The Forerunners

Vauban

The Origins of Laissez-Faire Economics

Vauban

Today, as the tax pressure in our country continues to grow, threatening to suffocate national economic forces, voices are rising in favor of change. Whether consciously or not, these calls for reform often echo the work of French economists who, since the 17th century, have criticized the nation's tax system as chaotic, despotic, excessive.

The first of these tax reformers, chronologically and in terms of merit, is the great marshal Sébastien Le Prestre Vauban, famous builder of strongholds and citadels.

Though we have sadly forgotten it, Vauban was more than a military man; he was also an economist. He took an interest in the fate of the peasants, he proposed bold tax reforms in 1695 (Projet de capitation - "the Project for a Capitation") and again in 1707 (Projet d'une Dime Royale - "the Royal Tithe"): to replace most existing taxes with a tax proportional to income, a flat tax before its time.

Vauban arrived at these ideas through curiosity. He was a keen observer, striving to study social life and economic reality rigorously, almost scientifically. He insisted particularly on the need to count, through censuses.

His second great merit was his moving and honest description of the misery endured by the masses. He wrote: "Let us not be deceived; the heart of the kingdom is ruined. Everything suffers, everything endures, everything groans. You only have to look and examine the heart of the provinces, what you'll find is even worse than what I'm saying". Far from exaggeration, Vauban's gloomy observations were an accurate reflection of early 18th-century life. Alexis de Tocqueville was well aware of these ideas, and would later describe Vauban's Royal Tithe as "frightening", because it was true.

Vauban's other great merit as an economist was proposing a far-reaching tax reform aimed at eradicating, or at least reducing the intensity of the evil he observed and described. He was right to do so; the French economy under the Ancien Régime was paralyzed by taxation, which was unequal, unstable and illegible.

Across his various political and economic writings, Vauban's overarching ambition was to relieve the suffering of what he called "the lower part of the people, who, by their labor, sustain and support the upper".

He understood that oppressive and disincentivizing taxation was overwhelming peasants, a concept he expressed with clear-sightedness, something that we can still observe perfectly in our time:

"The farmer lets the little land he has wither away, working it only half-heartedly, for fear that if it produced what it could with proper manure and cultivation, it would be taxed even more heavily".

Vauban saw the truth: taxation under the Ancien Régime was not only irrational but also cruelly strict. It was this tax system, unjust in its distribution, that he sought to overcome.

His proposed solution, a flat, proportional tax on all incomes, would have allowed the tax burden to be shared fairly among all social classes. Grounded in a theory of the State that saw public authority as necessary to protect individual rights and property, Vauban's tax reform demanded that all citizens contribute in strict proportion to what they earn, for instance, 10% of their income

In The Royal Tithe, the only one of his economic works printed in his lifetime, Vauban stated clearly:

"Since everyone in a State needs its protection to survive, it is only right that all contribute, according to their income, to its upkeep and expenses [...]. Nothing is more unjust than exempting those most able to pay, and shifting the burden onto those least able, who collapse beneath the weight; weight that would be quite light if borne proportionally by all according to their own strength. Therefore, every exemption from taxation is a disorder that must be corrected."

Shortly before his death, Vauban's idea was adopted by Louis XIV's ministers. However, Vauban had called for a proportional tax to replace all, or nearly all, existing taxes. Instead, as so often happens, his tax was implemented, but all the others were kept as well.

Quiz

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Why is the Ancien Régime tax system described as "disincentive"?