Saturday, June 08, 2024

Ancient Roman Oligarchs Avoided Tax


Liability and  Restrictions on Land Size


 
JUNE 7, 2024
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Roman land tenure was based increasingly on the appropriation of conquered territory, which was declared public land, the ager publicus populi. The normal practice was to settle war veterans on it, but the wealthiest and most aggressive families grabbed such land for themselves in violation of early law.

Cassius’ Indecent Proposal

The die was cast in 486 BC. After Rome defeated the neighboring Hernici, a Latin tribe, and took two-thirds of their land, the consul Spurius Cassius proposed Rome’s first agrarian law. It called for giving half the conquered territory back to the Latins and half to needy Romans, who were also to receive public land that patricians had occupied1. But the patricians accused Cassius of “building up a power dangerous to liberty” by seeking popular support and “endangering the security” of their land appropriation. After his annual term was over he was charged with treason and killed. His house was burned to the ground to eradicate memory of his land proposal (Livy, History of Rome 2.41).

Patricians Versus Plebs

The fight over whether patricians or the needy poor plebians would be the main recipients of public land dragged on for 12 years. In 474 the commoners’ tribune, Gnaeus Genucius, sought to bring the previous year’s consuls to trial for delaying the redistribution proposed by Cassius (Livy 2.54 and Dionysius 9.37-38). He was blocked by that year’s two consuls, Lucius Furius and Gaius Manlius, who said that decrees of the Senate were not permanent law, “but measures designed to meet temporary needs and having validity for one year only.” The Senate could renege on any decree that had been passed.

A century later, in 384, M. Manlius Capitolinus, a former consul (in 392) was murdered for defending debtors by trying to use tribute from the Gauls and to sell public land to redeem plebian debts, and for accusing senators of embezzlement and urging them to use their takings to redeem debtors. It took a generation of turmoil and poverty for Rome to resolve matters. In 367 the Licinio-Sextian law limited personal landholdings to 500 iugera (125 hectares, under half a square mile; see Livy 6.35-36). Indebted landholders were permitted to deduct interest payments from the principal and pay off the balance over three years instead of all at once.

Gifts of Land

Most wealth throughout history has been obtained from the public domain, and that is how Rome’s latifundia were created. The most fateful early land grab occurred after Carthage was defeated in 204. Two years earlier, when Rome’s life-and-death struggle with Hannibal had depleted its treasury, the Senate had asked families to voluntarily contribute their jewelry or other precious belongings to help the war effort. Their gold and silver were melted down in the temple of Juno Moneta to strike the coins used to hire mercenaries.

Upon the return to peace, the aristocrats depicted these contributions as having been loans, and convinced the Senate to pay their claims in three installments. The first was paid in 204, and a second in 202. As the third and final installment was coming due in 200, the former contributors pointed out that Rome needed to keep its money to continue fighting abroad, but had much public land available. In lieu of cash payment they asked the Senate to offer them land located within fifty miles of Rome, and to tax it at only a nominal rate. A precedent for such privatization had been set in 205 when Rome sold valuable land in the Campania to provide Scipio with money to invade Africa.

The recipients were promised that “when the people should become able to pay, if anyone chose to have his money rather than the land, he might restore the land to the state.” Nobody did, of course. “The private creditors accepted the terms with joy; and that land was called Trientabulum because it was given in lieu of the third part of their money” (Livy 28.46).

Latifundia Changed Rome’s Economy Forever

Arnold Toynbee2 describes this giveaway of Rome’s ager publicus as the turning point polarizing its economy by deciding, “at one stroke, the economic and social future of the Central Italian lowlands.” Most of this land ended up as latifundia cultivated by slaves captured in the wars against Carthage and Macedonia and imported en masse after 198. This turned the region into “predominantly a country of underpopulated slave-plantations” as the formerly free population was driven off the land into overpopulated industrial towns. In 194 and again in 177 the Senate organized a program of colonization that sent about 100,000 peasants, women, and children from central Italy to more than twenty colonies, mainly in the far south and north of Italy. Some settlers lost their Roman citizenship, and they must have remained quite poor as the average land allotment was small.

The Gracchi and Civil War

In 133, Tiberius Gracchus advocated distributing ager publicus to the poor, pointing out that this would “increase the number of property holders liable to serve in the army.” He was killed by angry senators who wanted the public land for themselves. Nonetheless, a land commission was established in Italy in 128, “and apparently succeeded in distributing land to several thousand citizens” in a few colonies, but not any land taken from Rome’s own wealthy elite. The commission was abolished around 119 after Tiberius’s brother Gaius Gracchus was killed.3

Appian (Civil Wars 1.1.7) describes the ensuing century of civil war as being fought over the land and debt crisis.

