Empire: The Rise and Demise of the British World Order and the Lessons for Global Power by Niall Ferguson Page A

levied on the producers of liable commodities. But in practice it fell on consumers, since producers simply added the excise to their prices. Every glass of beer or whisky a man drank was taxed, and every pipe he smoked. As Burns said, his business was ‘grinding the faces of the Publican & the Sinner on the merciless wheels of the Excise’. But even the virtuous had to pay. Every candle a man lit to read by, even the soap he washed with, was taxed. For the nabobs, of course, these taxes were scarcely noticeable. But they ate up a substantial proportion of an ordinary family’s income. In effect, then, the costs of overseas expansion – or to be precise of the interest on the National Debt – were met by the impoverished majority at home. And who received that interest? The answer was a tiny elite of mainly southern bondholders, somewhere around 200,000 families, who had invested a part of their wealth in ‘the Funds’.
    One of the great puzzles of the 1780s is therefore why it was in France – where taxes were much lighter and less regressive – rather than in Britain that political revolution finally came in the 1780s. Burns himself was one of those Britons to whom the idea of revolution appealed. It was he, after all, who gave the revolutionary era one of its most enduring anthems in ‘A Man’s a Man for a’ that’. An instinctive meritocrat, Burns bitterly resented ‘the stately stupidity of self-sufficient Squires, or the luxuriant insolence of upstart Nabobs’. Despite his own complicity as a taxman, he even wrote a populist attack on the excise tax, ‘The De’il’s awa’ wi’ th’ Exciseman’. But Burns had to abandon his political principles in order to keep his job. After he was spotted singing a revolutionary anthem in a Dumfries theatre, he had to write an obsequious exculpatory letter to the Commissioner of the Scottish Board of Excise, pledging to ‘seal up [his] lips’ on the subject of revolution.
    The poor drinkers and smokers of Ayrshire were far from the worst-off subjects of the British Empire, however. In India the impact of British taxes was even greater, for the spiralling cost of the Indian Army was the one item of imperial expenditure the British taxpayer never had to pay. Disastrously, the ratcheting up of taxes in Bengal coincided with a huge famine, which killed as many as a third of the population of Bengal – some five million people. To Gholam Hossein Khan, there was a clear connection between ‘the vast exportation of coin which is carried every year to the country of England’ and the plight of his country:
    The decrease of products in each District, added to the innumerable multitudes swept away by famine and mortality still go on augmenting the depopulation of the country ... For as the English are now the rulers and the masters of this country, as well as the only rich men, to whom can those poor people look up to for offering the productions of their art, so as to benefit by their expenses? ... Numerous artificers ... have no other resource left than that of begging or thieving. Numbers, therefore, have already quitted their homes and countries; and numbers unwilling to leave their abodes, have made covenant with hunger and distress, and ended their lives in the corner of their cottages.
     
    It was not just that the British repatriated so much of the money they made in India. Increasingly, even the money they spent while there tended to go on British goods, not Indian. Nor did the bad times end there. Another famine in 1783 – 4 killed more than a fifth of the population of the Indian plains; this was followed by severe scarcities in 1791, 1801 and 1805.
    Back in London, the shareholders were feeling uneasy, and the East India Company’s share price in this period makes it clear why. Having soared under Clive’s Governor-Generalship, it slumped under Hastings. If the cash cow of Bengal were to starve to death, the company’s prospective earnings would