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.

Washington, Franklin, and Foreign Wars

Why do we have governments? What is the purpose of government? This question occupied, in a theoretical way, writers like Thomas Hobbes and John Locke.

To be sure, their considerations weren’t purely theoretical: Hobbes lived through both the Thirty Years’ War and the English Civil War, while Locke experienced the Glorious Revolution. But neither of them was in a position to shape the institution of a government ex nihilo.

Hobbes, perceiving human nature as selfish and violent, asserted that the purpose of government was to provide peace and security. Locke, with a bit more optimistic assessment of human nature, viewed the task of a government as protecting the lives, freedoms, and property of its citizens.

Shortly after - Hobbes published his Leviathan in 1651, and Locke’s Treatises appeared in 1689 - events in North America made the question considerably less theoretical and much more practical. In founding a new government, America’s founding fathers relied on their reading of Hobbes, Locke, and other political thinkers.

In addition to determining, in a concrete and specific way, the purpose of government, it was also important to determine what a government should not do. While a government is good or bad to the extent that it does, or does not, serve its proper purpose, it is also good or bad to the extent that it refrains from, or engages in, activities which are outside its proper purpose. Matt Kibbe writes:

We all agree that the first legitimate role of government forces is to protect the lives of individual citizens. But things get more complicated when it comes to defending against “enemies foreign and domestic.”

According to the Lockean views adopted by the founders of the United States, it is within the government’s proper tasks to defend the country militarily when the country is directly threatened by external powers. But what about indirect threats? What about responding to military threats, not on our own territory, but on the territories of a state with which we may have an alliance?

President George Washington worked to formulate a decision procedure by which Americans might decide which conflicts directly involved the country’s interests, and which did not. That question was urgent then, and is urgent over two hundred years later.

One principle he set forth was that the country should avoid excessive attachment to, or antipathy toward, any other nation. The excess, he felt, would arise from passion, not reason, and lead to decisions blinded by emotion.

Thus misled, we might find ourselves surprised by an unexpected attack, drawn into a war involving another’s interests but not our own, or forgoing a beneficial alliance for no good reason. Matt Kibbe frames Washington’s view this way:

In his 1796 Farewell address, George Washington warned Americans not to “entangle our peace and prosperity in the toils” of foreign ambitions, interests, and rivalries. “It is our true policy to steer clear of permanent alliances with any portion of the foreign world.”

A “permanent” alliance would be an irrational one. Nations like Germany, England, Japan, and China have, over the decades, oscillated between being our friends and being our enemies.

The economic cost of war, Washington warned us, is to be carefully considered. Until 1930, the vast majority of nation’s debt was war-related. The Civil War and WWI created both debt and higher taxes. Because debt harms the economy, and the wars created debt, it can be said that those wars harmed economic mobility and economic opportunity, reducing the potential size of the middle class. Matt Kibbe writes:

Our first president was hardly an isolationist, and his foreign policy views were guided, in large part, by common sense and pragmatism. One of his key considerations was the budgetary implications of overly ambitious foreign entanglements. “As a very important source of strength and security, cherish public credit,” Washington counseled. “One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace.

One may well ask how Washington would have viewed the nation’s involvement in Korea, Vietnam, the Middle East, and other places. Even WWI and the Spanish-American war might be suspect from Washington’s point of view.

In the year 2014 alone, Obama has sent U.S. soldiers into Iraq and the Ukraine. In 2011, he ordered the United States Air Force to bomb Libya. Upon taking office in early 2009, he increased troop levels fivefold in Afghanistan: the U.S. military presence there had numbered approximately 20,000 men until Obama increased it to over 100,000.

To discern whether these actions were justifiable by Washington’s standard would require a nuanced and detailed examination. Matt Kibbe, Distinguished Senior Fellow at the Austrian Economic Center in Vienna, Austria, writes:

You might interpret Washington’s skepticism, in a modern context, as warning against open-ended nation-building quagmires. Can we really establish a constitutional democracy in Iraq? Can we successfully mediate the violent disputes of warring factions in civil wars like the one going on today in Syria? Better yet, should we?

