It Has Happened Here

by George F. Smith

The problem for the liberty-loving individual is chronically the same, no matter what the date: how to keep the big foot of government off the backs of our necks.

Libertarians such as Carla Howell and Michael Cloud argue that small government is beautiful.  Vote for Libertarian Party candidates, and they will chop leviathan down to a tiny fraction of its size.  We can certainly sympathize with any organization that opposes big government, but it misconstrues the nature of the state, which is why limited government has provided only limited relief historically. 

When England under their George III tried to muscle the American colonies into servitude we threw off our overseas masters and attempted to institute a government with enough checks on its power that we would always be able to say, “It can’t happen here.”  Yet, it has.  We now have the debt-ridden, corrupt, wasteful, elitist, special-interest-driven empire that we repudiated in 1776.

As should be expected, there were people who fought England not to create a free country but as rivals to king and Parliament.  These “patriots” didn’t object to England’s policies of plunder; they wanted to reap the benefits from it themselves.   They were influential men who managed to replace a weak central government – under whose auspices the most powerful fighting force on earth was defeated – with one having more control over people’s wealth.

They were advocates of mercantilism, a method of confiscating treasure from citizens for the benefit of politically-connected businessmen. Specifically, they wanted “internal improvements” to be paid for by high protective tariffs and the inflationary policies of a national bank.   Mercantilists argued that certain infrastructure projects such as roads, railroads, and canals couldn’t summon the private resources to pay for them.  Thus, as Alexander Hamilton wrote in his 1791 Report on Manufactures, “the public purse” must be tapped to make up for “the deficiency of private resource.” [1]

Most libertarians, including myself, are fond of quoting John Quincy Adams about America’s role in foreign affairs, that “she goes not abroad, in search of monsters to destroy.” His 1821 Fourth of July speech to the House of Representatives as Secretary of State is a libertarian classic.  [2]  But Adams did not apply the principles of freedom to domestic matters, leaving the presidency in 1829 bitter because he was unable to implement his mercantilist policies.  He had been resolute about seeing a nation “checkered over” with railroads and canals, to be funded by debt and taxes instead of private enterprise.  His predecessor in the White House, James Monroe, along with John C. Calhoun, raised Jeffersonian arguments against his proposals that carried the day.

During Adams’ presidency, Henry Clay of Kentucky managed to get a tariff passed that raised the average rate by almost 50 percent. Tariffs were a much bigger deal then than now because they were the main source of government revenue.  Southern states, South Carolina especially, regarded the tariff as a weapon by which northern manufacturers could profit at the South’s expense.  In 1832 South Carolina nullified the tariff, meaning they refused to collect it. The federal government backed down and a compromise rate was reached.

By 1857 the average tariff rate had been reduced to a mere 15 percent.  Individual states that had plunged ahead with internal improvements during the 1830s and 1840s experienced such massive failures and corruption that most had amended their constitutions by the 1850s prohibiting state subsidies to private companies.  Mercantilism was on the decline.

Then in 1860 Republicans rammed the Morrill Tariff through Congress a few days before Lincoln took office.  It was another South-exploiting revenue measure that Lincoln fully supported.  By 1862, the average tariff rate had more than tripled, to 47 percent, and remained that high or higher for the rest of the century.

Under Lincoln, mercantilism was reborn at the federal level and was infamous during the last half of the 19th century for fostering corrupt business practices in the railroad industry, such as the 1874 Credit Mobilier scandal.  Mercantilism generated resentment, which led to more intervention, followed by more corruption, more resentment, and more intervention.  Today the partnership of government and business is taken for granted and seen as one of the countless features of an aggressive state in both domestic and foreign matters. The intervention – corruption – resentment – more intervention cycle still persists, diminishing our prosperity, eroding our freedom, and engendering a cynical outlook on business and politics.

When the state offered a helping hand to business, it was only a matter of time before other special interests got into the act.  Since the advent of the Progressive Era, politics has turned into a legalized looting operation.

Being able to serve so many groups requires more government and a new definition of freedom.  The people could stop state growth but most are unable or unwilling to oppose the government’s indoctrination. The looters and moochers whom government intervention rewards, of course, have an obvious incentive not to change directions. 

If you must vote, at least vote for people who would fight for your right to be free from compulsion.  While a vote for a libertarian is still playing the state’s game, it would be better than voting for a candidate pledging to be your next master.

Sources

1  DiLorenzo, Thomas J., How Capitalism Saved America: The Untold History of Our Country from the Pilgrims to the Present, Crown Forum, NY, 2004. p. 80

2  John Quincy Adams on U. S. Foreign Policy