foundation runs seminar series that have attempted, often with scant success and considerable expense, to bring scholars together to consider common themes in the history of European countries. The result tends to be routine description of one country after another, taking the form of each state for granted rather than as something to be explained.

Fortunately, Richard Bonney's impressive collection of essays on the ability of European states to generate tax revenues marks a major leap forward in the ESF's intellectual ambitions, for it is the first in a massive seven-volume series which brings together the results of a four-year programme on the origins of the modern state in Europe between the 13th and the 18th centuries.

Subsequent volumes will deal with war and competition between states (with which the need for taxation was intimately connected); the legal instruments of power; the role of power elites in state formation; the nature of resistance to centralisation of power and the patterns of representation; the place of the individual in political theory and practice; and, finally, the role of iconography and propaganda in legitimising the state.

The ambition, in the words of the general editors, is to provide "a new vision of fundamental aspects of European state formation" which will start to make sense of the differing characters of the multitude of states covered by the ESF.

At the heart of this first volume is the shift from "domain" states, which relied on the estates of the crown for revenue, to "tax" states which drew more generally on the subjects of the crown for revenue, a shift which took place at different dates and with widely differing outcomes. Rather than the availability of revenue determining the level of expenditure, the prime mover was the increase in expenditure, above all for war, which led to a search for revenue.

An explanation for these demands for warfare, and the consequent pressure on fiscal capacity, will presumably be covered in the next volume. What is apparent here is that the fiscal capacity of states influenced their success in war, and that a tax system that was efficient in one period could become rigid and a source of failure. Drum and trumpet history must become part of a larger orchestra, with a large complement of fiscal fiddles.

The transition from a domain to a tax state was by no means simple, and one of the achievements of the project is to provide a data base that makes clear the variation in timing and in the form of both types of state. The general points are, it is true, often hidden in a mass of detail, with some contradictions between chapters, and the strength of the volume is more in providing a taxonomy than an explanation. It is, however, a major achievement to know the areas which require explanation, and to set out the range of possibilities.

In the Middle Ages states relied on revenue from domains which were paid in kind, and often consumed by a peripatetic court. The next stage was to collect and store these goods, such as in Denmark where royal officials were scattered across the country in castles, collecting goods to support the local garrison and administration, with a relatively small surplus passed to the centre. This system continued in Denmark into the early modern period, but Sweden shifted to an "entrepreneurial" use of the domain through the exploitation of natural products such as copper and silver; Spain could similarly exploit colonial assets in Latin America.

Active exploitation of the domain in Prussia extended well into the 19th century through the addition of state-owned heavy industry and railways. By contrast, the role of the domain was much less significant in England.

The collection is less successful in explaining these differences in the domain state, and it is necessary to work hard to extract a hint at the answer. Of course, the availability of natural resources is an obvious explanation; presumably another is the nature of land tenure and the definition of property rights, which might well appear in the volume on the law and power.

Could the crown maintain its demands on tenants to make payments in kind or would they claim ownership free of impositions? Would the crown be able to remove customary tenure and establish its ownership of land, which could then be more effectively exploited; or would difficulties in establishing complete ownership make sales more attractive?

The expansion of population and commerce, and the monetisation of the economy, also influenced the amount and types of wealth that were available, and might permit a shift from payment in kind to the collection of revenue in cash. The answers will, presumably, be more apparent when the whole series is completed.

The domain state could survive or be transformed, and the tax state similarly took many different forms. The ability of any state to extract taxation depended on the power of the monarch over classes beyond his or her immediate feudal tenants, which would be shaped by a number of factors. He or she would be in conflict with the nobility which wished to extract the surplus of the peasantry in rent. In some cases, agreement might be negotiated through assemblies in order to secure consent, but consent could be at the expense of exemption for particular groups such as the nobles or the church. States which experienced the reformation might remove the exemptions of the clergy and also obtain church lands to boost revenues; but the exemptions of the church might be reinforced in counter-reformation Europe.

There was also, of course, the possibility of resistance and rebellion which could limit the room for manouevre. Representative assemblies might have more control over direct taxes, so that the crown might therefore prefer to opt for indirect taxes, a choice with consequences for the fiscal capacity of the state. Direct taxes might provide more revenue during periods of recession than indirect taxes that were more responsive to the production and sale of goods; but indirect taxes were more buoyant in periods of growth. These issues will surely reappear in the companion volumes on resistance and representation, and on the role of power elites.

Bonney and his collaborators have provided a massive agenda for future historians, presenting them with a body of data and establishing taxonomies of the forms of domain and tax states. A concise summary of the findings would be of great value so that the fiscal evolution of each state is clearly set out.

Once the entire series is complete, attention can turn to the next stage: establishing how the differences arose. The results will be of the greatest importance, not only for historians of Europe between the 13th and the 18th centuries, but for the understanding of the forms of the European state into the 19th and 20th centuries.

Clearly taxation should be at the centre of the attention of historians, and the approaches adopted by Bonney and his collaborators have wide relevance. After all, the United States in the 19th century, with its huge tracts of land, was a form of domain state; and Prussia's use of state enterprise in the 19th century to provide a flow of revenue to hold down taxes in the longer term contrasts with the recent sale of public utilities in Britain in order to finance tax cuts in the short term.

Martin Daunton is professor of British history at University College London.