WEBVTT NOTE Taxes and History 1 00:00:00.000 --> 00:00:14.000 I'm going to talk about taxes and history, also sort of the pre-history of taxes, what is the likely way that taxes came about? 2 00:00:14.000 --> 00:00:28.000 There's a philosopher and writer named Franz Oppenheimer who distinguished between the economic and the political means of gaining wealth. 3 00:00:28.000 --> 00:00:39.000 There's the economic means, which involves production, you can, you know, farm and produce your own crops and produce wealth that way, or it can mean trade. 4 00:00:40.000 --> 00:00:44.000 And then there's the political means, where you just kind of take what you want. 5 00:00:45.000 --> 00:00:50.000 Now, obviously, taxation would fall under the political means. 6 00:00:50.000 --> 00:01:02.000 Taxation and the political means are very old. In fact, they might be considered older than mankind itself. 7 00:01:02.000 --> 00:01:11.000 You might consider the animal kingdom as operating according to the political means, sort of taxing each other all the time. 8 00:01:11.000 --> 00:01:18.000 You might consider a lion who takes down a zebra that he's taking what he needs, what he wants from the zebra. 9 00:01:18.000 --> 00:01:28.000 The Zebra is not giving it in return for anything else, it's just the law of the jungle. 10 00:01:28.000 --> 00:01:38.000 Or after words, when the lion is eating the zebra and a jackal comes over and snatches some of the food away from the lion, 11 00:01:38.000 --> 00:01:45.000 that's not economic means, that's sort of political means too, that's sort of taxing the lion in a way. 12 00:01:45.000 --> 00:01:50.000 You're just taking what you need, what you want from the lion. 13 00:01:50.000 --> 00:02:01.680 Now, that sort of law of the jungle is also what Montaigne, a French philosopher, he had 14 00:02:01.680 --> 00:02:09.040 what Rothbard, Murray Rothbard called the Montaigne Fallacy, which is that no man gains 15 00:02:09.040 --> 00:02:12.360 except what another man loses. 16 00:02:12.360 --> 00:02:18.680 And that's sort of the way it is in wildlife, that, you know, the lion doesn't gain unless 17 00:02:18.680 --> 00:02:24.840 the zebra loses, the jackal doesn't gain unless the lion loses. 18 00:02:24.840 --> 00:02:30.020 Another philosopher named Thomas Hobbes, he characterized the state of nature as a war 19 00:02:30.020 --> 00:02:38.440 of all against all, and that also describes the political means. 20 00:02:38.440 --> 00:02:44.440 Taxes usually aren't thought of in that nature, red in tooth and claw kind of way. 21 00:02:44.440 --> 00:02:48.440 It's considered more gentlemanly. 22 00:02:48.440 --> 00:02:57.440 And so it'd be interesting to trace how you can go from messy violence like that to gentlemanly violence, 23 00:02:57.440 --> 00:03:01.440 like the nice little process that we have when we fill out our tax returns 24 00:03:01.440 --> 00:03:07.440 and we mail our check to the government and it all seems very genteel and civilized. 25 00:03:07.440 --> 00:03:18.440 Another way of looking at the law of the jungle is what Mises called biological competition. 26 00:03:18.440 --> 00:03:28.440 Now, humans also engage in biological competition, sometimes in ways that are very little different from the animal way. 27 00:03:28.440 --> 00:03:36.440 For example, cannibals. When cannibals go to war with each other and one side wins, they just eat the other side, just like the lion and the zebra. 28 00:03:36.440 --> 00:03:56.440 But then there's also biological competition with non-cannibals too, because if some barbarians sack a city and they take no prisoners and they just kill everybody and just take all the food and eat all the food, that's pure biological competition. 29 00:03:56.440 --> 00:03:59.440 There's no society there at all. 30 00:03:59.440 --> 00:04:16.440 The inkling kernel of some sort of social thinking can start. Society is whenever someone takes someone else's purposes in mind with regard to their purposes. 