Marx and Engels in Neue Rheinische Zeitung Politisch-ökonomische Revue 1850


Le socialisme et l'imp˘t, par Emile de Girardin.

Source: MECW Volume 10, p. 326-337;
Written: Paris, in April, 1850;
First published: Reviews from the Neue Rheinische Zeitung Politisch-÷konomische Revue No. 4, April, 1850.

There are two distinct kinds of socialism, "good" socialism and "bad" socialism.

Bad socialism is "the war of labour against capital". At its door are laid all the horrors: equal distribution of the land, abolition of the family ties, organised plunder, etc.

Good socialism is "harmony between labour and capital". In its train are found the abolition of ignorance, the elimination of the causes of pauperism, the establishment of credit, the multiplication of property, the reform of taxation, in a word,

"the system which most closely approximates to mankind's conception of the kingdom of God on earth" [p. 9].

This good socialism must be used to stifle the bad variety.

"Socialism is possessed of a lever; that lever was the budget. But it needed a fulcrum if it was to turn the world upside down. That fulcrum was supplied by the Revolution of February 24: universal suffrage" [p. 12].

The source of the budget is taxation. So the effect of universal suffrage on the budget must be its effect on taxation. And it is by its effect on taxation that "good" socialism is realised.

"France cannot pay more than 1,200 million francs in taxes annually. How would you set about reducing expenditure to this sum:"

"You have written into two charters and one constitution in the last thirty-five years that every Frenchman shall contribute to the upkeep of the state in proportion to his wealth. In the last thirty-five years, this equality of taxation has been a myth.... Let us examine the French system of taxation" [pp. 14-15, 17].

I. Land-tax. The land-tax does not fall equally on all landowners:

"If two adjacent plots are given the same assessment in the land-register, the two landowners pay the same tax, without any distinction between the apparent and the actual owners" [p. 22],

i.e. between the owner who is encumbered with mortgages and the one who is not.

Furthermore, the tax on land bears no relation to the taxes which are levied on other kinds of property. When the National Assembly introduced it in 1790, it was influenced by the physiocratic school, which regarded the soil as the only source of net income and therefore placed the full burden of taxation on the landowners. The tax on land is therefore based on an error in economics. If taxation were distributed equally, the owner of land would be liable for 20 per cent of his income, whereas he now pays 53 per cent.

Finally, according to its original purpose, the tax on land ought only to fall on the owner and never on the tenant of the farm-land. Instead, according to M. Girardin, it always falls on the tenant of the farm-land.

In this M.Girardin commits an error in economics. Either the tenant farmer really is a tenant farmer, in which case it is not he but the owner or the consumer on whom the tax falls; or else he is, despite the appearance of tenancy, basically merely in the owner's employ, as in Ireland and frequently in France, in which case the taxes imposed on the owner will always fall on him, whatever name they are given.

II. Tax on persons and movable property. This tax, which was also decreed by the National Assembly in 1790, was intended to fall directly on liquid assets. The amount of house-rent paid was taken to indicate the value of the assets. This tax falls in reality on the landowner, the peasant and the manufacturer, whilst it represents an insignificant burden or none at all for the rentier. It is therefore the complete opposite of what its authors intended. Besides, a millionaire may live in a garret with two rickety chairs-unjust, etc.

III. Door and window tax. An attack on the health of the people. A fiscal device directed against clean air and daylight.

"Almost one half of the dwellings in France have either only one door and no windows, or at most one door and one window" [p. 38].

This tax was adopted on 24th Vendemiaire (October 14, 1799) because of an urgent need temporary and extraordinary measure; but in rejected.

IV. Licence-tax (trades-tax). A tax not on profit but on the exercise of industry. A penalty for work. Designed to fall on the manufacturer, it falls largely on the consumer. In any case, when this tax was imposed in 1791, it was also only a question of satisfying a momentary need for money.

V. Registration and stamp duty. The droit d'enregistrement originated with Francis I and had initially no fiscal purpose (?). In 1790 the obligatory registration of contracts concerning property was extended and the fee raised. The tax operates in such a way that buying and selling cost more than donations and legacies. Stamp duty is a purely fiscal device which applies equally to unequal profits.

VI. Beverage-tax. The quintessence of injustice, an impediment to production, an irritant, the most costly to collect. (See moreover Issue III: 1848-1849, Consequences of June 13.)

