Back in March, I wrote an editorial for PolicyMic debunking the conservative claim that left-wing economic policies violate the intent of our Founding Fathers. While I'd anticipated that my article would be viewed askance by many of that website's readers, I was surprised at the arguments made by Michael Suede, the founder of LibertarianNews.org, in his response a few days later. Naturally I took the couple hours needed to write a rebuttal, but after seeing to it that my piece was published and garnered a healthy number of readers, I more or less forgot about the whole incident.
Upon reviewing our debate today, however, I realize that it was nothing if not an invigorating exchange. That is why I've decided to republish our three articles here - each one complete and unedited - for anyone interested in seeing an intellectual clash between an Austrian school libertarian and a New Deal liberal on the history and meaning of the American Constitution. I hope you enjoy it!
My Original Editorial (March 8, 2012):
For the original PolicyMic link, see: http://www.policymic.com/articles/5168/memo-to-ron-paul-and-glenn-beck-america-s-founders-were-not-anti-government
If there is one point on which far too many conservatives and libertarians agree, it is that there is something deeply un-American about economic progressivism. It can be found in Ron Paul's references to his liberal opponents not understanding the Constitution or Michele Bachmann's insinuations about "anti-Americans" on the left, and it manifests itself more directly in the jeremiads of Glenn Beck and Mark Levin.
It's easy to see why this line of thinking has so much appeal for economic right-wingers. As a talking point, its effectiveness is hard to surpass; by linking their own ideas to those of America's major leaders and juxtaposing them with the allegedly antithetical beliefs of their opponents, they make it possible to brand those who disagree with them as being at best uninformed and at worst agents of a radical or even downright sinister un-American agenda. Of course, such polemics are only justifiable if they sync up with the facts. A brief overivew of American history quickly reveals, however, the truth is much more complicated than any set of sweeping assumptions.
We can start with the Constitution itself. Although often cited as the bulwark in the laissez-fairest's defense of limiting federal involvement in the economy, one of the primary impetuses behind the calling of the Constitutional Convention was the need for central economic authority. Under the initial governmental pact known as the Articles of Confederation, Congress lacked the power to lay or collect taxes, found that requisitions asked of the states were almost always ignored, and couldn't even impose uniform tariff policies throughout the nation. Most significantly, the federal government lacked the instruments with which to effectively confront economic crises that were national in scope, such as the post-war conflict between debtors and creditors which, as James Madison later wrote, "contributed more to that uneasiness which produced the Constitution and prepared the mind for a general reform" than any other issue.
The Constitution was thus viewed as an instrument which would solve these problems by granting more power to the central national state. Newly enumerated powers included the ability to pass commercial regulations, "coin money" and "regulate the value thereof," impose taxes, and even regulate how states could punish citizens who had gone bankrupt, then considered to be one of America's most pressing humanitarian issues. While Founding Fathers like Madison wanted even more powers expressly delegated to the federal government (such as being able to establish universities, promote the arts and sciences, secure payment of the public debt, etc.), they didn't push to have them to be listed because, as Madison explained nearly a half-century later, "the rejection or not adopting of particular propositions" was never intended to imply that those powers were thereby excluded from the federal aegis (given the nuances of parliamentary protocol, different enumerations were rejected for any number of reasons). "In expounding the Constitution and deducing the intention of its framers," he explained, "it should never be forgotten that the great object of the Convention was to provide, by a new Constitution, a remedy for the defects of the existing one."
In short, the Founding Fathers did not want Americans to so fear losses to their liberty that they avoided implementing policies needed to meet national exigencies, economic or otherwise. From Madison reminding his readers to avoid "a blind veneration for antiquity, for custom, or for names" to Alexander Hamilton scoffing at the notion of people avoiding a given measure "from a remote possibility of its being abused," they believed that state authority should endeavor to avoid extremes - be it the tyranny of King George III or the chaos of the Articles of Confederation -- and instead opt for a middle-ground, with federal authority being usually limited so as to maximize personal freedom but still increased whenever pragmatism called for it. While these arguments did not prevent the Constitution from being fiercely maligned by its opponents (the Antifederalists), the arguments of its supporters (the Federalists) ultimately prevailed, with each of the 13 states eventually deciding to join the union structured around the increased federal powers called for in that document.