“For the rich, getting possession of the greater part of the undistributed lands, and being emboldened by the lapse of time to believe that they would never be dispossessed, absorbing any adjacent strips and their poor neighbors’ allotments, partly by purchase under persuasion and partly by force, came to cultivate vast tracts instead of single estates, using slaves as laborers and herdsmen, lest free laborers should be drawn from agriculture into the army. At the same time the ownership of slaves brought them great gain from the multitude of their progeny, who increased because they were exempt from military service. Thus certain powerful men became extremely rich and the race of slaves multiplied throughout the country, while the Italian people dwindled in number and strength, being oppressed by penury, taxes and military service.”

How Land Changed Rome’s Army

Dispossession of free labor from the land transformed the character of Rome’s army. Starting with Marius, landless soldiers became soldati, living on their pay and seeking the highest booty, loyal to the generals in charge of paying them. Command of an army brought economic and political power. When Sulla brought his troops back to Italy from Asia Minor in 82 and proclaimed himself Dictator, he tore down the walls of towns that had opposed him, and kept them in check by resettling 23 legions (some 80,000 to 100,000 men) in colonies on land confiscated from local populations in Italy.

Sulla Steals Estates and Sells Them for Support

Sulla drew up proscription lists of enemies who could be killed with impunity, with their estates seized as booty. Their names were publicly posted throughout Italy in June 81 BC, headed by the consuls for the years 83 and 82, and about 1,600 equites (wealthy publican investors). Thousands of names followed. Anyone on these lists could be killed at will, with the executioner receiving a portion of the dead man’s estate. The remainder was sold at public auctions, the proceeds being used to rebuild the depleted treasury. Most land was sold cheaply, giving opportunists a motive to kill not only those named by Sulla, but also their personal enemies, to acquire their estates. A major buyer of confiscated real estate was Crassus, who became one of the richest Romans through Sulla’s proscriptions.

By giving his war veterans homesteads and funds from the proscriptions, Sulla won their support as a virtual army in reserve, along with their backing for his new oligarchic constitution. But they were not farmers, and ran into debt, in danger of losing their land. For his more aristocratic supporters, Sulla distributed the estates of his opponents from the Italian upper classes, especially in Campania, Etruria, and Umbria.

Battle of Generals

Caesar likewise promised to settle his army on land of their own. They followed him to Rome and enabled him to become Dictator in 49. After he was killed in 44, Brutus and Cassius vied with Octavian (later Augustus), each promising their armies land and booty. As Appian (Civil Wars 5.2.12-13) summarized: “The chiefs depended on the soldiers for the continuance of their government, while, for the possession of what they had received, the soldiers depend on the permanence of the government of those who had given it. Believing that they could not keep a firm hold unless the givers had a strong government, they fought for them, from necessity, with good-will.” After defeating the armies of Brutus, Cassius, and Mark Antony, Octavian gave his indigent soldiers “land, the cities, the money, and the houses, and as the object of denunciation on the part of the despoiled, and as one who bore this contumely for the army’s sake.”

Imperial Estates

The concentration of land ownership intensified under the Empire. Brown4notes that by the time Christianity became the Roman state religion, North Africa had become the main source of Roman wealth, based on “the massive landholdings of the emperor and of the nobility of Rome.” Its overseers kept the region’s inhabitants “underdeveloped by Roman standards. Their villages were denied any form of corporate existence and were frequently named after the estates on which the villagers worked, held to the land by various forms of bonded labor.”

A Christian from Gaul named Salvian5 described the poverty and insecurity confronting most of the population ca. 440:

“Faced by the weight of taxes, poor farmers found that they did not have the means to emigrate to the barbarians. Instead, they did what little they could do: they handed themselves over to the rich as clients in return for protection. The rich took over title to their lands under the pretext of saving the farmers from the land tax. The patron registered the farmer’s land on the tax rolls under his (the patron’s) own name. Within a few years, the poor farmers found themselves without land, although they were still hounded for personal taxes. Such patronage by the great, so Salvian claimed, turned free men into slaves as surely as the magic of Circe had turned humans into pigs.”

