Payback: Debt and the Shadow Side of Wealth (14 page)

“Excuse me,” my friend would say to the collection caller. “I understand why you have to call me, but I object to your tone of voice. There is no need for you to be rude. If it weren’t for people like me, people like you wouldn’t have a job. So call, by all means, but please be polite about it.”

“Oh. All right,” said the collections agency caller, seeing the logic of the position. And, this being Canada, he was indeed polite from then on.

Nowadays, those drowning in debt have a resource that wasn’t always available in the past: they can declare personal bankruptcy and more or less walk away from the whole mess. There are agencies that will help you do this, for a cut. “Settle for less than you owe,” coo the subway advertisements. True, there are drawbacks — your credit rating will be affected, and you’ll lose some of your flashier toys — but you won’t be thrown into a cold, dark dungeon where you’ll have to live on cheese rinds and mouldering bread, and where the other prisoners will steal your silk handkerchief and your boots and your cuff buttons. Not usually. Not here. Not yet.

SO FAR WE’VE
been talking about what might legitimately be done to you for nonpayment of debts that were contracted legally. But what if the debt itself has been arranged in some shady nook outside the borders of the law? What, for instance, if the debtor has borrowed the money from a Mafia loan shark? Then the pressures brought to bear may be of quite a different order.

My chief source of information on such matters is the inimitable Elmore Leonard. In his crime novel
Get Shorty
, his anti-hero, Chili Palmer, is employed as a skip tracer for the Mafia, and he’s chasing around after a compulsive small-time gambler who’s playing a hard but stupid game of “Try and Collect.” Chili has this to say about the techniques of loan sharks:

A guy comes to see you, it doesn’t matter how much he wants or why he needs it, you say to him up front before you give him a dime, “You sure you want to take this money? You’re not gonna put up your house or sign any papers. What you’re gonna give me is your word you’ll pay it back so much a week with interest.”. . . If the guy hesitates at all, “Well. I’m pretty sure I can”— says anything like that, I tell him, “No, I’m advising you now, don’t take the fuckin’ money.” The guy will beg for it, take an oath on his kids he’ll pay you on time. You know he’s desperate or he wouldn’t be borrowing shylock money in the first place. So you tell him, “Okay, but you miss even one payment you’re gonna be sorry you ever came here.” You never tell the guy what could happen to him. Let him use his imagination, he’ll think of something worse.

Later, Chili adds a gloss: “You have to understand the loan shark’s in business the same as everyone else. He isn’t in it looking for a chance to hurt people. He’s in it to make money.” But the corollary is that if the loan shark doesn’t make his money, then he is going to hurt people. In the shadowland of borrowing and lending, just as there are no limits set to the nature and size of the debt, so there are no limits set to the nature and grisliness of the penalty for nonpayment. As Chili says, there’s always something worse.

SO FAR WE’VE
been confining our focus to the individual debtor. The civilian debtor, the common-or-garden variety of debtor, the pedestrian debtor; the debtor without an army. But what happens if we enlarge the screen? What if the borrower is — for instance — a king, or an emperor, or a Renaissance duke, or a Genghis-Khan- or Attila-the-Hun-style warlord, or a modern government, democratic or not? Then things get even worse than Chili Palmer’s “something worse”; for, like hurricanes, volcanic eruptions, and tidal waves, big debts can make history and rearrange the landscape.

In
The Prince
— his instructive sixteenth-century treatise on how to govern with an iron fist in a very ornate and perfumed velvet glove — Niccolò Machiavelli lays such matters right out on the table with chilling but hard-to-refute logic. What leaders or would-be leaders most want and need to do, he says, is to gain, expand, and consolidate power. To do this, they need followers and subjects — in our day, for democracies, read “party members” and “taxpayers.” They can acquire their territory by inheritance, by force of conquest, or by guile and treachery; but in any case they will need an army, or a national police force — anyway, some folks with weaponry — and, to feed and equip their army, they will need money.

