An Inquiry into the Nature and Causes of the Wealth of Nations
Adam Smith

Part 16 out of 19

is in almost all cases a wretched instrument of govermnent, and ought
in particular never to be employed against any order of men who have
the smallest pretensions to independency. To attempt to terrify them,
serves only to irritate their bad humour, and to confirm them in an
opposition, which more gentle usage, perhaps, might easily induce them
either to soften, or to lay aside altogether. The violence which the
French government usually employed in order to oblige all their
parliaments, or sovereign courts of justice, to enregister any
unpopular edict, very seldom succeeded. The means commonly employed,
however, the imprisonment of all the refractory members, one would
think, were forcible enough. The princes of the house of Stuart
sometimes employed the like means in order to influence some of the
members of the parliament of England, and they generally found them
equally intractable. The parliament of England is now managed in
another manner; and a very small experiment, which the duke of
Choiseul made, about twelve years ago, upon the parliament of Paris,
demonstrated sufficiently that all the parliaments of France might
have been managed still more easily in the same manner. That
experiment was not pursued. For though management and persuasion are
always the easiest and safest instruments of government as force and
violence are the worst and the most dangerous; yet such, it seems, is
the natural insolence of man, that he almost always disdains to use
the good instrument, except when he cannot or dare not use the bad
one. The French government could and durst use force, and therefore
disdained to use management and persuasion. But there is no order of
men, it appears I believe, from the experience of all ages, upon whom
it is so dangerous or rather so perfectly ruinous, to employ force and
violence, as upon the respected clergy of an established church. The
rights, the privileges, the personal liberty of every individual
ecclesiastic, who is upon good terms with his own order, are, even in
the most despotic governments, more respected than those of any other
person of nearly equal rank and fortune. It is so in every gradation
of despotism, from that of the gentle and mild government of Paris, to
that of the violent and furious government of Constantinople. But
though this order of men can scarce ever be forced, they may be
managed as easily as any other; and the security of the sovereign, as
well as the public tranquillity, seems to depend very much upon the
means which he has of managing them; and those means seem to consist
altogether in the preferment which he has to bestow upon them.

In the ancient constitution of the Christian church, the bishop of
each diocese was elected by the joint votes of the clergy and of the
people of the episcopal city. The people did not long retain their
right of election; and while they did retain it, they almost always
acted under the influence of the clergy, who, in such spiritual
matters, appeared to be their natural guides. The clergy, however,
soon grew weary of the trouble of managing them, and found it easier
to elect their own bishops themselves. The abbot, in the same manner,
was elected by the monks of the monastery, at least in the greater
part of abbacies. All the inferior ecclesiastical benefices
comprehended within the diocese were collated by the bishop, who
bestowed them upon such ecclesiastics as he thought proper. All church
preferments were in this manner in the disposal of the church. The
sovereign, though he might have some indirect influence in those
elections, and though it was sometimes usual to ask both his consent
to elect, and his approbation of the election, yet had no direct or
sufficient means of managing the clergy. The ambition of every
clergyman naturally led him to pay court, not so much to his sovereign
as to his own order, from which only he could expect preferment.

Through the greater part of Europe, the pope gradually drew to
himself, first the collation of almost all bishoprics and abbacies, or
of what were called consistorial benefices, and afterwards, by various
machinations and pretences, of the greater part of inferior benefices
comprehended within each diocese, little more being left to the bishop
than what was barely necessary to give him a decent authority with his
own clergy. By this arrangement the condition of the sovereign was
still worse than it had been before. The clergy of all the different
countries of Europe were thus formed into a sort of spiritual army,
dispersed in different quarters indeed, but of which all the movements
and operations could now be directed by one head, and conducted upon
one uniform plan. The clergy of each particular country might be
considered as a particular detachment of that army, of which the
operations could easily be supported and seconded by all the other
detachments quartered in the different countries round about. Each
detachment was not only independent of the sovereign of the country in
which it was quartered, and by which it was maintained, but dependent
upon a foreign sovereign, who could at any time turn its arms against
the sovereign of that particular country, and support them by the arms
of all the other detachments.

Those arms were the most formidable that can well be imagined. In the
ancient state of Europe, before the establishment of arts and
manufactures, the wealth of the clergy gave them the same sort of
influence over the common people which that of the great barons gave
them over their respective vassals, tenants, and retainers. In the
great landed estates, which the mistaken piety both of princes and
private persons had bestowed upon the church, jurisdictions were
established, of the same kind with those of the great barons, and for
the same reason. In those great landed estates, the clergy, or their
bailiffs, could easily keep the peace, without the support or
assistance either of the king or of any other person; and neither the
king nor any other person could keep the peace there without the
support and assistance of the clergy. The jurisdictions of the clergy,
therefore, in their particular baronies or manors, were equally
independent, and equally exclusive of the authority of the king's
courts, as those of the great temporal lords. The tenants of the
clergy were, like those of the great barons, almost all tenants at
will, entirely dependent upon their immediate lords, and, therefore,
liable to be called out at pleasure, in order to fight in any quarrel
in which the clergy might think proper to engage them. Over and above
the rents of those estates, the clergy possessed in the tithes a very
large portion of the rents of all the other estates in every kingdom
of Europe. The revenues arising from both those species of rents were,
the greater part of them, paid in kind, in corn, wine, cattle,
poultry, etc. The quantity exceeded greatly what the clergy could
themselves consume; and there were neither arts nor manufactures, for
the produce of which they could exchange the surplus. The clergy could
derive advantage from this immense surplus in no other way than by
employing it, as the great barons employed the like surplus of their
revenues, in the most profuse hospitality, and in the most extensive
charity. Both the hospitality and the charity of the ancient clergy,
accordingly, are said to have been very great. They not only
maintained almost the whole poor of every kingdom, but many knights
and gentlemen had frequently no other means of subsistence than by
travelling about from monastery to monastery, under pretence of
devotion, but in reality to enjoy the hospitality of the clergy. The
retainers of some particular prelates were often as numerous as those
of the greatest lay-lords; and the retainers of all the clergy taken
together were, perhaps, more numerous than those of all the lay-lords.
There was always much more union among the clergy than among the
lay-lords. The former were under a regular discipline and
subordination to the papal authority. The latter were under no regular
discipline or subordination, but almost always equally jealous of one
another, and of the king. Though the tenants and retainers of the
clergy, therefore, had both together been less numerous than those of
the great lay-lords, and their tenants were probably much less
numerous, yet their union would have rendered them more formidable.
The hospitality and charity of the clergy, too, not only gave them the
command of a great temporal force, but increased very much the weight
of their spiritual weapons. Those virtues procured them the highest
respect and veneration among all the inferior ranks of people, of whom
many were constantly, and almost all occasionally, fed by them.
Everything belonging or related to so popular an order, its
possessions, its privileges, its doctrines, necessarily appeared
sacred in the eyes of the common people; and every violation of them,
whether real or pretended, the highest act of sacrilegious wickedness
and profaneness. In this state of things, if the sovereign frequently
found it difficult to resist the confederacy of a few of the great
nobility, we cannot wonder that he should find it still more so to
resist the united force of the clergy of his own dominions, supported
by that of the clergy of all the neighbouring dominions. In such
circumstances, the wonder is, not that he was sometimes obliged to
yield, but that he ever was able to resist.

The privileges of the clergy in those ancient times (which to us, who
live in the present times, appear the most absurd), their total
exemption from the secular jurisdiction, for example, or what in
England was called the benefit of clergy, were the natural, or rather
the necessary, consequences of this state of things. How dangerous
must it have been for the sovereign to attempt to punish a clergyman
for any crime whatever, if his order were disposed to protect him, and
to represent either the proof as insufficient for convicting so holy a
man, or the punishment as too severe to be inflicted upon one whose
person had been rendered sacred by religion? The sovereign could, in
such circumstances, do no better than leave him to be tried by the
ecclesiastical courts, who, for the honour of their own order, were
interested to restrain, as much as possible, every member of it from
committing enormous crimes, or even from giving occasion to such gross
scandal as might disgust the minds of the people.

In the state in which things were, through the greater part of Europe,
during the tenth, eleventh, twelfth, and thirteenth centuries, and for
some time both before and after that period, the constitution of the
church of Rome may be considered as the most formidable combination
that ever was formed against the authority and security of civil
government, as well as against the liberty, reason, and happiness of
mankind, which can flourish only where civil government is able to
protect them. In that constitution, the grossest delusions of
superstition were supported in such a manner by the private interests
of so great a number of people, as put them out of all danger from any
assault of human reason; because, though human reason might, perhaps,
have been able to unveil, even to the eyes of the common people, some
of the delusions of superstition, it could never have dissolved the
ties of private interest. Had this constitution been attacked by no
other enemies but the feeble efforts of human reason, it must have
endured for ever. But that immense and well-built fabric, which all
the wisdom and virtue of man could never have shaken, much less have
overturned, was, by the natural course of things, first weakened, and
afterwards in part destroyed; and is now likely, in the course of a
few centuries more, perhaps, to crumble into ruins altogether.

The gradual improvements of arts, manufactures, and commerce, the same
causes which destroyed the power of the great barons, destroyed, in
the same manner, through the greater part of Europe, the whole
temporal manufactures, and commerce, the clergy, like the great
barons, found something for which they could exchange their rude
produce, and thereby discovered the means of spending their whole
revenues upon their own persons, without giving any considerable share
of them to other people. Their charity became gradually less
extensive, their hospitality less liberal, or less profuse. Their
retainers became consequently less numerous, and, by degrees, dwindled
away altogether. The clergy, too, like the great barons, wished to get
a better rent from their landed estates, in order to spend it, in the
same manner, upon the gratification of their own private vanity and
folly. But this increase of rent could be got only by granting leases
to their tenants, who thereby became, in a great measure, independent
of them. The ties of interest, which bound the inferior ranks of
people to the clergy, were in this manner gradually broken and
dissolved. They were even broken and dissolved sooner than those which
bound the same ranks of people to the great barons; because the
benefices of the church being, the greater part of them, much smaller
than the estates of the great barons, the possessor of each benefice
was much sooner able to spend the whole of its revenue upon his own
person. During the greater part of the fourteenth and fifteenth
centuries, the power of the great barons was, through the greater part
of Europe, in full vigour. But the temporal power of the clergy, the
absolute command which they had once had over the great body of the
people was very much decayed. The power of the church was, by that
time, very nearly reduced, through the greater part of Europe, to what
arose from their spiritual authority; and even that spiritual
authority was much weakened, when it ceased to be supported by the
charity and hospitality of the clergy. The inferior ranks of people no
longer looked upon that order as they had done before; as the
comforters of their distress, and the relievers of their indigence. On
the contrary, they were provoked and disgusted by the vanity, luxury,
and expense of the richer clergy, who appeared to spend upon their own
pleasures what had always before been regarded as the patrimony of the

In this situation of things, the sovereigns in the different states of
Europe endeavoured to recover the influence which they had once had in
the disposal of the great benefices of the church; by procuring to the
deans and chapters of each diocese the restoration of their ancient
right of electing the bishop; and to the monks of each abbacy that of
electing the abbot. The re-establishing this ancient order was the
object of several statutes enacted in England during the course of the
fourteenth century, particularly of what is called the statute of
provisors; and of the pragmatic sanction, established in France in the
fifteenth century. In order to render the election valid, it was
necessary that the sovereign should both consent to it before hand,
and afterwards approve of the person elected; and though the election
was still supposed to be free, he had, however all the indirect means
which his situation necessarily afforded him, of influencing the
clergy in his own dominions. Other regulations, of a similar tendency,
were established in other parts of Europe. But the power of the pope,
in the collation of the great benefices of the church, seems, before
the reformation, to have been nowhere so effectually and so
universally restrained as in France and England. The concordat
afterwards, in the sixteenth century, gave to the kings of France the
absolute right of presenting to all the great, or what are called the
consistorial, benefices of the Gallican church.

