Financiers, the fiscal by-products

D. MURALI | Updated on: Apr 22, 2011






Over the seventeenth and eighteenth centuries, national armies and navies saw an astonishing increase; and more importantly, the supporting bureaucratic and fiscal apparatuses too grew, traces D. N. Ghosh in Business and Polity: Dynamics of a changing relationship ( ).

By-products of the rapid expansion of the fiscal military state were the financiers, writes Ghosh in a chapter titled ‘Fiscal revolution: Grip of financiers.' A consortium of bankers, ‘monied men' investors, speculators, and stock jobbers were living off the states' need to borrow money to fund their wars, he adds.

In England, for instance, the financiers were commonly viewed as the true power behind the Ministry and the Monarch, and were also accused of making private fortunes at the nation's expense, by lending the state their own and other people's money, and by the overt espousal of a belligerent and therefore expensive foreign policy, informs a snatch in the book, citing John Brewer's ‘ The Sinews of Power, War, Money and the English State 1688-1783 .'

Sale of offices

Among the many valuable historical narratives in Ghosh's book is a section that speaks of how the years of greatest financial crises were also ‘the years of greatest sales.' The reference is to sale of knighthoods, baronetcies, peerages, and other types of honours.

There were also sale of offices and titles, and these offered ‘a quick road to social respectability for the wealthy and upwardly mobile mercantile families.' Shockingly, ‘revenues from the sale of offices for the French monarchy reached 55 per cent of the ordinary revenues during 1630-34.'

No different was the sale of trade privileges and monopolies, which ‘reached a peak in the 1630s when the monopolies on starch, coal, salt and soap raised £80,000 a year and between £200,000 and 300,000 for the monopolists…'

Instructive read.

Revenue checks, price control

By introducing the practice of the measurement of land as a preliminary to land settlement, Alauddin Khilji became the first ruler of the Delhi Sultanate to establish direct relations with the peasants in order to know the actual amount paid by them towards land revenue, writes Salma Ahmed Farooqui in A Comprehensive History of Medieval India: From the twelfth to the mid-eighteenth century ( ).

The land tax that was imposed amounted to half the produce (in weight or value) on each individual peasant's holding, regardless of the land size, and this was to be supplemented by a house and cattle tax, the author notes. She adds that these revenue resources were constituted into iqtas, or different territorial units of land, which were distributed among the nobles.

Interestingly, the nobles did not have an absolute control over their iqtas, because they had to submit periodic statements of their income and expenditure and send the balance amount to the sultan's treasury.

The sultan already had an account of the estimated produce from each iqta, and so it was impossible to deceive him, one learns. “State agents, called the amils, collected the revenue helped by the local chiefs – the muqaddams and khuts. Land revenue was collected in kind; and the collected food grains were transported to the towns.”

The book speaks of how Alauddin controlled the prices of food grain, sugar, horses, cattle, slaves, perfume, cloth and other daily necessities, so as to enable his soldiers to live on the pay fixed by the state.

“The peasants were to sell their produce only to the merchants who were bound by the state to sell their wares on fixed price only. A ‘Superintendent of Markets' was appointed, who strictly enforced fixed prices with the help of a team of assistants. Punishments for breach of regulations were severe and even barbarous…”

Educative material.

Power solutions

Among the many insightful references in Climate Wars: The fight for survival as the world overheats by Gwynne Dyer ( ) is one about George Monbiot, whose book ‘ Heat ' speaks of how the U.K., the oldest industrial nation and the first to emit really large amounts of carbon dioxide and other greenhouse gases, could become a carbon-neutral society, achieving about 90 per cent cut in emissions by 2030.

Dyer extols Monbiot for the suggestion that far from dismantling the national electricity grid in favour of local co-generation schemes that produce both electricity and heat, as the fashionable wisdom has it, a low-emissions the U.K. might actually need to expand the grid (using high-voltage DC cables) in order to connect wind farms out at sea with all the customers who need electricity, but do not need heat. In Monbiot's view, the ‘facts' about the true costs of all the rival forms of power generation, whether coal, gas, solar, wind or nuclear, are so unreliable and divergent as to be close to useless.

Since the central and deeply intractable fact about electricity is that it must be generated at the very moment when it is used, those in charge of supplying a society with electricity face a tough task, the book highlights.

For instance, in the U.K., the demand can vary as much as threefold from a mild week-end day in summertime (20 gigawatts) to a cold mid-winter evening (60 gigawatts), one learns.

“And there are occasions when it varies by almost three gigawatts within a minute, as it did when almost the entire British population got up and put on the kettle after the penalty shootout in the World Cup semi-final in 1990.”

Recommended reference.

Published on April 23, 2011
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