We began our review of Adam Smith’s survey of “stamp-duties and duties upon registration” — i.e. stamp taxes and registration/recording fees — in my previous post. Today, I want to focus on Smith’s nuanced critique of France’s unpopular “tax farm” system, since France would be the scene of a major world-changing revolution just a few years after the publication of The Wealth of Nations.

By way of background, both stamp taxes (droit de timbre) and registration fees (contrôle des actes) were collected by the agents of a wealthy group of private tax collectors known as fermiers généraux or “tax farmers”, who paid the royal government a fixed sum for the right to collect specific taxes, like the salt taxes and customs taxes. It should come as no surprise that these tax farmers were unpopular for their aggressive collection methods. (These despised tax farmers, a symbol of Ancien Régime excess and corruption, are illustrated below in an engraving from 1791, Le Doyen des Fermiers Généraux, depicting the final downfall of the hated French tax-farming institution during the Revolution.)

Adam Smith, however, draws a distinction between “stamp-duties and duties upon registration.” According to the Scottish tax scholar, stamp-duties and registration fees in France were levied by two entirely different and non-overlapping set of tax officials:

“In France there are both stamp-duties and duties upon registration. The former are considered as a branch of the aides or excise, and in the provinces where those duties take place are levied by the excise officers. The latter are considered as a branch of the domain of the crown, and are levied by a different set of officers.” (WN, V.ii.h.11)

Furthermore according to Smith, “In France the stamp-duties are not much complained of. Those of registration, which they call the Controle, are.” (WN, V.ii.h.16) Why? Supposedly (“it is pretended”, says Smith), because of the heavy-handed tactics of the tax farmers. But the Scottish scholar explains why this critique is, in fact, wrong:

“They [the tax farmers] give occasion, it is pretended, to much extortion in the officers of the farmers-general who collect the tax, which is in a great measure arbitrary and uncertain. In the greater part of the libels which have been written against the present system of finances in France the abuses of the Controle make a principal article. Uncertainty, however, does not seem to be necessarily inherent in the nature of such taxes.” (WN, V.ii.h.16)

In other words, much to my surprise, Smith defends the tax farmers against “the greater part of libels that have been written against [them]”! [1] Instead, Smith lays the blame for the popular discontent in France not on the tax farmers but on the royal government itself for enacting poorly-drafted tax laws:

“If the popular complaints are well founded, the abuse must arise, not so much from the nature of the tax as from the want of precision and distinctness in the words of the edicts or laws which impose it.” (WN, V.ii.h.16)

In other words, it’s not the despised private tax collectors who deserve the blame for France’s terrible system of taxation; it’s the central government that does for giving those tax collectors too much discretion! Nota bene: I will proceed to Article 3 of Part 2, Ch. 2, Book V of The Wealth of Nations on Monday, 30 March.

[1] Could one of these “libels” include Roussel de la Tour’s provocative 1763 pamphlet Richesses de l’etat? See my 2025 paper “Adam Smith’s blind spot”, an ungated version of which is available here.