Since the establishment of the pragmatic sanction and of the
concordat, the clergy of France have in general shewn less respect to
the decrees of the papal court, than the clergy of any other catholic
country. In all the disputes which their sovereign has had with the
pope, they have almost constantly taken part with the former. This
independency of the clergy of France upon the court of Rome seems to
be principally founded upon the pragmatic sanction and the concordat.
In the earlier periods of the monarchy, the clergy of France appear to
have been as much devoted to the pope as those of any other country.
When Robert, the second prince of the Capetian race, was most unjustly
excommunicated by the court of Rome, his own servants, it is said,
threw the victuals which came from his table to the dogs, and refused
to taste any thing themselves which had been polluted by the contact
of a person in his situation. They were taught to do so, it may very
safely be presumed, by the clergy of his own dominions.

The claim of collating to the great benefices of the church, a claim
in defence of which the court of Rome had frequently shaken, and
sometimes overturned, the thrones of some of the greatest sovereigns
in Christendom, was in this manner either restrained or modified, or
given up altogether, in many different parts of Europe, even before
the time of the reformation. As the clergy had now less influence over
the people, so the state had more influence over the clergy. The
clergy, therefore, had both less power, and less inclination, to
disturb the state.

The authority of the church of Rome was in this state of declension,
when the disputes which gave birth to the reformation began in
Germany, and soon spread themselves through every part of Europe. The
new doctrines were everywhere received with a high degree of popular
favour. They were propagated with all that enthusiastic zeal which
commonly animates the spirit of party, when it attacks established
authority. The teachers of those doctrines, though perhaps, in other
respects, not more learned than many of the divines who defended the
established church, seem in general to have been better acquainted
with ecclesiastical history, and with the origin and progress of that
system of opinions upon which the authority of the church was
established; and they had thereby the advantage in almost every
dispute. The austerity of their manners gave them authority with the
common people, who contrasted the strict regularity of their conduct
with the disorderly lives of the greater part of their own clergy.
They possessed, too, in a much higher degree than their adversaries,
all the arts of popularity and of gaining proselytes; arts which the
lofty and dignified sons of the church had long neglected, as being to
them in a great measure useless. The reason of the new doctrines
recommended them to some, their novelty to many; the hatred and
contempt of the established clergy to a still greater number: but the
zealous, passionate, and fanatical, though frequently coarse and
rustic eloquence, with which they were almost everywhere inculcated,
recommended them to by far the greatest number.

The success of the new doctrines was almost everywhere so great, that
the princes, who at that time happened to be on bad terms with the
court of Rome, were, by means of them, easily enabled, in their own
dominions, to overturn the church, which having lost the respect and
veneration of the inferior ranks of people, could make scarce any
resistance. The court of Rome had disobliged some of the smaller
princes in the northern parts of Germany, whom it had probably
considered as too insignificant to be worth the managing. They
universally, therefore, established the reformation in their own
dominions. The tyranny of Christiern II., and of Troll archbishop of
Upsal, enabled Gustavus Vasa to expel them both from Sweden. The pope
favoured the tyrant and the archbishop, and Gustavus Vasa found no
difficulty in establishing the reformation in Sweden. Christiern II.
was afterwards deposed from the throne of Denmark, where his conduct
had rendered him as odious as in Sweden. The pope, however, was still
disposed to favour him; and Frederic of Holstein, who had mounted the
throne in his stead, revenged himself, by following the example of
Gustavus Vasa. The magistrates of Berne and Zurich, who had no
particular quarrel with the pope, established with great ease the
reformation in their respective cantons, where just before some of the
clergy had, by an imposture somewhat grosser than ordinary, rendered
the whole order both odious and contemptible.

In this critical situation of its affairs the papal court was at
sufficient pains to cultivate the friendship of the powerful
sovereigns of France and Spain, of whom the latter was at that time
emperor of Germany. With their assistance, it was enabled, though not
without great difficulty, and much bloodshed, either to suppress
altogether, or to obstruct very much, the progress of the reformation
in their dominions. It was well enough inclined, too, to be
complaisant to the king of England. But from the circumstances of the
times, it could not be so without giving offence to a still greater
sovereign, Charles V., king of Spain and emperor of Germany. Henry
VIII., accordingly, though he did not embrace himself the greater part
of the doctrines of the reformation, was yet enabled, by their general
prevalence, to suppress all the monasteries, and to abolish the
authority of the church of Rome in his dominions. That he should go so
far, though he went no further, gave some satisfaction to the patrons
of the reformation, who, having got possession of the government in
the reign of his son and successor completed, without any difficulty,
the work which Henry VIII. had begun.

In some countries, as in Scotland, where the government was weak,
unpopular, and not very firmly established, the reformation was strong
enough to overturn, not only the church, but the state likewise, for
attempting to support the church.

Among the followers of the reformation, dispersed in all the different
countries of Europe, there was no general tribunal, which, like that
of the court of Rome, or an oecumenical council, could settle all
disputes among them, and, with irresistible authority, prescribe to
all of them the precise limits of orthodoxy. When the followers of the
reformation in one country, therefore, happened to differ from their
brethren in another, as they had no common judge to appeal to, the
dispute could never be decided; and many such disputes arose among
them. Those concerning the government of the church, and the right of
conferring ecclesiastical benefices, were perhaps the most interesting
to the peace and welfare of civil society. They gave birth,
accordingly, to the two principal parties or sects among the followers
of the reformation, the Lutheran and Calvinistic sects, the only sects
among them, of which the doctrine and discipline have ever yet been
established by law in any part of Europe.

The followers of Luther, together with what is called the church of
England, preserved more or less of the episcopal government,
established subordination among the clergy, gave the sovereign the
disposal of all the bishoprics, and other consistorial benefices
within his dominions, and thereby rendered him the real head of the
church; and without depriving the bishop of the right of collating to
the smaller benefices within his diocese, they, even to those
benefices, not only admitted, but favoured the right of presentation,
both in the sovereign and in all other lay patrons. This system of
church government was, from the beginning, favourable to peace and
good order, and to submission to the civil sovereign. It has never,
accordingly, been the occasion of any tumult or civil commotion in any
country in which it has once been established. The church of England,
in particular, has always valued herself, with great reason, upon the
unexceptionable loyalty of her principles. Under such a government,
the clergy naturally endeavour to recommend themselves to the
sovereign, to the court, and to the nobility and gentry of the
country, by whose influence they chiefly expect to obtain preferment.
They pay court to those patrons, sometimes, no doubt, by the vilest
flattery and assentation; but frequently, too, by cultivating all
those arts which best deserve, and which are therefore most likely to
gain them, the esteem of people of rank and fortune; by their
knowledge in all the different branches of useful and ornamental
learning, by the decent liberality of their manners, by the social
good humour of their conversation, and by their avowed contempt of
those absurd and hypocritical austerities which fanatics inculcate and
pretend to practise, in order to draw upon themselves the veneration,
and upon the greater part of men of rank and fortune, who avow that
they do not practise them, the abhorrence of the common people. Such a
clergy, however, while they pay their court in this manner to the
higher ranks of life, are very apt to neglect altogether the means of
maintaining their influence and authority with the lower. They are
listened to, esteemed, and respected by their superiors; but before
their inferiors they are frequently incapable of defending,
effectually, and to the conviction of such hearers, their own sober
and moderate doctrines, against the most ignorant enthusiast who
chooses to attack them.

The followers of Zuinglius, or more properly those of Calvin, on the
contrary, bestowed upon the people of each parish, whenever the church
became vacant, the right of electing their own pastor; and
established, at the same time, the most perfect equality among the
clergy. The former part of this institution, as long as it remained in
vigour, seems to have been productive of nothing but disorder and
confusion, and to have tended equally to corrupt the morals both of
the clergy and of the people. The latter part seems never to have had
any effects but what were perfectly agreeable.

As long as the people of each parish preserved the right of electing
their own pastors, they acted almost always under the influence of the
clergy, and generally of the most factious and fanatical of the order.
The clergy, in order to preserve their influence in those popular
elections, became, or affected to become, many of them, fanatics
themselves, encouraged fanaticism among the people, and gave the
preference almost always to the most fanatical candidate. So small a
matter as the appointment of a parish priest, occasioned almost always
a violent contest, not only in one parish, but in all the neighbouring
parishes who seldom failed to take part in the quarrel. When the
parish happened to be situated in a great city, it divided all the
inhabitants into two parties; and when that city happened, either to
constitute itself a little republic, or to be the head and capital of
a little republic, as in the case with many of the considerable cities
in Switzerland and Holland, every paltry dispute of this kind, over
and above exasperating the animosity of all their other factions,
threatened to leave behind it, both a new schism in the church, and a
new faction in the state. In those small republics, therefore, the
magistrate very soon found it necessary, for the sake of preserving
the public peace, to assume to himself the right of presenting to all
vacant benefices. In Scotland, the most extensive country in which
this presbyterian form of church government has ever been established,
the rights of patronage were in effect abolished by the act which
established presbytery in the beginning of the reign of William III.
That act, at least, put in the power of certain classes of people in
each parish to purchase, for a very small price, the right of electing
their own pastor. The constitution which this act established, was
allowed to subsist for about two-and-twenty years, but was abolished
by the 10th of queen Anne, ch.12, on account of the confusions and
disorders which this more popular mode of election had almost
everywhere occasioned. In so extensive a country as Scotland, however,
a tumult in a remote parish was not so likely to give disturbance to
government as in a smaller state. The 10th of queen Anne restored the
rights of patronage. But though, in Scotland, the law gives the
benefice, without any exception to the person presented by the patron;
yet the church requires sometimes (for she has not in this respect
been very uniform in her decisions) a certain concurrence of the
people, before she will confer upon the presentee what is called the
cure of souls, or the ecclesiastical jurisdiction in the parish. She
sometimes, at least, from an affected concern for the peace of the
parish, delays the settlement till this concurrence can be procured.
The private tampering of some of the neighbouring clergy, sometimes to
procure, but more frequently to prevent this concurrence, and the
popular arts which they cultivate, in order to enable them upon such
occasions to tamper more effectually, are perhaps the causes which
principally keep up whatever remains of the old fanatical spirit,
either in the clergy or in the people of Scotland.

The equality which the presbyterian form of church government
establishes among the clergy, consists, first, in the equality of
authority or ecclesiastical jurisdiction; and, secondly, in the
equality of benefice. In all presbyterian churches, the equality of
authority is perfect; that of benefice is not so. The difference,
however, between one benefice and another, is seldom so considerable,
as commonly to tempt the possessor even of the small one to pay court
to his patron, by the vile arts of flattery and assentation, in order
to get a better. In all the presbyterian churches, where the rights of
patronage are thoroughly established, it is by nobler and better arts,
that the established clergy in general endeavour to gain the favour of
their superiors; by their learning, by the irreproachable regularity
of their life, and by the faithful and diligent discharge of their
duty. Their patrons even frequently complain of the independency of
their spirit, which they are apt to construe into ingratitude for past
favours, but which, at worse, perhaps, is seldom anymore than that
indifference which naturally arises from the consciousness that no
further favours of the kind are ever to be expected. There is scarce,
perhaps, to be found anywhere in Europe, a more learned, decent,
independent, and respectable set of men, than the greater part of the
presbyterian clergy of Holland, Geneva, Switzerland, and Scotland.