31 00:04:16.440 --> 00:04:22.440 So with animal, with a barbarian who just sacks a city, they don't care about the other person's purposes at all. 32 00:04:22.440 --> 00:04:24.440 The Theory of Money and Credit 33 00:04:52.440 --> 00:04:57.480 Part of the inkling of a society because you're at least taking other people's actions into 34 00:04:57.480 --> 00:05:00.760 consideration a little bit. 35 00:05:00.760 --> 00:05:10.740 And then another step might be that the barbarians come and the people in the city say, look, 36 00:05:10.740 --> 00:05:14.520 you know, if you invade us, we're going to fight back and we're going to kill some of 37 00:05:14.520 --> 00:05:19.620 you and it's going to be really hard and eventually you'll probably win and you'll take our food. 38 00:05:19.620 --> 00:05:28.620 But if you don't invade us, we'll just give you this much of our food outright in exchange for you just leaving us alone. 39 00:05:28.620 --> 00:05:35.620 And so the barbarians might take them up on that offer. They might say, okay, it's easier this way. 40 00:05:35.620 --> 00:05:48.620 And so that is how booty, you know, booty is like when pirates just, you know, take what they want, how booty becomes tribute. 41 00:05:48.620 --> 00:06:18.620 And the tribute is a kind of a tax. You could consider the booty as a sort of a tax, but it's sort of a short-sighted tax, it's like a one-time short-sighted tax, where you don't realize that, oh, if I just take all the booty I want, then they won't be able to produce much anymore, and then, you know, I won't be able to get very much booty in the long run, whereas with the tribute, you know, it already seems a little bit more civilized, and it already seems more like what we would normally think of 42 00:06:18.620 --> 00:06:48.620 as Attacks, and sometimes the barbarian invaders instead of sometimes they'll take the tribute and then they'll they'll just leave sort of like the the golden horde these Mongols who would just sweep into Russia once in a while and they just take everything and they just leave or sometimes they would come in and they would settle in among their victims 43 00:06:48.620 --> 00:06:55.660 Tribute throughout the course of the year as they lived there. One group that did that 44 00:06:55.660 --> 00:07:03.660 were the Spartans. So the Spartans were these Greeks who came down from the north and they 45 00:07:03.660 --> 00:07:12.820 invaded these people and the native people became what were called helots and they lived 46 00:07:12.820 --> 00:07:27.820 They worked separately and they did all the work and the Spartans became sort of a nobility, a noble class that they didn't do the work, they just fed as parasites off of the helots. 47 00:07:27.820 --> 00:07:38.820 And so that's another step where booty can become tribute and tribute can become a sort of a tax. 48 00:07:38.820 --> 00:07:43.420 Another way of thinking about tax is as a ransom. 49 00:07:45.420 --> 00:07:48.020 What's a ransom? Who can tell me what a ransom is? 50 00:07:50.820 --> 00:07:51.420 Anyone? 51 00:08:00.820 --> 00:08:03.220 Well, we have ransom even nowadays. 52 00:08:03.220 --> 00:08:17.220 For example, if someone kidnaps someone and they would demand a ransom, the only way they'll let them live and let them free is if they get some money for it. 53 00:08:17.220 --> 00:08:27.220 So it's like money for your freedom. And you might think of tribute as money for your freedom, or taxation as money for your freedom. 54 00:08:57.220 --> 00:09:00.580 It's your money or your life, or you could say your money or your liberty. 55 00:09:00.580 --> 00:09:05.340 So in a way, a tax is also a ransom. 56 00:09:05.340 --> 00:09:13.760 There's an economist who made a distinction between stationary bandits and roving bandits. 57 00:09:13.760 --> 00:09:18.780 So roving bandits would be just like the pirates and the brigands and the barbarians who just 58 00:09:18.780 --> 00:09:21.260 sweep in and then sweep out. 59 00:09:21.260 --> 00:09:26.940 And the stationary bandits are just bandits who just settle in with you and eventually 60 00:09:26.940 --> 00:09:28.940 Conquest Theory of the State 61 00:09:56.940 --> 00:10:26.940 The thing that can happen when the bandits are stationary and they're living among you is that they want you to forget as quickly as possible that you're a bandit and so they will especially, they'll have intellectuals who sort of create what's called apologia, sort of intellectual defenses of the bandits and one apologia that they might say is that they might say, 62 00:10:26.940 --> 00:10:33.580 The odds will favor us if we are obedient to these rulers. 