Should a prince be liberal with money or stingy according to Machiavelli in The Prince?

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As Machiavelli explains in Chapter 16 of The Prince, it is better to be stingy, though he notes that it can be advantageous to cultivate a reputation for generosity. However, the lavish displays necessary to maintain that reputation would ultimately prove so expensive as to be disastrous. Thus, for Machiavelli, the prince with the reputation for generosity will ultimately have to at some point raise taxes, and this for Machiavelli is a critical error, because raising taxes is something that will earn the enmity of one's subjects. One of the critical calculations of Machiavelli's thought is that the ruler must be careful not to become hated. Thus, for Machiavelli it is far better to be stingy than to be generous.

That being said, this advice does have a critical condition to be aware of—and that condition is in military considerations. As he tells us in chapter 14, "a Prince . . . must not have any other object nor any other thought . . . but war, its institutions and its discipline." (The Portable Machiavelli, ed. & trans. by Peter Bondanella & Mark Musa. United States: Penguin Books, 1979, p. 124) From that perspective, as important as it is to be stingy, this would not extend to matters of military expenditure, because princes should make whatever investments are necessary to secure their military capacity. These thoughts are further reflected in his thoughts concerning generosity and stinginess, because at the end of chapter 16, he makes a critical exception to his advice detailed earlier. When it comes to wealth that is taken in war, Machiavelli says that a victorious prince should be generous with it rather than stingy, because that generosity when shared with his soldiers and followers will maintain their loyalty.

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If you start to read Chapter XVI of The Prince, you will think that Machiavelli is saying that a ruler should be liberal.  However, you will soon find that he is really saying the opposite. Machiavelli argues that a ruler who is liberal will destroy his country.

Machiavelli starts by saying “I say that it would be well to be reputed liberal.”  However, he soon goes on to say that this is not practical in the real world.  If a ruler tries to be liberal with everyone, he (people in Machiavelli’s time did not think about women rulers much) will have to give away tremendous amounts of money to keep up that reputation.  He will end up having to tax people too much to keep up his generosity.  People will come to hate him because of the high taxes.

Instead, Machiavelli says a prince should be stingy.  People might initially dislike this, but they will eventually come around because the prince will not tax them very highly.  The prince will have enough money to do all the things that are necessary because he will not waste money trying to look liberal.  As Machiavelli says, the prince will be respected because he will be able to defend his country and will be “able to engage in enterprises without burdening his people.”

So, Machiavelli argues that it is better to be stingy because

a prince should guard himself, above all things, against being despised and hated; and liberality leads you to both.

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