A Curious Miscellany of Items Philosophical, Historical, and Literary

Manus haec inimica tyrannis.

Tuesday, July 16, 2013

Chandler's Debates


I recently acquired, at a quite reasonable price, volumes 4, 6, 7, 9, and 12 of The History and Proceedings of the House of Commons, compiled and published by Richard Chandler in fourteen volumes in 1742 (I have since also acquired volumes 6, 7, and 8 of Ebenezer Timberland’s companion History and Proceedings of the House of Lords, also published in 1742). Chandler’s Debates, as they are more commonly known, were what passed for Hansard before the latter began official publication in 1803. They were mostly compiled from newspaper reports, supplemented by notes of proceedings kept by members, along with speeches submitted to the journals for publication by the writers themselves. Chandler’s Debates were neither thorough nor entirely accurate, but it was largely the only game in town if you wanted to know what went in in the House of Commons.

Now, even for someone like me, who is sunk quite deep in the history and literature of 18th-century Britain, Chandler’s Debates can make for some rather dry reading. I have just finished volume 4, and I can tell you, there is a sort of tedious “tick-tock” quality to the work: the Queen’s gracious address to the Commons (tick), followed by the address of thanks from the Commons to Her Majesty on her late gracious address (tock); list of Bills given royal assent that session (tick), followed by prorogation (tock), etc. Because it is the history of procedure, it has a mechanical quality, as all procedure does.

This monotonous rhythm is typically only broken up by a notable speech here, or a rumour of a French invasion there. And always there are excruciatingly detailed statements of revenue (“the Produce of the Fines arising in the Alienation-Office, including the necessary Expences of the Court of Chancery, and other Charges borne thereout, is by a Medium, 4,804 l.”) and expense (“to discharge Malt Tickets, issued 8 W[illiam III]., besides 254,557 l. for 6 years Interest, the principal Sum of 579,000 l.”).

Gripping stuff, no? And yet, there are little treasures to be gleaned from these volumes.

Parliamentary Eloquence

For instance, one comes across speeches that have undeservedly fallen into obscurity. Political speeches are unfortunately like the flies of a summer; they have their day, hatching in the heat of a political occasion, nourished by the warm excrement of politicking, and dying off along with the season. There are of course exceptions to this general rule.

In our day, eloquent and moving political oratory has almost ceased to exist. I’ve said this before, but I’ll say it again: the only reason Barack Obama has a reputation for oratory is because there really are no orators left. As the proverb says, “in the kingdom of the blind, the one-eyed man is king.” I remember how shortly after the September 11 attacks, Tony Blair was described by a CBC reporter as having given a speech “of Ciceronian eloquence” on the subject. I heard that speech, and I don’t know which I found more surprising, the fact that such a bloodless and lacklustre performance could be described in such glowing terms, or the fact that a CBC reporter might actually have had a vague inkling of who Cicero was.

Many of the scattered speeches in Chandler’s Debates have the power to remind one that there was a time, unfortunately before living memory, when not every politician was a rhetorical dullard. As an example, I submit to you Lord Belhaven’s 1706 “Mother Caledonia” speech to the Scottish Parliament on the Act of Union, which opens volume 4 of Chandler’s Debates. Technically, it doesn’t belong there at all, since it was not delivered at Westminster, but Chandler included it anyway, because it “deserves to be forever remember’d.”

Belhaven was against the union with England. Now, a modern politician would probably have made it a “bread and butter” issue, offering arguments showing how the union would destroy national autonomy, increase taxes, or be detrimental to trade and the economy, with appropriate statistics cherry-picked to back up his case. If he were particularly clever, he might throw in a cheap and clumsy ad hominem against his opponents too.

Belhaven avoids ad hominem attacks. He doesn’t weary the listener with statistics on national revenue and trade. He rather appeals to the heart, which is really the only way to sway an assembly, since appeals to rationality rarely move the party spirit from its fixed purposes. Belhaven begins by framing his argument in the form of a vision, of a future Scotland, after the nation and its trade and economy have been dismantled:

“I think I see a free and independent Kingdom delivering up that, which all the world hath been fighting for since the Days of Nimrod; yea, that for which most of all the Empires, Kingdoms, States, Principalities, and Dukedoms of Europe, are at this time engaged in the most bloody and cruel Wars that ever were, to wit, a Power to manage their own Affairs by themselves, without the Assistance and Counsel of any other.”

