Montesquieu: Up until now, you have only occupied yourself with the forms of government and the rigorous laws necessary for its maintenance. This is much; it is not everything. You must still resolve the most difficult problem for a sovereign who wants to bring about absolute power in a European State that is accustomed to representative customs.
Machiavelli: And what is that problem?
Montesquieu: The problem of your finances.
Machiavelli: This point has not remained foreign to my preoccupations, because I recall having told you that everything would be resolved by a question of numbers.
Montesquieu: Very well, but here it is the very nature of things that would resist you.
Machiavelli: You worry me, I will confess, because I come from a century of barbarity from the standpoint of political economy and I understand very little of such matters.
Montesquieu: I am reassured about you. Nevertheless, permit me to address a question to you. I recall having written in the Spirit of the Laws that an absolute monarch is constrained by the principles of his government to only impose weak tributes upon his subjects.[1] Would you at least give the voters this satisfaction?
Machiavelli: I would not promise this and, in truth, I know nothing more contemptible than the proposition that you have expressed. How could the apparatus of monarchical power, the splendor and the representation of a great court, exist without the imposition of heavy sacrifices on the nation? Your thesis might be true in Turkey or Persia, among the little people who have no industry, who moreover do not have the means of paying taxes. But in European societies, in which wealth overflows from the sources of work and presents itself to taxation under so many forms; in which luxury is a means of governing;[2] in which the support and expenditures of all the public services are centralized in the hands of the State; in which the high public officials, all of the dignitaries, are salaried at great cost: once more, how could one restrain oneself from reasonable tributes, as you say, when one is sovereign master?
Montesquieu: This is very just and I abandon my thesis, the true meaning of which has moreover escaped you. Thus, your government would cost dearly; it is obvious that it would cost more dearly than a representative government.
Machiavelli: This is possible.
Montesquieu: Yes, and it is here that the difficulty would begin. I know how representative governments provide for their financial needs, but I have no idea about the means of existence of absolute power in modern societies. If I interrogate the past, I see very clearly that absolute power can only exist in the following conditions: in the first place, the absolute monarch must be a military leader; no doubt you realize this.
Machiavelli: Yes.
Montesquieu: It would moreover be necessary that he is a conqueror, because it is during war that he must demand the principal resources that are necessary for him to maintain his pomp and his armies. If he would [also] demand taxes from his subjects, he would crush them. You can see from this that it is not true that the absolute monarch must husband his resources because he spends less: the law of his subsistence is elsewhere. Therefore, war today no longer brings profits to those who make them: it ruins the victors as well as the vanquished. Here a source of revenue escapes you.
Taxes remain, but of course the absolute prince must be able to do without the consent of his subjects in this regard. In despotic States, there is a legal fiction that permits their leaders to collect discretionary taxes: in the law, the sovereign is supposed to possess all the goods of his subjects. When he takes something from them, he only takes what belongs to him. With the result that there is no resistance.
Finally, it is necessary that the prince can, without discussion or oversight, dispose of the resources that taxes have procured for him. In this matter, such as the inevitable methods[3] of absolutism, you will agree that there is much to do to narrowly escape here. If modern people are as indifferent to the loss of their liberties as you say they are, this would not be the case when it comes to their [financial] interests; their interests are tied to an economic regime that excludes despotism. If you do not have despotism in financial matters, you will not have it in matters of politics. Your entire reign would collapse under the heading of budgetary pressures.
Machiavelli: I am very tranquil on this point, as on the others.
Montesquieu: This is what remains to be seen; let us proceed to the deed. The vote on taxes by the representatives of the nation is the fundamental rule of the modern states: would you accept the vote on taxes?
Machiavelli: Why wouldn't I?
Montesquieu: Oh! Beware, this principle is the most purposeful consecration of the sovereignty of the nation: because it recognizes the right to vote on taxes, it also recognizes the right to refuse them, to limit them, to reduce to nothing the prince's means of action and, consequently, to annihilate them, if need be.
Machiavelli: You are categorical. Continue.
Montesquieu: Those who vote on taxes are the very ones who pay them. Here their interests are in close solidarity with those of the nation, to the point that the nation would necessarily have its eyes open. You would find its representatives as little accommodating concerning legislative appropriations as you found them easy concerning their liberties.
Machiavelli: Here the weakness of your argument becomes apparent: I beseech you to take note of two considerations that you have forgotten. In the first place, the nation's representatives would be salaried; taxpayers or not, they would personally be disinterested in the vote on taxes.
Montesquieu: I agree that this arrangement would be practical and that your remark is just.
Machiavelli: You see the disadvantage of too systematically envisioning things; the smallest skillful modification alters everything [else]. Perhaps you would be right if I had based my power on the aristocracy or the bourgeois classes that could -- at any given moment -- refuse me their cooperation. But, in the second place, I would have my base of action in the proletariat, in the masses who possess nothing. The State's taxes would not weight so heavily on them, and I would even arrange things so that taxes do not weigh on them at all. Fiscal measures hardly preoccupy the working classes; they do not reach them.[4]
Montesquieu: If I have understood you well, this is very clear: you would make those who possess [property] pay, according to the sovereign will of those who do not possess [property]. This would be the price that the many and the impoverished impose on the rich.
Machiavelli: Would this not be just?