They can pay the army either by conquering more territory and going in for looting and pillaging — thus spending other people’s wealth — or by spending wealth of their own that they might already have, or by taxing their subjects. But if they tax their subjects too much — “too much” probably being the point past which the subject’s inner child is screaming “That’s not fair!” for more than twelve hours a day — they inspire hatred and invite rebellion. On the other hand, if they tax their subjects
really
too much, so that widespread poverty and starvation result, the subjects may be too malnourished and weak and feeble to rebel; in addition to which, they will lose the incentive and the strength to do any productive labour. But on yet another hand, if things go that far, the subjects may feel they have nothing to lose by rebelling. It’s a fine calculation.

A nice way of putting the whole matter of taxation is that governments borrow from the people — sometimes they really do borrow, in the form of bond issues — and then they owe their people a debt that should be repaid in services rendered. Even Machiavelli says that the Prince should try to improve the lot of his subjects, if possible. (What “if possible” seems to mean is “If there’s possibly any money left over from the expense of all the wars I intend to wage.”) What the subjects want is to have the services without paying the taxes, and what the rulers want is to have the taxes without rendering the services — these conflicting wants appear to be a constant in human history, ever since there have been food surpluses and social hierarchies, and armies, and taxes — so there’s always bound to be some grumbling.

Nevertheless, you can float many a hefty tax scheme on the back of a righteous-sounding and energizing war. Wars focus the attention; people don’t want to feel or even appear disloyal at such times. Scare them with the thought that they themselves may be looted and pillaged by bands of slavering, subhuman barbarians who will roast and eat their children and ravish and eviscerate their women — don’t laugh, it’s happened — and they’ll fork over with remarkable docility, if not eagerness. Just to remind you: the income tax was begun in Great Britain in 1799, to finance the Napoleonic Wars. In the United States, it began in 1862, to support the Civil War. In Canada, in 1917, incomes were first taxed as a temporary measure to finance the First World War. And taxes are like zebra mussels: once they’ve been introduced, they’re very hard to get rid of. The wars the income taxes were meant to pay for have come and gone, but the income taxes themselves persist. Oh well, it’s better than a tax on windows, or beards, or bachelors, all of which have also had their day.

It’s remarkable how often the assumed debt of services in return for the citizen’s tax dollar is forgotten by governments at large. And once the money’s been spent, the people have no means of recovering the sums they’ve been forced to lend, since they aren’t the ones with the army. In a democracy, you can depose an unpopular leader by voting for somebody else. In a tyranny, you can risk an armed coup or a popular uprising. But in either system, even if you win the election or the coup or the uprising, you’ll still be out of pocket. In the very worst scenario, your children will still be starving and /or uneducated, your water purification plant will still be unbuilt, your tax money will be in a numbered bank account in Switzerland, and your ex-tyrant will be sunning himself on the Riviera, surrounded by a high wall and a posse of expensive bodyguards. Or, in a democracy, your money will have vanished up the sleeves of your ex-leader’s political cronies via a bouquet of untendered and overpriced contracts, and that ex-leader will be warming the seat cushions of half a dozen grateful boards of directors, far from the madding journalists. On the other hand, if things get chaotic enough and riots are afoot, you might be able to parade through the streets with somebody’s head on a stick, shouting, “The jig is up!” But though satisfying as an act of revenge, this is a temporary thrill, and it still won’t restore your vanished money.

A jig, by the way — and I know you’ve been wondering — doesn’t only mean a form of Irish dancing. It can also mean a game or trick or ingenious mechanism. Some tax systems are jigs, in this sense of the word. They are ingenious mechanisms for extracting more money than the extractor ever intends to pay back in the form of services rendered.

THERE ARE TWO
kinds of taxation systems: ones that are resented, and ones that are
really
resented. The Roman Empire, during its expansionist phase — the first century
B.C.E
. — had one of the really resented kind, since it went in for tax farming to support its ongoing military ventures. Here’s how the tax farming worked. The leaders would set a tax quota for an entire community, and local tax collectors would bid on the right to pay that amount or more to Rome — the highest bidder being the winner. The tax collector would pay the state up front, and would then have the right to grind the money out of the local population.

