Thursday, 16 August 2012

The railway market and tax farming

Thanks to the Tax Justice Network for pointing out a piece by Mary Beard, drawing an analogy between the tax farming system of ancient Rome (and, if memory of A-level French literature studies serves, pre-revolutionary France) and the financing of the British railway system. (This is sometimes described as Thatcherite, but it should be remembered that it was set up under John Major.)

Professor Beard writes:
The jewel in the crown of Roman private enterprise was tax farming. When the republican Romans wanted to (say) impose taxes on a province, they didn't collect the taxes through state officials, but by offering the tax contract to rival bidding companies -- of "tax-farmers" or publicani (the 'publicans' of the King James Bible). It was a simple principle. The companies offered their bids, waving the figure they would hand over to the Roman treasury for the taxes of the province, and anything else they made in the process of collection was their profit. The higher they bid, the more they had to squeeze cash out of the poor bloody provincials to make any money for themselves (and that meant intimidation, violence, extortion etc ... which wasnt exactly a vote-loser in the ancient Roman province, but was a bundle of trouble for the Roman administration). If they really bid too high, they could come off with a loss.

It seems to me that there is one major (pun not intended) difference between fermiers généraux and publicani on the one hand and the railway pseudo-market on the other: in the former case, money did actually come back to the state.

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