Where the church benefices are all nearly equal, none of them can be
very great; and this mediocrity of benefice, though it may be, no
doubt, carried too far, has, however, some very agreeable effects.
Nothing but exemplary morals can give dignity to a man of small
fortune. The vices of levity and vanity necessarily render him
ridiculous, and are, besides, almost as ruinous to him as they are to
the common people. In his own conduct, therefore, he is obliged to
follow that system of morals which the common people respect the most.
He gains their esteem and affection, by that plan of life which his
own interest and situation would lead him to follow. The common people
look upon him with that kindness with which we naturally regard one
who approaches somewhat to our own condition, but who, we think, ought
to be in a higher. Their kindness naturally provokes his kindness. He
becomes careful to instruct them, and attentive to assist and relieve
them. He does not even despise the prejudices of people who are
disposed to be so favourable to him, and never treats them with those
contemptuous and arrogant airs, which we so often meet with in the
proud dignitaries of opulent and well endowed churches. The
presbyterian clergy, accordingly, have more influence over the minds
of the common people, than perhaps the clergy of any other established
church. It is, accordingly, in presbyterian countries only, that we
ever find the common people converted, without persecution completely,
and almost to a man, to the established church.

In countries where church benefices are, the greater part of them,
very moderate, a chair in a university is generally a better
establishment than a church benefice. The universities have, in this
case, the picking and chusing of their members from all the churchmen
of the country, who, in every country, constitute by far the most
numerous class of men of letters. Where church benefices, on the
contrary, are many of them very considerable, the church naturally
draws from the universities the greater part of their eminent men of
letters; who generally find some patron, who does himself honour by
procuring them church preferment. In the former situation, we are
likely to find the universities filled with the most eminent men of
letters that are to be found in the country. In the latter, we are
likely to find few eminent men among them, and those few among the
youngest members of the society, who are likely, too, to be drained
away from it, before they can have acquired experience and knowledge
enough to be of much use to it. It is observed by Mr. de Voltaire,
that father Porée, a jesuit of no great eminence in the republic of
letters, was the only professor they had ever had in France, whose
works were worth the reading. In a country which has produced so many
eminent men of letters, it must appear somewhat singular, that scarce
one of them should have been a professor in a university. The famous
Cassendi was, in the beginning of his life, a professor in the
university of Aix. Upon the first dawning of his genius, it was
represented to him, that by going into the church he could easily find
a much more quiet and comfortable subsistence, as well as a better
situation for pursuing his studies; and he immediately followed the
advice. The observation of Mr. de Voltaire may be applied, I believe,
not only to France, but to all other Roman Catholic countries. We very
rarely find in any of them an eminent man of letters, who is a
professor in a university, except, perhaps, in the professions of law
and physic; professions from which the church is not so likely to draw
them. After the church of Rome, that of England is by far the richest
and best endowed church in Christendom. In England, accordingly, the
church is continually draining the universities of all their best and
ablest members; and an old college tutor who is known and
distinguished in Europe as an eminent man of letters, is as rarely to
be found there as in any Roman catholic country, In Geneva, on the
contrary, in the protestant cantons of Switzerland, in the protestant
countries of Germany, in Holland, in Scotland, in Sweden, and Denmark,
the most eminent men of letters whom those countries have produced,
have, not all indeed, but the far greater part of them, been
professors in universities. In those countries, the universities are
continually draining the church of all its most eminent men of

It may, perhaps, be worth while to remark, that, if we except the
poets, a few orators, and a few historians, the far greater part of
the other eminent men of letters, both of Greece and Rome, appear to
have been either public or private teachers; generally either of
philosophy or of rhetoric. This remark will be found to hold true,
from the days of Lysias and Isocrates, of Plato and Aristotle, down to
those of Plutarch and Epictetus, Suetonius, and Quintilian. To impose
upon any man the necessity of teaching, year after year, in any
particular branch of science seems in reality to be the most effectual
method for rendering him completely master of it himself. By being
obliged to go every year over the same ground, if he is good for any
thing, he necessarily becomes, in a few years, well acquainted with
every part of it, and if, upon any particular point, he should form
too hasty an opinion one year, when he comes, in the course of his
lectures to reconsider the same subject the year thereafter, he is
very likely to correct it. As to be a teacher of science is certainly
the natural employment of a mere man of letters; so is it likewise,
perhaps, the education which is most likely to render him a man of
solid learning and knowledge. The mediocrity of church benefices
naturally tends to draw the greater part of men of letters in the
country where it takes place, to the employment in which they can be
the most useful to the public, and at the same time to give them the
best education, perhaps, they are capable of receiving. It tends to
render their learning both as solid as possible, and as useful as

The revenue of every established church, such parts of it excepted as
may arise from particular lands or manors, is a branch, it ought to be
observed, of the general revenue of the state, which is thus diverted
to a purpose very different from the defence of the state. The tithe,
for example, is a real land tax, which puts it out of the power of
the proprietors of land to contribute so largely towards the defence
of the state as they otherwise might be able to do. The rent of land,
however, is, according to some, the sole fund; and, according to
others, the principal fund, from which, in all great monarchies, the
exigencies of the state must be ultimately supplied. The more of this
fund that is given to the church, the less, it is evident, can be
spared to the state. It may be laid down as a certain maxim, that all
other things being supposed equal, the richer the church, the poorer
must necessarily be, either the sovereign on the one hand, or the
people on the other; and, in all cases, the less able must the state
be to defend itself. In several protestant countries, particularly in
all the protestant cantons of Switzerland, the revenue which anciently
belonged to the Roman catholic church, the tithes and church lands,
has been found a fund sufficient, not only to afford competent
salaries to the established clergy, but to defray, with little or no
addition, all the other expenses of the state. The magistrates of the
powerful canton of Berne, in particular, have accumulated, out of the
savings from this fund, a very large sum, supposed to amount to
several millions; part or which is deposited in a public treasure, and
part is placed at interest in what are called the public funds of the
different indebted nations of Europe; chiefly in those of France and
Great Britain. What may be the amount of the whole expense which the
church, either of Berne, or of any other protestant canton, costs the
state, I do not pretend to know. By a very exact account it appears,
that, in 1755, the whole revenue of the clergy of the church of
Scotland, including their glebe or church lands, and the rent of their
manses or dwelling-houses, estimated according to a reasonable
valuation, amounted only to £68,514:1:5 1/12d. This very moderate
revenue affords a decent subsistence to nine hundred and fortyfour
ministers. The whole expense of the church, including what is
occasionally laid out for the building and reparation of churches, and
of the manses of ministers, cannot well be supposed to exceed eighty
or eighty-five thousand pounds a-year. The most opulent church in
Christendom does not maintain better the uniformity of faith, the
fervour of devotion, the spirit of order, regularity, and austere
morals, in the great body of the people, than this very poorly endowed
church of Scotland. All the good effects, both civil and religious,
which an established church can be supposed to produce, are produced
by it as completely as by any other. The greater part of the
protestant churches of Switzerland, which, in general, are not better
endowed than the church of Scotland, produce those effects in a still
higher degree. In the greater part of the protestant cantons, there is
not a single person to be found, who does not profess himself to be of
the established church. If he professes himself to be of any other,
indeed, the law obliges him to leave the canton. But so severe, or,
rather, indeed, so oppressive a law, could never have been executed in
such free countries, had not the diligence of the clergy beforehand
converted to the established church the whole body of the people, with
the exception of, perhaps, a few individuals only. In some parts of
Switzerland, accordingly, where, from the accidental union of a
protestant and Roman catholic country, the conversion has not been so
complete, both religions are not only tolerated, but established by

The proper performance of every service seems to require, that its pay
or recompence should be, as exactly as possible, proportioned to the
nature of the service. If any service is very much underpaid, it is
very apt to suffer by the meanness and incapacity of the greater part
of those who are employed in it. If it is very much overpaid, it is
apt to suffer, perhaps still more, by their negligence and idleness. A
man of a large revenue, whatever may be his profession, thinks he
ought to live like other men of large revenues; and to spend a great
part of his time in festivity, in vanity, and in dissipation. But in a
clergyman, this train of life not only consumes the time which ought
to be employed in the duties of his function, but in the eyes of the
common people, destroys almost entirely that sanctity of character,
which can alone enable him to perform those duties with proper weight
and authority.


Of the Expense of supporting the Dignity of the Sovereign.

Over and above the expenses necessary for enabling the sovereign to
perform his several duties, a certain expense is requisite for the
support of his dignity. This expense varies, both with the different
periods of improvement, and with the different forms of government.

In an opulent and improved society, where all the different orders of
people are growing every day more expensive in their houses, in their
furniture, in their tables, in their dress, and in their equipage; it
cannot well be expected that the sovereign should alone hold out
against the fashion. He naturally, therefore, or rather necessarily,
becomes more expensive in all those different articles too. His
dignity even seems to require that he should become so.

As, in point of dignity, a monarch is more raised above his subjects
than the chief magistrate of any republic is ever supposed to be above
his fellow-citizens; so a greater expense is necessary for supporting
that higher dignity. We naturally expect more splendour in the court
of a king, than in the mansion-house of a doge or burgo-master.


The expense of defending the society, and that of supporting the
dignity of the chief magistrate, are both laid out for the general
benefit of the whole society. It is reasonable, therefore, that they
should be defrayed by the general contribution of the whole society;
all the different members contributing, as nearly as possible, in
proportion to their respective abilities.

The expense of the administration of justice, too, may no doubt be
considered as laid out for the benefit of the whole society. There is
no impropriety, therefore, in its being defrayed by the general
contribution of the whole society. The persons, however, who give
occasion to this expense, are those who, by their injustice in one way
or another, make it necessary to seek redress or protection from the
courts of justice. The persons, again, most immediately benefited by
this expense, are those whom the courts of justice either restore to
their rights, or maintain in their rights. The expense of the
administration of justice, therefore, may very properly be defrayed by
the particular contribution of one or other, or both, of those two
different sets of persons, according as different occasions may
require, that is, by the fees of court. It cannot be necessary to have
recourse to the general contribution of the whole society, except for
the conviction of those criminals who have not themselves any estate
or fund sufficient for paying those fees.

Those local or provincial expenses, of which the benefit is local or
provincial (what is laid out, for example, upon the police of a
particular town or district), ought to be defrayed by a local or
provincial revenue, and ought to be no burden upon the general revenue
of the society. It is unjust that the whole society should contribute
towards an expense, of which the benefit is confined to a part of the

The expense of maintaining good roads and communications is, no doubt,
beneficial to the whole society, and may, therefore, without any
injustice, be defrayed by the general contributions of the whole
society. This expense, however, is most immediately and directly
beneficial to those who travel or carry goods from one place to
another, and to those who consume such goods. The turnpike tolls in
England, and the duties called peages in other countries, lay it
altogether upon those two different sets of people, and thereby
discharge the general revenue of the society from a very considerable

The expense of the institutions for education and religious
instruction, is likewise, no doubt, beneficial to the whole society,
and may, therefore, without injustice, be defrayed by the general
contribution of the whole society. This expense, however, might,
perhaps, with equal propriety, and even with some advantage, be
defrayed altogether by those who receive the immediate benefit of such
education and instruction, or by the voluntary contribution of those
who think they have occasion for either the one or the other.

When the institutions, or public works, which are beneficial to the
whole society, either cannot be maintained altogether, or are not
maintained altogether, by the contribution of such particular members
of the society as are most immediately benefited by them; the
deficiency must, in most cases, be made up by the general contribution
of the whole society. The general revenue of the society, over and
above defraying the expense of defending the society, and of
supporting the dignity of the chief magistrate, must make up for the
deficiency of many particular branches of revenue. The sources of this
general or public revenue, I shall endeavour to explain in the
following chapter.