Church Estates

Church estates became islands in this sea of poverty. As deathbed confessions and donations of property to the Church became increasingly popular among wealthy Christians, the Church came to accept existing creditor and debtor relationships, land ownership, hereditary wealth, and the political status quo. What mattered to the Church was how the ruling elites used their wealth, regardless of how they obtained it as long as it was destined for the Church, whose priests were the paradigmatic “poor” deserving of aid and charity.

The Church sought to absorb local oligarchies into its leadership, along with their wealth. Testamentary disposition undercut local fiscal balance. Land given to the Church was tax-exempt, obliging communities to raise taxes on their secular property in order to maintain their flow of public revenue (many heirs found themselves disinherited by such bequests, leading to a flourishing legal practice of contesting deathbed wills). The Church became the major corporate body, a sector alongside the state. Its critique of personal wealth focused on personal egotism and self-indulgence, nothing like the socialist idea of public ownership of land, monopolies, and banking. In fact, the Crusades led the Church to sponsor Christendom’s major secular bankers to finance its wars against the Holy Roman Emperors, Moslems, and Byzantine Sicily.

Notes.

1. Roman Antiquities by Dionysius of Halicarnassus, 8.77.2.
2. Hannibal’s Legacy by Arnold Toynbee, 1965, II: pp. 250-51 and pp. 341-373.
3. Conquerors and Slaves by Keith Hopkins, 1978, pp. 61-63.
4. Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 AD by Peter Brown, 2012, pp. 330, 366, and 327.
5. De gubernatione Dei (“The Government of God”) 5.9.45, paraphrased and discussed in Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 AD by Peter Brown, 2012, pp. 433-450.

This article was produced by Human Bridges.

Michael Hudson’s new book, The Destiny of Civilization, will be published by CounterPunch Books next month.

El Salvador Braces for Five More Years of the World’s Self-Proclaimed “Coolest Dictator”


 
 JUNE 7, 2024

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Earlier this year, El Salvadoran president Nayib Bukele won reelection by a wide margin. His Nuevas Ideas party also won 54 of the 60 seats in the Legislative Assembly and the vast majority of the country’s mayorships. His power is now almost absolute.

But the elections were marred by a large number of irregularities documented by the Organization of American States, damaging Bukele’s international reputation. Could it be a sign of troubles to come?

Bukele officially began his second five-year term on June 1. He’s probably the most popular president in Latin America due to his success in quelling gang violence in the country.

But the fact that he broke El Salvador’s constitution to allow himself a second term, along with the large number of human rights violations and lack of transparency during his “state of exception,” is leading to international criticism. The Canadian government, for example, refrained from congratulating Bukele after the election. And Bukele’s government remains unable to attract the foreign investment it craves.

Approximately 80,000 people have been detained under Bukele’s “state of emergency” since March 2022. Estimates for how many of those people are innocent range from 30 to 70 percent.

Those arrested include leaders of dozens of unions and civil organizations, among them five environmentalists and water defenders from Santa Marta in the Department of Cabañas. Organizations from many countries have dedicated the last year and a half to an international campaign under the leadership of John Cavanagh, former director of the Institute for Policy Studies — and co-author, with Robin Broad, of The Water Defenders —  to get the charges dropped.

At a press conference held by social and civil organizations on May 30, Ivania Cruz — a member of United for Human and Community Rights (UNIDEHC), which is part of the Popular Resistance and Rebellion Bloc — said that “there is a deterioration of the rule of law and the country’s institutions.” She warned that “the repression of the most vulnerable sectors of the population is increasing through unjust arrests and the elimination of all guarantees for all citizens.”

Roberto Zapata of the organization AMATE (Love Yourself) denounced Bukele as part of an ultraconservative wave in the region — also including governments in Argentina, Peru, and Ecuador — against human rights for LGBTQ people. He mentioned that there are 132 registered cases of legal actions against LGBTQ people and recalled that Bukele pronounced himself against “gender ideology,” calling it “contrary to nature.”

Salomón Alfaro of the Movement of Dismissed Workers said that he is one of the 21,000 workers dismissed from public institutions without any of the procedures that the law dictates. “This government wants to control everyone, disappearing institutions and union structures,” he said. “So far 22 unions have been eliminated.”

Tutela Legal, an organization of Salvadoran human rights lawyers, remains extremely busy helping to defend innocent people and civil society leaders. International organizations have worked with them on an amicus brief for the five water defenders to be submitted to the Inter-American Commission on Human Rights.

Meanwhile, the Association for Economic and Social Development of Santa Marta (ADES) continues to lead the defense of the five water defenders. ADES and many international organizations have documented the Bukele government’s efforts to overturn a hard-won law that banned metallic mining in the country in 2017.

