The Causes of the Revolution of 1776
Enemy, the State
It was said
at the time, I believe, that the actual causes of the colonial
revolution of 1776 would never be known. The causes assigned by
our schoolbooks may be dismissed as trivial; the various partisan
and propagandist views of that struggle and its origins may be
put down as incompetent. Great evidential value may be attached
to the long line of adverse commercial legislation laid down by
the British State from 1651 onward, especially to that portion
of it which was enacted after the merchant-State established itself
firmly in England in consequence of the events of 1688. This legislation
included the Navigation Acts, the Trade Acts, acts regulating
the colonial currency, the act of 1752 regulating the process
of levy and distress, and the procedures leading up to the establishment
of the Board of Trade in 1696.
These directly affected the industrial and commercial interests
in the colonies, though just how seriously is perhaps an open
question enough at any rate, beyond doubt, to provoke deep
above these, however, if the reader will put himself back into
the ruling passion of the time, he will at once appreciate the
import of two matters which have for some reason escaped the attention
of historians. The first of these is the attempt of the British
State to limit the exercise of the political means in respect
of rental values.
In 1763 it forbade the colonists to take up lands lying westward
of the source of any river flowing through the Atlantic seaboard.
The deadline thus established ran so as to cut off from preemption
about half of Pennsylvania and half of Virginia and everything
to the west thereof. This was serious. With the mania for speculation
running as high as it did, with the consciousness of opportunity,
real or fancied, having become so acute and so general, this ruling
affected everybody. One can get some idea of its effect by imagining
the state of mind of our people at large if stock gambling had
suddenly been outlawed at the beginning of the last great boom
in Wall Street a few years ago.
For by this
time the colonists had begun to be faintly aware of the illimitable
resources of the country lying westward; they had learned just enough
about them to fire their imagination and their avarice to a white
heat. The seaboard had been pretty well taken up, the freeholding
farmer had been pushed back farther and farther, population was
coming in steadily, the maritime towns were growing. Under these
conditions, "western lands" had become a center of attraction. Rental-
values depended on population, the population was bound to expand,
and the one general direction in which it could expand was westward,
where lay an immense and incalculably rich domain waiting for preemption.
What could be more natural than that the colonists should itch to
get their hands on this territory, and exploit it for themselves
alone, and on their own terms, without risk of arbitrary interference
by the British State? and this of necessity meant political
independence. It takes no great stress of imagination to see that
anyone in those circumstances would have felt that way, and that
colonial resentment against the arbitrary limitation which the edict
of 1763 put upon the political means must therefore have been great.
state of land speculation during the colonial period will give
a fair idea of the probabilities in the case. Most of it was done
on the company system; a number of adventurers would unite, secure
a grant of land, survey it, and then sell it off as speedily as
they could. Their aim was a quick turnover; they did not, as a
rule, contemplate holding the land, much less settling it
in short, their ventures were a pure gamble in rental values.
Among these prerevolutionary enterprises was the Ohio company,
formed in 1748 with a grant of half a million acres; the Loyal
Company, which like the Ohio Company was composed of Virginians;
the Transylvania, the Vandalia, Scioto, Indiana, Wabash, Illinois,
Susquehanna, and others whose holdings were smaller.
It is interesting
to observe the names of persons concerned in these undertakings;
one cannot escape the significance of this connection in view
of their attitude toward the revolution, and their subsequent
career as statesmen and patriots. For example, aside from his
individual ventures, General Washington was a member of the Ohio
Company, and a prime mover in organizing the Mississippi Company.
He also conceived the scheme of the Potomac Company, which was
designed to raise the rental value of western holdings by affording
an outlet for their produce by canal and portage to the Potomac
River, and thence to the seaboard. This enterprise determined
the establishment of the national capital in its present most
ineligible situation, for the proposed terminus of the canal was
at that point. Washington picked up some lots in the city that
bears his name, but in common with other early speculators, he
did not make much money out of them; they were appraised at about
$20,000 when he died.