Subsequent presidents then interpreted those powers as they deemed appropriate. George Washington chartered the First National Bank, created the federal post office, and enforced the government's right to levy unpopular taxes by quashing the Whiskey Rebellion. Thomas Jefferson, despite espousing a non-interventionist approach to economic questions, saw no inconsistency in championing generous federal subsidies for public school education, the promotion of the arts and sciences, and job-creating transportation infrastructure. Abraham Lincoln formed the Department of Agriculture, passed both the first income tax and the first progressive income tax, and used federal money to build the transcontinental railroad and create land-grant colleges (the forebears of today's public universities). Theodore Roosevelt passed laws regulating food and drugs for cleanliness and safety, broke up corporate trusts, and advocated social insurance, minimum-wage laws, pro-union legislation, and eight hour workdays.
While most of these measures are taken for granted by Americans today, they constituted major expansions of state power into areas of the economy that had previously been entirely private at the time they were proposed. More important, they weren't backed by presidents who are currently viewed as controversial by the bulk of the right-wing (such as Woodrow Wilson, Franklin Roosevelt, or Barack Obama). Indeed, to see how firmly Washington, Jefferson, Lincoln, and Roosevelt are etched into the rock of America's national identity, one doesn't need to look any further than Mount Rushmore.
It's important to note that I'm not trying to invert the fallacy made by economic consevatives to liberals' advantage - i.e., my goal is not to argue that America's most important leaders would have definitely favored the progressive economic policies detested by the right-wing today, be it health care reform and New Deal-esque stimulus packages or measures protecting labor organizing rights and welfare policies aiding the poor and disadvantaged. For one thing, the voluminous quantity of writing produced by the Founding Fathers makes it very easy for supporters of both laissez-faire and economic interventionism to find material supporting their respective philosophies (the views of Madison and Hamilton on the general welfare clause being one prime example). In addition, progressives should welcome the debate sparked when conservatives claim that too much government regulation inhibits economic growth, that having the government provide certain goods and services stifles creativity and hinders efficiency, that welfare programs to assist the poor and unemployed disincentivizes individual initiative, or that progressive stimulus programs are too expensive to be fiscally safe. While liberals may disagree with these arguments, there is nothing intellectually dishonest about their use by the right-wing in political debate, and if we are confident in the correctness of our position (which we should be), there is no reason to object when we are expected to rebut them.
That said, if conservatives are confident in the merits of their positions, they should not feel the need to fight liberals with calumnies. While socialists want all economic power centered in the state and radical libertarians want it pared down to a bare minimum, the vast majority of Americans are sensible enough to realize that there is a happy medium between those two dangerous extremes, and are conflicted primarily on ascertaining where that medium rests. When conservatives attempt to win them over not by appealing to fact, but by wrongly claiming – either directly or by implication – that their opponents are somehow "un-American," they engage in the strategy of winning hearts by cheating instead of earning minds through honest persuasion.
Daniel Patrick Moynihan put it best: "Everyone is entitled to his own opinion, but not his own facts."
For more reading, feel free to check out the sources I used, including: The Ideological Origins of the American Revolution by Bernard Bailyn, The Great Challenge: The Myth of Laissez-Faire in the Early Republic by Frank Bourgin, Spreading the News: The American Postal System from Franklin to Morse by Richard John, The Foundations of American Economic Freedom: Government and Enterprise in the Age of Washington by E. A. J. Johnson, The Presidency of Abraham Lincoln by Philip Shaw Paludan, and The Presidency of Theodore Roosevelt by Lewis L. Gould. I also encourage you to look at primary sources, including Notes on the Debates in the Federal Convention of 1787 by James Madison, The Federalist Papers by James Madison, Alexander Hamilton, and John Jay, and The New Nationalism by Theodore Roosevelt.
