War & Taxes

Two stories on the front page of the New York Times this morning reminded me of a historical precedent that may be useful to recall. The first story relates the increasing cost of deploying a single additional American soldier to Afghanistan.

The latest internal government estimates place the cost of adding 40,000 American troops and sharply expanding the Afghan security forces, as favored by Gen. Stanley A. McChrystal, the top American and allied commander in Afghanistan, at $40 billion to $54 billion a year, the officials said.

Even if fewer troops are sent, or their mission is modified, the rough formula used by the White House, of about $1 million per soldier a year, appears almost constant.

The second story is the sad tale of an American President entering Beijing as supplicant before his banker.

When President Obama visits China for the first time on Sunday, he will, in many ways, be assuming the role of profligate spender coming to pay his respects to his banker. That stark fact — China is the largest foreign lender to the United States — has changed the core of the relationship between the United States and the only country with a reasonable chance of challenging its status as the world’s sole superpower.

The historical analogy is to the city-state of Florence at the beginning of the 15th Century. The oligarchs that controlled the government of Florence at the time were always pushing Florence to go to war with Milan in order to control more land, which was of course the basis of wealth in this era at the very dawn of capitalism. The war against Milan in 1424 was extraordinarily expensive–Machiavelli estimated it cost 4,200,000 gold florins–and was paid for through a tax on income called the “estimo”. The oligarchs, having most of their wealth in land, and being able to hide their true income, forced the average citizen or tradesman to bear a disproportionately large tax burden. The citizens, who never gained any of the land spoils of conquest, complained bitterly and were referred to by the financial elites as the “piagnoni”, or “whiners”. Of course the elites also gained by selling the armor and weapons to the city and because the Florence often hired both mercenaries and other cities to help fight the war, the battles continued because the surrogates were interested in prolonging the conflict for as long as their paymasters could afford it.

In 1427 all of this came to a breaking point. The Medici Bank which had been loaning money to the city refused to go further in debt and supported the piagnoni’s call for a new tax on a citizen’s entire wealth called a “castato” (register of property). This of course was much harder for the financial elites to escape and given that the Medici now had so much control over the city-state’s finances and that the piagnoni were in full revolt, the castato was passed. And then a funny thing happened. Because the castato was determined each year based on the needs of the city, the oligarchs stopped pushing for war, because its cost was coming out of their hides.

I believe the day is coming soon when the average American piagnoni will wake up like the Florentines did. We may think of the teabaggers as our modern whiners, but like every working stiff in America they have been suckered into supporting the phony patriotism of the chicken-hawks and they are paying for the Trillion Dollar Wars in Iraq and Afghanistan. It is their sons and daughters who die on the battlefield, while the financial elites avoid putting their sons and daughters in harm’s way and take home million dollar bonuses for trading Credit Default Swaps. And of course, the surrogates in our contemporary story are both the Blackwater mercenaries and the corrupt governments of Afghanistan and Pakistan anxious to prolong the “war on terror” so Uncle Sucker will continue to fund their regimes. But perhaps the Chinese will play the part of the Medici Bank, forcing America to tax the wealthy to pay for the wars that only seem to benefit their pocketbooks.

And then we may find our elites suddenly anxious to stop being the world’s unpaid cop.