At the press conference, ADES leader Vidalina Morales expressed her concern about the possible reopening of mining in El Salvador and the growing interest in the mineral thorium, in addition to gold. She denounced the criminalization of struggles against extractive projects as a desperate response to the failure of Bukele projects such as Bitcoin or Surf City. Bukele, she says, “is selling the country to the highest bidder and will do with it whatever he wants.”

In May, the Bukele government initiated a trial against the five water defenders of Santa Marta for an alleged murder during the country’s civil war, despite the fact that there’s no proof for the allegations — and in violation of the amnesty passed as part of the peace accords that ended the fighting.

In a show of international solidarity, representatives of embassies from Canada, France, the United Kingdom, and the European Union attended the first hearing of the trial, warning the Salvadoran government that the world is watching. Advocates have tried to inform other governments, such as Mexico and the United States, about the general crisis of human rights and democracy in El Salvador.

Organizations in El Salvador are concerned about the possibility of an even greater wave of arrests of civil society leaders during Bukele’s second term. They’re hoping that international solidarity will help curb his abuses.

As Alexis Stoumbelis of the International Committee in Solidarity with the People of El Salvador (CISPES) said, “thanks to the work of journalists and human rights organizations, the world knows about the violations committed by Bukele.” How long will governments like Mexico and the United States continue to turn a blind eye to the self-proclaimed “coolest dictator in the world”?

A version of this article originally appeared in Spanish in La Jornada.

The Necessary State: the Market Can’t

Deliver the Energy Transition

 

JUNE 7, 2024
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A serious look at the state of global energy presents something of a double-edged sword. On one hand, 2023 was another record year for renewable installations worldwide. An estimated 507 GW (gigawatts) of new generation capacity was installed a 50 percent increase from 2022. On the other hand, according to estimates by the International Energy Agency (IEA), electricity generation from coal and gas, along with total power sector CO2 emissions, continued to grow in 2023 reaching an all-time high of 17,252 TWh (Terawatt hours). The dirtiest of all fossil fuels is coal. Coal production also marked an all-time high in 2023 and the world’s most populous nations are highly dependent on it. Coal accounts for over half of India’s energy usage. China is by far the world’s largest user of coal (roughly 65 percent of China’s energy) and coal accounts much of Indonesia’s energy, where usage has doubled over the past decade. In other words, despite renewables growing fast, it isn’t happening fast enough. The IEA’s 2023 World Energy Report estimates that nearly 80 of global energy still comes from fossil fuels.

Now consider this: Over 3 billion people on the planet still live without a consistent source of electricity- in places where per-capita electricity consumption is less than 1,000 kilowatt-hours per year, or less than the amount used by a decent refrigerator. That includes about a billion people with no access to electricity at all. Average consumption per person in sub-Saharan Africa is only about 185 KWh (kilowatt-hours) a year, compared with 12,000 kWh in the U.S. and 6500 KWh in Europe. In December 2023, the World Health Organization (WHO) reported that around 2.3 billion people still cooked using open fires or with inefficient stoves powered by wood or charcoal. Such a method is more carbon-intensive than burning coal and the resulting household air pollution causes an estimated 3.2 million deaths a year (including over 237,000 children under the age of 5 in 2020).

Poverty is short for being energy-poor. Energy is saved time, reduced drudgery, healthcare, and opportunity. Global electricity demand figures to double in the next 15-20 years if not sooner. The bulk of carbon missions now are emitted by developing countries. In fact, in 2023 the world’s annual CO2 emissions increased by 398 million metric tons. China and India accounted for more than 100 percent of that increase- meaning if China and India were taken out the equation, global emissions would have actually fallen last year.

Last November, the UN reported that aid for climate adaptation in developing countries fell to $21 billion in 2021, the latest year for which comprehensive data is available. The report found that developing nations will needs between $215 billion and $387 billion annually to protect against climate shocks- that’s as much as 18 times greater than the committed amount of 2021.

It is the essence of market economics that profit be pursued above all else even if the pursuit of said profit harms society in general. Fossil fuels, due to their flexibility and energy density, largely freed our species from a dependence on the whims of Mother Nature and local geography, but greenhouse gases that are emitted from their continued use will shift the planet from the average temperature that has allowed human flourishing since the last ice age. Therefore, their use needs to be minimized as soon as possible.

