Sacred Haven of Debauchery

You are both right. There are thugs everywhere, among the paladins and the mercenaries. Both sometimes attack peasants for money and for fun. There are even more thugs among the peasants. And the king has no other choice; if he doesn't profit from the peasants, the orcs will kill everyone, including the peasants, so they are fools if they are unhappy with the taxes. I don't quite understand, though, how arming the army with iron blades instead of ordinary ones will make them fight much better? It would be better if the king spent his efforts on improving the warriors' skills, rather than on their equipment.