Some revolutions are quiet. Almost nobody noticed when an international tax revolution started between the ordinary consumers and the governments of oil-producing nations. Author Alvin Toffler recounts that
On August 8, 1960, a West Virginia-born chemical engineer named Monroe Rathbone, sitting in his office high over Rockefeller Plaza in Manhattan, made a decision that future historians might some day choose to symbolize the end of the
industrial economy as it had been know during the first half of the twentieth century, and earlier. Whether we say that we are moving into a different phase of industrialism or moving into a post-industrial phase is not important to the fact that what Mr. Rathbone was thinking about was taxes. The simple notion of taxes was once again about to change the world, just as it did when the American colonists perceived that they had an opportunity to escape British taxation. Two centuries totally changed technology, but they did not change the human desire for freedom.
Few paid any attention that day when Rathbone, chief executive of the giant Exxon Corporation, took steps to cut back on the taxes Exxon paid to the oil-producing countries. His decision, though ignored by the Western press, struck like a thunderbolt at the governments of these countries, since virtually all their revenues derived from oil company payments.
When we think of freedom, we are inclined to think of noble freedoms like freedom of the press, freedom of speech, and freedom of religion. To speak about freedom from taxation seems greedy, materialistic, and downright money-grubbing. But those noble freedoms could not exist if it were not for economic freedom. The freedom to use one's money, to buy or to sell, to save or to invest, is a necessary foundation for those more noble liberties. Taxation is a way of limiting economic freedom. Again, it is true that taxes are necessary; but it is also true that they are dangerous, and should be kept as small as possible.
Within a few days the other major oil companies had followed Exxon's lead. And one month later, on September 9, in the fabled city of Baghdad, delegates of the hardest-hit countries met in emergency council. Backed to the wall, they formed themselves into a committee of oil-exporting governments.
Our narrative, thus far, could lend itself to the idea that large American oil companies were exploiting the poor people of third-world countries who happened to have oil beneath the surface of their land. But the citizens of these nations were not being harmed by the reduction in tax revenues which their governments felt. That's because those governments used that revenue, and any other revenue, to support an aristocratic leadership class.
The governments of the Middle East did not then, and do not now, use such revenue to in any way help the poor in their nations. These tax dollars, paid by American consumers, were not going to build schools and hospitals, or to support the elderly. The funds were used to support an extravagant lifestyle of luxury among the royal families and upper classes. So by seeking to avoid paying these taxes, the Americans were harming nobody.
As with all generalizations, there were exceptions. One oil-producing country was, in fact, using some of its tax revenue in the type of 'social' expenditures that western governments envision: Iran. Before the 1979 revolution, Iran was a progressive country. Education, health care, and women's rights were the political agenda.
Responsible historians do not speculate. But one cannot help but wonder, what if the Americans hadn't had a tax revolution, and what if the OPEC organization hadn't been formed in response? Would Iran have taken a different course with the extra income? Would its freedoms have expanded to the point that the 1979 takeover would not have been possible? Would Iran still be a free country today?
We will probably never know the answers to these questions. But we do know that revolutions start when people decide to throw off the oppression of taxes.