63 00:10:33.580 --> 00:10:50.300 Another thing that can happen that helps this apologia is the bandits will give a little bit of what they took back as a service. 64 00:10:50.300 --> 00:11:09.300 And people will start, especially if their, if this view is supported by the intellectuals, people will start thinking, wow, you know, that's so generous of them, that's so nice of them, that they're giving me some stuff, giving me some food, and they're taking care of me, forgetting where they got that stuff in the first place. 65 00:11:09.300 --> 00:11:31.300 It's sort of like there's this comic where there's like the state and he's got his hand in your back pocket and he's giving you money in front of you and it's like that's how it works and so that helps to legitimize the state, the bandits. 66 00:11:31.300 --> 00:11:59.100 Another thing that happens is the state will institute democracy, and what can happen with democracy is that one set of people can use the state to mug another set of people, and so the state kind of serves as like a mugging medium, like a middleman for mugging, 67 00:11:59.100 --> 00:12:07.300 Whereas, because if one group directly mugged the other group, you know, it would seem uncivilized, un-gentlemanly. 68 00:12:07.300 --> 00:12:21.700 But if they do it through the process of elections and voting for people who will take from other people and give to them, and then they do it back, then it all seems very... 69 00:12:21.700 --> 00:12:27.540 Then you get the myth that, like Obama recently said, the government is us. 70 00:12:27.540 --> 00:12:32.820 So you can't really worry about what we do because we're a democracy. The government is us. 71 00:12:32.820 --> 00:12:45.540 And that kind of legitimation really goes a long way in empowering the state to basically do whatever it wants. 72 00:12:45.540 --> 00:12:58.180 Now, another way of looking at the state is thinking about the difference between hunting and gathering and farming. 73 00:12:58.180 --> 00:13:04.380 So, you could think of it as the roving barbarians and pirates and brigands. 74 00:13:04.380 --> 00:13:10.380 By the way, Murray Rothbard said that the state is a band of brigands writ large. 75 00:13:10.380 --> 00:13:21.380 You can think of them as hunters, whereas you can think of the stationary bandit who settles in, you can think of them as farmers. 76 00:13:21.380 --> 00:13:33.380 That they don't just outright kill the people and just take things once, they live with the beasts, 77 00:13:33.380 --> 00:13:44.180 of just like a farmer lives with his pigs and chickens and takes the substance from them as they go along. 78 00:13:44.180 --> 00:13:57.580 And so when you look at a political map of the earth, instead of just seeing countries, you could kind of see a bunch of farms. 79 00:13:57.580 --> 00:14:03.180 And then that kind of puts wars in a different perspective, 80 00:14:03.180 --> 00:14:07.660 that wars can be considered as one farm invading another farm. 81 00:14:10.060 --> 00:14:18.300 Sometimes in order to directly tax the people, sometimes it's about farming farmers, 82 00:14:18.300 --> 00:14:24.060 because instead of directly taking over and directly taxing the people, you tax the taxers. 83 00:14:24.060 --> 00:14:47.060 So, for example, in England, when the Danes would come in and then the English kings would have to gather what's called the danegeld, which was the money to pay as the tribute to the Danes, to the Vikings. 84 00:14:47.060 --> 00:14:57.060 And so, that's sort of like farming farmers, that the farmers take from the people and then they give to people who in turn farm them. 85 00:15:00.060 --> 00:15:12.060 Now, states often have a motivation to limit taxation. It doesn't make sense to tax completely. 