The Great Beard Tax: Peter’s War on Hipsters


In June 2017, Peter the Great would have turned 345. If it was only for numerical reasons, this mere fact would provide a great opportunity for an article on the legendary Russian emperor. However, the circumstances here are even more exigent. The reason to write a blog post, originated in class. Giving a lecture on the Pigouvian tax, PPE-Professor Aleš Rod explained the economic foundations of this curious duty. Arthur Cecil Pigou (1877 – 1959) is widely known as the originator of the concept of a Pigouvian tax that is supposed to alleviate negative externalities by taxing those activities that cause these externalities. Providing current and historic examples for a Pigouvian tax, I stated that the infamous beard-tax, introduced by Peter the Great, may serve as the first historic example for a Pigouvian tax. My claim had sparked vivid protest by Professor Rod and some students, most eagerly so by Casey Pender. The claims of some of my opponents can be summarized as following:

a) A beard is not a negative externality.

b) Peter the Great was bearded himself, and therefore imposed a beard-tax not to minimize the number of beards in his empire, but to simply collect money and maximize state revenue.

In this article, I will argue that both claims are false. Finally, I will prove that the beard-tax was a Pigouvian tax and maybe even the first one of its kind in the world.

The Beard Tax

A first tax on beards was introduced by Russian emperor Peter the Great (1672 – 1725) in 1698. A similar tax was imposed earlier in England by Henry XIII who proudly wore a beard himself. Henry’s motivation in establishing a beard tax was probably a simple one – to collect money. The Russian Tsar, however, was more of a romantic – very much inspired by Western fashion and culture. He grew, quite contrary to Russian tradition, a mustache. In 1705, men of all ranks, including merchants and artisans (but not priests, deacons and peasants), were ordered to shave. Anyone who wished to keep his beard and whiskers had to pay a fine on a sliding scale according to status: 60 roubles for nobles, military officers and chancellery officials, 100 rubles for merchants of the first guild, and so on. Permits took the form of a beard token disc obtainable from the Police Office. Bearded peasants had to pay a kopeck (1/100 rouble) each time they entered the city gates. The beard token was worn with a chain around the neck to prove to any challengers that his beard was legal. The beard tax was an annual, per-unit tax. Revenues raised from the beard tax remained insignificant. Not only did the tax raise hardly any revenue for the tokens that had to be coined and the tax collectors that had to be employed, but also other transaction costs constituted a heavy burden and even a threat to the system. The beard-tax was considered as highly offensive to the feelings of the people, and created so much discontent that the greatest vigilance became necessary to prevent popular outbreak and mutiny, especially among the bearded Cossacks. Notwithstanding this, the beard tax was extended to St. Petersburg, which previously had been exempt. In 1722, another decree was promulgated, ordering all who retained their beards to adopt particular dress, and to pay fifty roubles every year. Who would not shave, and could not pay, was condemned to hard labor to work off the fine.

  1. Externalities

According to Buchanan and Stubblebine, an external effect or externality is present when, uP = uP (X1, X2, … ,Xm, Y1).

This states that the utility of an individual, P(eter), is dependent upon the activities, (X1, X2, …,Xm), that are exclusively under his own control or authority, but also upon another single activity, Y1, which is, by definition, under the control of a second individual, B(earded person), who is presumed to be a member of the same social group. An activity here is defined as any distinguishable human action that may be measured, such as eating bread, drinking milk, spewing smoke into the air, dumping litter on the highways, giving to the poor or –  growing a beard.

The utility of an individual is not economic in nature, at least not mathematically deducible. Utility, and gains and losses in utility, are purely subjective and psychic concepts, and cannot possibly be measured by outside observers. Therefore, a beard can well reduce or increase the utility of a person just as it is the case for candy or smoke.

