Posted on 10/18/2008 7:42:15 AM PDT by trueamerica
The complete text is at:
http://www.cato.org/pubs/journal/cjv14n2-7.html
Here are some highlights:
Augustus, emperor of Rome 27 B.C. to 14 A.D: An expansion of economic freedom. Augustus clearly favored private enterprise, private property, and free trade. The burden of taxation was significantly lifted … a period of "almost complete freedom for trade and of splendid opportunities for private initiative.
Tiberius, emperor of Rome (14-37 A.D.) extended the policies of Augustus. It was his strong desire to encourage growth and establish a solid middle class (bourgeoisie), which he saw as the backbone of the Empire.
High level of economic prosperity, made possible by exceptionally favorable conditions. It was possible for a bourgeoisie to come into being whose chief interests were economic, and characterized by individualism and private enterprise. The State deliberately encouraged this activity of the bourgeoisie, both directly through government protection and its liberal economic policy, which guaranteed freedom of action and an organic growth on the lines of "laissez faire, laissez aller," and directly through measures encouraging economic activity.
As Rome expanded after the unification of Italy in 272 B.C., so did Roman taxes. In the provinces, however, the main form of tax was a tithe levied on communities, rather than directly on individuals. This was partly because censuses were seldom conducted, thus making direct taxation impossible, and also because it was easier to administer. Local communities would decide for themselves how to divide up the tax burden among their citizens.
Tax farming was replaced by direct taxation. The shift to flat assessments based on wealth and population both regularized the yield of the tax system and greatly reduced its "progressivity."
Communities were only liable for a fixed payment. Thus any increase in income accrued entirely to the people and did not have to be shared with Rome. Individuals knew in advance the exact amount of their tax bill and that any income over and above that amount was entirely theirs. This was obviously a great incentive to produce, since the marginal tax rate above the tax assessment was zero. The tax system was very pro-growth.
As early as the rule of Nero (54-68 A.D.) there is evidence that the demand for revenue led to debasement of the coinage. Revenue was needed to pay the increasing costs of defense and a growing bureaucracy.
Although taxes on ordinary Romans were not raised, citizenship was greatly expanded in order to bring more people into the tax net. Taxes on the wealthy, however, were sharply increased, especially those on inheritances and manumissions (freeing of slaves).
Most emperors continued the policies of debasement and increasingly heavy taxes, levied mainly on the wealthy.
As the private wealth of the Empire was gradually confiscated or taxed away, driven away or hidden, economic growth slowed to a virtual standstill. Moreover, once the wealthy were no longer able to pay the state's bills, the burden inexorably fell onto the lower classes, so that average people suffered as well from the deteriorating economic conditions.
At this point, in the third century A.D., the money economy completely broke down.
With the collapse of the money economy, the normal system of taxation also broke down. This forced the state to directly appropriate whatever resources it needed wherever they could be found. Food and cattle, for example, were requisitioned directly from farmers. Other producers were similarly liable for whatever the army might need. The result, of course, was chaos, dubbed "permanent terrorism". Eventually, the state was forced to compel individuals to continue working and producing.
The result was a system in which individuals were forced to work at their given place of employment and remain in the same occupation, with little freedom to move or change jobs. Farmers were tied to the land, as were their children, and similar demands were made on all other workers, producers, and artisans as well. Even soldiers were required to remain soldiers for life, and their sons compelled to follow them. The remaining members of the upper classes were pressed into providing municipal services, such as tax collection, without pay. And should tax collections fall short of the state's demands, they were required to make up the difference themselves. This led to further efforts to hide whatever wealth remained in the Empire, especially among those who still found ways of becoming rich. Ordinarily, they would have celebrated their new-found wealth; now they made every effort to appear as poor as everyone else, lest they become responsible for providing municipal services out of their own pocket.
The steady encroachment of the state into the intimate workings of the economy also eroded growth. The result was increasing feudalization of the economy and a total breakdown of the division of labor. People fled to the countryside and took up subsistence farming or attached themselves to the estates of the wealthy, which operated as much as possible as closed systems, providing for all their own needs and not engaging in trade at all. Meanwhile, much land was abandoned and remained fallow or fell into the hands of the state, whose mismanagement generally led to a decline in production.
By the end of the third century, Rome had clearly reached a crisis. The state could no longer obtain sufficient resources even through compulsion and was forced to rely ever more heavily on debasement of the currency to raise revenue. By the reign of Claudius II Gothicus (268-270 A.D.) the silver content of the denarius was down to just .02 percent. As a consequence, prices skyrocketed. A measure of Egyptian wheat, for example, which sold for seven to eight drachmaes in the second century now cost 120,000 drachmaes. This suggests an inflation of 15,000 percent during the third century.