Much has been made in recent times that the price of producing renewables is currently cheaper than fossil fuels. However, as Brett Christophers thoroughly explains in his new book The Price is Wrong: Why Capitalism Won’t Save the Planet, this fact overlooks the question of profit. While, Christophers explains, there is no single, consistent answer to investor returns on renewables, which vary historically and geographically, most analysis conclude that an internal rate of return of 5-8 percent is what investors on average expect and achieve (in terms of deploying the energy). Yet in the U.S. big oil and gas companies typically don’t pursue new hydrocarbon projects unless anticipated returns are at least 15 percent.

In March 2023, the Financial Times reported on a survey where over three-quarters of energy executives surveyed pointed to limited return on investment as a leading barrier to pumping money into clean energy. ‘We don’t have a shortage of capital, we have a shortage of returns’, Joe Scalise, head of Bain’s Global Energy & Natural Resources practice explained.

In the meantime, while it is certainly true that China is burning mountains of coal, China is also responsible for most of the world’s progress on renewables, including nearly 80 percent of the 50 percent increase reported by the IEA. The difference is the role of the state and planning. Nine out of 10 of China’s top wind developers are owned by the government.  In 2021, China’s President Xi Jinping announced plans for huge ‘clean energy bases’ to be built in Gobi and other desert areas by 2030. When completed these bases will have a combined capacity higher than Europe’s current total solar and wind capacity.

China also boosts an impressive capacity for building nuclear plants. Since the start of 2022, China has completed an additional five domestic reactor builds, with their completion times ranging from just under five years to just over 7 years. Countries with high Human Development Index (HDI) values that have successfully, or at least largely, decarbonized their electric grids such as Iceland, Sweden, Norway, and France have done so through a mix of hydro, geothermal, and nuclear (so have countries lower on the HDI scale such as Paraguay, Costa Rica, and Kenya). In this context, the Biden administration’s Inflation Reduction Act is a positive step. However, the public sector needs to take a much more assertive role. The largest historical drop in carbon intensity of any economy was France’s nuclear energy program of the late 1970s and early 1980s, a centralized, government-led effort.

Energy is often conflated with electricity; however, it is an oft-overlooked fact that electricity makes up only about 22 percent of energy usage worldwide. Even with the grand mission to ‘electrify everything’, the IEA generously estimates that by 2050 electricity will still only account for about half of energy usage. A majority of carbon emissions are used to produce things like concrete and steel- together they make up about 16 percent of emissions worldwide. Plastic accounts for 3-4 percent.

Before these sectors are dismissed as first-world excess, consider that one of the biggest problems for young children in poor countries is intestinal parasites. These parasites usually live in feces, which often gets brought into the home on the bottom of someone’s feet. If the home has a dirt floor, the parasites can go undetected longer and infect more children. A few years ago, when Mexico began providing families with cement to pave over dirt floors, the number of parasitic infections dropped by 78 percent. Replacing dirt tracks with paved roads has been shown to increase the wages of those living nearby by more than a quarter along with the proportion of children enrolled in school. A point well made by Ed Conway in his book Material World: The Six Raw Materials That Shape Modern Civilization, is how much steel a country has to build hospitals, as well as homes, railways and bridges can be as useful a metric as measuring GDP. The average person living in sub-Saharan Africa has less than a ton of steel per capita as opposed to 15 tons per person in rich countries. Look around a hospital and see the significance of plastic.

The ‘Haber-Bosch’ process and the synthetic ammonia fertilizer it produces is dependent on natural gas. It is responsible for around 2 percent of carbon emissions and energy expert Vaclav Smil estimates that it would be impossible to feed 40 to 50 percent of the global human population without it. What is known as Bennett’s Law posits that the consumption of protein and fat (i.e. meat) rises with people’s incomes. It has proven to be a truism thus far. Meat consumption has skyrocketed in China in recent decades. Since 1990 it has nearly doubled in Brazil. This does not figure to change any time soon. Luxuries being desirable, they change into necessities whenever possible. The Food and Agriculture Organization (FAO) estimates that consumption of beef, pork, and chicken in Africa will all increase by at least 20 percent by 2050.

There is a substantial effort being made to decarbonize and scale up greener versions of these sectors (Lab grown meat, green steel, improved recycling, etc.). Obviously, the challenge remains monumental. Public investment and planning is again critical. These are exactly the sort of public moonshots that the Left can get behind. Such public investment can be tied to required union jobs and publically-owned utilities. The point has always been abundance for all. Such remains the worthiest of goals in the midst of the energy transition.

Joseph Grosso is a librarian and writer in New York City. He is the author of Emerald City: How Capital Transformed New York (Zer0 Books).