Michael Suede's Response (March 12, 2012):
For the original PolicyMic link, see: http://www.policymic.com/articles/5218/america-s-founders-were-pro-big-government-but-only-because-it-suited-their-interests/latest_articles
Recently, PolicyMic pundit Mathew Rozsa authored an article "Memo to Ron Paul and Glenn Beck: America's Founders Were Not Anti-Government" in which he makes the case that many of the founding fathers wanted a progressive centralized national state. On this point, I agree with him 100%. However, Rozsa then goes on to claim that Federalists like Alexander Hamilton wanted a centralized state for purely benevolent reasons. On this point, I disagree with him 100%.
Rozsa states that a “Constitutional Convention was the need for central economic authority” and that “the federal government lacked the instruments with which to effectively confront economic crises that were national in scope,” as the reasons why the Federalists advocated for a centralized state. I claim this is entirely false. The Federalists were rich businessmen who wanted to benefit from political graft. They desired a system of mercantilism, such as that operated by the Crown, only they wanted to be the direct beneficiaries of such a system.
Historian Murray Rothbard writes in The Mystery of Banking (p. 192) that Hamilton and his political allies like Sen. Robert Morris (one of the richest men in America) sought “to reimpose in the new United States a system of mercantilism and big government similar to that in Great Britain, against which the colonists had rebelled. The object was to have a strong central government, particularly a strong president or king as chief executive, built up by high taxes and heavy public debt.”
Hamilton intended to use public debt to enrich himself, his political allies and his business partners by having the national bank buy up Revolutionary War bonds.
Douglas Adair, an editor of The Federalist Papers (1980 Penguin Books edition, p. 171) writes, “with devious brilliance, Hamilton set out, by a program of class legislation, to unite the propertied interests of the Eastern seaboard into a cohesive administration party, while at the same time he attempted to make the executive dominant over the Congress by a lavish use of the spoils system. In carrying out his scheme ... Hamilton transformed every financial transaction of the Treasury Department into an orgy of speculation and graft in which selected senators, congressmen, and certain of their richer constituents throughout the nation participated.”
Adair is making a direct reference to the purchase of war bonds here. Because news traveled slowly on horseback at the time, this provided political insiders a massive arbitrage opportunity. The politicos bought up all the Revolutionary War bonds from unsuspecting war veterans and then cashed those bonds out at face value which made them a tremendous profit. They bought the bonds from the veterans for as little as 2% of par value. In effect, this became the first instance of political insider trading in U.S. history – and it was a massive one.
Rozsa also states that, “George Washington chartered the First National Bank, created the federal post office, and enforced the government's right to levy unpopular taxes by quashing the Whiskey Rebellion.” But what Rozsa fails to mention are the reasons why Washington agreed to these schemes. Washington was originally opposed to the idea of a national bank, but agreed to sign the bank into law after negotiating the property lines of where the future Washington, D.C., was to be built so that it bounded his slave-operated plantation, Mount Vernon; thereby raising its property value.
As for the Whiskey Rebellion, it points out the unpopularity of federal taxes with the public at the time. The people didn’t want whiskey taxes, only the politicians and bankers wanted taxes, and they were willing to use violence to collect them.
Rothbard writes in The Whiskey Rebellion: a Model for Our Time, “Rather than the whiskey tax rebellion being localized and swiftly put down, the true story turns out to be very different. The entire American back-country was gripped by a non-violent, civil disobedient refusal to pay the hated tax on whiskey. No local juries could be found to convict tax delinquents. The Whiskey Rebellion was actually widespread and successful, for it eventually forced the federal government to repeal the excise tax.”