Among the many changes, from George Washington’s time to ours, is that our geographical situation no longer offers us a safe haven. We can be easily attacked in ways not possible two or three centuries ago. This requires that we recalibrate our understanding of threat.

The principle of nonaggression means that we should only declare war on nations demonstrably seeking to do us harm. The men and women who volunteer for our military should not be put in harm’s way by their commander-in-chief without a clear and just purpose, without a plan or without an endgame. This is just common sense.

While our notion of threat may need to be updated, our notion of alliance does not. The litmus test remains this: an alliance should be created or maintained only to the extent, and only as long as, it is in our nation’s interests:

In an era in which our enemies are no longer just confined to nations, the other key question is the balance between security at home and the protection of our civil liberties, particularly our right to privacy and our right to due process. Massive expansions of the government’s surveillance authorities under the Patriot Act and recent amendments to the Foreign Intelligence Surveillance Act have civil libertarians of all ideological stripes worried that the government has crossed essential constitutional lines.

Since Washington’s day, there has always been a tension between war and a citizen’s liberties. In the 1770’s and 1780’s, there were heated debates about conscripting both men and materials from citizens. During WWI, freedom of speech was curtailed in shocking ways. Now, the NSA and other government branches are being used, allegedly in the national interests, to intercept private communications between U.S. citizens.

One distinction needs to be articulated: if some agency of the U.S. government intercepts private communications between individuals who are not U.S. citizens, no civil liberties have been violated, and no U.S. citizen need be concerned. But intercepts of communications between U.S. citizens are matters of grave concern, and in such cases one must ask about warrants and FISA courts.

Returning to the Lockean hypothesis that the task of a government is to protect the lives, properties, and freedoms of its citizens, it is the task of each nation’s government to protect its citizens. If a Spaniard’s cell phone calls are being intercepted by a French intelligence agency, it is the task of the Spanish government, not of the French government, to be concerned about this. If a Swede’s emails are being read by a Polish intelligence agency, the Swedish government, not the Polish government, may have some duty to consider protecting the Swede from “unreasonable search.”

Defending America against the unchecked aggression of our enemies is a first responsibility of the federal government, but respecting the rights of individual citizens and checking the power of unelected employees at the National Security Agency is an equally important responsibility.

A few years before George Washington penned his “farewell address,” Ben Franklin offered some thought on the complexities of economics, freedom, and the role of government.

The situation in which Franklin wrote was this: In 1755, the colony of Pennsylvania was under attack. Franklin was a duly elected member of the legislature in that colony, and the legislature, as the voice of the people, intended to levy a tax upon all the colonists in Pennsylvania. The governor of that colony, however, wanted to exempt from taxation the lands owned by the Penn family.

The revenues from the taxes were urgently needed to continue the conduct of a defensive war.

Franklin noted that it is an “essential liberty” of the voters to levy, through the acts of their representatives, a tax upon the colony. It would be a violation of electorate’s “essential liberty” to impose that tax if one family, by fiat, could exempt itself from that tax.

To complicate matters, the war was raging as the Pennsylvania legislature argued with the governor about its right to levy taxes. The governor, hoping to pressure the legislature, intimated that by delaying the tax until the Penn family’s exemption could be eliminated, the legislature was compromising the safety of colonist in vicinity of the fighting.

The governor argued that the legislature, including Franklin, could “purchase a little temporary safety” by conceding the exemption to the Penn family. Franklin countered that this would be damaging to the rights of the electorate; the voters had the power to levy taxes, and a single family could not simply exempt itself by fiat. Franklin wrote to the governor:

In fine, we have the most sensible Concern for the poor distressed Inhabitants of the Frontiers. We have taken every Step in our Power, consistent with the just Rights of the Freemen of Pennsylvania, for their Relief, and we have Reason to believe, that in the Midst of their Distresses they themselves do not wish us to go farther. Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety. Such as were inclined to defend themselves, but unable to purchase Arms and Ammunition, have, as we are informed, been supplied with both, as far as Arms could be procured, out of Monies given by the last Assembly for the King’s Use; and the large Supply of Money offered by this Bill, might enable the Governor to do every Thing else that should be judged necessary for their farther Security, if he shall think fit to accept it.