Montesquieu: This is not even true, because in contemporary societies -- from the economic point of view -- there are neither rich nor poor people. The artisan of yesterday is the bourgeois of tomorrow by virtue of the law of labor. If you were to touch the territorial or industrial bourgeoisie [through taxation], do you know what would happen?
In reality, you would render the emancipation through work more difficult; you would keep a great number of workers in the bonds [liens][5] of the proletariat. It is an aberration to believe that the proletarian would profit from injuries made to production. By using fiscal laws to impoverish those who possess [property], one would only create artificial situations and, at a given time, one would even impoverish those who do not possess [property].
Machiavelli: These are beautiful theories, but I am quite decided upon opposing them with theories that are just as beautiful, if you would like me to.
Montesquieu: No, because you still have not resolved the problem that I posed to you. First you must obtain what offsets the expenditures of absolute sovereignty. This would not be as easy as you might think, even with a legislative chamber in which you would be assured of the majority, even with the complete power of the popular mandate with which you would be invested. For example, tell me how you would bend the financial mechanisms of modern States to the exigencies of absolute power. I repeat to you: here the very nature of things would resist you. The civilized [polices] people of Europe have surrounded the administration of their finances with such tight, jealous and numerous guarantees that they do not leave more room for either tax collection[6] or the arbitrary use of public funds.
Machiavelli: What is this marvelous system?
Montesquieu: I can indicate it to you in a couple of words. The perfection of the financial system in modern times rests upon two fundamental bases: accounting and publicity.[7] It is here that the guarantee of the taxpayers essentially resides. A sovereign cannot touch either one without indirectly saying to his subjects: "You have order, I want disorder; I want obscurity in the management of public funds; I have need of it because there are a mass of expenditures that I want to be able to make without your approval; there are deficits that I want the ability to mask; there are debts that I want to have the means of disguising or enlarging according to the circumstances."
Machiavelli: You begin well.
Montesquieu: In the free and industrious countries, everyone knows financial matters due to necessity, self-interest and situation, and your government would not deceive anyone in this regard.
Machiavelli: Who told you that one wanted to deceive?
Montesquieu: In the final analysis, all of the work of financial administration -- as vast and complicated in the details as it is -- ends up in two very simple operations: receiving and spending.
It is around these two orders of financial actions that gravitate multitudes of laws and special regulations, which have two very simple things as their common objects: to somehow make the taxpayer only pay the necessary and regularly established taxes; and to somehow make the government only apply public funds to the expenses approved by the nation.
I leave to the side all that relates to the basis and method of tax collection, to the practical means of assuring the completeness of the collection, the order and precision of the movements of public funds; these are details of accounting that I do not have to explain to you. I only want to show you how publicity proceeds along with accounting in the best organized systems of financial policy in Europe.
One of the most important problems to resolve is completely bringing out of obscurity, rendering visible to all eyes[8] the elements of collection and expenditures on which the use of the public fortunes held in the hands of the government is based. This result was obtained by the creation of what one calls in modern language the State budget, which is the outline or estimate of collected taxes and expenditures, previewed not for a distant period of time, but each year for use the following year. The annual budget is thus the capital point and, in a certain way, the generator of the financial situation that improves or worsens in proportion to its proven results. The items that compose the budget are prepared by the different ministers in the department into which their services are placed. As the basis for their work, these ministers take the allocations of previous budgets, to which they introduce modifications, additions and necessary cut-backs. The whole thing is submitted to the minister of finance, who redacts the documents that have been transmitted to him and who presents to the legislative assembly what one [today] calls the projected budget. This great work -- published, printed and reproduced in a thousand newspapers -- unveils to all eyes[9] the domestic and foreign policies of the State, as well as its civil, judicial and military administration. It is examined, discussed and voted upon by the country's representatives, after which it is executed in the same manner as the other laws of the State.
Machiavelli: Allow me to admire the clarity of deduction and the propriety of terminology -- completely modern -- with which the illustrious author of the Spirit of the Laws has extracted the slightly vague financial theories and sometimes slightly ambiguous financial terms from the great work that has rendered him immortal.
Montesquieu: The Spirit of the Laws is not a financial treatise.
Machiavelli: Your sobriety on this point all the more merits being praised as you have been able to speak quite competently. Please continue, I beseech you: I follow you with the greatest interest.
[1] Author's note: Book XIII, Chapter X. [Translator's note: "Taxes ought to be very light in despotic governments: otherwise who would be at the trouble of tilling the land? Besides, how is it possible to pay heavy duties in a government that makes no manner of return to the different contributions of the subject?"]
[2] Note the great distance here from Karl Marx's idea that capitalism (the capitalist State) rules by immiseration, by immiserating the proletariat. But see footnote [4] below.
[3] The French word used here, errements, also means "bad habits."
[4] Today, the situation is reversed: the rich pay no taxes and the poor and working classes are heavily taxed.
[5] The English word "liens" (claims on property as security for the payment of a debt) is relevant here.
[6] The French word used here, perception, is quite remarkable: it means both "tax collection" and "perception"; that which is perceptible is both "collectible" and "sensible."
[7] The French words used here, controle and publicite, are very suggestive: the first can also be translated as "auditing" or "verification," and the second evokes what today one calls financial "transparency," which of course is a visual metaphor.
[8] See footnotes [6] and [7] above.
[9] See footnotes [6] and [7] above.