He then describes his vision of the various classes of Scotland from the highest peers to the lowest day-labourer, emasculated, corrupted, hungry, cheated:

“I think I see the honest industrious Tradesman loaded with new Taxes and Impositions, disappointed of the Equivalents, drinking Water in place of Ale, eating his saltless Pottage, petitioning for Encouragement to his Manufactures, and answered by Counter-Petitions…. In short, I think I see the laborious Ploughman, with his Corn spoiling upon his Hands, for want of Sale, cursing the Day of his Birth, dreading the Expence of his Burial, and uncertain whether to marry or do worse. I think I see the incurable Difficulties of the Landed-Men, fettered under the Golden Chain of Equivalents, their pretty Daughters petitioning for want of Husbands, and their Sons for want of Employment.”

He goes on like this, in a slow burn, steadily building to that crescendo which gave the speech its name:

“But above all, my Lord, I think I see our ancient Mother CALEDONIA, like C├Žsar, sitting in the midst of our Senate, ruefully looking round about her, covering herself with her royal Garment, attending the fatal Blow, and breathing out her last with an et tu quoque mi fili.”

And lest his hearers should forget the urgency and import of the question they are to decide, Belhaven brings it home, into the very room where they sit:

“Hannibal, my Lord, is at our Gates, Hannibal is come within our Gates, Hannibal is come the length of this Table, he is at the Foot of this Throne, he will demolish this Throne; if we take not notice, he’ll seize upon these Regalia, he’ll take them as our spolia opima, and whip us out of this House, never to return again.”

All through the speech, there is a running simile, wherein voting in favour of the Act of Union is characterized as a particularly loathsome kind of murder. The Romans, says Belhaven, reserved the most severe form of punishment for he who was guilty of parricide, of killing his father. Such an abomination was sewn up into a sack with a snake, a cock, and an ape, and thrown into the Tiber. How much worse punishment, Belhaven asks, do those merit who are guilty of patricide, of murdering their fatherland? Patricide, he says, is what the house is essentially contemplating, and those who vote in favour of union make themselves guilty of it.

I can’t remember ever hearing anything close to this kind of eloquence in the Canadian House of Commons in my lifetime.

The Ancient Fiscal Constitution

There are also lessons to be learned from Chandler’s Debates on how to manage the national finances.

When a government today wishes to enact a spending measure, what does it do? Well, generally speaking, and assuming it has decided for whatever reasons that the measure is a good idea, it simply estimates the cost and adds it as an item to the budget of the department concerned (this is of course somewhat oversimplified, but pretty accurate in the main).

And when a modern government adds all these items of expenditure up and finds that this column totals more than the other column in the budget (you know, the one containing estimated revenue), what does it do? Well, it depends. If, as in the United States, the expenditure in question won’t come due for several years yet (as is the case with social security and other similar unfunded entitlements), then it does nothing; it simply ignores it until it becomes some other future government’s problem.

If time does not allow for the American-style “kick-the-can-down-the-road” approach to public finance, then the new expenditure can be financed by:

1. Borrowing the money.

2. Making the new expenditure self-financing. Examples would be instituting a postal service by charging customers for delivery, or instituting a customs service whose agents are paid from the proceeds of confiscated goods.

3. Introducing a new source of revenue to pay for it. This needn’t be a tax — government lotteries were increasingly popular in the 18th century.

The first way seems to be the most common today, but it was not always thus. In Chandler’s Debates one realizes that 2 and 3 were far more common. If old churches needed to be repaired or new ones built, then perhaps a dedicated excise tax might be placed on all spirituous liquors. Sometimes the introduction of such a new tax betrays a fairly sophisticated understanding of policy analysis, as when war with France is partly financed by a punitive 25% duty on all goods imported from France. Here, any comparative success France enjoys in trade will contribute to Britain’s comparative military success, which is fairly clever when you think that today Britain would be more likely to simply impose a complete embargo on all enemy goods.

And in the 18th century, when the government had recourse to 3, there are a couple of ways in which it was done that differed from the way it is often done today. First, the new revenue stream was dedicated: if an excise was raised or a lottery set up to pay for road repairs, then that money went into a fund to pay for road repairs, not to wage war with France. It did not go into general revenues. As a matter of fact, the very idea of a “general revenue” was not very prominent in 18th century public finance.

