War Making and State Making as Organized Crime 179 180 Charles Tilly standing mobilizers of capital.Both the trade and the capital served the (The government's failure to pay those rentes,incidentally,helped align the purposes of ambitious rulers.By a circuitous route,that observation brings us Parisian bourgeoisie against the Crown during the Fronde,some twelve back to the arguments of Lane and Bean.Considering that both of them wrote decades later.)By 1595,the national debt had risen to 300 million francs; as economic historians,the greatest weakness in their analyses comes as a despite governmental bankruptcies,currency manipulations,and the surprise:Both of them understate the importance of capital accumulation to monumental rise in taxes,by Louis XIV's death in 1715 war-induced borrowing military expansion.As Jan de Vries says of the period after 1600: had inflated the total to about 3 billion francs,the equivalent of about eighteen years in royal revenues.8 War,state apparatus,taxation,and borrowing Looking back,one cannot help but be struck by the seemingly symbiotic advanced in tight cadence relationship existing between the state,military power,and the private Although France was precocious,it was by no means alone."Even economy's efficiency in the age of absolutism.Behind every successful more than in the case of France,"reports the ever-useful Earl J.Hamilton. dynasty stood an array of opulent banking families.Access to such bourgeois resources proved crucial to the princes'state-building and centralizing the national debt of England originated and has grown during major wars. policies.Princes also needed direct access to agricultural resources,which Except for an insignificant carry-over from the Stuarts,the debt began in could be mobilized only when agricultural productivity grew and an effective 1689 with the reign of William and Mary.In the words of Adam Smith,"it was administrative and military power existed to enforce the princes'claims.But in the war which began in 1688,and was concluded by the treaty of Ryswick the lines of causation also ran in the opposite direction.Successful state- in 1697,that the foundation of the present enormous debt of Great Britain building and empire-building activities plus the associated tendency toward was first laid. concentration of urban population and government expenditure,offered the private economy unique and invaluable opportunities to capture economies of Hamilton,it is true,goes on to quote the mercantilist Charles Davenant,who scale.These economies of scale occasionally affected industrial production complained in 1698 that the high interest rates promoted by government but were most significant in the development of trade and finance.In addition, borrowing were cramping English trade.Davenant's complaint suggests the sheer pressure of central government taxation did as much as any other however,that England was already entering Frederic Lane's third stage of economic force to channel peasant production into the market and thereby state-capital relations,when merchants and landowners receive more of the augment the opportunities for trade creation and economic specialization. surplus than do the suppliers of protection. Until the sixteenth century,the English expected their kings to live on Nor does the "symbiotic relationship"hold only for the period after 1600.For revenues from their own property and to levy taxes only for war.G.R.Elton the precocious case of France,we need only consider the increase in royal marks the great innovation at Thomas Cromwell's drafting of Henry Vlll's expenditures and revenues from 1515 to 1785.Although the rates of growth in subsidy bills for 1534 and 1540:"1540 was very careful to continue the real both regards accelerated appropriately after 1600,they also rose substantially innovation of 1534,namely that extraordinary contributions could be levied for during the sixteenth century.After 1550,the intemal Wars of Religion checked reasons other than war."10 After that point as before,however,war making the work of intemational expansion that Francis I had begun earlier in the provided the main stimulus to increases in the level of taxation as well as of century,but from the 1620'onward Louis XIll and Louis XIV (aided and debt.Rarely did debt and taxes recede.What A.T.Peacock and J.Wiseman abetted,to be sure,by Richelieu,Mazarin,Colbert,and other state-making call a "displacement effect"(and others sometimes call a "ratchet effect") wizards)resumed the task with a vengeance."As always,"comments V.G. occurred:When public revenues and expenditures rose abruptly during war, Kiernan,"war had every political recommendation and every financial they set a new,higher floor beneath which peacetime revenues and drawback." expenditures did not sink.During the Napoleonic Wars,British taxes rose from Borrowing and then paying interest on the debt accounts for much of 15 to 24 percent of national income and to almost three times the French level the discrepancy between the two curves.Great capitalists played crucial parts of taxation.1 on both sides of the transaction:as the principal sources of royal credit, True,Britain had the double advantage of relying less on expensive especially in the short term,and as the most important contractors in the risky land forces than its Continental rivals and of drawing more of its tax revenues but lucrative business of collecting royal taxes.For this reason,it is worth from customs and excise -taxes that were,despite evasion,significantly noticing that cheaper to collect than land taxes,property taxes,and poll taxes.Never- for practical purposes the national debt began in the reign of Francis 1. theless,in England as well as elsewhere,both debt and taxes rose enor- Following the loss of Milan,the key to northern Italy,on September 15,1522, mously from the seventeenth century onward.They rose mainly as a function Francis I borrowed 200,000 francs ..at 12.5 percent from the merchants of of the increasing cost of war making. Paris,to intensify the war against Charles V.Administered by the city government,this loan inaugurated the famous series of bonds based on revenues from the capital and known as rentes sue /'Hote/de Ville.'War Making and State Making as Organized Crime 179 standing