  1. Pigouvian Tax

A Pigouvian tax is defined as “a constant per unit tax on output designed to correct an externality”, mostly a negative externality (Carlton/ Loury). Pollution is a typical case of a negative externality. Nuisance is frequently brought into the context of Pigouvian taxation. The case of “aesthetic nuisance” was also entertained, although not yet in the context of the Pigouvian tax: “Giving  recognition  to  aesthetic  interests  would  simply  reflect  the  significant effect  that  visual  harmony  has  on  an  individual’s  relation  to  his  or  her  environment” (Raymond Coletta). Although the beard-tax has not yet come into the scope of systematic economic analysis, we find a reference in the economic literature that links the beard-tax to the Pigouvian tax. Luc Nijs references in his book (“Neoliberalism 2.0: Regulating and Financing Globalizing Markets. A Pigovian Approach for 21st Century”) a source that might correctly identify the beard-tax as a Pigouvian tax: “…the beard tax  introduced by Peter the Great in 1698 as a first type or predecessor of a Pigovian tax, although there necessarily was not an externality in this case, but merely a drive for modernization of society.” The author precisely assumes that the Peterian bear-tax was not – or was not merely – aimed at maximizing state revenue.

In the following, I will document that the beard-tax was targeted against a negative externality, namely the beards themselves.

  1. Peter the Great: A Cultural Revolutionary

Tsar Peter was not a great financial genius, nor was he very fond of a sensible approach towards his social environment. The Russia of his time was already huge by extension, but also wild, as well as economically and culturally, as Peter believed, reactionary. If Russia wanted to compete with the western powers that were ruling the world, the Tsar held, she had to be reformed, modernized, and hence westernized. Peter introduced a more structured bureaucracy, he liberalized the feudal economy and brought western experts into his country to reshape his military and political system. One crucial step in Peter’s attempts to reform his empire, he believed, was to introduce western, especially French and German clothing and attire, but in order to get Russia a western face, he had to get rid of the old-fashioned Russian beard – a relict that was overcome in occidental Europe for many decades. He personally detested the “symbols of Old Russian ‘barbarism’” and did not shy away from shaving – with his own hands – the highest members of Russian aristocracy (boyars) who were due to their wealth not sensible to the relatively mild beard tax. In fighting the boyars’ long beards in which he saw “symbols of antiquity”, he did not even shy away from naked brutality: “Finding men in his presence still bearded, Peter sometimes, ‘in a merry humor, pulled out their beards by the roots or took it off so roughly [with a razor] that some of the skin went with it,” a contemporary observer remembered [1]. Peter’s tax on beards was not a way to make money, it was a declaration of war against Russian reactionism. A bojar who was shaved by the emperor’s hands and could therefore hardly escape his fate, would have rather “preserved his beard with some thousands of Thalers”, but the will of Peter to shave was greater than almost any financial stimulus [2]. The forced shaving at Peter’s court along with the tax on beards were part of a “wider package of cultural reform”. The beard-tax was not a weird invention that was singular or any special in its time. There was a tax on births, on marriages, on funerals and on the registration of wills. There was a tax on wheat and tallow. Horses were taxed, and horse hides and horse collars. There was a hat tax and a tax on the wearing of leather boots. The beard tax was systematized and enforced, and a tax on mustaches was added later.

It can be argued whether Peter the Great took any offence in leather boots or hats or if he wanted his subjects to renounce from riding horses. But in any case, Peter was not fond of people around him wearing beards. In contrast to hats, horses, and births, beards represented a negative externality to him that reduced his personal utility. In order to maximize overall welfare, Peter introduced the – Pigouvian – beard-tax. As the Russian historian Nikolay Karamzin wrote decades after Peter’s rule in his famous “Letters of a Russian Traveler”:

“A beard belongs to the state of savagery. Not to shave is the same as not paring one’s nails. A beard protects only a small part of the face from the cold, and how uncomfortable it is in the summertime when it is very hot! How uncomfortable in winter, too, to carry around frost, snow, and icicles on one’s face! Is it not better to have a fur collar, which warms not only the chin but the entire face as well? To select the best in all things is the mark of an enlightened mind. And Peter the Great wanted to enlighten the mind in all respects. Our sovereign declared war on our ancient customs, firstly, because they were coarse, unworthy of his age, and secondly, because they hindered the introduction of other foreign innovations, even more important and more useful. It was necessary to wring the neck, as it were, of the ingrained Russian obstinacy, to make us flexible, capable of learning and of borrowing.”[3]



[1] Robert K. Massie: Peter the Great: His Life and World, New York 1981.

[2] James Cracraft: The Revolution of Peter the Great, Cambridge 2003

[3] Nicholas V. Riasanovsky: The Image of Peter the Great in Russian History and Thought, New York 1992


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