The revenue which must defray, not only the expense of defending the
society and of supporting the dignity of the chief magistrate, but all
the other necessary expenses of government, for which the constitution
of the state has not provided any particular revenue may be drawn,
either, first, from some fund which peculiarly belongs to the
sovereign or commonwealth, and which is independent of the revenue of
the people; or, secondly, from the revenue of the people.


Of the Funds, or Sources, of Revenue, which may peculiarly belong to
the Sovereign or Commonwealth.

The funds, or sources, of revenue, which may peculiarly belong to the
sovereign or commonwealth, must consist, either in stock, or in land.

The sovereign, like, any other owner of stock, may derive a revenue
from it, either by employing it himself, or by lending it. His revenue
is, in the one case, profit, in the other interest.

The revenue of a Tartar or Arabian chief consists in profit. It arises
principally from the milk and increase of his own herds and flocks, of
which he himself superintends the management, and is the principal
shepherd or herdsman of his own horde or tribe. It is, however, in
this earliest and rudest state of civil government only, that profit
has ever made the principal part of the public revenue of a
monarchical state.

Small republics have sometimes derived a considerable revenue from the
profit of mercantile projects. The republic of Hamburgh is said to do
so from the profits of a public wine-cellar and apothecary's shop. {See
Memoires concernant les Droits et Impositions en Europe, tome i. page
73. This work was compiled by the order of the court, for the use of a
commission employed for some years past in considering the proper means
for reforming the finances of France. The account of the French taxes,
which takes up three volumes in quarto, may be regarded as perfectly
authentic. That of those of other European nations was compiled from
such information as the French ministers at the different courts could
procure. It is much shorter, and probably not quite so exact as that
of the French taxes.} That state cannot be very great, of which the
sovereign has leisure to carry on the trade of a wine-merchant or an
apothecary. The profit of a public bank has been a source of revenue
to more considerable states. It has been so, not only to Hamhurgh, but
to Venice and Amsterdam. A revenue of this kind has even by some
people been thought not below the attention of so great an empire as
that of Great Britain. Reckoning the ordinary dividend of the bank of
England at five and a-half per cent., and its capital at ten millions
seven hundred and eighty thousand pounds, the neat annual profit,
after paying the expense of management, must amount, it is said, to
five hundred and ninety-two thousand nine hundred pounds. Government,
it is pretended, could borrow this capital at three per cent.
interest, and, by taking the management of the bank into its own
hands, might make a clear profit of two hundred and sixty-nine
thousand five hundred pounds a-year. The orderly, vigilant, and
parsimonious administration of such aristocracies as those of Venice
and Amsterdam, is extremely proper, it appears from experience, for
the management of a mercantile project of this kind. But whether such
a government us that of England, which, whatever may be its virtues,
has never been famous for good economy; which, in time of peace, has
generally conducted itself with the slothful and negligent profusion
that is, perhaps, natural to monarchies; and, in time of war, has
constantly acted with all the thoughtless extravagance that
democracies are apt to fall into, could be safely trusted with the
management of such a project, must at least be a good deal more

The post-office is properly a mercantile project. The government
advances the expense of establishing the different offices, and of
buying or hiring the necessary horses or carriages, and is repaid,
with a large profit, by the duties upon what is carried. It is,
perhaps, the only mercantile project which has been successfully
managed by, I believe, every sort of government. The capital to be
advanced is not very considerable. There is no mystery in the
business. The returns are not only certain but immediate.

Princes, however, have frequently engaged in many other mercantile
projects, and have been willing, like private persons, to mend their
fortunes, by becoming adventurers in the common branches of trade.
They have scarce ever succeeded. The profusion with which the affairs
of princes are always managed, renders it almost impossible that they
should. The agents of a prince regard the wealth of their master as
inexhaustible; are careless at what price they buy, are careless at
what price they sell, are careless at what expense they transport his
goods from one place to another. Those agents frequently live with the
profusion of princes; and sometimes, too, in spite of that profusion,
and by a proper method of making up their accounts, acquire the
fortunes of princes. It was thus, as we are told by Machiavel, that
the agents of Lorenzo of Medicis, not a prince of mean abilities,
carried on his trade. The republic of Florence was several times
obliged to pay the debt into which their extravagance had involved
him. He found it convenient, accordingly to give up the business of
merchant, the business to which his family had originally owed their
fortune, and, in the latter part of his life, to employ both what
remained of that fortune, and the revenue of the state, of which he
had the disposal, in projects and expenses more suitable to his

No two characters seem more inconsistent than those of trader and
sovereign. If the trading spirit of the English East India company
renders them very bad sovereigns, the spirit of sovereignty seems to
have rendered them equally bad traders. While they were traders only,
they managed their trade successfully, and were able to pay from their
profits a moderate dividend to the proprietors of their stock. Since
they became sovereigns, with a revenue which, it is said, was
originally more than three millions sterling, they have been obliged
to beg the ordinary assistance of government, in order to avoid
immediate bankruptcy. In their former situation, their servants in
India considered themselves as the clerks of merchants; in their
present situation, those servants consider themselves as the ministers
of sovereigns.

A state may sometimes derive some part of its public revenue from the
interest of money, as well as from the profits of stock. If it has
amassed a treasure, it may lend a part of that treasure, either to
foreign states, or to its own subjects.

The canton of Berne derives a considerable revenue by lending a part
of its treasure to foreign states, that is, by placing it in the
public funds of the different indebted nations of Europe, chiefly in
those of France and England. The security of this revenue must depend,
first, upon the security of the funds in which it is placed, or upon
the good faith of the government which has the management of them;
and, secondly, upon the certainty or probability of the continuance of
peace with the debtor nation. In the case of a war, the very first act
of hostility on the part of the debtor nation might be the forfeiture
of the funds of its credit or. This policy of lending money to foreign
states is, so far as I know peculiar to the canton of Berne.

The city of Hamburgh {See Memoire concernant les Droites et
Impositions en Europe tome i p. 73.}has established a sort of public
pawn-shop, which lends money to the subjects of the state, upon
pledges, at six per cent. interest. This pawn-shop, or lombard, as it
is called, affords a revenue, it is pretended, to the state, of a
hundred and fifty thousand crowns, which, at four and sixpence the
crown, amounts to £33,750 sterling.

The government of Pennsylvania, without amassing any treasure,
invented a method of lending, not money, indeed, but what is
equivalent to money, to its subjects. By advancing to private people,
at interest, and upon land security to double the value, paper bills
of credit, to be redeemed fifteen years after their date; and, in the
mean time, made transferable from hand to hand, like banknotes, and
declared by act of assembly to be a legal tender in all payments from
one inhabitant of the province to another, it raised a moderate
revenue, which went a considerable way towards defraying an annual
expense of about £4,500, the whole ordinary expense of that frugal and
orderly government. The success of an expedient of this kind must have
depended upon three different circumstances: first, upon the demand
for some other instrument of commerce, besides gold and silver money,
or upon the demand for such a quantity of consumable stock as could
not be had without sending abroad the greater part of their gold and
silver money, in order to purchase it; secondly, upon the good credit
of the government which made use of this expedient; and, thirdly, upon
the moderation with which it was used, the whole value of the paper
bills of credit never exceeding that of the gold and silver money
which would have been necessary for carrying on their circulation, had
there been no paper bills of credit. The same expedient was, upon
different occasions, adopted by several other American colonies; but,
from want of this moderation, it produced, in the greater part of
them, much more disorder than conveniency.

The unstable and perishable nature of stock and credit, however,
renders them unfit to be trusted to as the principal funds of that
sure, steady, and permanent revenue, which can alone give security and
dignity to government. The government of no great nation, that was
advanced beyond the shepherd state, seems ever to have derived the
greater part of its public revenue from such sources.

Land is a fund of more stable and permanent nature; and the rent of
public lands, accordingly, has been the principal source of the public
revenue of many a great nation that was much advanced beyond the
shepherd state. From the produce or rent of the public lands, the
ancient republics of Greece and Italy derived for a long the the
greater part of that revenue which defrayed the necessary expenses of
the commonwealth. The rent of the crown lands constituted for a long
time the greater part of the revenue of the ancient sovereigns of

War, and the preparation for war, are the two circumstances which, in
modern times, occasion the greater part of the necessary expense or
all great states. But in the ancient republics of Greece and Italy,
every citizen was a soldier, and both served, and prepared himself for
service, at his own expense. Neither of those two circumstances,
therefore, could occasion any very considerable expense to the state.
The rent of a very moderate landed estate might be fully sufficient
for defraying all the other necessary expenses of government.

In the ancient monarchies of Europe, the manners and customs of the
time sufficiently prepared the great body of the people for war; and
when they took the field, they were, by the condition of their feudal
tenures, to be maintained either at their own expense, or at that of
their immediate lords, without bringing any new charge upon the
sovereign. The other expenses of government were, the greater part of
them, very moderate. The administration of justice, it has been shewn,
instead of being a cause of expense was a source of revenue. The
labour of the country people, for three days before, and for three
days after, harvest, was thought a fund sufficient for making and
maintaining all the bridges, highways, and other public works, which
the commerce of the country was supposed to require. In those days the
principal expense of the sovereign seems to have consisted in the
maintenance of his own family and household. The officers of his
household, accordingly, were then the great officers of state. The
lord treasurer received his rents. The lord steward and lord
chamberlain looked after the expense of his family. The care of his
stables was committed to the lord constable and the lord marshal. His
houses were all built in the form of castles, and seem to have been
the principal fortresses which he possessed. The keepers of those
houses or castles might be considered as a sort of military governors.
They seem to have been the only military officers whom it was
necessary to maintain in time of peace. In these circumstances, the
rent of a great landed estate might, upon ordinary occasions, very
well defray all the necessary expenses of government.

In the present state of the greater part of the civilized monarchies
of Europe, the rent of all the lands in the country, managed as they
probably would be, if they all belonged to one proprietor, would
scarce, perhaps, amount to the ordinary revenue which they levy upon
the people even in peaceable times. The ordinary revenue of Great
Britain, for example, including not only what is necessary for
defraying the current expense of the year, but for paying the interest
of the public debts, and for sinking a part of the capital of those
debts, amounts to upwards of ten millions a-year. But the land tax, at
four shillings in the pound, falls short of two millions a-year. This
land tax, as it is called however, is supposed to be one-fifth, not
only of the rent of all the land, but of that of all the houses, and
of the interest of all the capital stock of Great Britain, that part
of it only excepted which is either lent to the public, or employed as
farming stock in the cultivation of land. A very considerable part of
the produce of this tax arises from the rent of houses and the
interest of capital stock. The land tax of the city of London, for
example, at four shillings in the pound, amounts to £123,399: 6: 7;
that of the city of Westminster to £63,092: 1: 5; that of the palaces
of Whitehall and St. James's, to £30,754: 6: 3. A certain proportion
of the land tax is, in the same manner, assessed upon all the other
cities and towns corporate in the kingdom; and arises almost
altogether, either from the rent of houses, or from what is supposed
to be the interest of trading and capital stock. According to the
estimation, therefore, by which Great Britain is rated to the land
tax, the whole mass of revenue arising from the rent of all the lands,
from that of all the houses, and from the interest of all the capital
stock, that part of it only excepted which is either lent to the
public, or employed in the cultivation of land, does not exceed ten
millions sterling a-year, the ordinary revenue which government levies
upon the people, even in peaceable times. The estimation by which
Great Britain is rated to the land tax is, no doubt, taking the whole
kingdom at an average, very much below the real value; though in
several particular counties and districts it is said to be nearly
equal to that value. The rent of the lands alone, exclusive of that of
houses and of the interest of stock, has by many people been estimated
at twenty millions; an estimation made in a great measure at random,
and which, I apprehend, is as likely to be above as below the truth.
But if the lands of Great Britain, in the present state of their
cultivation, do not afford a rent of more than twenty millions a-year,
they could not well afford the half, most probably not the fourth part
of that rent, if they all belonged to a single proprietor, and were
put under the negligent, expensive, and oppressive management of his
factors and agents. The crown lands of Great Britain do not at present
afford the fourth part of the rent which could probably be drawn from
them if they were the property of private persons. If the crown lands
were more extensive, it is probable, they would be still worse