Any discussion that talks about why Hamilton and the Federalists wanted a centralized economic authority should include the monetary interests behind such a scheme. They wanted to rob the public and enrich themselves. Obviously nothing has changed since the time of Hamilton. Cronyism, bailouts, political graft, bond price manipulation, and political insider trading today dwarf what even Hamilton could have imagined.
My Rebuttal (March 12, 2012):
For the original PolicyMic link, see: http://www.policymic.com/articles/5356/in-defense-of-america-s-founders-were-not-anti-government
This is my response to PolicyMic pundit Michael Suede's editorial “America’s Founders Were Pro-Big Government, But Only Because it Suited Their Interests.” I respond to each passage in its own right, with the different sections indicated by quotes and ellipses.
"Recently, PolicyMic pundit Matthew Rozsa... On this point, I disagree with him 100%."
The sole thesis of my editorial was that the Founding Fathers were not inherently opposed to the idea of a federal government that intervened in economic matters. My goal, as made clear in the opening paragraphs, was to draw a contrast between the historical facts and the assertions made by figures like Ron Paul and Glenn Beck, who insist that a stronger central state ran counter to the will of the Founding Fathers, at least insofar as economic questions were concerned. Although Suede subsequently picks my editorial apart in an effort to attribute subjective interpretations of their agenda to me (i.e., that they had "purely benevolent reasons"), the reality is that my main goal — as made clear in the concluding statements as well as the opening paragraphs — was to rebut the laissez-fairest interpretation of our Founding Fathers' intent, not state whether that intent was a positive or negative one. His effort to shift attention away from my argument in the name of promoting his own agenda is, at best, disingenuous.
It is also worth noting that, although Suede focuses his analysis on Alexander Hamilton and cites him as an example of a Founding Father on whom I lavished praise ("Rozsa then goes on to claim that Federalists like Alexander Hamilton wanted a centralized state for purely benevolent reasons"), Hamilton was only mentioned twice, and briefly at that, in my piece. James Madison, whose motives and ideas factored much more heavily into my analysis, isn't mentioned once by Suede in his attempted rebuttal.
Incidentally, one of the things with which Suede "agrees" isn't something I actually argued. Although he concurs that the Founding Fathers wanted a "progressive" state, I actually wrote that "my goal is not to argue that America's most important leaders would have definitely favored the progressive economic policies detested by the right-wing today."
"Rozsa states that... such a system."
While I will address the alternative reasons cited by Suede in a moment, I first need to contest his notion that these claims of mine were "entirely false." Suede's choice of quotations is telling here — although he mentions that I wrote "the federal government lacked the instruments with which to effectively confront economic crises that were national in scope," he conveniently leaves out the remainder of that sentence, in which I provide an example of one such crisis. That crisis, namely, was "the post-war conflict between debtors and creditors which, as James Madison later wrote, 'contributed more to that uneasiness which produced the Constitution and prepared the mind for a general reform' than any other issue."
In the entirety of Suede's piece, he never once addresses the issue of the crisis between debtors and creditors. Does he deny that it existed? If so, how? If not, does he deny the link between its severity and the motives of many of the Founding Fathers who called for the Constitutional Convention? His analysis is incomplete unless he addresses all of the points that I raised, rather than cherry picking the ones which fit into his own polemic. Likewise, he cannot effectively argue that it is "entirely false" to claim that the Federalists created a centralized state to deal with national economic crises without addressing this issue, to say nothing of the other issues I mentioned (including "that requisitions asked of the states were almost always ignored" and that the government "couldn't even impose uniform tariff policies throughout the nation").
"Historian Murray Rothbard... Revolutionary War bonds."
