Friday, August 22, 2014

1776: Was It Really about Taxes?

When hostilities began, in April 1775, in the American Revolution, or as some scholars frame it, in the American War of Independence, an exact notion of the reason for the war was lacking - or, perhaps more accurately, there were competing notions about the exact reason for the war.

A collection of phrases reflects the slightly different motives held by different segments of the population: “freedom of speech” or “no taxation without representation” or “freedom of the press” or “religious freedom” or “live free or die” and many others. Different emphases included political freedom, spiritual freedom, and economic opportunity.

It was important for the leaders of the revolution to harmonize these goals - and to show that there was a common essence which these goals shared. Political freedom, religious freedom, and economic freedom are, finally, variations on freedom.

Economic freedom is the only possible foundation for economic opportunity and prosperity.

In addition to uniting the varying motivations for independence, the American leaders also addressed the significant segment of the population which either opposed, or was uncertain about, independence.

Thomas Paine’s writing influenced many as he explained the revolution and the ideas behind it. His style was energetic, the length of most of his writings short, and his diction accessible to the general reading public. His texts were precisely the sort of language which was comfortable for the average reading citizen. Among his many writings was a series of newspaper articles published under the title The Crisis.

In one installment in this series, written in Philadelphia in October 1780, Paine explores the role of taxation as a motivation for the independence movement. He argues cogently that independence makes financial sense. After presenting long lists of taxes and expenses, and calculating the average of these over the population of the thirteen colonies, he summarizes:

I have placed before the reader, the average tax per head, paid by the people of England; which is forty shillings sterling.

And I have shown the rate on an average per head, which will defray all the expenses of the war to us, and support the several governments without running the country into debt, which is thirteen shillings and fourpence.

In short, Thomas Paine calculates that even with the cost of the war, and including the ongoing cost of running the government after independence is achieved, that the average resident of the colonies will pay many fewer taxes.

If a man were the crassest of materialists, and had no love but money, he would then support the revolution. Paine certainly does not endorse pure greed as the supreme guiding principle in life, but makes the argument as a sort of reductio ad absurdum. He points out the greater benefit of liberty which independence will bring.

One further point remains: without making the greed of the crass materialist into one’s guiding principle in life, one must still note that economic freedom is to be desired because it is a necessary precondition to those more noble-sounding forms of liberty. Without economic freedom, including the lower taxes explained by Paine, the other freedoms are meaningless and impossible.

Without free markets and minimalistic taxes, there is no true freedom of speech, freedom of the press, freedom to assemble, freedom of association, or freedom of religion. Without the material means to instantiate themselves, the intellectual liberties are unintelligible. Paine explains:

The peace establishment then will, on an average, be five shillings sterling per head. Whereas, was England now to stop, and the war cease, her peace establishment would continue the same as it is now, viz. forty shillings per head; therefore was our taxes necessary for carrying on the war, as much per head as hers now is, and the difference to be only whether we should, at the end of the war, pay at the rate of five shillings per head, or forty shillings per head, the case needs no thinking of. But as we can securely defend and keep the country for one third less than what our burden would be if it was conquered, and support the governments afterwards for one eighth of what Britain would levy on us, and could I find a miser whose heart never felt the emotion of a spark of principle, even that man, uninfluenced by every love but the love of money, and capable of no attachment but to his interest, would and must, from the frugality which governs him, contribute to the defence of the country, or he ceases to be a miser and becomes an idiot. But when we take in with it every thing that can ornament mankind; when the line of our interest becomes the line of our happiness; when all that can cheer and animate the heart, when a sense of honor, fame, character, at home and abroad, are interwoven not only with the security but the increase of property, there exists not a man in America, unless he be an hired emissary, who does not see that his good is connected with keeping up a sufficient defence.

Paine takes effort to calculate as a dispassionate disinterested economist. Surely this is a pose: Thomas Paine was a passionate advocate of independence. But his pose is taken to persuade his reader - he argues that even if one were indifferent, or even opposed, to the cause of independence, then sheer financial reckoning should persuade the undecided reader to side with independence.

Suppose Britain was to conquer America, and, as a conqueror, was to lay her under no other conditions than to pay the same proportion towards her annual revenue which the people of England pay: our share, in that case, would be six million pounds sterling yearly. Can it then be a question, whether it is best to raise two millions to defend the country, and govern it ourselves, and only three quarters of a million afterwards, or pay six millions to have it conquered, and let the enemy govern it?

Paine then proceeds to examine the other side of the calculation: if economic forces dictate that a resident of the thirteen colonies would benefit from independence, then similar calculations dictate that England would want to keep the colonies as subjects merely to reap a profit from them. Having saddled the colonies with its economically inefficient army, in the name of protecting them, England wanted to not only cover its costs, but to gain a surplus from the colonies - no matter that the colonies had manifested that they could defend themselves better and at lower cost.

Britain did not go to war with America for the sake of dominion, because she was then in possession; neither was it for the extension of trade and commerce, because she had monopolized the whole, and the country had yielded to it; neither was it to extinguish what she might call rebellion, because before she began no resistance existed. It could then be from no other motive than avarice, or a design of establishing, in the first instance, the same taxes in America as are paid in England (which, as I shall presently show, are above eleven times heavier than the taxes we now pay for the present year, 1780) or, in the second instance, to confiscate the whole property of America, in case of resistance and conquest of the latter, of which she had then no doubt.

Paine clearly advocated independence because he believed it was just; but in this particular installment of The Crisis, he took on the persona of one whose assessment of American independence was purely material. His rhetorical technique, in this episode of his series of articles, was addressed to the those who were perhaps undecided regarding the cause of independence, and designed to persuade them.