VII. Customs-duties. A chaotic historical accumulation of pointless, mutually contradictory rates of duty injurious to industry. E, g. raw cotton is taxed at 22 frs. 50 cts. per 100 kilos in France. Passons outre. VIII. Octroi. Lacks even the excuse of protecting a national industry. Internal customs. Originally a local poor-tax, but now chiefly a burden upon the poorer classes, resulting in the adulteration of their food. Puts as many obstacles in the way of national industry as there are towns.

So much for what Girardin has to say concerning the individual taxes. The reader will have noticed that his criticism is as shallow as it is correct. It is reducible to three arguments.

1. that no tax ever falls on the class intended by those who imposed the tax, but is shifted on to another class;

2. that every temporary tax takes root and becomes permanent;

3. that no tax is proportional to wealth, just, equal, or equitable, These general economic objections to present taxation are repeated in every country. However, the French tax system has one characteristic peculiarity. Just as the British are the historic nation par excellence with regard to public and private law, so the French are with regard to the system of taxation, although in all other respects they have codified, simplified and broken with tradition in accordance with universal principles. Girardin says on this point:

"In France we live under the rule of almost all the fiscal procedures of the ancien regime. Taille, poll-tax, aide, customs, salt-tax, registration fees, tax on legal submissions, greffe, tobacco monopoly, excessive profits from the postal services and the sale of gunpowder, the lottery, parish or state corvee, billetting, octrois, river and road tolls, extraordinary levies--all these things may have changed their names, but they all persist in essence and have become no less a burden on the people nor any more productive for the treasury. The basis of our financial system is totally unscientific. It reflects nothing more than the traditions of the Middle Ages, which are in turn themselves the legacy of the ignorant and predatory fiscal practice of the Romans" [p. 102].

Nevertheless, as long ago as the National Assembly of the first revolution, our fathers cried out:

"We have made the revolution only in order to take taxation into our own hands."

But although this state of affairs was able to persist under the Empire, the Restoration and the July monarchy, its hour has now struck:

"The abolition of electoral privilege necessarily entails the abolition of all fiscal inequality. [...] There is therefore no time to be lost in coming to grips with the finance reform, if science is not to be ousted by violence.... Taxation is virtually the sole foundation on which our society rests... Social and political reforms are sought in the remotest and most elevated places; the most important are to be found in taxation. Seek here, and ye shall find" [pp. 103, 105, 108].

And what do we find?

"As we conceive taxation, taxation should be an insurance premium paid by those who have property, to insure themselves against all risks which might disturb them in the possession and enjoyment of it... This premium must be proportional and strict in its exactitude. Every tax which is not a guarantee against a risk, the price for a commodity or the equivalent for a service, must be abandoned--we allow bur two exceptions: tax on foreign countries (douone) and tax on death (enregistrement)... The taxpayer is thus replaced by the insured person.... Everyone who has an interest in payment pays, and pays only to the extent of his interest.... We go further and say: every tax stands condemned by the mere fact that it bears the name of tax or imposition. Every tax must be abolished [...] for the peculiar characteristic of a tax is that it is obligatory, whereas it is in the nature of insurance to be voluntary" [pp. 120, 122, 127-28].

This insurance premium must not be confused with a tax on income; it is rather a tax on capital, in the same way that an insurance premium does not guarantee income but capital assets as a whole. The state acts in exactly the same way as the insurance companies, who do not want to know what revenue the thing insured yields but what it is worth.

"The national wealth of France is estimated at 134 thousand million, from which liabilities of 28 thousand million must be subtracted. If the budget expenditure is reduced to 1,200 million, only 1 per cent of the capital would need to be levied to raise the state to the level of a colossal mutual insurance company" [p. 130].

And from that moment onward--"no more revolutions.!" [P. 131.]

"The word solidarity will replace the word authority, communal interest will become the bond linking the members of society" [p. 133].

M. Girardin does not rest content with this general suggestion but at the same time gives us a form for an insurance policy or registration such as will be issued to every citizen by the state.

Each year the former tax-collector gives the insured a policy consisting of "four pages of the size of a passport". On the first page is the name of the insured with his registration number, as well as the form for the receipts of the premium payments. On the second page are all the personal particulars of the insured and his family, along with a detailed estimate of the value he puts on his total assets, certified as correct; on the third page, the budget of the state along with a general balance for France, and on the fourth, all sorts of more or less useful statistical information. The policy serves as a passport, election card and travel record for workers, etc. The registers of these policies allow the state in turn to prepare the four Great Books: the Great Book of Population, the Great Book of Property, the Great Book of the Public Debt, and the Great Book of Mortgage Debts, which together contain full statistics of all the assets of France.

