Fiscal innovations in early modern states: which war did really matter in the portuguese case?

Throughout the Early Modern times, European dynastic states started a long-term process towards the building of a territorial organization, depending on increasing revenues and creating its own self-sustaining logics. Different solutions were found to face expenditures; hence different paths to fiscal efficiency came up. This paper brings up the Portuguese case to add new issues to the debate of the factors for fiscal innovation and political-military efficiency in Early Modern times. Prior to the Spanish Secession war, the Portuguese state had faced the Spanish armies in the 14th century and again in the 17th century. Both wars triggered fiscal innovations, shaping the Portuguese fiscal system for centuries afterwards. Taking as benchmarks 1580 and 1680, this paper questions the choice for an income tax precisely at a time when excises were being generalized in North-western Europe. It makes an assessment of state revenues and of the role of this income tax (décima) on a comparative approach. The endurance of décima, as had happened to medieval excises, will be questioned taking into account cost-benefit considerations, regarding the costs (economic and political issues) of any change in collection and assessment. It will be argued that there are good examples of fiscal innovation in the Portuguese case. However, the importance of fiscal innovation for the process of state making and financial modernization may be overestimated just where institutional rigidities had subverted its potentials

Merchant groups in the 17th-century Brazilian sugar trade! Reappraising old topics with new research insights

This paper examines the role of the New Christians within Portuguese mercantile organizations during the early modern period. It stems from the case of the General Brazil Company, because the foundation of this enterprise provides an example of how the 17th-century Portuguese authorities dealt with New Christian issues, allowing for a survey of Portuguese historiography on the subject

Portuguese resilience in global war: military motivation and institutional adaptation in the sixteenth-and seventeenth- century Cape Route

Between 1500 and 1600, intercontinental trade might have grown at an annual compound rate of 1.2 per cent.1 While some enterprises pursued trade through peaceful intercourse, the expansion of global trade was also attained through conflict, violence and recourse to arms, particularly in Euro-Asian trade. Artillery on board merchant vessels was clear evidence that trade and plunder occurred together. Not only was commercial exchange compatible with violence and conflict, but trade ties also prompted far-reaching innovation and adaptation to ensure that commercial ventures remained lucrative. The economic implications of risk of attack or confrontations with opponents led Frederic C. Lane to examine the economic spin-offs of war in protection rents, while Douglass C. North surveyed the consequences of the state’s supply of defence to merchant fleets in his pioneering article on factors for productivity growth in merchant shipping.2 This chapter examines the dynamic between trade and war by explaining how the military competition between Portugal under Habsburg rule (1580–1640) and the Netherlands provoked institutional innovation affecting the financing of commercial voyages to Asia, such that the Portuguese Carreira da Índia continued to be profitable even when confronted with determined rivals and falling pepper prices in European markets..info:eu-repo/semantics/publishedVersio

State monopoly or corporate business : warfare in early-modern Europe

The shift of the core of Europe from the Mediterranean to the north-west of the continent has been considered the outcome of military advantages which, in turn, mirror the early modernisation of the fiscal systems and constitutions of the northern European states. Bearing this in mind, the Portuguese regaining of Brazil from the Dutch, while they were fighting a war against the Habsburgs to regain political independence, is an intriguing issue which leads us to reconsider the widely-accepted connection between the outcomes of military campaigns and modernisation in financial and institutional spheres. In this paper, special attention is paid to the issue of how private and public affairs could intertwine in forming a state. An enlightened estimate of the rates of return from tax farming is provided, as well as proof that uncertainty caused by war raised profits if the commercial integration of trade and the collection of taxes levied on traded commodities was the rule. The accumulation of capital by private tax-collectors was eventually exploited by the state to regain Brazil from the Dutch by means of a compromise which privatised war in the colony. It is argued that the Portuguese solution as far as warfare was concerned was an efficient response to the colonial issue, albeit a divergence from the modern institutional limit between private and public affairs, which gives the state the monopoly over attack (or over defence).info:eu-repo/semantics/publishedVersio

The chronic food deficit of early modern Portugal : curse or myth?

The chronic food deficit of early modern Portugal: curse or myth? Two historiographie currents have debated whether early modern Portugal was cursed by an excessive dependence on agricultural imports due to being unable to feed its population. In this short paper, the first long-run systematic quantitative study of this question, we show that the former view is a myth and therefore could not be a curse. Throughout the entire period, a certain amount of grain was in fact imported but cereal purchases abroad never represented more than a diminutive percentage of total food consumption. More importantly, the country carried out a diversified trade in foodstuffs which was seldom seriously out of balance. Portuguese agriculture showed itself consistently capable of specializing in different foodstuffs for export. It was thus not hopelessly inefficient and succeeded reasonably well in meeting the basic nutritional needs of the population.info:eu-repo/semantics/publishedVersio

The chronic food deficit of early modern Portugal : curse or myth?

