Smith discusses Paine’s welfare proposals in Rights of Man and Agrarian Justice.

George H. Smith was formerly Senior Research Fellow for the Institute for Humane Studies, a lecturer on American History for Cato Summer Seminars, and Executive Editor of Knowledge Products. Smith’s fourth and most recent book, The System of Liberty, was published by Cambridge University Press in 2013.

The English tax system, according to Thomas Paine in the second part of Rights of Man, was designed to benefit the landed aristocracy at the expense of commoners without political pull. The “landed interest” used its political power “to ward off taxes from itself, and throw the burthen upon such articles of consumption by which itself would be least affected.” Land taxes were diminishing in England as taxes on consumables were increasing. For example, the tax on the sale of beer “does not affect the aristocracy, who brew their own beer free of this duty”; yet the beer tax alone, from which the aristocracy was exempt, generated nearly as much revenue as the land tax – and even more than the land tax if the taxes on malt and hops were factored in. Thus, “It is from the power of taxation being in the hands of those who can throw so great a part of it from their own shoulders, that it has raged without a check.” The common people of England, including the desperately poor, paid more taxes than even they realized.

[A]t the time when taxes [in England] were very low, the poor were able to maintain themselves; and there were no poor rates. In the present state of things, a laboring man, with a wife and two or three children, does not pay less than between seven and eight pounds per year in taxes. He is not sensible of this, because it is disguised to him in the articles which he buys, and he thinks only of their dearness; but as the taxes take from him, at least, a fourth part of his yearly earnings, he is consequently disabled from providing for a family, especially if himself, or any of them, are afflicted with sickness.

The first thing to understand about Paine’s welfare scheme, as presented in Part Two of Rights of Man, is that it was part of a broader plan for a drastic reduction of taxes by the English government. Paine estimated that current (1792) taxes in England totaled around 17 million pounds per annum. Most of this was spent on privileged governmental elites and a bloated military, whereas the expenses for “a sufficient peace establishment for all the honest purposes of government” would only amount to around 1.5 million pounds.

Paine understood that in most cases “when taxes are once laid on, they are never taken off.” This is because tax cuts, by lessening the influence and power of government, “will be unwelcome to those who feed upon the spoil.” And though Paine’s long‐​term proposal for a tax cut of over 90 percent could not be effected all at once – at the very least it would not be possible until England, France, and Holland agreed to cut back dramatically on their military expenditures – Paine believed that the English government could reduce its expenditures by 4 or 5 million pounds each year. Meanwhile, given the current expenses of the English government (civil and military) and its current revenue, a surplus of around 4 million pounds (after abolition of the poor‐​rates) could be used to restitute taxpayers who had been impoverished by “the excessive burden of taxes.”

The first step, therefore, of practical relief, would be to abolish the poor‐​rates entirely, and, in lieu thereof, make a remission of taxes to the poor to double the amount of the present poor‐​rates, viz., four million annually out of the surplus taxes. By this measure, the poor would be benefited two millions, and the housekeepers [i.e.,. ratepayers] two millions. This alone would be equal to a reduction of one hundred and twenty millions of the national debt, and consequently equal to the whole expense of the American War.

Paine estimated that one‐​fifth of England’s population, or 1.4 million people, fell into “that class of poor which need support.” This included many “aged poor…for which a distinct provision will be proposed.” Paine then proceeds to outline an elaborate system of social welfare, including stipends to poor families to educate their children, payments to people over sixty (10 pounds per annum), and so forth. I shall not discuss the details in this essay, however; interested readers may consult the original text for more information. What I wish to discuss instead is the moral foundation of Paine’s social welfare scheme.

Again and again commentators have quoted the following remark by Paine in an effort to portray him as a founding father of the modern welfare state: “This support [of the aged, etc.], as already remarked, is not of the nature of a charity, but of a right.” But before we jump to conclusions we need to understand the kind of “right” that Paine invoked. This is not difficult to discern, for immediately after the quoted remark Paine continued: “Every person in England, male and female, pays on an average in taxes two pounds eight shillings and sixpence per ann. from the day of his (or her) birth….” Then, after calculating the total taxes paid “at the end of fifty years,” Paine concluded that “the money he shall receive after fifty years is but little more than the legal interest of the net money he has paid….”

Essentially, therefore, Paine viewed his welfare proposals as restitution for victims of an onerous and unjust tax system. This is made clear in numerous passages, including a passage quoted above in which Paine refers to “a remission of taxes to the poor.” Hence the “right” mentioned by Paine is the right of compensation for an injustice, not a natural right per se. We see this in the fact that Paine confined his welfare proposals to England, as measures to rectify burdensome and unfair taxes; he does not say or suggest that his proposals should be implemented in other countries, such as America, as a matter of natural and universal rights. In addition, as noted above, Paine’s proposals were part of a larger plan for a huge reduction in taxes – an idea that scarcely conforms to the ideology of the modern welfare state.