While the Penn family, in 1755, did not possess a role in the government that allowed it to make tax regulations, it did have the type of unofficial relationship and influence which could result in the governor taking up its cause. As Matt Kibbe notes, any “unnatural concentration of power” found “outside government” is the result of some relationship between such a non-governmental power and some power within the government.

Thus it is that monopolies, in their truest and most damaging forms, are the products of government. Monopolies arise and endure only when natural market forces have been distorted by government intervention. In a truly free market, monopolies will eventually face some competition. This fact reveals the irony in “anti-monopoly” or “trust-busting” legislation.

We should always be skeptical of too much concentrated power in the hands of government agents. They will naturally abuse it. Outside government, an unnatural concentration of power - such as the extraordinary leverage wielded by mega-investment banks or government employees unions - is always in partnership with government power monopolists.

From the era of Benjamin Franklin to the present, complex questions of international military involvements can be analyzed not only in terms of the nation’s interests in terms of physical security, but also in terms of economic freedom and financial health.

The Coolidge Economy

When Calvin Coolidge suddenly and unexpectedly became President of the United States in 1923, he had a carefully articulated and precisely planned economic policy, although he did not expect that he would have the opportunity to implement it. President Warren Harding’s sudden death placed Coolidge into the position of having to make fiscal decisions, and he was prepared to do because of his systematic understanding of economics.

Coolidge retained Harding’s appointee, Andrew Mellon, as Secretary of Treasury. Despite the abrupt nature of his ascent to the presidency, Coolidge was confident, because he had not only worked out his economic policy over the previous years, but his experience as governor of Massachusetts had given his practical experience in taxation and budgeting.

While we have brief motion pictures and sound recordings of other presidents, Coolidge was perhaps the first president to make frequent and deliberate use of radio broadcasts and film newsreels. The confident expertise which Coolidge exuded was caught on film at an early press conference. Historian Amity Shlaes writes:

The extent to which the new administration would prioritize economy became clear at one of the first press conferences, one that Mellon, finally on U.S. soil, was able to attend. Coolidge, more relaxed than they had ever seen him, led his cabinet to pose outdoors on the White House lawn before a crowd. As the cameras of Fox News and others rolled, Coolidge seated himself in the center chair, and Secretary Hughes placed himself to the president’s right, legs spread out wide. The seat to the new president’s left waited open for Mellon. But Mellon was seconds slow to arrive. In that moment, the camera caught Coolidge’s eagerness. The presidential eyes hunted for the Treasury secretary. The president’s arm motioned. The tap of the hand was a swift but unmistakable, invitation and command.

What was Coolidge’s economic policy? He used the word ‘economy’ in the sense of behaving ‘economically’ - i.e., spending as little as possible. The core of his fiscal policy was reducing government spending. This would lead to reduced deficits, reduced debts, and reduced taxation. Reduced taxation would ease the burden on the middle and working classes, raise wages, and create jobs. These ideas don’t sound new to modern readers, but in the 1920s they were novel.