86 00:15:12.060 --> 00:15:21.060 You don't want to kill the golden goose, the goose that lays the golden egg, because then there won't be any more eggs. 87 00:15:21.060 --> 00:15:33.060 And then you start getting back to where you were before, where it's just pure biological competition, and you're just destroying them, and it's just like a one-time tax. 88 00:15:33.060 --> 00:15:39.060 And then over the long term, you don't have as much. 89 00:15:39.060 --> 00:15:50.860 Another way of thinking about this is that free range farming is often, if you're gentler with the chickens and the pigs, that they'll be more productive. 90 00:15:50.860 --> 00:16:04.420 And so if you let them trade with each other and feel free, then they'll be more productive and then you can tax more from them in the long run. 91 00:16:04.420 --> 00:16:15.740 So, this gives us some perspective on the history of taxation once we understand sort of the nature of taxation. 92 00:16:16.740 --> 00:16:26.580 One fallacy that people like to put forth is they like to say, well, you know what, before we had the state, before we had the taxation, 93 00:16:27.860 --> 00:16:31.420 you know, we had all these tribes that were just killing each other all the time. 94 00:16:31.420 --> 00:16:49.420 and that was more like the war of all against all, and now that we have the state, you know, everything's, we're all richer, we're all more civilized and more productive, and that gets things backwards, that puts the cart before the horse. 95 00:16:49.420 --> 00:16:56.500 But what happened is that property and the division of labor came first. 96 00:16:56.500 --> 00:17:04.460 People on the earth didn't always have private property and trading and the division of labor. 97 00:17:04.460 --> 00:17:08.060 In primitive societies, there was a lot of, it was just very communal. 98 00:17:08.060 --> 00:17:12.900 Even though there wasn't a state, there also wasn't very much in terms of private property. 99 00:17:12.900 --> 00:17:14.960 Everything was just communal. 100 00:17:14.960 --> 00:17:29.960 And then what happened is that when private property, but in that, in that time, there's nothing to tax, you know, if, if everything's primitive and there's no private property, there's no division of labor and there's no wealth being built up, there's nothing to tax. 101 00:17:29.960 --> 00:17:33.960 The parasite has to have a host to survive. 102 00:17:33.960 --> 00:17:38.960 So the parasite couldn't have come into the scene until the host got big enough. 103 00:17:38.960 --> 00:17:49.760 And so, civilization developed first, and then the state came, and that produces the myth that the state caused civilization. 104 00:17:53.760 --> 00:18:04.760 So, all the early civilizations that we see, so the first civilization was in what is now Iraq, it was called Sumer, 105 00:18:04.760 --> 00:18:11.160 And they had private property first, before they had a state. 106 00:18:11.160 --> 00:18:18.840 There's a book called Ancient Iraq by George Roux, where he demonstrates this. 107 00:18:18.840 --> 00:18:28.040 And it became a flourishing civilization in spite of the parasitic state that was on top of it. 108 00:18:28.040 --> 00:18:33.320 And then you had the civilization in Egypt. 109 00:18:33.320 --> 00:18:39.320 But, back then, taxes, it was pretty clear what they were. 110 00:18:39.320 --> 00:18:43.320 It wasn't as genteel as it is now. 111 00:18:43.320 --> 00:18:51.320 There's a scribe, an ancient Egyptian scribe, wrote this about a tax collection. 112 00:18:51.320 --> 00:18:53.320 He said, 113 00:18:53.320 --> 00:19:00.360 Dost thou not recall the picture of the farmer when the tenth of his grain is levied? 114 00:19:00.360 --> 00:19:07.680 Tenth is where the word tithe comes from, that was kind of the classic rate of taxation 115 00:19:07.680 --> 00:19:10.500 in the ancient world, was the tenth. 116 00:19:10.500 --> 00:19:14.660 Worms have destroyed half the wheat and the hippopotami have eaten the rest. 117 00:19:14.660 --> 00:19:19.540 There are swarms of rats in the fields, the grasshoppers alight there, the cattle devour, 118 00:19:19.540 --> 00:19:24.340 The little birds pilfer, and if the farmer loses sight for an instant of what remains 119 00:19:24.340 --> 00:19:31.120 on the ground, it is carried off by robbers. Moreover, the thongs which bind the iron in 120 00:19:31.120 --> 00:19:37.880 the hoe are worn out and the team has died at the plow. It is then that the scribe steps 121 00:19:37.880 --> 00:19:45.960 out of the boat at the landing place to levy the tithe. So a scribe is someone who writes. 