was an inveterate and voracious engrosser of land lying beyond the
deadline set by the British State; later he was heavily involved
in the affairs of one of the notorious Yazoo companies, operating
in Georgia. He seems to have been most unscrupulous. His company's
holdings in Georgia, amounting to more than 10 million acres, were
to be paid for in Georgia scrip, which was much depreciated. Henry
bought up all these certificates that he could get his hands on,
at ten cents on the dollar, and made a great profit on them by their
rise in value when Hamilton put through his measure for having the
central government assume the debts they represented. Undoubtedly
it was this trait of unrestrained avarice which earned him the dislike
of Mr. Jefferson, who said, rather contemptuously, that he was "insatiable
Franklin's thrifty mind turned cordially to the project of the
Vandalia Company, and he acted successfully as promoter for it
in England in 1766. Timothy Pickering, who was secretary of state
under Washington and John Adams, went on record in 1796 that "all
I am now worth was gained by speculations in land." Silas Deane,
emissary of the Continental Congress in France, was interested
in the Illinois and Wabash Companies, as was Robert Morris, who
managed the revolution's finances; as was also James Wilson, who
became a justice of the Supreme Court and a mighty man in postrevolutionary
land grabbing. Wolcott of Connecticut, and Stiles, president of
Yale College, held stock in the Susquehanna Company; so did Peletiah
Webster, Ethan Allen, and Jonathan Trumbull, the "Brother Jonathan,"
whose name was long a sobriquet for the typical American, and
is still sometimes so used. James Duane, the first mayor of New
York City, carried on some quite considerable speculative undertakings;
and however indisposed one may feel toward entertaining the fact,
so did the "Father of the Revolution" himself Samuel Adams.
A mere commonsense
view of the situation would indicate that the British State's
interference with a free exercise of the political means was at
least as great an incitement to revolution as its interference,
through the Navigation Acts, and the Trade Acts, with a free exercise
of the economic means. In the nature of things it would be a greater
incitement, both because it affected a more numerous class of
persons, and because speculation in land-values represented much
easier money. Allied with this is the second matter which seems
to me deserving of notice, and which has never been properly reckoned
with, as far as I know, in studies of the period.
It would seem
the most natural thing in the world for the colonists to perceive
that independence would not only give freer access to this one mode
of the political means, but that it would also open access to other
modes which the colonial status made unavailable. The merchant-State
existed in the royal provinces complete in structure, but not in
function; it did not give access to all the modes of economic exploitation.
The advantages of a State which should be wholly autonomous in this
respect must have been clear to the colonists, and must have moved
them strongly toward the project of establishing one.
is purely a commonsense view of the circumstances that leads to
this conclusion. The merchant-State in England had emerged triumphant
from conflict, and the colonists had plenty of chance to see what
it could do in the way of distributing the various means of economic
exploitation, and its method of doing it. For instance, certain
English concerns were in the carrying trade between England and
America, for which other English concerns built ships. Americans
could compete in both these lines of business. If they did so,
the carrying charges would be regulated by the terms of this competition;
if not, they would be regulated by monopoly, or, in our historic
phrase, they could be set as high as the traffic would bear. English
carriers and shipbuilders made common cause, approached the State
and asked it to intervene, which it did by forbidding the colonists
to ship goods on any but English-built and English-operated ships.
Since freight charges are a factor in prices, the effect of this
intervention was to enable British ship owners to pocket the difference
between monopoly-rates and competitive rates; to enable them,
that is, to exploit the consumer by employing the political means.
Similar interventions were made at the instance of cutlers, nail
makers, hatters, steel makers, etc.
took the form of simple prohibition. Another mode of intervention
appeared in the customs duties laid by the British State on foreign
sugar and molasses.
We all now know pretty well, probably, that the primary reason
for a tariff is that it enables the exploitation of the domestic
consumer by a process indistinguishable from sheer robbery.
All the reasons regularly assigned are debatable; this one is
not, hence propagandists and lobbyists never mention it. The colonists
were well aware of this reason, and the best evidence that they
were aware of it is that long before the Union was established,
the merchant-enterprisers and industrialists were ready and waiting
to set upon the new-formed administration with an organized demand
for a tariff.
It is clear
that while in the nature of things the British State's interventions
upon the economic means would stir up great resentment among the
interests directly concerned, they would have another effect fully
as significant, if not more so, in causing those interests to look
favorably on the idea of political independence. They could hardly
have helped seeing the positive as well as the negative advantages
that would accrue from setting up a State of their own, which they
might bend to their own purposes. It takes no great amount of imagination
to reconstruct the vision that appeared before them of a merchant
state clothed with the full powers of intervention and discrimination,
a State which should first and last "help business," and which should
be administered by persons of actual interest like to their own.
It is hardly presumable that the colonists generally were not intelligent
enough to see this vision, or that they were not resolute enough
to risk the chance of realizing it when the time could be made ripe;
as it was, the time was ripened almost before it was ready.