The revenue which the great body of the people derives from land is,
in proportion, not to the rent, but to the produce of the land. The
whole annual produce of the land of every country, if we except what
is reserved for seed, is either annually consumed by the great body of
the people, or exchanged for something else that is consumed by them.
Whatever keeps down the produce of the land below what it would
otherwise rise to, keeps down the revenue of the great body of the
people, still more than it does that of the proprietors of land. The
rent of land, that portion of the produce which belongs to the
proprietors, is scarce anywhere in Great Britain supposed to be more
than a third part of the whole produce. If the land which, in one
state of cultivation, affords a revenue of ten millions sterling
a-year, would in another afford a rent of twenty millions; the rent
being, in both cases, supposed a third part of the produce, the
revenue of the proprietors would be less than it otherwise might be,
by ten millions a-year only; but the revenue of the great hotly of the
people would be less than it otherwise might be, by thirty millions
a-year, deducting only what would be necessary for seed. The
population of the country would be less by the number of people which
thirty millions a-year, deducting always the seed, could maintain,
according to the particular mode of living, and expense which might
take place in the different ranks of men, among whom the remainder was

Though there is not at present in Europe, any civilized state of any
kind which derives the greater part of its public revenue from the
rent of lands which are the property of the state; yet, in all the
great monarchies of Europe, there are still many large tracts of land
which belong to the crown. They are generally forest, and sometimes
forests where, after travelling several miles, you will scarce find a
single tree; a mere waste and loss of country, in respect both of
produce and population. In every great monarchy of Europe, the sale of
the crown lands would produce a very large sum of money, which, if
applied to the payment of the public debts, would deliver from
mortgage a much greater revenue than any which those lands have even
afforded to the crown. In countries where lands, improved and
cultivated very highly, and yielding, at the time of sale, as great a
rent as can easily be got from them, commonly sell at thirty years
purchase; the unimproved, uncultivated, and low-rented crown lands,
might well be expected to sell at forty, fifty, or sixty years
purchase. The crown might immediately enjoy the revenue which this
great price would redeem from mortgage. In the course of a few years,
it would probably enjoy another revenue. When the crown lands had
become private property, they would, in the course of a few years,
become well improved and well cultivated. The increase of their
produce would increase the population of the country, by augmenting
the revenue and consumption of the people. But the revenue which the
crown derives from the duties or custom and excise, would necessarily
increase with the revenue and consumption of the people.

The revenue which, in any civilized monarchy, the crown derives from
the crown lands, though it appears to cost nothing to individuals, in
reality costs more to the society than perhaps any other equal revenue
which the crown enjoys. It would, in all cases, be for the interest of
the society, to replace this revenue to the crown by some other equal
revenue, and to divide the lands among the people, which could not
well be done better, perhaps, than by exposing them to public sale.

Lands, for the purposes of pleasure and magnificence, parks, gardens,
public walks, etc. possessions which are everywhere considered as
causes of expense, not as sources of revenue, seem to be the only
lands which, in a great and civilized monarchy, ought to belong to the

Public stock and public lands, therefore, the two sources of revenue
which may peculiarly belong to the sovereign or commonwealth, being
both improper and insufficient funds for defraying the necessary
expense of any great and civilized state; it remains that this expense
must, the greater part of it, be defrayed by taxes of one kind or
another; the people contributing a part of their own private revenue,
in order to make up a public revenue to the sovereign or commonwealth.


Of Taxes.

The private revenue of individuals, it has been shown in the first
book of this Inquiry, arises, ultimately from three different sources;
rent, profit, and wages. Every tax must finally be paid from some one
or other of those three different sources of revenue, or from all of
them indifferently. I shall endeavour to give the best account I can,
first, of those taxes which, it is intended should fall upon rent;
secondly, of those which, it is intended should fall upon profit;
thirdly, of those which, it is intended should fall upon wages; and
fourthly, of those which, it is intended should fall indifferently
upon all those three different sources of private revenue. The
particular consideration of each of these four different sorts of
taxes will divide the second part of the present chapter into four
articles, three of which will require several other subdivisions. Many
of these taxes, it will appear from the following review, are not
finally paid from the fund, or source of revenue, upon which it is
intended they should fall.

Before I enter upon the examination of particular taxes,it is
necessary to premise the four following maximis with regard to taxes
in general.

1. The subjects of every state ought to contribute towards the support
of the government, as nearly as possible, in proportion to their
respective abilities; that is, in proportion to the revenue which they
respectively enjoy under the protection of the state. The expense of
government to the individuals of a great nation, is like the expense
of management to the joint tenants of a great estate, who are all
obliged to contribute in proportion to their respective interests in
the estate. In the observation or neglect of this maxim, consists what
is called the equality or inequality of taxation. Every tax, it must
be observed once for all, which falls finally upon one only of the
three sorts of revenue above mentioned, is necessarily unequal, in so
far as it does not affect the other two. In the following examination
of different taxes, I shall seldom take much farther notice of this
sort of inequality; but shall, in most cases, confine my observations
to that inequality which is occasioned by a particular tax falling
unequally upon that particular sort of private revenue which is
affected by it.

2. The tax which each individual is bound to pay, ought to be certain
and not arbitrary. The time of payment, the manner of payment, the
quantity to be paid, ought all to be clear and plain to the
contributor, and to every other person. Where it is otherwise, every
person subject to the tax is put more or less in the power of the
tax-gatherer, who can either aggravate the tax upon any obnoxious
contributor, or extort, by the terror of such aggravation, some
present or perquisite to himself. The uncertainty of taxation
encourages the insolence, and favours the corruption, of an order of
men who are naturally unpopular, even where they are neither insolent
nor corrupt. The certainty of what each individual ought to pay is, in
taxation, a matter of so great importance, that a very considerable
degree of inequality, it appears, I believe, from the experience of
all nations, is not near so great an evil as a very small degree of

3. Every tax ought to be levied at the time, or in the manner, in
which it is most likely to be convenient for the contributor to pay
it. A tax upon the rent of land or of houses, payable at the same term
at which such rents are usually paid, is levied at the time when it is
most likely to be convenient for the contributor to pay; or when he is
most likely to have wherewithall to pay. Taxes upon such consumable
goods as are articles of luxury, are all finally paid by the consumer,
and generally in a manner that is very convenient for him. He pays
them by little and little, as he has occasion to buy the goods. As he
is at liberty too, either to buy or not to buy, as he pleases, it must
be his own fault if he ever suffers any considerable inconveniency from
such taxes.

4. Every tax ought to be so contrived, as both to take out and to keep
out of the pockets of the people as little as possible, over and above
what it brings into the public treasury of the state. A tax may either
take out or keep out of the pockets of the people a great deal more
than it brings into the public treasury, in the four following ways.
First, the levying of it may require a great number of officers, whose
salaries may eat up the greater part of the produce of the tax, and
whose perquisites may impose another additional tax upon the people.
Secondly, it may obstruct the industry of the people, and discourage
them from applying to certain branches of business which might give
maintenance and employment to great multitudes. While it obliges the
people to pay, it may thus diminish, or perhaps destroy, some of the
funds which might enable them more easily to do so. Thirdly, by the
forfeitures and other penalties which those unfortunate individuals
incur, who attempt unsuccessfully to evade the tax, it may frequently
ruin them, and thereby put an end to the benefit which the community
might have received from the employment of their capitals. An
injudicious tax offers a great temptation to smuggling. But the
penalties of smuggling must arise in proportion to the temptation. The
law, contrary to all the ordinary principles of justice, first creates
the temptation, and then punishes those who yield to it; and it
commonly enhances the punishment, too, in proportion to the very
circumstance which ought certainly to alleviate it, the temptation to
commit the crime. {See Sketches of the History of Man page 474, and
Seq.} Fourthly, by subjecting the people to the frequent visits and
the odious examination of the tax-gatherers, it may expose them to
much unnecessary trouble, vexation, and oppression; and though
vexation is not, strictly speaking, expense, it is certainly
equivalent to the expense at which every man would be willing to
redeem himself from it. It is in some one or other of these four
different ways, that taxes are frequently so much more burdensome to
the people than they are beneficial to the sovereign.

The evident justice and utility of the foregoing maxims have
recommended them, more or less, to the attention of all nations. All
nations have endeavoured, to the best of their judgment, to render
their taxes as equal as they could contrive; as certain, as convenient
to the contributor, both the time and the mode of payment, and in
proportion to the revenue which they brought to the prince, as little
burdensome to the people. The following short review of some of the
principal taxes which have taken place in different ages and
countries, will show, that the endeavours of all nations have not in
this respect been equally successful.

ARTICLE I. -- Taxes upon Rent -- Taxes upon the Rent of Land.

A tax upon the rent of land may either be imposed according to a
certain canon, every district being valued at a curtain rent, which
valuation is not afterwards to be altered; or it may be imposed in
such a manner, as to vary with every variation in the real rent of the
land, and to rise or fall with the improvement or declension of its

A land tax which, like that of Great Britain, is assessed upon each
district according to a certain invariable canon, though it should be
equal at the time of its first establishment, necessarily becomes
unequal in process of time, according to the unequal degrees of
improvement or neglect in the cultivation of the different parts of
the country. In England, the valuation, according to which the
different counties and parishes were assessed to the land tax by the
4th of William and Mary, was very unequal even at its first
establishment. This tax, therefore, so far offends against the first
of the four maxims above mentioned. It is perfectly agreeable to the
other three. It is perfectly certain. The time of payment for the tax,
being the same as that for the rent, is as convenient as it can be to
the contributor. Though the landlord is, in all cases, the real
contributor, the tax is commonly advanced by the tenant, to whom the
landlord is obliged to allow it in the payment of the rent. This tax
is levied by a much smaller number of officers than any other which
affords nearly the same revenue. As the tax upon each district does
not rise with the rise of the rent, the sovereign does not share in
the profits of the landlord's improvements. Those improvements
sometimes contribute, indeed, to the discharge of the other landlords
of the district. But the aggravation of the tax, which this may
sometimes occasion upon a particular estate, is always so very small,
that it never can discourage those improvements, nor keep down the
produce of the land below what it would otherwise rise to. As it has
no tendency to diminish the quantity, it can have none to raise the
price of that produce. It does not obstruct the industry of the
people; it subjects the landlord to no other inconveniency besides the
unavoidable one of paying the tax.

The advantage, however, which the land-lord has derived from the
invariable constancy of the valuation, by which all the lands of Great
Britain are rated to the land-tax, has been principally owing to some
circumstances altogether extraneous to the nature of the tax

It has been owing in part, to the great prosperity of almost every
part of the country, the rents of almost all the estates of Great
Britain having, since the time when this valuation was first
established, been continually rising, and scarce any of them having
fallen. The landlords, therefore, have almost all gained the
difference between the tax which they would have paid, according to
the present rent of their estates, and that which they actually pay
according to the ancient valuation. Had the state of the country been
different, had rents been gradually falling in consequence of the
declension of cultivation, the landlords would almost all have lost
this difference. In the state of things which has happened to take
place since the revolution, the constancy of the valuation has been
advantageous to the landlord and hurtful to the sovereign. In a
different state of things it might have been advantageous to the
sovereign and hurtful to the landlord.