A convincing speaker, Coolidge argued for his plan, and got support from a wide variety of voters. Even significant members of the opposition party supported the plan. Historian David Greenberg writes:

The 1926 Mellon bill provided for across-the-board income tax cuts, zeroed out the gift tax, halved the estate tax, and slashed surtaxes on the wealthy by 20 percent. Supporting it were several trade associations, banks, local chambers of commerce, and a business lobby formerly called the American Bankers’ League, which had renamed itself the American Taxpayers’ League. The Democrats, adrift and cowed by their 1924 election losses, folded their hand; Senator Furnifold Simmons, one of Coolidge’s chief antagonists, from 1924, backed the new bill, he said, “to make businessmen realize that the Democratic Party is not bent on taxing them or their enterprises exorbitantly.” And with the financial outlook now rosy and the federal budget running a surplus, tax cuts were an easy sell. Coolidge even began to worry that Congress had cut taxes too much and that deficits would return. He warned lawmakers that after the easy work of cutting taxes, they would also have to rein in spending - threatening to veto various appropriations bills if they defied him.

Coolidge rightly understood that tax cuts must be accompanied by spending cuts; otherwise, an increasing deficit and debt would result - the very opposite of the anticipated outcome of such policies. Several of his successors have attempted but failed to replicate his results: they have cut taxes but not spending. These later presidents did what they did, either because they were thwarted in their intended spending cuts by the opposition party, or because they did not fully understand the necessity of such cuts.

Reducing tax was, for Coolidge, not merely an exercise in applying some abstract economic hypothesis. Rather he understood tax cuts to be incremental increases in freedom and in human dignity. If a worker pays 10% or 20% of his income in taxes, this means that for 10% or 20% of his time, he was working for naught, which is tantamount to having his time stolen from him.

Lower taxes freed the ordinary worker to access the fruit of his labor. Lower taxes gave the worker a choice about what would be done with the fruit of his labor. Rather than have the government decide how to spend his money, the worker would be free to spend his own money as he pleased, or to save it, or to give it away. Tax policy was, for Coolidge, social policy. He strengthened the American economy, but he also saw these actions as improving the lives of citizens. Historian Robert Ferrell writes:

If Calvin Coolidge prided himself on one single aspect of his presidential years, it was his policy of fiscal economy. “I favor the policy of economy,” he declared, “not because I wish to save money, but because I wish to save people.” The “people” part of the equation was perhaps a rhetorical flourish, yet people were involved; he may have been speaking of their labor, which he would save by not spending it. In any case, he saw absolute, positive good in fiscal economy, and therefore he not merely balanced the budget but obtained a surplus during every one of his presidential years (as Harding had done before him).

In terms of specific numbers, the Coolidge tax cuts, and their effect on the economy, are described by historian Thomas Sowell:

What actually followed the cuts in tax rates in the 1920s were rising output, rising employment to produce that output, rising incomes as a result and rising tax revenues for the government because of the rising incomes, even though the tax rates had been lowered. Another consequence was that people in higher income brackets not only paid a larger total amount of taxes, but a higher percentage of all taxes.

Who should get the credit for the improvement in the economy? Many historians point to Andrew Mellon, but Mellon was retained by Coolidge, and Mellon’s proposals would not have become law without Coolidge’s support.

Did America’s prosperity during these years, produced by Coolidge and Mellon, come at the cost of the economic collapse of the 1930s? Probably not. The Great Depression was created when what could have been a temporary self-correction in the economy was turned into a chronic condition by certain taxes and tariffs which distorted natural market forces, by the mere existence of the Federal Reserve System, and by well-intentioned but counterproductive attempts to intervene in the economy.

It was careful analysis which led Coolidge and Mellon to their policies, and careful implementation of those policies led to an era of prosperity for citizens of all classes.

The Economic Pain of the Great Depression

By the late 1930's, the misery of the Great Depression had been growing for several years. Unemployment in the United States was worse in 1938 than it was in 1937, and the stock market remained a disaster. What began as a temporary correction in late 1929 was extended for a decade.

Roosevelt's celebrated New Deal programs included four steps: the creation of a large amount of debt as the government borrowed huge sums of money; a significant increase in taxation; a high degree of regulation on almost every aspect of the economy; and a series of "make work" programs which created government jobs.