(Indeed, I suspect that our propensity to think in general revenue terms is partly a product of the development of the income tax as the primary source of revenue: when the lion’s share of the treasury is made up from one source, then that source tends to be thought of as the de facto “general revenue”. I leave it to empirical research to discover whether this way of thinking is a cause or consequence also of the decreasing reliance on dedicated revenue streams.)

There is wisdom in this way of doing things. The ideal of having each item of expenditure financed by a corresponding dedicated revenue stream meant that there was a close relationship between the revenue and expenditure columns of the public accounts. The totals at the bottom of the two columns may not have always balanced exactly, but they would typically be a lot closer, especially over the long run. The modern custom tends to treat the two columns as conceptually unrelated. Viewing the expenditure side as being indefinitely expandable through borrowing, creates a situation in which revenue and expense have become uncoupled.

Furthermore, when a proposed expenditure is required to be met by a dedicated revenue stream, it is as if the public is simultaneously receiving a good or service and the bill for it. Do I like having well-maintained roads enough to cheerfully pay the 10% excise tax on my wine and beer? It enables citizens to be better informed of the value of publicly-provided goods and services and it (hopefully) enables politicians to make better choices about how to spend money. Under the modern finance regime, you are offered spending proposals by entrepreneurial politicians without being given a clear indication of what your share of the bill will be (or your children’s share, as the case may be). Price signals under the modern fiscal regime are hopelessly opaque. This distorts decision-making.

The second way in which the 18th-century method of raising revenue differed from the modern is that the new tax was typically closed- rather than open-ended: if the proposed road repairs were estimated to take two years, then the excise financing them would run for only two years (or however long it had to run to make good the cost of repairs). This time limit was expressly included in the legislation instituting the tax. This had the effect of curbing the “ratchet effect”, whereby new taxes are piled on top of old ones, with taxation eating up a growing share of national GDP (see Addendum 1, below). Taxation today tends to be open-ended; an incidental tax here and there may be repealed, but the overall level of taxation tends ever upward.

I have spoke at some length of revenue generation. However, I do not wish to give the impression that the British government in the 18th century never borrowed to pay for its activities. Deficit financing is not new. Then as now there were occasionally large contingencies that simply could not be paid for by the immediate imposition of taxes without doing more harm than good. Such was the case with the growing cost of the War of the Spanish Succession against France and her allies. This was essentially a Europe-wide war that dragged on for over a dozen years and took a severe toll on national finances. Despite generally prudent fiscal practices, 18th-century British governments were forced to borrow large sums.

Nevertheless, even in their borrowing, 18th-century governments seemed to possess a prudence lacking in modern public finance. When was the last time you heard the word “sinking fund” uttered by a minister of finance? In the past, it sometimes so happened that a dedicated stream of revenue would produce greater funds than expected or required to pay for its mandated expenditure. Typically, this money would be put into a sinking fund, the purpose of which was to redeem government bonds and retire debt. Often, where there was a plan to borrow money to finance an endeavor, such a sinking fund would also be mandated to pay down that debt according to a fixed schedule at the very same time the debt was incurred. Today, whenever there is a budget surplus (an admittedly rare occurrence under the modern fiscal constitution), great pressure is exerted by entrepreneurial politicians to apply the windfall to an expansion of spending. In the 18th century there would often be legislation that already earmarked it for debt retirement ahead of time, foreclosing the schemes of such entrepreneurial politicians.

(Of course, in practice it was not always that smooth: then as now, the temptation to raid a pot of surplus funds to pay for current exigencies was often too much for governments to resist. The difference is that in the past surpluses were spoken for before they even accrued, whereas today they become a political prize for politicians to fight over. And in theory at least, having clear sinking fund provisions should reduce the perceived credit risk of accepting government debt in the first place, thereby lowering the government’s cost of borrowing. At least, that is the theory; I leave it to abler minds than mine to prove or disprove it.)