122 00:19:45.960 --> 00:19:50.520 And so back in ancient Egypt, not very many people knew how to read and write. 123 00:19:50.520 --> 00:19:54.320 And it was usually the people who read and write. 124 00:19:54.320 --> 00:20:00.700 Those were the administrators who served the pharaoh and who staffed the state. 125 00:20:00.700 --> 00:20:04.340 And they were the ones who were able to keep tax records. 126 00:20:04.340 --> 00:20:07.280 And so they were generally the bureaucrats. 127 00:20:07.280 --> 00:20:15.020 And so education at the time was often about becoming a scribe, in order to become a bureaucrat 128 00:20:15.020 --> 00:20:19.940 and often to become a tax collector, to levy the tithe. 129 00:20:19.940 --> 00:20:26.300 So levy means to raise, to pull out. 130 00:20:26.300 --> 00:20:33.140 And there come the keepers of the doors of the king's granary. 131 00:20:33.140 --> 00:20:37.940 So at the time, they collected taxes in kind. 132 00:20:37.940 --> 00:20:41.260 So it wasn't so much of a money economy. 133 00:20:41.260 --> 00:20:44.300 So they would collect the grain. 134 00:20:44.300 --> 00:20:51.300 The grain was the tax, and so it would be a certain percentage of grain, and they're 135 00:20:51.300 --> 00:20:57.600 crying out, come, now come, there is none, there's no grain, and they throw the cultivator 136 00:20:57.600 --> 00:21:06.120 full length upon the ground, bind him, drag him to the canal, and fling him in head first. 137 00:21:06.120 --> 00:21:11.760 His wife is bound with him, his children are put into chains, the neighbors in the meantime 138 00:21:11.760 --> 00:21:14.640 Leave Him and Fly to Save the Grain. 139 00:21:15.880 --> 00:21:18.800 So, IRS audits are one thing, 140 00:21:18.800 --> 00:21:23.800 but that was when taxation was really recognized 141 00:21:24.520 --> 00:21:25.840 for what it was. 142 00:21:28.620 --> 00:21:33.620 So, what can happen is that, like I said before, 143 00:21:35.920 --> 00:21:39.660 states have an interest in limiting the taxation. 144 00:21:39.660 --> 00:21:44.900 Now, if you don't limit the taxation, then you're going to be pretty poor. 145 00:21:44.900 --> 00:21:50.740 And if you do limit the taxation, you as a state are going to be richer. 146 00:21:50.740 --> 00:21:57.300 Now, a richer state is going to be able to conquer a poorer state a lot more easily. 147 00:21:57.300 --> 00:22:03.380 So that produces what's called the paradox of imperialism. 148 00:22:03.380 --> 00:22:05.980 Now, imperialism means an empire. 149 00:22:05.980 --> 00:22:35.980 Now, normally, we think of, you know, freedom in the domestic area, going along with freedom in terms of foreign policy, that if you're liberal in one area, you're going to be liberal in the other area, but actually, that is often not the case, because it's the states that are liberal in the domestic area, that don't tax their people as much, they end up having more resources, and so they're able to conquer the other states, 150 00:22:35.980 --> 00:22:43.500 and so you have like for example the Athenians were pretty free, the Greeks 151 00:22:43.500 --> 00:22:51.620 called Athenians and so they were able to create their own empire, but it 152 00:22:51.620 --> 00:22:56.820 was a pretty vicious empire. They had what was called the the Delian League 153 00:22:56.820 --> 00:23:05.160 and League kind of seems to mean like a voluntary association, like the Justice 154 00:23:05.160 --> 00:23:14.400 League and but it wasn't voluntary and they they realized that there was a 155 00:23:14.400 --> 00:23:21.720 famous speech by the leader of the Athenian democracy named Pericles and 156 00:23:21.720 --> 00:23:26.440 he told the people he's like we have an empire let's let's just admit it we have 157 00:23:26.440 --> 00:23:34.360 an empire and we've got to be we've got to act like an imperial nation we have 158 00:23:34.360 --> 00:23:48.360 and we have to be cruel in order to maintain our empire and so there were a lot of city states in Greece that wanted to get out of the Delian League. 