We can discern a distinct line of common purpose uniting the interests
of the actual or potential speculator in rental values uniting
the Hancocks, Gores, Otises, with the Henrys, Lees Wolcotts, Trumbulls
and leading directly toward the goal of political independence.
conclusion, however, toward which these observations tend, is
that one general frame of mind existed among the colonists with
reference to the nature and primary function of the State. This
frame of mind was not peculiar to them; they shared it with the
beneficiaries of the merchant state in England, and with those
of the feudal State as far back as the State's history can be
traced. Voltaire, surveying the debris of the feudal State, said
that in essence the State is "a device for taking money out of
one set of pockets and putting it into another." The beneficiaries
of the feudal State had precisely this view, and they bequeathed
it unchanged and unmodified to the actual and potential beneficiaries
of the merchant state. The colonists regarded the State primarily
as an instrument whereby one might help oneself and hurt others;
that is to say, first and foremost they regarded it as the organization
of the political means. No other view of the State was ever held
in colonial America. Romance and poetry were brought to bear on
the subject in the customary way; glamorous myths about it were
propagated with the customary intent; but when all came to all,
nowhere in colonial America were actual practical relations with
the State ever determined by any other view than this.
For a most admirable discussion of these measures and their
consequences, cf. Beard, op. cit., vol. I, pp. 191220.
In principle, this had been done before; for example, some of
the early royal land-grants reserved mineral-rights and timber-rights
to the Crown. The Dutch State reserved the rights to furs and
pelts. Actually, however, these restrictions did not amount
to much, and were not felt as a general grievance, for these
resources had been but little explored.
There were a few exceptions, but not many; notably in the case
of the Wadsworth properties in Western New York, which were
held as an investment and leased out on a rental-basis. In one,
at lease, of General Washington's operations, it appears that
he also had this method in view. In 1773 he published an advertisement
in a Baltimore newspaper, stating that he had secured a grant
of about twenty thousand acres on the Ohio and Kanawha rivers,
which he proposed to open to settlers on a rental-basis.
Sakolski, op. cit., ch. I.
It is an odd fact that among the most eminent names of the period,
almost the only ones unconnected with land-grabbing or land-jobbing,
are those of the two great antagonists, Thomas Jefferson and
Alexander Hamilton. Mr. Jefferson had a gentleman's distaste
for profiting by any form of the political means; he never even
went so far as to patent one of his many useful inventions.
Hamilton seems to have cared nothing for money. His measures
made many rich, but he never sought anything from them for himself.
In general, he appears to have had few scruples, yet amidst
the riot of greed and rascality which he did most to promote,
he walked worthily. Even his professional fees as a lawyer were
absurdly small, and he remained quite poor all his life.
Raw colonial exports were processed in England, and re-exported
to the colonies at prices enhanced in this way, thus making
the political means effective on the colonists both coming and
Beard, op. cit., vol. I., p. 195, cites the observation current
in England at the time, that seventy-three members of the Parliament
that imposed this tariff were interested in West Indian sugar-plantations.
It must be observed, however, that free trade is impractical
so long as land is kept out of free competition with industry
in the labor-market. Discussions of the rival policies of free
trade and protection invariably leave this limitation out of
account, and are therefore nugatory. Holland and England, commonly
spoken of as free-trade countries, were never really such; they
had only so much freedom of trade as was consistent with their
special economic requirements. American free-traders of the
last century, such as Sumner and Godkin, were not really free-traders;
they were never able or willing to entertain the
crucial question why, if free trade is a good thing, the conditions
of labor were no better in free-trade England than, for instance,
in protectionist Germany, but were in fact worse. The answer
is, of course, that England had no unpreempted land to absorb
displaced labor, or to stand in continuous competition with
industry for labor.
The immense amount of labor involved in getting the revolution
going, and keeping it going, is not as yet exactly a commonplace
of American history, but it has begun to be pretty well understood,
and the various myths about it have been exploded by the researches
of disinterested historians.
The influence of this view upon the rise of nationalism and
the maintenance of the national spirit in the modern world,
now that the merchant-State has so generally superseded the
feudal State, may be perceived at once. I do not think it has
ever been thoroughly discussed, or that the sentiment of patriotism
has ever been thoroughly examined for traces of this view, though
one might suppose that such a work would be extremely useful.
Jay Nock (18701945) was an influential American libertarian
author, educational theorist, and social critic. Murray Rothbard
was deeply influenced by him, and so was that whole generation of
free-market thinkers. See Nock's The
State of the Union.
© 2012 by the Ludwig von Mises Institute.
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