Finally, the very survival of the state was at stake. At this point, the Emperor Diocletian (284-305 A.D.) took action. He attempted to stop the inflation with a far-reaching system of price controls on all services and commodities. These controls were justified by Diocletian's belief that the inflation was due mainly to speculation and hoarding, rather than debasement of the currency.
Despite the fact that the death penalty applied to violations of the price controls, they were a total failure. Finally, after many had met their deaths, sheer necessity led to the repeal of the law.
The cornerstone of Diocletian's economic policy was to turn the existing ad hoc policy of requisitions to obtain resources for the state into a regular system. Since money was worthless, the new system was based on collecting taxes in the form of actual goods and services.
It was also necessary to calculate what the taxpayers were able to provide in terms of the necessary goods and services. This required a massive census, not only of people but of resources, especially cultivated land. Land was graded according to its productivity. Fields were measured out clod by clod, vines and trees were counted, every kind of animal was registered, and note taken of every member of the population.
In order to maintain this system where people were tied to their land, home, jobs, and places of employment, Diocletian transformed the previous ad hoc practice. Workers were organized into guilds and businesses into corporations called collegia. Both became de facto organs of the state, controlling and directing their members to work and produce for the state.
Despite such efforts, land continued to be abandoned and trade, for the most part, ceased. Industry moved to the provinces, basically leaving Rome as an economic empty shell; still in receipt of taxes, grain and other goods produced in the provinces, but producing nothing itself. The mob of Rome and the palace favorites produced nothing, yet continually demanded more, leading to an intolerable tax burden on the productive classes.
In the fifty years after Diocletian the Roman tax burden roughly doubled, making it impossible for small farmers to live on their production. This is what led to the final breakdown of the economy.
The state's fiscal problem was the excessive burden of taxation, which fell unequally on the population. The wealthy effectively were able to evade taxation through legal and illegal measures, such as bribery. By contrast, the ordinary citizen was helpless against the demands of the increasingly brutal tax collectors.
However, state revenues continued to shrink, as taxpayers invested increasing amounts of time, effort and money in tax evasion schemes. Thus even as tax rates rose, tax revenues fell, hastening the decline of the Roman state. In short, taxpayers evaded taxation by withdrawing from society altogether.
In the end, there was no money left to pay the army, build forts or ships, or protect the frontier. The barbarian invasions, which were the final blow to the Roman state in the fifth century, were simply the culmination of three centuries of deterioration in the fiscal capacity of the state to defend itself. Indeed, many Romans welcomed the barbarians as saviors from the onerous tax burden.
In conclusion, the fall of Rome was fundamentally due to economic deterioration resulting from excessive taxation, inflation, and over-regulation. Higher and higher taxes failed to raise additional revenues because wealthier taxpayers could evade such taxes while the middle class--and its taxpaying capacity--were exterminated.
Obama knows this. We should not assume he wants the Republic to survive. He’d rather be Dictator-for-life of a 3rd World Hell Hole than Leader of the Free World.
What makes you think Barry even cares? SOcialists will just state, “The right people weren’t governing then and now we have the right people to bring socialism to America.”
It’s done and we can thank the dysfunctional Republican party for hastening this transformation along. It will be a miracle of RINO McCain win. Truly a miracle.
Excellent post, thanks.
Later read.
Bumpomatic
Please, in the future use Rovin Hood in the correct context instead of the Leftist BS.
Robin Hood robbed the TAX COLLECTOR and gave the money back to whom it was collected from.
Remember the Sheriff of Nottingham was the TAX COLLECTOR.
Long live the CORRECT version of the Robin Hood legand.
That is what Obama and his owner Soros want to do. Destroy the United States.
Sound familiar?
Americans are some of the few people on earth who are ever asked the question, “Where do you want to eat tonight, or what do you want for supper!”
Reread the classic “Amimal Farm”
Can Dumbo read?
“Americans are some of the few people on earth who are ever asked the question, “Where do you want to eat tonight, or what do you want for supper!””
Few? All of Europe does. England does. Many people of South America do. Mexico does.
Another good read of how taxation killed off the Roman empire and
made Islam a practical option (lower taxes)...look for “For Good and Evil”,
a history of taxation by Charles Adams.
btt
ping for later
The really scary part is looking past the fall of the Roman Empire to what was called The dark Ages. Are we headed for times like this again?
"Those who cannot learn from history are doomed to repeat it." - - George Santayana
Self-proclaimed historians ought to read this. A history professor once admitted to me that the average historian lacks any understanding of economics. You have but to pick up the average American history text and turn to the New Deal for an example of this.
Illegals.
Barack(”Robin Hood”)obama omit the word Robin and it would sound right.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.