159 00:23:48.360 --> 00:24:00.360 They wanted to get out from under the thumb of Athens and one of them was called Mylos and they didn't want to pay tribute to Athens anymore. 160 00:24:00.360 --> 00:24:06.720 and so they were completely depopulated every male I mean we think of Athens as 161 00:24:06.720 --> 00:24:10.860 like you know this wonderfully civilized place and you know we think of Socrates 162 00:24:10.860 --> 00:24:15.800 and Plato and all this stuff they they executed every single adult male in 163 00:24:15.800 --> 00:24:22.520 Milos for for the temerity of not wanting to pay tribute to be part of 164 00:24:22.520 --> 00:24:35.400 of the League, and so eventually then the next big empire that came along was the Macedonian 165 00:24:35.400 --> 00:24:44.080 Empire launched by Alexander the Great and the Macedonians were, their base were the 166 00:24:44.080 --> 00:24:49.720 Greek city states and so again they were able to use the civilization of the Greek city 167 00:24:49.720 --> 00:25:03.720 as a base to fund their empire. The Roman Empire was similar, but the Roman Empire was also brutal in terms of how much it exacted as tribute from the people. 168 00:25:03.720 --> 00:25:15.720 There's a great quote from the historian Tacitus, who recalls a speech by a Scottish leader called Calgacus. 169 00:25:15.720 --> 00:25:19.720 And the Scots were being invaded by the Romans. 170 00:25:19.720 --> 00:25:27.720 And Calgacus said of the Romans, that they are the robbers of the world, having by their universal plunder exhausted the land. 171 00:25:27.720 --> 00:25:46.720 If the enemy be rich, they are rapacious. If he be poor, they lust for dominion. Neither the East nor the West has been able to satisfy them. Alone among men they covet with equal eagerness, poverty, and riches. 172 00:25:46.720 --> 00:26:01.920 So you can kind of think of the American Empire in that way too, that not only have we tried to, especially in the past, take over rich areas, like we had imperial designs on China for a long time, 173 00:26:01.920 --> 00:26:14.240 but we're out there bombing caves in the middle of nowhere to take over these poor people too. 174 00:26:14.240 --> 00:26:18.240 So, rich or poor, it doesn't matter, the empire just spreads. 175 00:26:18.240 --> 00:26:23.440 To robbery, slaughter, plunder, they give the lying name of empire. 176 00:26:23.440 --> 00:26:26.560 They make a wasteland and call it peace. 177 00:26:28.560 --> 00:26:35.760 Tacitus talked about another leader in Britain named Boudicca, a female, and she said this in 178 00:26:35.760 --> 00:26:41.360 one of her speeches, she said, how much better it would have been to have been sold to masters 179 00:26:41.360 --> 00:26:49.760 once and for all than possessing empty titles of freedom to have to ransom ourselves every year. 180 00:26:49.760 --> 00:26:55.200 So again there's that notion of the ransom as a tax and just like with us it's like an annual 181 00:26:55.200 --> 00:27:04.400 ransom, an annual money payment for your freedom. So that was the Roman Empire. 182 00:27:04.400 --> 00:27:11.400 The Roman Empire fell largely because of taxes. 183 00:27:11.400 --> 00:27:21.400 Eventually it got bad at limiting its taxation so it could continue to feed on the population. 184 00:27:21.400 --> 00:27:33.400 Mises talks about how first the Romans debased the currency, which itself is a tax, 185 00:27:33.400 --> 00:27:59.400 The Tax, because when you create money out of nowhere, that's what's called an inflation tax, and instead of collecting taxes in the debased currency, they started to requisition just goods and services from the people in order to support the army, and then Diocletian, this Roman Emperor, he turned that requisition into a huge tax. 186 00:27:59.400 --> 00:28:07.400 Eventually, people started getting poorer and poorer, and some people wanted to move into the countryside. 187 00:28:07.400 --> 00:28:11.400 Some people wanted to escape to go be with the barbarians. 