mobilizers of capital. Both the trade and the capital served the purposes of ambitious rulers. By a circuitous route, that observation brings us back to the arguments of Lane and Bean. Considering that both of them wrote as economic historians, the greatest weakness in their analyses comes as a surprise: Both of them understate the importance of capital accumulation to military expansion. As Jan de Vries says of the period after 1600: Looking back, one cannot help but be struck by the seemingly symbiotic relationship existing between the state, military power, and the private economy's efficiency in the age of absolutism. Behind every successful dynasty stood an array of opulent banking families. Access to such bourgeois resources proved crucial to the princes' state-building and centralizing policies. Princes also needed direct access to agricultural resources, which could be mobilized only when agricultural productivity grew and an effective administrative and military power existed to enforce the princes' claims. But the lines of causation also ran in the opposite direction. Successful state￾building and empire-building activities plus the associated tendency toward concentration of urban population and government expenditure, offered the private economy unique and invaluable opportunities to capture economies of scale. These economies of scale occasionally affected industrial production but were most significant in the development of trade and finance. In addition, the sheer pressure of central government taxation did as much as any other economic force to channel peasant production into the market and thereby augment the opportunities for trade creation and economic specialization.5 Nor does the "symbiotic relationship" hold only for the period after 1600. For the precocious case of France, we need only consider the increase in royal expenditures and revenues from 1515 to 1785. Although the rates of growth in both regards accelerated appropriately after 1600, they also rose substantially during the sixteenth century. After 1550, the internal Wars of Religion checked the work of international expansion that Francis I had begun earlier in the century, but from the 1620' onward Louis XIII and Louis XIV (aided and abetted, to be sure, by Richelieu, Mazarin, Colbert, and other state-making wizards) resumed the task with a vengeance. "As always," comments V. G. Kiernan, "war had every political recommendation and every financial drawback.”6 Borrowing and then paying interest on the debt accounts for much of the discrepancy between the two curves. Great capitalists played crucial parts on both sides of the transaction: as the principal sources of royal credit, especially in the short term, and as the most important contractors in the risky but lucrative business of collecting royal taxes. For this reason, it is worth noticing that for practical purposes the national debt began in the reign of Francis 1. Following the loss of Milan, the key to northern Italy, on September 15, 1522, Francis I borrowed 200,000 francs ... at 12.5 percent from the merchants of Paris, to intensify the war against Charles V. Administered by the city government, this loan inaugurated the famous series of bonds based on revenues from the capital and known as rentes sue l'Hotel de Ville.7 180 Charles Tilly (The government's failure to pay those rentes, incidentally, helped align the Parisian bourgeoisie against the Crown during the Fronde, some twelve decades later.) By 1595, the national debt had risen to 300 million francs; despite governmental bankruptcies, currency manipulations, and the monumental rise in taxes, by Louis XIV's death in 1715 war-induced borrowing had inflated the total to about 3 billion francs, the equivalent of about eighteen years in royal revenues.8 War, state apparatus, taxation, and borrowing advanced in tight cadence. Although France was precocious, it was by no means alone. "Even more than in the case of France," reports the ever-useful Earl J. Hamilton, the national debt of England originated and has grown during major wars. Except for an insignificant carry-over from the Stuarts, the debt began in 1689 with the reign of William and Mary. In the words of Adam Smith, "it was in the war which began in 1688, and was concluded by the treaty of Ryswick in 1697, that the foundation of the present enormous debt of Great Britain was first laid."9 Hamilton, it is true, goes on to quote the mercantilist Charles Davenant, who complained in 1698 that the high interest rates promoted by government borrowing were cramping English trade. Davenant's complaint suggests, however, that England was already entering Frederic Lane's third stage of state-capital relations, when merchants and landowners receive more of the surplus than do the suppliers of protection. Until the sixteenth century, the English expected their kings to live on revenues from their own property and to levy taxes only for war. G. R. Elton marks the great innovation at Thomas Cromwell's drafting of Henry VIII's subsidy bills for 1534 and 1540: "1540 was very careful to continue the real innovation of 1534, namely that extraordinary contributions could be levied for reasons other than war."10 After that point as before, however, war making provided the main stimulus to increases in the level of taxation as well as of debt. Rarely did debt and taxes recede. What A. T. Peacock and J. Wiseman call a "displacement effect" (and others sometimes call a "ratchet effect") occurred: When public revenues and expenditures rose abruptly during war, they set a new, higher floor beneath which peacetime revenues and expenditures did not sink. During the Napoleonic Wars, British taxes rose from 15 to 24 percent of national income and to almost three times the French level of taxation.11 True, Britain had the double advantage of relying less on expensive land forces than its Continental rivals and of drawing more of its tax revenues from customs and excise – taxes that were, despite evasion, significantly cheaper to collect than land taxes, property taxes, and poll taxes. Never￾theless, in England as well as elsewhere, both debt and taxes rose enor￾mously from the seventeenth century onward. They rose mainly as a function of the increasing cost of war making