Other proposals by Paine, such as a call for “progressive taxation,” should be viewed in a similar light. His tax reforms are invariably accompanied by demands that other taxes (such as those on houses and windows) be abolished, with a substantial reduction of taxes overall. Even his plan for a progressive inheritance tax was aimed at rectifying the injustice of primogeniture, according to which only the oldest son could inherit the father’s estate. At a certain point, as inheritance taxes became too onerous, there would be an incentive to divide property among additional heirs.

Now, I don’t wish to suggest that Paine’s welfare scheme is free of theoretical difficulties. But I do insist that, on the whole, Paine presents his welfare scheme not as an elaboration of natural rights per se but as a partial remedy, via restitution, for the injustices of the English system of taxation, and as a stopgap measure until taxes were drastically reduced in a manner that did not victimize the poor and unjustly enrich the landed aristocracy. I would be remiss, however, not to mention a later essay by Paine, Agrarian Justice, written during the winter of 1795, just a few years after the publication of Part Two of Rights of Man (February 1792).

Agrarian Justice has posed a serious problem for Paine scholars because some of it directly contradicts arguments that we find in Paine’s earlier writings. Those interested in the details of this issue should consult the excellent discussion by Gregory Claeys in Thomas Paine: Social and Political Thought (Routledge, 1989, Chapter 8). I shall confine myself to noting a couple of the more serious problems.

In Rights of Man, Paine argued that abject poverty is the result of government oppression, and that a civilized society with equal rights and free commerce is the best remedy for such poverty. But in Agrarian Justice, Paine maintained that civilization itself is to blame for a good deal of poverty. Some of what Paine had to say sounds as if it came straight from Rousseau.

Whether that state that is proudly, perhaps erroneously, called civilization, has most promoted or most injured the general happiness of man, is a question that may be strongly contested. On one side, the spectator is dazzled by splendid appearances; on the other, he is shocked by extremes of wretchedness; both of which it has erected. The most affluent and the most miserable of the human race are to be found in the countries that are called civilized.

To understand what the state of society ought to be, it is necessary to have some idea of the natural and primitive state of man; such as it is at this day among the Indians of North America. There is not, in that state, any of those spectacles of human misery which poverty and want present to our eyes in all the towns and streets of Europe.

Poverty, therefore, is a thing created by that which is called civilized life. It exists not in the natural state. On the other hand, the natural state is without those advantages which flow from agriculture, arts, sciences and manufactures.

As with Rousseau, Paine did not call for a return to the “natural and primitive state of man.” Rather, he sought “to remedy the evils and preserve the benefits that have arisen to society by passing from the natural to that which is called the civilized state.” Paine’s fundamental moral premise was that no one should be worse off in a civilized condition than “if they had been born before civilization began, or had been born among the Indians of North America at the present day.”

This argument is fraught with problems, not the least of which is that it is more bare assertion than argument. Moreover, the identification of American Indians with a primitive state of nature, though popular in the eighteenth century, is a facile bit of comparative anthropology without justification. Nevertheless, Paine had no doubt that the radical inequality between rich and poor in modern civilization was rooted in the failure to understand that land in its uncultivated state is “the common property of the human race.” Therefore, if the problem of poverty is to be solved, proprietors of land should pay a “ground‐​rent” to society, which will then provide the fund for the kind of welfare proposals found in Rights of Man.

Although the claim that God gave the earth to mankind “in common” went back centuries, many modern natural‐​law theorists, such as Grotius and Pufendorf, interpreted this common ownership in a negative sense to mean that all land was originally unowned, and that until private appropriation had occurred, every person had a common, or equal, right to use unowned land. But Paine embraced the positive meaning of common ownership. In the primitive state that preceded civilization, “every man would have been born to property. He would have been a joint life proprietor with the rest in the property of the soil, in all its natural productions, vegetable and animal.”

As Gregory Claeys discusses at some length, it is difficult to understand how Paine, a deist, could justify this God‐​given right, which traditionally had been based on a passage in the book of Genesis. After all, in The Age of Reason, a notorious two‐​part attack on revealed theology (1794, 1795), Paine repudiated, indeed ridiculed, the claim that the Old Testament had anything to do with God; he maintained instead that everything we need to know can be discerned through natural reason. Yet in Agrarian Justice, Paine expressly argued that land “is the free gift of the Creator in common to the human race.” Paine did not explain how he figured out the divine plan without recourse to revelation, though he did add the secular, if vague, premise that personal property “is the effect of society.”

It is with good reason that the modern disciples of Henry George regard Thomas Paine as a predecessor to their hero. But Agrarian Justice stands alone in this regard. In terms of essentials, it is quite unlike anything Paine had written previously. No longer were his social welfare proposals treated as restitution for unjust taxation. Rather, such measures were now defended as a matter of natural justice – so the “plan contained in [Agrarian Justice] is not adapted for any particular country,” as was the case with England and the welfare scheme in Rights of Man.

Scholars have speculated on the factors that may have influenced the development of Paine’s ideas between 1792 and 1795. But Paine never discussed this matter, so no one really knows.