All of these characteristics of 18th-century public finance make up what, paraphrasing James M. Buchanan, we might call the “ancient fiscal constitution” (see Buchanan’s Democracy in Deficit: The Legacy of Lord Keynes). To reiterate, these characteristics are:

  1. A preference for financing through dedicated revenue streams
  2. A systematic relationship between revenue and expense columns
  3. Revenue streams that are closed-ended
  4. Debt retirement through a sinking fund
It is worth noting that these characteristics were more a matter of custom and habit, a sort of generally accepted public-sphere morality. Sometimes there were deviations from this morality, and it was not enforced by some supreme lawgiver. Like all moralities, it was necessarily fragile, and contingencies gradually broke it down.

Addendum 1: Clarendon and the Excise

I recently came across the following little gem towards the end of Book VII of Lord Clarendon’s History of the Rebellion and Civil Wars in England. It is an early illustration of that “ratchet effect” spoken of earlier. When you read it, you might want to reflect upon how the income tax, introduced during World War One, was intended to be a temporary measure only.

Clarendon writes that in 1643 Parliament “laid an imposition, which they called an excise, upon wine, beer, ale, and many other commodities… for carrying on the war. This was the first time that ever the name of payment of excise was heard of or practiced in England.” The King’s side followed their lead, and “in Oxford, Bristol, and other garrisons, it did yield a reasonable supply for the provision of arms and ammunition; which, for the most part, it was assigned to; both sides making ample declarations, with bitter reproaches upon the necessity which drew on this imposition, ‘that it should be continued no longer than to the end of the war, and then laid down, and utterly abolished;’ which few wise men believed it would ever be.”

Addendum 2: “The Norfolk Steward”

Lest you think that I look upon the 18th-century as a Golden Age of public finance, I offer the following little gem to illustrate that even then, enterprising and unscrupulous politicians were quite capable of cooking the public books. It is extracted from “The History of the Norfolk Steward”, appearing as an Appendix to volume 3 of the collected Craftsman papers (London: R. Francklin, 1731).

The story is this: Mr. Lyn is steward to kindly Sir George English. It seems that the estate is being grossly mismanaged and run into debt, and the rack-rented tenants are grumbling. They are pressing Sir George to replace his incompetent steward. They repeatedly ask Lyn for a full accounting of Sir George’s affairs. Lyn avoids submitting his accounts for as long as he can, all the while claiming that as great as the debt may seem, it is greatly reduced from what it had been the decade previous. Thus, you see, all is not as bad as it may seem on paper.

Undeterred, the tenants continue to press him for full disclosure, in which demands Sir George concurs. Finally, being able to put it off no longer, the steward — too clever by half — submits his accounts, but with an explanation of the rather unorthodox method he has used to arrive at them.

The tale of the Norfolk Steward is allegorical. Mr. Lyn represents Prime Minister Robert Walpole, since Lyn is a town in Norfolk, and the “Norfolk mortgage” represents Walpole’s own constituency, since he was a Norfolk man and commonly stood accused of enriching himself and his cronies at the expense of the nation. Sir George English represents the King, and of course, the grumbling tenants represent the people of Great Britain. I leave you to reflect on whether Mr. Lyn’s accounting is not a piece of political cant as poetically sublime as Donald Rumsfeld’s “known unknowns” and “unknown unknowns”:

“There is not, perhaps, so great a Master in Europe of the grand Art of Bambouzle as Mr. Lyn. Though, said He, there are new Debts incurr’d, the old Debt is not increas’d. There are real Debts and nominal Debts. There are real nominal Debts, and nominal real Debts. There are family Debts and personal Debts; which, though the Family must pay, ought not to be brought to the Family Account. There are Debts never stated, tho’ incurred; and Debts which, tho’ incurred and stated, might never be paid; so that, upon the whole, you see, Gentleman, I have paid off a considerable Part of the Mortgage upon Sir George’s Estate. But when he was told, that tho’ it was true that Part of the Norfolk Mortgage was paid off, yet Sir George was really now as much in debt as before; because Mr. Lyn, to perform this mighty Deed, had borrow’d just as much upon Sir George’s Estate in Leicestershire, as he had paid off in Norfolk, so that the Ballance continued as before; he broke into a loud Laugh, and told the Tenants they knew nothing of Accounts, nor the difference between a Debt incurred and a Debt increased…. Nay, what is still more extraordinary, he stated his Account of Debts contracted to Christmas last only; whereas he calculated the Sum of Debts discharged to Lady-day next; a Method of stating and ballancing Accounts, which was never before practiced or heard of in these Parts!”