As the tax is made payable in money, so the valuation of the land is
expressed in money. Since the establishment of this valuation, the
value of silver has been pretty uniform, and there has been no
alteration in the standard of the coin, either as to weight or
fineness. Had silver risen considerably in its value, as it seems to
have done in the course of the two centuries which preceded the
discovery of the mines of America, the constancy of the valuation
might have proved very oppressive to the landlord. Had silver fallen
considerably in its value, as it certainly did for about a century at
least after the discovery of those mines, the same constancy of
valuation would have reduced very much this branch of the revenue of
the sovereign. Had any considerable alteration been made in the
standard of the money, either by sinking the same quantity of silver
to a lower denomination, or by raising it to a higher; had an ounce of
silver, for example, instead of being coined into five shillings and
two pence, been coined either into pieces which bore so low a
denomination as two shillings and seven pence, or into pieces which
bore so high a one as ten shillings and four pence, it would, in the
one case, have hurt the revenue of the proprietor, in the other that
of the sovereign.

In circumstances, therefore, somewhat different from those which have
actually taken place, this constancy of valuation might have been a
very great inconveniency, either to the contributors or to the
commonwealth. In the course of ages, such circumstances, however, must
at some time or other happen. But though empires, like all the other
works of men, have all hitherto proved mortal, yet every empire aims
at immortality. Every constitution, therefore, which it is meant
should be as permanent as the empire itself, ought to be convenient,
not in certain circumstances only, but in all circumstances; or ought
to be suited, not to those circumstances which are transitory,
occasional, or accidental, but to those which are necessary, and
therefore always the same.

A tax upon the rent of land, which varies with every variation of the
rent, or which rises and falls according to the improvement or neglect
of cultivation, is recommended by that sect of men of letters in
France, who call themselves the economists, as the most equitable of
all taxes. All taxes, they pretend, fall ultimately upon the rent of
land, and ought, therefore, to be imposed equally upon the fund which
must finally pay them. That all taxes ought to fall as equally as
possible upon the fund which must finally pay them, is certainly true.
But without entering into the disagreeable discussion of the
metaphysical arguments by which they support their very ingenious
theory, it will sufficiently appear, from the following review, what
are the taxes which fall finally upon the rent of the land, and what
are those which fall finally upon some other fund.

In the Venetian territory, all the arable lands which are given in
lease to farmers are taxed at a tenth of the rent. {Memoires
concernant les Droits, p. 240, 241.} The leases are recorded in a
public register, which is kept by the officers of revenue in each
province or district. When the proprietor cultivates his own lands,
they are valued according to an equitable estimation, and he is
allowed a deduction of one-fifth of the tax; so that for such land he
pays only eight instead of ten per cent. of the supposed rent.

A land-tax of this kind is certainly more equal than the land-tax of
England. It might not, perhaps, be altogether so certain, and the
assessment of the tax might frequently occasion a good deal more
trouble to the landlord. It might, too, be a good deal more expensive
in the levying.

Such a system of administration, however, might, perhaps, be
contrived, as would in a great measure both prevent this uncertainty,
and moderate this expense.

The landlord and tenant, for example, might jointly be obliged to
record their lease in a public register. Proper penalties might be
enacted against concealing or misrepresenting any of the conditions;
and if part of those penalties were to be paid to either of the two
parties who informed against and convicted the other of such
concealment or misrepresentation, it would effectually deter them from
combining together in order to defraud the public revenue. All the
conditions of the lease might be sufficiently known from such a

Some landlords, instead of raising the rent, take a fine for the
renewal of the lease. This practice is, in most cases, the expedient
of a spendthrift, who, for a sum of ready money sells a future revenue
of much greater value. It is, in most cases, therefore, hurtful to the
landlord; it is frequently hurtful to the tenant; and it is always
hurtful to the community. It frequently takes from the tenant so great
a part of his capital, and thereby diminishes so much his ability to
cultivate the land, that he finds it more difficult to pay a small
rent than it would otherwise have been to pay a great one. Whatever
diminishes his ability to cultivate, necessarily keeps down, below
what it would otherwise have been, the most important part of the
revenue of the community. By rendering the tax upon such fines a good
deal heavier than upon the ordinary rent, this hurtful practice might
be discouraged, to the no small advantage of all the different parties
concerned, of the landlord, of the tenant, of the sovereign, and of
the whole community.

Some leases prescribe to the tenant a certain mode of cultivation, and
a certain succession of crops, during the whole continuance of the
lease. This condition, which is generally the effect of the landlord's
conceit of his own superior knowledge (a conceit in most cases very
ill-founded), ought always to be considered as an additional rent, as
a rent in service, instead of a rent in money. In order to discourage
the practice, which is generally a foolish one, this species of rent
might be valued rather high, and consequently taxed somewhat higher
than common money-rents.

Some landlords, instead of a rent in money, require a rent in kind, in
corn, cattle, poultry, wine, oil, etc.; others, again, require a rent
in service. Such rents are always more hurtful to the tenant than
beneficial to the landlord. They either take more, or keep more out of
the pocket of the former, than they put into that of the latter. In
every country where they take place, the tenants are poor and
beggarly, pretty much according to the degree in which they take
place. By valuing, in the same manner, such rents rather high, and
consequently taxing them somewhat higher than common money-rents, a
practice which is hurtful to the whole community, might, perhaps, be
sufficiently discouraged.

When the landlord chose to occupy himself a part of his own lands, the
rent might be valued according to an equitable arbitration of the
farmers and landlords in the neighbourhood, and a moderate abatement
of the tax might be granted to him, in the same manner as in the
Venetian territory, provided the rent of the lands which he occupied
did not exceed a certain sum. It is of importance that the landlord
should be encouraged to cultivate a part of his own land. His capital
is generally greater than that of the tenant, and, with less skill, he
can frequently raise a greater produce. The landlord can afford to try
experiments, and is generally disposed to do so. His unsuccessful
experiments occasion only a moderate loss to himself. His successful
ones contribute to the improvement and better cultivation of the whole
country. It might be of importance, however, that the abatement of the
tax should encourage him to cultivate to a certain extent only. If the
landlords should, the greater part of them, be tempted to farm the
whole of their own lands, the country (instead of sober and
industrious tenants, who are bound by their own interest to cultivate
as well as their capital and skill will allow them) would be filled
with idle and profligate bailiffs, whose abusive management would soon
degrade the cultivation, and reduce the annual produce of the land, to
the diminution, not only of the revenue of their masters, but of the
most important part of that of the whole society.

Such a system of administration might, perhaps, free a tax of this
kind from any degree of uncertainty, which could occasion either
oppression or inconveniency to the contributor; and might, at the same
time, serve to introduce into the common management of land such a
plan of policy as might contribute a good deal to the general
improvement and good cultivation of the country.

The expense of levying a land-tax, which varied with every variation
of the rent, would, no doubt, be somewhat greater than that of levying
one which was always rated according to a fixed valuation. Some
additional expense would necessarily be incurred, both by the
different register-offices which it would be proper to establish in
the different districts of the country, and by the different
valuations which might occasionally be made of the lands which the
proprietor chose to occupy himself. The expense of all this, however,
might be very moderate, and much below what is incurred in the levying
of many other taxes, which afford a very inconsiderable revenue in
comparison of what might easily be drawn from a tax of this kind.

The discouragement which a variable land-tax of this kind might give
to the improvement of land, seems to be the most important objection
which can be made to it. The landlord would certainly be less disposed
to improve, when the sovereign, who contributed nothing to the
expense, was to share in the profit of the improvement. Even this
objection might, perhaps, be obviated, by allowing the landlord,
before he began his improvement, to ascertain, in conjunction with the
officers of revenue, the actual value of his lands, according to the
equitable arbitration of a certain number of landlords and farmers in
the neighbourhood, equally chosen by both parties: and by rating him,
according to this valuation, for such a number of years as might be
fully sufficient for his complete indemnification. To draw the
attention of the sovereign towards the improvement of the land, from a
regard to the increase of his own revenue, is one or the principal
advantages proposed by this species of land-tax. The term, therefore,
allowed, for the indemnification of the landlord, ought not to be a
great deal longer than what was necessary for that purpose, lest the
remoteness of the interest should discourage too much this attention.
It had better, however, be somewhat too long, than in any respect too
short. No incitement to the attention of the sovereign can ever
counterbalance the smallest discouragement to that of the landlord.
The attention of the sovereign can be, at best, but a very general and
vague consideration of what is likely to contribute to the better
cultivation of the greater part of his dominions. The attention of the
landlord is a particular and minute consideration of what is likely to
be the most advantageous application of every inch of ground upon his
estate. The principal attention of the sovereign ought to be, to
encourage, by every means in his power, the attention both of the
landlord and of the farmer, by allowing both to pursue their own
interest in their own way, and according to their own judgment; by
giving to both the most perfect security that they shall enjoy the
full recompence of their own industry; and by procuring to both the
most extensive market for every part of their produce, in consequence
of establishing the easiest and safest communications, both by land
and by water, through every part of his own dominions, as well as the
most unbounded freedom of exportation to the dominions of all other

If, by such a system of administration, a tax of this kind could be so
managed as to give, not only no discouragement, but, on the contrary,
some encouragement to the improvement or land, it does not appear
likely to occasion any other inconveniency to the landlord, except
always the unavoidable one of being obliged to pay the tax.

In all the variations of the state of the society, in the improvement
and in the declension of agriculture; in all the variations in the
value of silver, and in all those in the standard of the coin, a tax
of this kind would, of its own accord, and without any attention of
government, readily suit itself to the actual situation of things, and
would be equally just and equitable in all those different changes. It
would, therefore, be much more proper to be established as a perpetual
and unalterable regulation, or as what is called a fundamental law of
the commonwealth, than any tax which was always to be levied according
to a certain valuation.

Some states, instead of the simple and obvious expedient of a register
of leases, have had recourse to the laborious and expensive one of an
actual survey and valuation of all the lands in the country. They have
suspected, probably, that the lessor and lessee, in order to defraud
the public revenue, might combine to conceal the real terms of the
lease. Doomsday-book seems to have been the result of a very accurate
survey of this kind.

In the ancient dominions of the king of Prussia, the land-tax is
assessed according to an actual survey and valuation, which is
reviewed and altered from time to time. {Memoires concurent les
Droits, etc. tom, i. p. 114, 115, 116, etc.} According to that
valuation, the lay proprietors pay from twenty to twenty-five per
cent. of their revenue; ecclesiastics from forty to forty-five per
cent. The survey and valuation of Silesia was made by order of the
present king, it is said, with great accuracy. According to that
valuation, the lands belonging to the bishop of Breslaw are taxed at
twenty-five per cent. of their rent. The other revenues of the
ecclesiastics of both religions at fifty per cent. The commanderies of
the Teutonic order, and of that of Malta, at forty per cent. Lands
held by a noble tenure, at thirty-eight and one-third per cent. Lands
held by a base tenure, at thirty-five and one-third per cent.

The survey and valuation of Bohemia is said to have been the work of
more than a hundred years. It was not perfected till after the peace
of 1748, by the orders of the present empress queen. {Id. tom i.
p.85, 84.} The survey of the duchy of Milan, which was begun in the
time of Charles VI., was not perfected till after 1760 It is esteemed
one of the most accurate that has ever been made. The survey of Savoy
and Piedmont was executed under the orders of the late king of
Sardinia. {Id. p. 280, etc.; also p, 287. etc. to 316.}

In the dominions of the king of Prussia, the revenue of the church is
taxed much higher than that of lay proprietors. The revenue of the
church is, the greater part of it, a burden upon the rent of land. It
seldom happens that any part of it is applied towards the improvement
of land; or is so employed as to contribute, in any respect, towards
increasing the revenue of the great body of the people. His Prussian
majesty had probably, upon that account, thought it reasonable that it
should contribute a good deal more towards relieving the exigencies of
the state. In some countries, the lands of the church are exempted
from all taxes. In others, they are taxed more lightly than other
lands. In the duchy of Milan, the lands which the church possessed
before 1575, are rated to the tax at a third only or their value.