Taxation is merely the premium paid by the insured to permit him to enjoy the following benefits: 1. the right to public protection, a free legal service, free religious practice, free education, credit against security and a savings-bank pension; 2. exemption from military service in peace time; 3. protection from destitution; 4. compensation for loss through fire, floods, hail, cattle-disease and shipwreck.

We further observe that M. Girardin intends to raise the compensation sum which the state has to pay, in case of loss by insured persons, by means of various fines, etc., from the product of the nationally-owned estates and the fees from enregistrement and customs, which will have been maintained, as well as from the state monopolies.

Tax reform is the hobby-horse of every radical bourgeois, the specific element in all bourgeois economic reforms. From the earliest medieval philistines to the modern English free-traders, the main struggle has revolved around taxation.

Tax reform has as its aim either the abolition of traditional taxes which impede the progress of industry, or less extravagant state budgets, or more equal distribution. The further it slips from his grasp in practice, the more keenly does the bourgeois pursue the chimerical ideal of equal distribution of taxation.

The distribution relations, which rest directly upon bourgeois production, the relations between wages and profit, profit and interest, rent and profit, may at most be modified in inessentials by taxation, but the latter can never threaten their foundations. All investigations and discussions about taxation presuppose the everlasting continuance of these bourgeois relations. Even the abolition of taxes could only hasten the development of bourgeois property and its contradictions.

Taxation may benefit some classes and oppress others harshly, as we observe, for example, under the rule of the financial aristocracy. It is ruinous only for those intermediate sections of society between the bourgeoisie and the proletariat, whose position does not allow them to shift the burden of taxation to another class.

Every new tax depresses the proletariat one step further; the abolition of an old tax increases not wages but profits. In a revolution, taxation, swollen to colossal proportions, can be used as a form of attack against private property; but even then it must be an incentive for new, revolutionary measures or eventually bring about a reversion to the old bourgeois relations.

The reduction of taxes, their more equitable distribution, etc., etc., is a banal bourgeois reform. The abolition of taxes is bourgeois socialism. This bourgeois socialism appeals especially to the industrial and commercial middle sections and to the peasants. The big bourgeoisie, who are already living in what is for them the best of possible worlds," naturally despise the utopia of a best of worlds.

M. Girardin abolishes taxes by transforming them into an insurance premium. By paying a certain percentage, the members of society insure each other's assets against fire and flood, against hail and bankruptcy and against every possible risk which today disturbs the peace of bourgeois enjoyment. The annual contribution is not merely fixed by the insured persons collectively, but is determined by each individual himself. He estimates his assets himself. The crises of trade and agriculture, the torrent of losses and bankruptcies, all the fluctuations and vicissitudes of the bourgeois mode of life, which have been epidemic since the introduction of modern industry, all the poetry of bourgeois society will disappear. Universal security and insurance will become a reality. The burgher has it in writing from the state that he cannot under any circumstances be ruined. All the shady sides have gone from the present world, its bright sides live on, their brilliancy enhanced, in short, that system of government has become reality "which most closely approximates to the bourgeois conception of the kingdom of God on earth". In place of authority, solidarity; in place of compulsion, freedom; in place of the state, a committee of administrators--and the puzzle of Columbus and the egg is solved, the mathematically precise contribution of each "insured person", according to his assets. Each "insured person" carries a complete constitutional state, a fully formed bicameral system, within his breast. The fear of paying the state too much, the bourgeois opposition in the Chamber of Deputies, impels him to underestimate his assets. His interest in preserving his property, the conservative element of the Chamber of Peers, inclines him to overestimate them. The constitutional interaction of these opposing tendencies of necessity engenders the true balance of powers, the precisely correct valuation of assets, the exact proportion of the contribution.

A certain Roman wished his house might be made of glass so that his every action would be visible to all. The bourgeois wishes that not his own house but that of his neighbour should be of glass. This wish too is fulfilled. For example: a citizen asks me for an advance, or wishes to form an association with me. I ask him for his policy, and in it I have a confession, entire and in detail, of all his civil circumstances, guaranteed by his interest correctly understood and countersigned by the insurance board. A beggar knocks at my door and begs for alms. Let me see his policy. The burgher must be sure that his alms are going to the right man. I engage a servant, I take him into my house, I entrust myself to him for good or ill: let me see his policy!