In August 1937, after the nation and its economy had suffered extensive damage inflicted upon it by the New Deal programs, many of the country's employers were unable to offer meaningful work. Historian Amity Shlaes writes:

Companies were also marking new lows. Leonard Ayres, the executive at Cleveland Trust who had called on Alf Landon with Anderson in 1936, tried to get a grasp on the story by comparing the profitability of corporations in the current decade to that in the preceding one. He found that close to two of three had been profitable from the midteens through the 1920s. Since the Depression, however, that ratio had dropped below one in three, so that "for nearly a decade now the great majority of corporations have been losing money instead of making it," he would note. The editors at the Economist in London were also watching, trying to put what was happening to the United States in perspective. In 1930, the per capita national income of the United States had been one-third larger than that of Britain, the magazine wrote. At the end of the 1930s, it was about the same. The problem, the magazine would conclude several years later, was "institutional obstructions to a free flow of capital." The 1930s, all in all, the magazine would decide, were a strange decade; maybe, as it wrote, the United States really had forgotten how to grow.

It was a decade of misery. Several other countries had been able to find a slow steady path to recovery, but in the United States, the indicators got steadily worse. The Great Depression was worldwide, but took a different shape in each country. In America, the New Deal programs, well-intentioned as they might have been, prevented recovery.

Coolidge's Lasting Contributions

Calvin Coolidge accomplished feats which proved to strengthen the United States long after he left office. In matters of domestic policy, his victories were in the matter of race relations and in the matter of carefully managing the money which belonged to the citizens; in matters of foreign policy, he eased tensions among the nations by means of the Dawes Plan and the Kellogg-Briand Pact.

Long before occupying the White House, Coolidge was an acknowledged expert at fiscal policy. He was resourceful at finding ways to reduce government spending. Historian Amity Shlaes writes:

It was as president that Coolidge's saving proved so exceptional. Coolidge hacked away at the federal budget with a discipline tragically missing in his well-intentioned predecessor, Warren G. Harding. Coolidge vetoed fifty bills and turned down new spending, even for projects such as farm subsidies and construction of rural roads that would have immensely benefitted the region from which he hailed.

By foregoing the short-term gains which might arise from federal funds for agriculture or road-building, Coolidge made possible larger and longer-term gains which were reaped when these sectors were allowed to grow organically. Likewise, the growth of electrification under Coolidge was greater precisely because he did not enact something like the Rural Electrification Act. While many citizens obtained electrification under Coolidge between late 1923 and early 1929, relatively few people gained electrification after March 1933, despite Congress's approval of Roosevelt's Rural Electrification bill.

Coolidge was constantly working to reduce the nation's debt. The result was that taxpayer dollars were not being used to pay interest. Coolidge understood that having a debt reduced the nation's productivity, and that paying interest was a waste of money. During Coolidge's administration, unemployment was low and went lower.

Between August 1923 and March 1929, the economy encouraged invention and growth. Inventors found opportunities to bring new technologies to market. Average citizens were able to obtain these new goods and the standard of living increased for Americans of all classes.

Coolidge served for sixty-seven months, finishing out Harding's term after Harding died in early August 1923 and remaining until March 1929. Under Coolidge, the federal debt fell. Under Coolidge, the federal budget was always in surplus. Under Coolidge, unemployment was 5 percent or even 3 percent. Under Coolidge, Americans wired their homes for electricity and bought their first cars or household appliances on credit. Under Coolidge, the economy grew strongly, even as the federal government shrank. Under Coolidge, the rates of patent applications and patents granted increased dynamically. Under Coolidge, there came no federal antilynching law, but lynchings themselves became less frequent and Ku Klux Klan membership dropped by millions. Under Coolidge, a man from a town without a railroad station, Americans moved from the road into the air.

Perhaps Coolidge's one regret was Congress's refusal to pass the antilynching bills which he encouraged. He worked around this partisan opposition by finding other ways to advance African-American civil rights. He was the first incumbent president to give a commencement address at a historically Black college when he spoke at Howard University in 1924.