188 00:28:11.400 --> 00:28:17.400 They thought, oh, if I got to escape this Roman Empire, I got to go be with the barbarians where I can be free. 189 00:28:17.400 --> 00:28:25.400 And so Diocletian tried to freeze everything. He put a price ceiling on everything, 190 00:28:25.400 --> 00:28:45.400 Mises talks about the upshot of all this. He said to avoid starving, people deserted the cities, settled on the countryside, and tried to grow grain, oil, wine, and other necessities for themselves. On the other hand, the owners of the big estates restricted their excesses of grain, oil, wine, and other necessities for themselves. 191 00:28:45.400 --> 00:28:51.800 settled on the countryside and tried to grow grain, oil, wine, and other necessities for themselves. 192 00:28:51.800 --> 00:28:57.000 On the other hand, the owners of the big estates restricted their excess production of cereals 193 00:28:57.000 --> 00:29:03.160 and began to produce in their farmhouses the products of handicraft which they needed. 194 00:29:03.160 --> 00:29:09.400 For their big-scale farming, which was already seriously jeopardized because of the inefficiency of slave labor, 195 00:29:09.400 --> 00:29:17.400 lost its rationality completely when the opportunity to sell at remunerated prices disappeared. 196 00:29:17.400 --> 00:29:25.400 As the owner of the estate could no longer sell in the cities, he could no longer patronize the urban artisans either. 197 00:29:25.400 --> 00:29:33.400 He was forced to look for a substitute to meet his needs by employing handicraftsmen on his own account in his own villa. 198 00:29:33.400 --> 00:29:41.000 he discontinued big-scale farming and became a landlord receiving rents from tenants or sharecroppers 199 00:29:41.640 --> 00:29:53.880 and so that is basically how the medieval economy started was from this process that 200 00:29:53.880 --> 00:30:00.200 Mises talks about which came about because of the excess taxation however the the middle ages 201 00:30:00.200 --> 00:30:14.200 The Middle Ages after the initial dark ages that happened because of this Roman folly, 202 00:30:14.200 --> 00:30:24.200 the Middle Ages had actually very limited taxation. Rothbard talks about that there were no regular taxes. 203 00:30:24.200 --> 00:30:29.200 In the medieval era, while the king was supposed to be all-powerful in his own sphere, 204 00:30:29.200 --> 00:30:59.200 and that sphere was restricted by the sanctity of private property so the king had to often come hat in hand to ask for taxes and that was the origin of the parliament and the estates general in France that they were holding the purse strings they were having to decide whether to let the king have those taxes or not and so the middle ages were actually a time of great economic prosperity 205 00:30:59.200 --> 00:31:10.200 The Roman era was great and the Middle Ages were poor, but it was in the Middle Ages where iron was first used on a widespread basis. 206 00:31:10.200 --> 00:31:19.200 It was when they had windmills and water mills that could produce things that used energy in a continuous manner. 207 00:31:19.200 --> 00:31:32.200 and so cities were springing up all over medieval Europe in these places in northern Europe where the Romans didn't even really cultivate, like it was just wasteland during the Roman era. 208 00:31:32.200 --> 00:31:38.200 Basically, the Romans was just a parasite city living off of the East. 209 00:31:38.200 --> 00:31:48.200 It was still the East, Egypt and Greece and Asia Minor, where all the wealth was, that mercantile civilization, and Rome was just living off of that as a parasite. 210 00:31:48.200 --> 00:31:52.360 People living in Italy were exempt from taxation. 211 00:31:52.360 --> 00:31:55.240 More than that, they started getting bread dole. 212 00:31:55.240 --> 00:32:00.960 People were coming into Rome just to basically live off of welfare. 213 00:32:00.960 --> 00:32:03.220 And so it was really a parasite civilization. 214 00:32:03.220 --> 00:32:08.520 And it was in the medieval era when there were more limited taxes. 215 00:32:08.520 --> 00:32:14.840 That's when economic growth started really getting underway. 