Two historiographical currents have debated whether early modern Portugal was cursed by an excessive dependence on foreign food imports as a result of being unable to feed its population, or not. In this short paper, the first long-run systematic quantitative study of this question, we show that the former view is a myth and therefore could not be a curse. Throughout the entire period, a certain amount of grain was in fact imported but cereal purchases abroad never represented more than a diminutive percentage of total food consumption. More importantly, the country carried out a diversified trade in foodstuffs which was seldom seriously out of balance. Portuguese agriculture showed itself consistently capable of specializing in different foodstuffs for export. It was thus not hopelessly inefficient and succeeded reasonably well in meeting the basic nutritional needs of the population

Why did people pay taxes? Fiscal innovation in Portugal and state making in times of political struggle (1500-1680)

This paper considers growing fiscal capacity of the European early modern states as contingent to taxpayer’s consent in higher tax loads. It puts forward the hypothesis that war damages were the main factor guiding the taxpayer’s cost-benefit assessment of consenting or violently resisting to a fiscal innovation. To test the hypotheses, we consider data on Portugal in times of political struggle against the Habsburgs to restore and keep the political autonomy after 1640. The war was financed by an entirely new, universal income tax, remaining in the Portuguese fiscal system well until the liberal revolution in 1820, although enforced by a decentralized and nonspecialized administration. A model derives the optimal tax rate from the standpoint of the taxpayer as a function of war intensity, risk aversion, and awareness that evasion would enhance war damages. Data on damages, contemporary assessments of the tax base, and amounts enforced allow the model’s calibration. Results suggest the accuracy of the hypothesis and draw the conclusion that taxpayers’ utility in paying the new tax determined the efective tax rate (tax enforced). This paper claims that ultimately improvements in the fiscal capacity of states needed taxpayer’s perception of high levels of destruction, hence any political regime in early modern Europe must have found in war damages a persuasive argument to make efective a fiscal innovation. The other contribution of this case study is pointing out the advantage of the assignment of the tax collection to local, non-professional administration, for the endurance of a fiscal system, which incorporated an income tax that withstood the liberal revolution. It enhanced the role of peer monitoring and turned out to be an efective way of instilling social norms contributing to build up the taxpayer’s liability, which somehow the liberal state in 19th century exploited within a different technological environment.info:eu-repo/semantics/publishedVersio

Aspectos empresariais da construção naval no século XVI : o caso da Ribeira das Naus de Lisboa

Como condição necessária ao desenvolvimento de frotas de guerra, os arsenais multiplicam-se nos séculos XVII e XVIII, surgindo, aos olhos dos investigadores, como casos emblemáticos do papel precursor do Estado, tanto pelas inovações técnicas que foram capazes de impulsionar como pelas estruturas organizativas, que envolviam elevados capitais e contingentes assinaláveis de mão-de-obra. Desta forma, os estudos realizados, se insistem em sublinhar a importância destas unidades de produção na passagem ao estádio da «grande indústria», procuram também denunciar as suas fragilidades, já que todas as características que não permitem identificá-las com o que será vulgar nas empresas da «era industrial» são consideradas, nesta perspectiva, como arcaísmos, isto é, sinais da sua relativa ineficiência em termos económicos. O recurso a mão-de-obra requisitada, cuja produtividade estaria, deste modo, longe de ser garantida, e uma gestão só secundariamente direccionada para a rentabilização dos capitais são tópicos entendidos como reveladores das ambiguidades destas «empresas de Estado». A Ribeira das Naus, o estaleiro destinado a fornecer parte importante das naus e galeões que serviram a carreira da índia, partilha com outras experiências europeias, um tanto mais tardias na sua generalidade, aqueles a que permitem identificá-la com uma «empresa de Estado», conceito útil, mas com limitações quando se reporta a épocas em que «empresa», sobre- tudo no domínio dos transportes marítimos, se associava tanto à aventura como ao risco calculado e em que «público» e «privado» não eram esferas jurídicas claramente distinta.info:eu-repo/semantics/publishedVersio

The great escape? The contribution of the empire to Portugal’s economic growth, 1500-1800

Newly assembled macroeconomic statistics for early modern Portugal reveal one of Europe’s most vigorous colonial traders and at the same time one of its least successful growth records. Using an estimated model in the spirit of Allen (2009) we conclude that intercontinental trade had a substantial and increasingly positive impact on economic growth. In the heyday of colonial expansion, eliminating the economic links to empire would have reduced Portugal’s per capita income by roughly a fifth. While the empire helped the domestic economy it was not sufficient to annul the tendency towards decline in relation to Europe’s advanced core which set in from the 17th century onwards. We conclude that the explanation for Portugal’s long-term backwardness must be sought primarily in domestic condition