In sharp contrast to Woodrow Wilson, who was an enthusiastic supporter of the KKK, Coolidge made fun of the Klan, and was clear in his speeches that would support the right of African-Americans to vote, even as he supported their other civil rights.

Imperialism - Or Not

Many nations have built empires over the centuries: the Persians, Greeks, and Romans did it in ancient times; the Spanish and British did it in more recent centuries. An empire is a collection of kingdoms or countries, under the leadership or control of the imperial nation.

The United States, however, did not get into the empire-building business. Having worked to gain its independence from an imperial power, the United States asserted, in the words of the Monroe Doctrine, that its role would be to prevent imperial interference in, or takeovers of, independent nations.

To be sure, history books typically make the claim that, while the United States did not build a traditional empire, it did engage in economic imperialism. While this claim is impressive, it is also specious. The trade relations which the United States formed during the last half of the nineteenth century and the first half of the twentieth century were largely voluntary and mutually beneficial.

The results of the Spanish-American War in 1898, a bit of the alleged American imperialism, were in fact deliberate steps to prevent the formation of an empire. Discussions of the territories involved - Guam, Cuba, Puerto Rico, and the Philippines - centered around the notion that these entities were to be put on a path to independence.

Newspapers inside the U.S. at the time reveal that discussions of sovereignty for these former Spanish colonies were front and center. On June 11, 1904, The New York Times, under the headline "President Planning Filipino Home Rule," published the following:

Secretary Taft received the Philippine Commissioners at the War Department today, and in the course of a speech intimated that in the even of Mr. Roosevelt being elected President the Filipinos might soon enjoy home rule.

Taft was, at the time, Secretary of War, but had served as Governor-General of the Philippines until late 1903. Roosevelt was at the time finishing up McKinley's term, and would soon be elected to the Presidency on his own. There was a strong anti-imperialist movement in the United States, and leaders of that movement, including Lyman Abbott, lobbied the government to ensure that the Philippines would not become part of an American empire, but instead would be independent.

The fact that Dr. Abbott, the acknowledged champion of the idea "The Philippines for the Filipinos," comes here at this time as the invited guest of the President, and that he publicly declares that he aims to set in motion public sentiment favorable to the self-government of the Philippines, however, is taken to mean that he believes the President may be won over to this view in question, and there is a disposition to expect that not long after Roosevelt enters on his term as President of the United States in his own right by virtue of his election, should the November election result favorably to him, he will take a position indicating the ultimate relinquishment of the Philippines as an absolute dependency.

As it turned out, it took a little longer to grant full sovereignty to the Philippines. Woodrow Wilson's racist views delayed the matter, as did World War One and World War Two. But in 1934, Congress approved a measure to put the Philippines on a ten-year path to independence, and despite the hardship of WWII in the Pacific, the United States kept that promise, and the Philippines did indeed become a free nation because of America's work in liberating it from the Japanese.

But the eventual granting of Philippine independence was already a foregone conclusion in 1904. The New York Times continues:

It is known that in this view of the expedient disposition of the problem Secretary Taft share the hope that there may be ultimate self-government by the Filipinos.

Thus it becomes clear that the United States, far from engaging in any form of imperialism, worked in fact to establish the Philippines as an independent nation-state, a goal clearly articulated by American policy makers in the late 1890's, written into law by Congress in 1934, and realized in the 1940's. As Dinesh D'Souza writes:

The United States was itself once a colony of Great Britain. After World War II, the United States used its influence to compel Britain and France to grant independence to many of their colonies, giving America an anti-colonial reputation. Even now Americans don't think of themselves as colonialists; on the contrary, we see ourselves as champions of self-government and liberty.

Not only the Philippines, but also Cuba established itself as an independent nation-state after the Spanish-American War. Again, voices inside the United States prevented the formation of an empire.

Saving the Economy, Again

The narrative of any nation can be told as a series of dangers which threaten the country, and a series of escapes by which the land and its people are returned to safety. Typically, histories conceptualize those dangers armies attacking the nation from without, subversives destabilizing the nation from within, weather inflicting floods or droughts, or diseases and plagues which sicken and kill the people in large numbers. Often a hero organizes the rescue.

