Near one of the entrances to an Aberdeen graveyard stands a prominent tomb. The inscription marks the occupant out as an economist esteemed by his students and peers, whose work was respected across Europe. His name: Dr Robert Hamilton.
Hamilton is forgotten today; his apogee fell two centuries ago. But his work is remarkable in the way it stood out against the trends of his time. He promulgated 12 rules for government finance, and he was writing during the Napoleonic Wars when the British government was deep in debt.
I National income is readily definable
II “The portion of national income which can be appropriated to public purposes, and the possible amount of taxation, is limited; and we are already far advanced to the utmost limit”
III “The amount of the revenue raised in the time of peace, ought to be greater than the expense of a peace establishment, and the overplus applied to the discharge of debts contracted in former wars, or reserved for the expense of future wars”
IV Taxes can be temporarily raised in times of war
V Wars being so costly, borrowing also follows
VI This increases the national debt
VII “In every year of peace, the excess of the revenue above the expenditure, ought to be applied to the discharge of the national debt”
VIII Having more war expenditure than peace revenue means an unbearable debt
IX “The only effective remedies to this danger, are the extension of the relative length of the periods of peace; frugality in peace establishment; lessening the war expenses; and increase of taxes, whether permanent, or levied during war”
X Taxation may be used to achieve this rather than war loans
XI Current taxation levels would defray current war costs but for the accumulated debts
XII “The increase of revenue, and the diminution of expense, are the only means by which this sinking fund can be enlarged, and its operations rendered more effectual.” Costs could be cut “as far as safety permits”
From "A fate Worse than Debt" by Dr Lee Rotherham
Buy your copy at a bookshop or on Amazon