216 00:32:14.840 --> 00:32:35.240 Rothbard talks about the 14th century depression and that's when kings started to become powerful again and some of the prosperity that had built up through the Middle Ages was destroyed, especially Philip the Fair, was not fair to the people, the fair meant handsome, that he was kind of handsome. 217 00:32:35.240 --> 00:32:49.240 Rothbard says that in the early 14th century, Philip IV, the fair, king of France, moved to tax, plunder and effectively destroy the vitally important fairs of Champagne to finance his perpetual dynastic wars. 218 00:32:49.240 --> 00:32:53.240 Philip levied a stiff sales tax on the Champagne fairs. 219 00:32:53.240 --> 00:33:03.240 He also destroyed domestic capital and finance by repeated confiscatory levies on groups and organizations with money, 220 00:33:03.240 --> 00:33:09.640 including the Jews who he just just completely confiscated their wealth and 221 00:33:09.640 --> 00:33:15.480 kicked them out the Lombard bankers the Italians did the same thing to them the 222 00:33:15.480 --> 00:33:20.760 Knights Templar who were international bankers he killed them and and took all 223 00:33:20.760 --> 00:33:28.560 their money and so it was it was with kings like Philip the Fair later on 224 00:33:28.560 --> 00:33:49.560 In the early 18th century, strong kings like Henry VIII and Louis XIV became really strong, and they started taxing people a lot more, and that ultimately ended up with the revolutions that happened starting in 1688 and then through the 18th century. 225 00:33:49.560 --> 00:33:53.720 What happened with the kings would want to go on all these wars. 226 00:33:53.720 --> 00:33:57.840 They'd have all these dynastic wars and they'd have to tax the people. 227 00:33:57.840 --> 00:34:03.920 And so, especially the dynastic wars of Louis XIV and XV, 228 00:34:03.920 --> 00:34:11.520 that it was because of the taxes to support those wars that people were so upset 229 00:34:11.520 --> 00:34:15.920 and ultimately the French Revolution came out of that. 230 00:34:15.920 --> 00:34:19.480 And the American Revolution, I mean, it's very politically incorrect. 231 00:34:19.480 --> 00:34:24.680 But the American Revolution was a tax revolt, and it was a war of secession. 232 00:34:24.680 --> 00:34:31.280 Two things that people don't really like in certain circles these days, but that's exactly what they were. 233 00:34:31.280 --> 00:34:40.880 And it largely came out because of the Seven Years' War of the British, that it was a really expensive war, 234 00:34:40.880 --> 00:34:46.880 and that's how the British Empire started, really, was the result of the Seven Years' War. 235 00:35:16.880 --> 00:35:23.600 have taxation only with representation. We're not represented in parliament. And then the 236 00:35:23.600 --> 00:35:28.920 Stamp Act came about. And that's the dumbest thing to do is you don't want to tax people 237 00:35:28.920 --> 00:35:38.960 who publish newspapers because they'll rabble rouse. And so the Stamp Act was hugely unpopular. 238 00:35:38.960 --> 00:35:43.400 And Benjamin Franklin went over and said, like, you know, we don't want internal taxes. 239 00:35:43.400 --> 00:35:50.600 The British said, OK, fine, we'll do external taxes. We'll do the Townsend Acts, which were a bunch of tariffs. 240 00:35:50.600 --> 00:35:58.400 The American colleges said, wait a minute, we don't want any taxes, actually, unless we are represented. 241 00:35:58.400 --> 00:36:10.600 They did boycotts, tax revolt in terms of boycotts, and so most of the Townsend Acts were removed except for the Tea Act, 242 00:36:10.600 --> 00:36:19.000 Because they wanted to keep just one little tax, even if it was inconsequential in terms of revenue, it was the principle that mattered. 243 00:36:19.000 --> 00:36:28.000 The people in the government, they wanted to keep the principle because they wanted to be able to expand on that principle later. 244 00:36:28.000 --> 00:36:33.800 They wanted to be able to get serious revenue later, so they wanted that symbolic last thread of taxation. 245 00:36:33.800 --> 00:36:38.800 and then of course that last, the Tea Act resulted in the Boston Tea Party 246 00:36:38.800 --> 00:36:43.800 which precipitated the American Revolution and there you have it.