At least since Karl Marx, but even earlier, we know also that economic dangers play a motivating role in history. While a doctrinaire Marxist claims economics as the chief or even sole engine of history, it is less controversial to hypothesize that economics are among the main movers.

In 1920, the United States found itself enduring economic hardship. Although the war had been over for more than a year, its lingering effects included massive debt and an anemic trade relationship with Europe. But the war was not the only reason for a weak economy. Damage had been done to the nation’s financial system even prior to the war. The Wilson administration had eagerly implemented the sixteenth amendment, violated the property rights of American citizens by cruel and bitter taxation. Woodrow Wilson had also intervened into the sphere of personal choice by private citizens: the Federal Trade Commission, allegedly organized to protect consumers, reduced competition between businesses and thereby increased prices; the Federal Reserve System exerted control over the economy, reducing choice and creating risks which would eventually lead to the Great Depression.

While it is easy to condemn these actions in hindsight, it must be remembered that some members of the “progressive movement” - the movement which instituted these actions - were perhaps sincere, if gravely mistaken, in their desire to do something helpful for the average American. Not all of them were cynically manipulating the laws and the economy in order to gather power to themselves.

The net result was that by mid 1920, the ordinary citizen was not enjoying the hoped-for blessings of peace. The war was over, but the economy was crippled. In fact, America’s involvement in the war had been direct for only one year, and indirect involvement had been, if anything, profitable for the American economy in the years prior to the nation’s official entry into the war in 1917. Describing Wilson’s postwar economic misery, Amity Shlaes writes:

The country was expecting a revival, but instead the economy worsened before Americans’ eyes. Debt plagued many companies. Even Henry Ford was struggling under a giant burden of debt. Frederick Gillett told Amherst alumni at the Hotel Commodore in New York that February that “the present is one of the most critical times in the whole history of our country.” The federal war debt was $21 billion alone and the entire federal debt more like $25 billion; ten times the debt before the war. State and federal taxes both had escalated in recent years. Senator Borah had once said he could not imagine the top rate on income tax going over 20 percent; now the top rate was over 70 percent.

Two poisons were killing the economy: debt and taxes. 1920 was an election year, and, of course, the economy would be a major issue in the political campaigns. What the American voters wanted to was to move forward - to get past the burdens of high taxes, to get past the task of paying of the national debt, and to move into the prosperity which lay beyond. It is in part a rhetorical flourish to cast this as a “return” to the past, while simultaneously depicting it as a move into the future. In either case, or in both cases, citizens knew that they were bearing the burden of Wilson’s progressivism, with its high tax rates and micro-management of their personal decisions.

In this context the word “normalcy” was born. Although the word had been in use since at least 1857, Warren Harding is often credited with at least popularizing, if not inventing the word. Ordinary voters wanted a life not filled with wartime urgency, not burdened by taxes and by national debt, and free from interfering government regulations. On May 14, 1920, Harding, campaigning for the presidency, catapulted the word into fame. In Boston, at the Home Market Club, several speakers addressed the crowd, including Calvin Coolidge. Harding spoke later in the day. Coolidge and Harding expressed similar views, but Harding’s speech would be the one to became famous as he introduced the word. Amity Shlaes recounts the event:

Harding went at the same matters more deftly. He defended the free market more robustly and assailed “the false economics which lure economic control to utter chaos. The world,” Harding said, “needs to be reminded that all human ills are not curable by legislation.” Rather than shouting or demanding discipline, Harding appealed to common sense. It was daunting to see how Harding’s gracious humor could melt even the stiff Boston crowd. “If I lived in Massachusetts I should be for Governor Coolidge for President,” he jovially allowed. “Coming from Ohio, I am for Harding.” Harding’s rhetorical style was often criticized, but this time the alliteration soothed rather than distracted.