In Silesia, lands held by a noble tenure are taxed three per cent.
higher than those held by a base tenure. The honours and privileges of
different kinds annexed to the former, his Prussian majesty had
probably imagined, would sufficiently compensate to the proprietor a
small aggravation of the tax; while, at the same time, the humiliating
inferiority of the latter would be in some measure alleviated, by
being taxed somewhat more lightly. In other countries, the system of
taxation, instead of alleviating, aggravates this inequality. In the
dominions of the king of Sardinia, and in those provinces of France
which are subject to what is called the real or predial taille, the
tax falls altogether upon the lands held by a base tenure. Those held
by a noble one are exempted.

A land tax assessed according to a general survey and valuation, how
equal soever it may be at first, must, in the course of a very
moderate period of time, become unequal. To prevent its becoming so
would require the continual and painful attention of government to all
the variations in the state and produce of every different farm in the
country. The governments of Prussia, of Bohemia, of Sardinia, and of
the duchy of Milan, actually exert an attention of this kind; an
attention so unsuitable to the nature of government, that it is not
likely to be of long continuance, and which, if it is continued, will
probably, in the long-run, occasion much more trouble and vexation
than it can possibly bring relief to the contributors.

In 1666, the generality of Montauban was assessed to the real or
predial taille, according, it is said, to a very exact survey and
valuation. {Memoires concernant les Droits, etc. tom. ii p. 139,
etc.} By 1727, this assessment had become altogether unequal. In order
to remedy this inconveniency, government has found no better
expedient, than to impose upon the whole generality an additional tax
of a hundred and twenty thousand livres. This additional tax is rated
upon all the different districts subject to the taille according to
the old assessment. But it is levied only upon those which, in the
actual state of things, are by that assessment under-taxed; and it is
applied to the relief of those which, by the same assessment, are
over-taxed. Two districts, for example, one of which ought, in the
actual state of things, to be taxed at nine hundred, the other at
eleven hundred livres, are, by the old assessment, both taxed at a
thousand livres. Both these districts are, by the additional tax,
rated at eleven hundred livres each. But this additional tax is levied
only upon the district under-charged, and it is applied altogether to
the relief of that overcharged, which consequently pays only nine
hundred livres. The government neither gains nor loses by the
additional tax, which is applied altogether to remedy the inequalities
arising from the old assessment. The application is pretty much
regulated according to the discretion of the intendant of the
generality, and must, therefore, be in a great measure arbitrary.

Taxes which are proportioned, not in the Rent, but to the Produce of

Taxes upon the produce of land are, In reality, taxes upon the rent;
and though they may be originally advanced by the farmer, are finally
paid by the landlord. When a certain portion of the produce is to be
paid away for a tax, the farmer computes as well as he can, what the
value of this portion is, one year with another, likely to amount to,
and he makes a proportionable abatement in the rent which he agrees to
pay to the landlord. There is no farmer who does not compute
beforehand what the church tythe, which is a land tax of this kind,
is, one year with another, likely to amount to.

The tythe, and every other land tax of this kind, under the appearance
of perfect equality, are very unequal taxes; a certain portion of the
produce being in differrent situations, equivalent to a very different
portion of the rent. In some very rich lands, the produce is so great,
that the one half of it is fully sufficient to replace to the farmer
his capital employed in cultivation, together with the ordinary
profits of farming stock in the neighbourhood. The other half, or,
what comes to the same thing, the value of the other half, he could
afford to pay as rent to the landlord, if there was no tythe. But if a
tenth of the produce is taken from him in the way of tythe, he must
require an abatement of the fifth part of his rent, otherwise he
cannot get back his capital with the ordinary profit. In this case,
the rent of the landlord, instead of amounting to a half, or
five-tenths of the whole produce, will amount only to four-tenths of
it. In poorer lands, on the contrary, the produce is sometimes so
small, and the expense of cultivation so great, that it requires
four-fifths of the whole produce, to replace to the farmer his capital
with the ordinary profit. In this case, though there was no tythe, the
rent of the landlord could amount to no more than one-fifth or
two-tenths of the whole produce. But if the farmer pays one-tenth of
the produce in the way of tythe, he must require an equal abatement of
the rent of the landlord, which will thus be reduced to one-tenth only
of the whole produce. Upon the rent of rich lands the tythe may
sometimes be a tax of no more than one-fifth part, or four shillings
in the pound; whereas upon that of poorer lands, it may sometimes be a
tax of one half, or of ten shillings in the pound.

The tythe, as it is frequently a very unequal tax upon the rent, so it
is always a great discouragement, both to the improvements of the
landlord, and to the cultivation of the farmer. The one cannot venture
to make the most important, which are generally the most expensive
improvements; nor the other to raise the most valuable, which are
generally, too, the most expensive crops; when the church, which lays
out no part of the expense, is to share so very largely in the profit.
The cultivation of madder was, for a long time, confined by the tythe
to the United Provinces, which, being presbyterian countries, and upon
that account exempted from this destructive tax, enjoyed a sort of
monopoly of that useful dyeing drug against the rest of Europe. The
late attempts to introduce the culture of this plant into England,
have been made only in consequence of the statute, which enacted that
five shillings an acre should be received in lieu of all manner of
tythe upon madder.

As through the greater part of Europe, the church, so in many
different countries of Asia, the state, is principally supported by a
land tax, proportioned not to the rent, but to the produce of the
land. In China, the principal revenue of the sovereign consists in a
tenth part of the produce of all the lands of the empire. This tenth
part, however, is estimated so very moderately, that, in many
provinces, it is said not to exceed a thirtieth part of the ordinary
produce. The land tax or land rent which used to be paid to the
Mahometan government of Bengal, before that country fell into the
hands of the English East India company, is said to have amounted to
about a fifth part of the produce. The land tax of ancient Egypt is
said likewise to have amounted to a fifth part.

In Asia, this sort of land tax is said to interest the sovereign in
the improvement and cultivation of land. The sovereigns of China,
those of Bengal while under the Mahometan govermnent, and those of
ancient Egypt, are said, accordingly, to have been extremely attentive
to the making and maintaining of good roads and navigable canals, in
order to increase, as much as possible, both the quantity and value of
every part of the produce of the land, by procuring to every part of
it the most extensive market which their own dominions could afford.
The tythe of the church is divided into such small portions that no
one of its proprietors can have any interest of this kind. The parson
of a parish could never find his account, in making a road or canal to
a distant part of the country, in order to extend the market for the
produce of his own particular parish. Such taxes, when destined for
the maintenance of the state, have some advantages, which may serve in
some measure to balance their inconveniency. When destined for the
maintenance of the church, they are attended with nothing but

Taxes upon the produce of land may be levied, either in kind, or,
according to a certain valuation in money.

The parson of a parish, or a gentleman of small fortune who lives upon
his estate, may sometimes, perhaps find some advantage in receiving,
the one his tythe, and the other his rent, in kind. The quantity to be
collected, and the district within which it is to be collected, are so
small, that they both can oversee, with their own eyes, the collection
and disposal of every part of what is due to them. A gentleman of
great fortune, who lived in the capital, would be in danger of
suffering much by the neglect, and more by the fraud, of his factors
and agents, if the rents of an estate in a distant province were to be
paid to him in this manner. The loss of the sovereign, from the abuse
and depredation of his tax-gatherers, would necessarily be much
greater. The servants of the most careless private person are,
perhaps, more under the eye of their master than those of the most
careful prince; and a public revenue, which was paid in kind, would
suffer so much from the mismanagement of the collectors, that a very
small part of what was levied upon the people would ever arrive at the
treasury of the prince. Some part of the public revenue of China,
however, is said to be paid in this manner. The mandarins and other
tax-gatherers will, no doubt, find their advantage in continuing the
practice of a payment, which is so much more liable to abuse than any
payment in money.

A tax upon the produce of land, which is levied in money, may be
levied, either according to a valuation, which varies with all the
variations of the market price; or according to a fixed valuation, a
bushel of wheat, for example, being always valued at one and the same
money price, whatever may be the state of the market. The produce of a
tax levied in the former way will vary only according to the
variations in the real produce of the land, according to the
improvement or neglect of cultivation. The produce of a tax levied in
the latter way will vary, not only according to the variations in the
produce of the land, but according both to those in the value of the
precious metals, and those in the quantity of those metals which is at
different times contained in coin of the same denomination. The
produce of the former will always bear the same proportion to the
value of the real produce of the land. The produce of the latter may,
at different times, bear very different proportions to that value.

When, instead either of a certain portion of the produce of land, or
of the price of a certain portion, a certain sum of money is to be
paid in full compensation for all tax or tythe; the tax becomes, in
this case, exactly of the same nature with the land tax of England. It
neither rises nor falls with the rent of the land. It neither
encourages nor discourages improvement. The tythe in the greater part
of those parishes which pay what is called a modus, in lieu of all
other tythe is a tax of this kind. During the Mahometan government of
Bengal, instead of the payment in kind of the fifth part of the
produce, a modus, and, it is said, a very moderate one, was
established in the greater part of the districts or zemindaries of the
country. Some of the servants of the East India company, under
pretence of restoring the public revenue to its proper value, have, in
some provinces, exchanged this modus for a payment in kind. Under
their management, this change is likely both to discourage
cultivation, and to give new opportunities for abuse in the collection
of the public revenue, which has fallen very much below what it was
said to have been when it first fell under the management of the
company. The servants of the company may, perhaps, have profited by
the change, but at the expense, it is probable, both of their masters
and of the country.

Taxes upon the Rent of Houses.

The rent of a house may be distinguished into two parts, of which the
one may very properly be called the building-rent; the other is
commonly called the ground-rent.

The building-rent is the interest or profit of the capital expended in
building the house. In order to put the trade of a builder upon a
level with other trades, it is necessary that this rent should be
sufficient, first, to pay him the same interest which he would have
got for his capital, if he had lent it upon good security; and,
secondly, to keep the house in constant repair, or, what comes to the
same thing, to replace, within a certain term of years, the capital
which had been employed in building it. The building-rent, or the
ordinary profit of building, is, therefore, everywhere regulated by
the ordinary interest of money. Where the market rate of interest is
four per cent. the rent of a house, which, over and above paying the
ground-rent, affords six or six and a-half per cent. upon the whole
expense of building, may, perhaps, afford a sufficient profit to the
builder. Where the market rate of interest is five per cent. it may
perhaps require seven or seven and a half per cent. If, in proportion
to the interest of money, the trade of the builders affords at any
time much greater profit than this, it will soon draw so much capital
from other trades as will reduce the profit to its proper level. If it
affords at any time much less than this, other trades will soon draw
so much capital from it as will again raise that profit.

Whatever part of the whole rent of a house is over and above what is
sufficient for affording this reasonable profit, naturally goes to the
ground-rent; and, where the owner of the ground and the owner of the
building are two different persons, is, in most cases, completely paid
to the former. This surplus rent is the price which the inhabitant of
the house pays for some real or supposed advantage of the situation.
In country houses, at a distance from any great town, where there is
plenty of ground to chuse upon, the ground-rent is scarce anything, or
no more than what the ground which the house stands upon would pay, if
employed in agriculture. In country villas, in the neighbourhood of
some great town, it is sometimes a good deal higher; and the peculiar
conveniency or beauty of situation is there frequently very well paid
for. Ground-rents are generally highest in the capital, and in those
particular parts of it where there happens to be the greatest demand
for houses, whatever be the reason of that demand, whether for trade
and business, for pleasure and society, or for mere vanity and

A tax upon house-rent, payable by the tenant, and proportioned to the
whole rent of each house, could not, for any considerable time at
least, affect the building-rent. If the builder did not get his
reasonable profit, he would be obliged to quit the trade; which, by
raising the demand for building, would, in a short time, bring back
his profit to its proper level with that of other trades. Neither
would such a tax fall altogether upon the ground-rent; but it would
divide itself in such a manner, as to fall partly upon the inhabitant
of the house, and partly upon the owner of the ground.