"How many marriages are concluded without the two parties knowing exactly what to rely on concerning the reality of the dowry or their mutually exaggerated expectations" [p. 178].

Let us see their policies!

In future the exchange of loving hearts will be reduced to the exchange of policies by the two parties. Thus fraud will disappear, which today provides the sweetness and the bitterness of life, and the Kingdom of Truth in the strict sense of the word will become a reality. Nor is that all:

"Under the present system, the courts cost the state some 7 1/2 million, under our system offences will bring revenue instead of expense, for they will be transmuted into fines and compensation--what an idea!" [Pp. 190-91.]

Everything in this best of possible worlds brings in profit: crimes disappear and offences yield revenue. Finally, as under this system property is protected against all risks and the state is no more than the universal insurance for all interests, the workers are always employed: "No more revolutions!"

If that is not what the bourgeois wants,
Then I don't know what else he wants!

The bourgeois state is nothing more than the mutual insurance of the bourgeois class against its individual members, as well as against the exploited class, insurance which will necessarily become increasingly expensive and to all appearances increasingly independent of bourgeois society, because the oppression of the exploited class is becoming ever more difficult. The change of name changes nothing in the nature of this insurance. M. Girardin himself is at once obliged to abandon the apparent independence from insurance which he for a moment allows individuals to enjoy. Anyone who estimates his assets too low is liable to punishment: the insurance fund buys his property from him at the price he has set and even encourages informers with rewards. Nor is that the worst: anyone who prefers not to insure his assets at all is declared outside society and simply outlawed. Society of course cannot tolerate the formation of a class in its midst which rebels against its very conditions of existence. Compulsion, authority, bureaucratic interference which are precisely what Girardin wants to eliminate, reappear in society. If for a moment he made abstraction of the conditions of bourgeois society, he did so only in order to return to them by another route.

Behind the abolition of taxation lurks the abolition of the state. The abolition of the state has meaning with the Communists, only as the necessary consequence of the abolition of classes, with which the need for the organised might of one class to keep the others down automatically disappears. In bourgeois countries the abolition of the state means that the power of the state is reduced to the level found in North America. There, the class contradictions are but incompletely developed; every clash between the classes is concealed by the outflow of the surplus proletarian population to the west; intervention by the power of the state, reduced to a minimum in the east, does not exist at all in the west. In feudal countries the abolition of the state means the abolition of feudalism and the creation of an ordinary bourgeois state. In Germany it conceals either a cowardly flight from the struggles that lie immediately ahead, a spurious inflating of bourgeois freedom into absolute independence and autonomy of the individual, or, finally, the indifference of the bourgeois towards all forms of state, provided the development of bourgeois interests is not obstructed. It is of course not the fault of the Berliners Stirner and Faucher that this abolition of the state the higher sense" is being preached in so fatuous a way. La plus belle fills de la France ne peut donner que ce qu'elle a.

What remains of M. Girardin's insurance company is the tax on capital, as opposed to the tax on income, and in place of all other taxes. Capital for M. Girardin is not confined to capital employed in production, it embraces all movable and immovable assets. In respect of this tax on capital, he boasts:

"it is like the egg of Columbus, it is a pyramid which must stand on its base and not on its apex, [...] it is the stream cutting a course for itself, the revolution without revolutionaries, progress with never a backward step, movement with neither jar nor jolt, finally it is the Idea in all its simplicity and the true Law" [pp. 135-36].

There is no denying that of all the costermongering advertisements that M. Girardin has ever produced--and they, as we know, are legion--this prospectus for capital-tax represents the masterpiece.

Incidentally the tax on capital, as the sole form of taxation, has its merits. All the economists and Ricardo in particular have demonstrated the advantages of a single form of taxation. The tax on capital, as the sole form of taxation, eliminates at a stroke the expense of the numerous staff previously needed to administer taxation, interferes least with the regular process of production, circulation and consumption and is the only tax to fall on luxury capital.

But M.Girardin's tax on capital is not limited to this. Its effects include yet other and very special blessings.