The speech which Harding delivered that day became a turning-point in American political rhetoric, and a turning point in United States history. Harding’s use of the word ‘normalcy’ connected the best of the past with the best of the future. The nation had lived through a roller-coaster ride of progressivist interventionist policies. Even if well-intentioned, those policies had produced the political and economic equivalent of nausea: too much roller-coaster.

Such was the state of the nation in 1920. The successful campaign of Harding for the presidency was a sign of the voters’ desire for “normalcy” - a chance for moving forward from Wilson’s nightmarish bureaucracy, a chance for moving forward into an environment in which each citizen would have a chance - a chance for political expression, a chance for economic opportunity. Harding, as president, began to unfold that opportunity. Harding’s premature death, and an overplayed scandal of much publicity and little substance, got in the way of Harding’s concept of expanding freedom.

In terms of policy, the Harding administration and the Coolidge administration can be seen as largely continuous. In terms of the politics with which those policies were implemented, there was a significant difference in style. Which one was more effective remains a matter of research for historians. But the cumulative efforts of both offered a sense of hope to the average citizen. Opportunities seemed suddenly plentiful, after the barren days of the Wilson administration. Historian David Greenberg writes:

Apart from taxation, Coolidge also made strides in his second term in minimizing the regulation of business and finance. In his fourth annual message to Congress, on December 7, 1926, he issued a call “for reducing, rather than expanding, government bureaus which seek to regulate and control the business activities of the people.” To the objection that workers, consumers, and other citizens needed safeguards, the president replied, “Unfortunately, human nature cannot be changed by an act of the legislature. … It is too much assumed that because an abuse exists it is the business of the national government to remedy it.”

The mechanisms by which Coolidge and Harding created opportunities for citizens were simple in principle: cut taxes, cut spending even more, and reduce the national debt. These principles created prosperity for all Americans.

In creating economic benefits for all Americans, Coolidge and Harding went sharply against the grain of the Wilson administration. While Woodrow Wilson had worked to keep Blacks out of universities, mercilessly mocked the Republican Party’s habit of appointing African-Americans to significant federal posts, and re-segregated civil service jobs such as those in the Post Office to keep “Negroes” from working near other people, Coolidge and Harding both spoke courageously in favor of anti-lynching laws. While Woodrow Wilson referred publicly to Blacks in racial epithets which are too crude to mention in this blog, Coolidge was the first sitting United States president to give a commencement address at a “Historically Black College” or “Historically Black University” when he spoke at the graduation ceremonies at Howard University. African-Americans understood Coolidge’s bold stance against the KKK and voted for him in large numbers in 1924. Coolidge’s campaign mocked the Klan with its deliberately misspelled slogan, “Keep Kool with Koolidge!”

Historian Robert Ferrell explains how the Harding and Coolidge policies created wealth, jobs, and prosperity for all citizens, of all races, of all classes, in all parts of the country:

In holding down government expenditures and saving enough money to retire the debt, Coolidge employed several devices, one of which was the Bureau of the Budget. The very fact that the bureau’s statisticians and accountants were screening the proposed expenses of cabinet departments and the independent agencies gave comfort to the parsimonious president. The bureau’s experts also could watch for special proposals by those well-known spendthrifts, the members of Congress. When the president presented his annual budget he could feel fairly sure that it was as low as he properly should go, and not a crazy quilt of special-interest propositions.

The Coolidge and Harding administrations successfully used free market policies to combat racism, to offer opportunities to Americans of every class and region, and to generate prosperity for the nation generally. The laissez-faire policies of Coolidge and Harding cannot be blamed for the Great Depression: although the exact causes of the Depression are still debated, they seem to emanate generally from Wilson’s Federal Reserve Board and from tariff and taxation policies which distorted the organic and natural trends of the market.

In any case, Wilson’s policies left the nation in economic shambles in 1920. Harding and Coolidge are properly seen as revitalizing not only the nation’s economy, but also revitalizing civil liberties in general.