In Czarist Russia, one of the taxes applied to estates was a head tax on the number of serfs on the estate. This number was determined by a census and periodically was revised depending upon the addition or subtraction of the number of serfs over time. But the census was infrequent so if a serf died, the estate still had to pay for him until the census eventually corrected the numbers. Enter Chichikov, the main character of Gogol's novel "Dead Souls."
Chichikov, a delightful con man, has a plan. He goes to the owners of the estates and offers to buy their dead serfs. He says he will pay the taxes on them. He then plans to go to the bank with his list of serfs, borrow money from the bank using the serfs as collateral to buy a farm.
Is this first cap-and-trade?
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