Let us suppose, for example, that a particular person judges that he
can afford for house-rent all expense of sixty pounds a-year; and let
us suppose, too, that a tax of four shillings in the pound, or of
one-fifth, payable by the inhabitant, is laid upon house-rent. A house
of sixty pounds rent will, in that case, cost him seventy-two pounds
a-year, which is twelve pounds more than he thinks he can afford. He
will, therefore, content himself with a worse house, or a house of
fifty pounds rent, which, with the additional ten pounds that he must
pay for the tax, will make up the sum of sixty pounds a-year, the
expense which he judges he can afford, and, in order to pay the tax,
he will give up a part of the additional conveniency which he might
have had from a house of ten pounds a-year more rent. He will give up,
I say, a part of this additional conveniency; for he will seldom be
obliged to give up the whole, but will, in consequence of the tax, get
a better house for fifty pounds a-year, than he could have got if
there had been no tax for as a tax of this kind, by taking away this
particular competitor, must diminish the competition for houses of
sixty pounds rent, so it must likewise diminish it for those of fifty
pounds rent, and in the same manner for those of all other rents,
except the lowest rent, for which it would for some time increase the
competition. But the rents of every class of houses for which the
competition was diminished, would necessarily be more or less reduced.
As no part of this reduction, however, could for any considerable time
at least, affect the building-rent, the whole of it must, in the
long-run, necessarily fall upon the ground-rent. The final payment of
this tax, therefore, would fall partly upon the inhabitant of the
house, who, in order to pay his share, would be obliged to give up a
part of his conveniency; and partly upon the owner of the ground, who,
in order to pay his share, would be obliged to give up a part of his
revenue. In what proportion this final payment would be divided
between them, it is not, perhaps, very easy to ascertain. The division
would probably be very different in different circumstances, and a tax
of this kind might, according to those different circumstances, affect
very unequally, both the inhabitant of the house and the owner of the

The inequality with which a tax of this kind might fall upon the
owners of different ground-rents, would arise altogether from the
accidental inequality of this division. But the inequality with which
it might fall upon the inhabitants of different houses, would arise,
not only from this, but from another cause. The proportion of the
expense of house-rent to the whole expense of living, is different in
the different degrees of fortune. It is, perhaps, highest in the
highest degree, and it diminishes gradually through the inferior
degrees, so as in general to be lowest in the lowest degree. The
necessaries of life occasion the great expense of the poor. They find
it difficult to get food, and the greater part of their little revenue
is spent in getting it. The luxuries and vanities of life occasion the
principal expense of the rich; and a magnificent house embellishes and
sets off to the best advantage all the other luxuries and vanities
which they possess. A tax upon house-rents, therefore, would in
general fall heaviest upon the rich; and in this sort of inequality
there would not, perhaps, be any thing very unreasonable It is not
very unreasonable that the rich should contribute to the public
expense, not only in proportion to their revenue, but something more
than in that proportion.

The rent of houses, though it in some respects resembles the rent of
land, is in one respect essentially different from it. The rent of
land is paid for the use of a productive subject. The land which pays
it produces it. The rent of houses is paid for the use of an
unproductive subject. Neither the house, nor the ground which it
stands upon, produce anything. The person who pays the rent,
therefore, must draw it from some other source of revenue, distinct
from and independent of this subject. A tax upon the rent of houses,
so far as it falls upon the inhabitants, must be drawn from the same
source as the rent itself, and must be paid from their revenue,
whether derived from the wages of labour, the profits of stock, or the
rent of land. So far as it falls upon the inhabitants, it is one of
those taxes which fall, not upon one only, but indifferently upon all
the three different sources of revenue; and is, in every respect, of
the same nature as a tax upon any other sort of consumable
commodities. In general, there is not perhaps, any one article of
expense or consumption by which the liberality or narrowness of a
man's whole expense can be better judged of than by his house-rent. A
proportional tax upon this particular article of expense might,
perhaps, produce a more considerable revenue than any which has
hitherto been drawn from it in any part of Europe. If the tax, indeed,
was very high, the greater part of people would endeavour to evade it
as much as they could, by contenting themselves with smaller houses,
and by turning the greater part of their expense into some other

The rent of houses might easily be ascertained with sufficient
accuracy, by a policy of the same kind with that which would be
necessary for ascertaining the ordinary rent of land. Houses not
inhabited ought to pay no tax. A tax upon them would fall altogether
upon the proprietor, who would thus be taxed for a subject which
afforded him neither conveniency nor revenue. Houses inhabited by the
proprietor ought to be rated, not according to the expense which they
might have cost in building, but according to the rent which an
equitable arbitration might judge them likely to bring if leased to a
tenant. If rated according to the expense which they might have cost
in building, a tax of three or four shillings in the pound, joined
with other taxes, would ruin almost all the rich and great families of
this, and, I believe, of every other civilized country. Whoever will
examine with attention the different town and country houses of some
of the richest and greatest families in this country, will find that,
at the rate of only six and a-half, or seven per cent. upon the
original expense of building, their house-rent is nearly equal to the
whole neat rent of their estates. It is the accumulated expense of
several successive generations, laid out upon objects of great beauty
and magnificence, indeed, but, in proportion to what they cost, of
very small exchangeable value. {Since the first publication of this
book, a tax nearly upon the above-mentioned principles has been

Ground-rents are a still more proper subject of taxation than the rent
of houses. A tax upon ground-rents would not raise the rent of houses;
it would fall altogether upon the owner of the ground-rent, who acts
always as a monopolist, and exacts the greatest rent which can be got
for the use of his ground. More or less can be got for it, according
as the competitors happen to be richer or poorer, or can afford to
gratify their fancy for a particular spot of ground at a greater or
smaller expense. In every country, the greatest number of rich
competitors is in the capital, and it is there accordingly that the
highest ground-rents are always to be found. As the wealth of those
competitors would in no respect be increased by a tax upon
ground-rents, they would not probably be disposed to pay more for the
use of the ground. Whether the tax was to be advanced by the
inhabitant or by the owner of the ground, would be of little
importance. The more the inhabitant was obliged to pay for the tax,
the less he would incline to pay for the ground; so that the final
payment of the tax would fall altogether upon the owner of the
ground-rent. The ground-rents of uninhabited houses ought to pay no

Both ground-rents, and the ordinary rent of land, are a species of
revenue which the owner, in many cases, enjoys without any care or
attention of his own. Though a part of this revenue should be taken
from him in order to defray the expenses of the state, no
discouragement will thereby be given to any sort of industry. The
annual produce of the land and labour of the society, the real wealth
and revenue of the great body of the people, might be the same after
such a tax as before. Ground-rents, and the ordinary rent of land, are
therefore, perhaps, the species of revenue which can best bear to have
a peculiar tax imposed upon them.

Ground-rents seem, in this respect, a more proper subject of peculiar
taxation, than even the ordinary rent of land. The ordinary rent of
land is, in many cases, owing partly, at least, to the attention and
good management of the landlord. A very heavy tax might discourage,
too much, this attention and good management. Ground-rents, so far as
they exceed the ordinary rent of land, are altogether owing to the
good government of the sovereign, which, by protecting the industry
either of the whole people or of the inhabitants of some particular
place, enables them to pay so much more than its real value for the
ground which they build their houses upon; or to make to its owner so
much more than compensation for the loss which he might sustain by
this use of it. Nothing can be more reasonable, than that a fund,
which owes its existence to the good government of the state, should
be taxed peculiarly, or should contribute something more than the
greater part of other funds, towards the support of that government.

Though, in many different countries of Europe, taxes have been imposed
upon the rent of houses, I do not know of any in which ground-rents
have been considered as a separate subject of taxation. The contrivers
of taxes have, probably, found some difficulty in ascertaining what
part of the rent ought to be considered as ground-rent, and what part
ought to be considered as building-rent. It should not, however, seem
very difficult to distinguish those two parts of the rent from one

In Great Britain the rent of houses is supposed to be taxed in the
same proportion as the rent of land, by what is called the annual land
tax. The valuation, according to which each different parish and
district is assessed to this tax, is always the same. It was
originally extremely unequal, and it still continues to be so. Through
the greater part of the kingdom this tax falls still more lightly upon
the rent of houses than upon that of land. In some few districts only,
which were originally rated high, and in which the rents of houses
have fallen considerably, the land tax of three or four shillings in
the pound is said to amount to an equal proportion of the real rent of
houses. Untenanted houses, though by law subject to the tax, are, in
most districts, exempted from it by the favour of the assessors; and
this exemption sometimes occasions some little variation in the rate
of particular houses, though that of the district is always the same.
Improvements of rent, by new buildings, repairs, etc. go to the
discharge of the district, which occasions still further variations in
the rate of particular houses.

In the province of Holland, {Memoires concernant les Droits, etc. p.
223.} every house is taxed at two and a-half per cent. of its value,
without any regard, either to the rent which it actually pays, or to
the circumstance of its being tenanted or untenanted. There seems to
be a hardship in obliging the proprietor to pay a tax for an
untenanted house, from which he can derive no revenue, especially so
very heavy a tax. In Holland, where the market rate of interest does
not exceed three per cent., two and a-half per cent. upon the whole
value of the house must, in most cases, amount to more than a third of
the building-rent, perhaps of the whole rent. The valuation, indeed,
according to which the houses are rated, though very unequal, is said
to be always below the real value. When a house is rebuilt, improved,
or enlarged, there is a new valuation, and the tax is rated

The contrivers of the several taxes which in England have, at
different times, been imposed upon houses, seem to have imagined that
there was some great difficulty in ascertaining, with tolerable
exactness, what was the real rent of every house. They have regulated
their taxes, therefore, according to some more obvious circumstance,
such as they had probably imagined would, in most cases, bear some
proportion to the rent.

The first tax of this kind was hearth-money; or a tax of two shillings
upon every hearth. In order to ascertain how many hearths were in the
house, it was necessary that the tax-gatherer should enter every room
in it. This odious visit rendered the tax odious. Soon after the
Revolution, therefore, it was abolished as a badge of slavery.

The next tax of this kind was a tax of two shillings upon every
dwelling-house inhabited. A house with ten windows to pay four
shillings more. A house with twenty windows and upwards to pay eight
shillings. This tax was afterwards so far altered, that houses with
twenty windows, and with less than thirty, were ordered to pay ten
shillings, and those with thirty windows and upwards to pay twenty
shillings. The number of windows can, in most cases, be counted from
the outside, and, in all cases, without entering every room in the
house. The visit of the tax-gatherer, therefore, was less offensive in
this tax than in the hearth-money.

This tax was afterwards repealed, and in the room of it was
established the window-tax, which has undergone two several
alterations and augmentations. The window tax, as it stands at present
(January 1775), over and above the duty of three shillings upon every
house in England, and of one shilling upon every house in Scotland,
lays a duty upon every window, which in England augments gradually
from twopence, the lowest rate upon houses with not more than seven
windows, to two shillings, the highest rate upon houses with
twenty-five windows and upwards.

The principal objection to all such taxes is their inequality; an
inequality of the worst kind, as they must frequently fall much
heavier upon the poor than upon the rich. A house of ten pounds rent


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