Needless to say, his goal would be to collect more than he’d actually paid to Rome and then keep the difference for himself. Fortunes were made through all kinds of cheats and stratagems — taking goods instead of cash while undervaluing them, then selling the goods at a profit; cornering the grain market, thus creating scarcity, then selling back to the population at exorbitant prices what you’d squeezed out of them as taxes, and so forth. That this was a highly corrupt system goes without saying. Some historians have listed it as one of the causes for the collapse of the Roman Empire: grind the peasants too much and they cease to yield. It’s like any predator-prey pyramid: if there are no more little fish, the population of big fish collapses. Lest you think that Rome was the only outfit ever to do this, think again. The Ming Dynasty in China undermined itself in much the same way; so did the Ottoman Empire; and so did the French monarchy before Louis the Sixteenth.

The name for the Roman tax collectors was
publicani
— which gives us that intriguing phrase in the New Testament, “publicans and sinners.” I used to think that the publicans were the men who ran the pubs, and that their publicanism had something to do with the wine-bibbers usually mentioned in the same breath. Jesus of Nazareth had a habit of hanging out with all three kinds of badly behaved people — publicans, sinners, and wine-bibbers — and now that I’ve told you about the tax farming, you can understand why the palship of the
publicani
, in particular, would have been viewed by Jesus’ compatriots as colouring really, really far outside the moral box.

The exploitative Roman tax-farming system also explains why the opponents of Jesus asked him whether it was sinful to pay taxes to Rome, thus giving rise to his well-known reply: “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s.” This answer was a clever way of getting out of a trap, the trap being that if you said Yes to paying the Roman taxes you endorsed a peasant-grinding tax system, but if you said No to paying them you’d be charged with sedition by the Roman tyrants — but it’s caused some head-scratching ever since. Is money in general a thing of Caesar’s? Did Jesus mean,
Cheat the taxman
? In addition to which, many governments have gone out of their way to give the impression that God and they are firmly in cahoots, so that paying them is the same as paying God. Or almost the same. Or as close as maybe. Just take a look at what governments write on their money, even today. In Canada, it’s
Elizabeth D.G. Regina
, short for
Dei Gratia Regina
— Queen by the Grace of God. In Britain, it’s a longer inscription that adds initials meaning “Defender of the Faith.” And in America, there’s the motto “In God We Trust”— which, when I was in high school, gave rise to a joke: “In God we trust, all others pay cash.” But there’s a distinct advantage to having “God” written on your government’s money: it appears to give the currency a divine imprimatur.

Resentment over heavy taxation has given rise to a great many rebellions over the centuries. To clarify terms: if your rebellion succeeds, it’s called a “revolution.” Otherwise it’s just a rebellion. The heavy taxes that were so resented very often had to do with wars. Thus the Hundred Years’ War between England and France inspired a rebellion in France in 1358 called “the Jacquerie”— a term that was picked up later during the French Revolution — and it also inspired a rebellion in England in 1381 that was kicked off by a poll tax levied to raise war funds. Among the grievances was a move made by the nobility to restore the feudal system, whereby peasants were bound to the land and owed unpaid labour to their lords — in effect, a sort of serfdom. This system had been eroded by the Black Death, which, by killing off half the population of Europe, had created a shortage of workers, thus upping the standard minimum wage and increasing peasant bargaining power. The moral: even the Black Death was good for something.

The 1381 English rebellion was led by a yeoman called Wat Tyler, and one of the participants was a priest named John Ball, who preached a sermon containing the famous rhyme, “When Adam delved and Eve span / Who was then the gentleman?” The password among the rebels was “John the Miller grinds small, small, small,” to which the right answer was “And the king’s son of heaven shall pay for all.” I’ve come across no definitive interpretation of this, but I would take the line about the miller grinding small to be a reference to the often quoted ancient Greek saying, “The mills of the gods grind slowly, but they grind exceeding small,” meaning “Retribution may be slow in coming, but when it does come, the wicked will be crushed to dust.” The response, “And the king’s son of heaven shall pay for all” meant, I expect, that if the rebels had to kill a few people while doing the small grinding of their enemies, they’d be forgiven for it in the afterlife — their debt of sin having been paid for by the sacrificial blood of Christ. They did kill some people before being defeated and executed in horrible ways, but they mainly assaulted the tax collectors and burnt their records. Without memory there is no debt, and a written record is a form of memory; and whenever there’s been a tax-and-debt-inspired uprising, one of the prime targets has been the tax and debt records. The principle at work was,
If you can’t prove it, I don’t owe it.