Capital assets of equal size will be obliged to pay the same rates of tax to the state, regardless of whether they bring in 6 per cent, 3 per cent or no income at all. The consequence of this is that idle capital will be put to work and will increase the volume of productive capital, and that capital which is already productive will be put to yet further exertions, i. e. it will produce more in less time. The consequence of these two things will be a fall in profit and in the rate of interest. M. Girardin however asserts that profit and the rate of interest will then rise--a true economic miracle. The transformation of unproductive into productive capital and the increasing productivity of capital in general have intensified and aggravated the development of crises in industry and depressed profits and the rate of interest. The tax on capital can only hasten this process, exacerbate crises and thereby increase the growth of revolutionary elements.--"No more revolutions!"

A second miraculous effect of the tax on capital, according to M. Girardin, is that it would attract capital from the land, where its yield is low, to industry, where its yield is higher, bring down land prices and transplant to France the concentration of land. Britain's large-scale agriculture and therewith all of Britain's advanced industry. Quite apart from the fact that this would require a similar migration to France of the other conditions of British industry too, M. Girardin is here guilty of quite peculiar errors. Farming in France is suffering not from a surplus but from a lack of capital. Not by withdrawing capital from farming but on the contrary by pouring industrial capital into agriculture have British concentration and British farming come about. The price of land in Britain is far higher than in France; the total value of the land in Britain is almost as much as the whole national wealth of France, in Girardin's estimation. Concentration in France would therefore not merely not cause the price of land to fall, on the contrary it would cause it to rise. The concentration of landed property in Britain has furthermore totally swept away whole generations of the population. The same concentration, to which the tax on capital will of course necessarily contribute by hastening the ruin of the peasants, would in France drive the great mass of the peasants into the towns and make revolution all the more inevitable. And finally, if in France the tide has already begun to turn from fragmentation to concentration, in Britain the large landed estates are making giant strides towards renewed disintegration, conclusively proving that agriculture necessarily proceeds in an incessant cycle of concentration and fragmentation of the land, as long as bourgeois conditions as a whole continue to exist.

Enough of these miracles. Let us turn to the provision of credit for mortgage deposits.

Credit for mortgage deposits will initially only be available to landowners. The state will issue mortgage notes, resembling banknotes in all respects except that land is the guarantee instead of cash or bullion. These mortgage notes will be advanced by the state at 4 per cent to peasants in debt, anti will be used to satisfy their mortgage creditors; in place of the private creditor, the state now has the mortgage on the land and consolidates the debt so that repayment can never be demanded. The total of mortgage debts in France amounts to 14 thousand million. It is true that Girardin only envisages the issue of 5 thousand million mortgage notes, but the augmentation of paper money by such a sum would have the effect, not of making capital cheaper, but of devaluing paper money entirely. Moreover, Girardin lacks the courage to impose a fixed rate on this new paper. To obviate devaluation he proposes that the holders of these notes should exchange them al pari for 3 per cent national debt certificates. The outcome of the transaction is thus as follows: the peasant who formerly paid 5 per cent interest and 1 per cent conveyancing, and renewal and other fees, now only pays 4 per cent and thus gains 2 per cent; the state borrows,at 3 per cent and lends at 4 per cent, and thus gains 1 per cent; the former mortgage creditor, who previously received 5 per cent, is obliged by the threatening devaluation of mortgage notes gratefully to accept the 3 per cent he is offered by the state; he therefore loses 2 per cent. Furthermore the peasant does not need to pay his debt and the creditor can never realise what the state owes him. What these dealings therefore amount to is that behind the thin camouflage of the mortgage notes the mortgage creditors are directly robbed of 2 out of their 5 per cent. On the only occasion, apart from taxation, therefore that M. Girardin plans to change social relations themselves, he is forced to make a direct attack on private property, he has to become a revolutionary and to give up his whole utopia. And this attack is not even of his own invention. He borrowed it from the German Communists, who after the February Revolution were the first to demand that mortgage debts should be transformed into debts to the state, admittedly in an entirely different fashion from M. Girardin, who even publicly opposed it. It is characteristic that on the sole occasion when M. Girardin proposes a somewhat revolutionary measure he has not the courage to suggest anything but a palliative which can only make the development of fragmentation in landownership in France the more chronic, and turn the clock back in that regard by a few decades, until the present state of affairs is finally reached again.

The only thing the reader will have missed throughout Girardin's expose is the workers But of course bourgeois socialism always presupposes that society is exclusively composed of capitalists, so as to be able then to resolve the issue between capital and wage labour according to this point of view.