Sunday, July 4, 2010

3rd July 2010

Taxes, spending cuts, and a few sweeteners—rather how the emperor Vespasian dealt with his financial crisis when he came to came to power in Rome in AD 69, but less inventive.

The earlier emperor Nero had poured gazillions into military campaigns and the construction of a fabulous palace (the ‘Golden House’) for himself. The great fire of Rome in AD 64 burned another vast hole in the accounts. But Vespasian was a man suited to the task ahead. He was of humble origins, simple tastes, hard-working—he rose early—and with a good sense of humour (on his death-bed he observed ‘Good heavens! I do believe I am turning into a god’). It is not clear that Mr Osborne shares these winning characteristics.

Vespasian’s first move was to sell off some imperial estates and nearly double taxes in the provinces. Those were the days... . Then he cut the consultants by making himself censor. This gave him power to get the best deal from juicy revenue-raising options: leasing out public property, selling off the right to collect taxes in the provinces, and letting out contracts for public works.

He knew where to make the pips squeak. He identified provincial governors known for their greed, promoted them to encourage them to become even greedier, and then hit them with charges for extortion. His ‘sponges’, they were called: ‘he put them in to soak, then squeezed them dry later’.

But there were sweeteners too. Vespasian was aware of the needs of the poor. He encouraged people to take over and rebuild ruined houses themselves if the owner did not come forward. When an engineer offered to haul some huge columns up hill mechanically, Vespasian declined, saying ‘I must always ensure the working classes earn enough to buy food’. And he started the Colosseum too.

Perhaps his most striking revenue-raising ploy was to tax urine (used to clean woollens) from the city urinals. When his son Titus complained, Vespasian handed him a coin from the day’s proceeds and said ‘Does this smell bad, son?’ ‘No, father’ said Titus. ‘Strange’ said Vespasian, ‘it comes straight from the urinal!’ He was determined to prevent money just leaking away. One for Mr Osborne next time, perhaps.

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