Ah dammit, couldn't finish this in one day. :/
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Now, prior to the restoration of Kavadh, most of the land in the Sassanid empire was owned by the Seven Great Parthian clans. There were only 3 classes: The Magi, the nobles and the commoners. For this it had been for over 200 years, and under normal circumstances this is how it would continue for generations. But now, for the Shahanshah, the defeat of the nobles rebellion and his newfound religion provided the perfect pretext for changing the status quo. It was time to change, to introduce reform amongst the Sassanian state. It was time to break up the landowners and and reward the common man, to assuage the just resentment of the masses. With this, the King of Kings, protector of Eran, set out to change his land, much to the pleasure of his radical sect. With an army at his back and the masses at his side, no one would get in the way of progress.
Now the first thing that Kavad did was to ensure a peace with his greatest foe, the Roman Empire. What Kavadh about to do was unprecedented, and would surely shook up the state. The potential for revolt was already high, and he had no desire to see his gambit be ruined by a marauding Roman Army, eager to step in and plunder all they could should revolt break out and the state was distracted. Thus,peace was of utmost importance. Sending emissaries to the court of Anastasius, he pleaded for a 20 year peace with the Romans. Anastasius, the practical man he was, agreed to the treaty, as it would further allow him to go on about his reforms and fortification of the frontiers when war inevitably broke out. Peace would be the norm between the two superpowers for the rest of the duration of Anastasius’ reign.
Kavadh, however devout he might have been, was still a pragmatic man and monarch at heart and had no qualms putting his ideology aside if it meant increasing the state (and by extension, his) power. Thus, although the reforms were a step ahead, many Mazdakites would criticize Kavadh (not in public of course, you don’t get away with being an ungrateful bastard) for ‘watering down the revolution’. As such, while the nobility would be reigned in, they still enjoyed a large amount of privileges and still made up the the vast majority of the heavy cavalry, the backbone of the Sassanid military. Nevertheless his reign would kickstart the further centralization of the Sassanid state and a introduce a series of reforms that would bridge the wealth gap and class inequality of the empire.
The first thing Kavadh would do is institute a series of reforms to limit the nobles wealth and land. In concordance with Mazdak’s philosophy of the equality of all peoples, noble and commoner would be taxed. As well, with the pretext of ‘redistributing wealth’ the nobility would be taxed more than the peasants. Effectively, it meant that in addition to the nobles being introduced taxation, and they were taxed at a higher rate than the peasants were. This in particularly a popular measure for the Sassanid, the peasants liking it because it while the central government enjoyed this as it mean This served as a very primitive form of a progressive tax policy that nonetheless provided great income to the state. At the same time, the Sassanid state continued the lower tax rate of Kavadh’s temporary successor, Jamasp. The increase of government revenue from the nobility more than made up for the lower taxes received from the peasants. A dual win-win.
Now, in the empire, land and power were synonymous, so the government went out of its way to break apart and confiscate much of the land of the nobility, giving it to smaller landowners, loyal soldiers or commoners. This was both more economically productive for the central government (as it was easier to tax) and made it even more popular in the eyes of the masses. As such, the policy was widely adopted by the state and become increasingly common as time passed, with the Sassanian government implementing a variety of ways and excuses to seize land and distribute it. Many Mazdakites however, would pool their land and run it communally, as one unit rather than as several smallholders. Combined with the various administrative reforms taken in by Kavadh, this new class and the peasants eventually overtook the nobility as the backbone of the Sassanid state’s power. This, communal system, while rare would lead to important effects, both cultural and economic, as the decades passed.
While many Nobles protested towards this measure, with more than a few attempting to revolt against the government, these were brutally suppressed by a combination of loyalists forces (the fact that the majority of the people in the country were benefitting from these laws did much to keep their overlord popular) and the well paid Hepthalite mercenaries over a series of years. The nobles were disadvantaged in that as time went on, the government was able to match their wealth and land pound for pound, and inspired much more loyalty than they did. As well, whenever nobility was crushed, the land would often be confiscated and given to smaller owners, mercenaries and peasants, further undermining their power while entrenching the central government’s.
All these policies had very interesting effects on the status of the Sassanid Empire. The sharing of the tax burden did much to reduce poverty and wealth inequality in the state, which very much added to the popularity of Kavadh I. The redistribution of land inadvertently created a new class, in between the nobilities but above the common masses. [1] This new class, and its newfound wealth would be immensely important in both the military and economic sectors. The peasants were richer than what they had been before, and while that wasn’t saying much, it did much to end starvation and assuage dissent. In addition, their newfound wealth was a boon for the economy, as it allowed the peasants more ability to purchase things, creating more demand for products. With more demand, trade increased in the empire, bringing more wealth and more demand. And with more wealth in the hands of the people, there was more to tax. The government's treasury began a build up. Said treasury was often put to good use in the form of internal improvements of infrastructure and the army. Slowly but surely, a positive feedback loop was occurring, that increased the wealth and relative power of Iran.
[1] Some of these policies would eventually be realized by Kavadh’s successor Khosrau I (breaking up the land, tax reform), who was to some extent influenced to some extent by the Mazdaks. Here however, these are being pushed earlier as the Kavadh has a good excuse to push these reforms (and go farther than his son did)