Bernard Bailyn and Frank Bourgin, the two historians who I used in my own analysis of constitutional history (in addition to referring to the Federalist Papers, the Madison transcripts, and the Constitution itself), both concur with Rothbard insofar as mercantilist influences are concerned. That said, unlike Rothbard, they do not attribute purely sinister motives to these efforts. To quote Bourgin (p. 93), Hamilton "viewed some of the methods of mercantilism as the efficient means of combating European trade discrimination, and to an even greater extent, of planning the growth of American industry." This is not to say that Hamilton and his allies within the industrialist class did not hope to financially profit from such a system, just as one can't deny that Madison and many in the Southern plantation class adopted laws that they hoped would benefit them as slaveowners (more on that later). That said, it is important to separate one's political biases from how one analyzes the existing historical data. If you're going to address the motives of the Hamiltonians, it behooves you to either (a) rely on both the positive and negative reasons attributes to them, rather than merely citing the one that is convenient to your case or (b) mention both and then explain how the one you dislike happens to be in error. Suede does neither of these things.
"Douglas Adair... a massive one."
Whereas Murray Rothbard is a controversial libertarian polemicist, Douglass Adair is indeed one of the most brilliant historians of the twentieth century, helping to trace the influences of Western European intellectual traditions on the ideas of Founding Fathers like Madison and Hamilton, to say nothing of many others (he even helped determine the authorship of disputed Federalist Papers, no mean feat). He was extraordinarily prolific, and his analysis of Hamilton's pecuniary self-interest is indeed as Suede describes it... but again, alas, Suede is selective in what he cites. Ironically, the best summary of Adair's overall position on Hamilton, which Suede ignores, comes from the author William Hogeland as he criticizes Adair for his liberal bias:
"Adair’s liberal style of Beard debunking (a reference to acclaimed historian Charles A. Beard), in contrast to McDonald’s right-wing one, makes Hamilton a social conservative living in hysterical fear of a chimerical class war. So Adair doesn’t have to deny Beard’s contention that Hamilton’s efforts in public finance involved an attack on the less advantaged; he just sees the class attack as baseless, even silly, off the point of founding history as he’s defined it. Since balancing fights among Americans is what interests Adair and his liberal-intellectual progeny, not the fights themselves, both Hamilton and the his enemies in the eighteenth-century popular-finance movement exist by definition outside the mainstream of the American founding."
What is noteworthy here is what Suede left out - i.e., the fact that Adair, even as he lambasted Hamilton for being an elitist who wished to skew the government to his own financial interest, also placed him outside the mainstream of America's Founding Fathers. Many scholars disagree with this analysis (including Hogeland himself, which is why he summarizes it), but they at least see fit to cite it. Suede neglected to mention it altogether.
"Rozsa also states... its property value."
It is noteworthy that Suede doesn't list his source here, although I suspect it is Rothbard. Either way, does his historian provide primary sources proving that George Washington agreed to a central national bank for the sole reason that it would increase the property value of his Mount Vernon estate? Showing that this was the major motive would be quite serious, and such a charge requires more than mere "historical interpretation" or circumstantial evidence (like whether or not the northern Virginian real estate bounding the new capital increased in value), but actual primary documents showing that Washington was directly motivated by a desire to accumulate profit. When making such a serious charge, one needs direct and irrefutable proof. I would be especially curious given that the Residence Act of 1790 was passed one year before the bill chartering the National Bank, which was chartered on February 25, 1791.
"As for the Whiskey Rebellion... the excise tax.”
Once again, what claims in my editorial is Suede refuting? Did I argue that the Whiskey Rebellion was localized (as opposed to being national) or swiftly put down (as opposed to being more difficult to quell)? Let's look at the quote:
"George Washington chartered the First National Bank, created the federal post office, and enforced the government's right to levy unpopular taxes by quashing the Whiskey Rebellion."
That, in its entirety, is my mention of the Whiskey Rebellion. Regardless of whether I share Rothbard's interpretation of those events, Suede once again uses a straw man fallacy to respond to my editorial. A straw man fallacy, for those of you unfamiliar with the term, is defined by The Nizkor Project as follows:
The Straw Man fallacy is committed when a person simply ignores a person's actual position and substitutes a distorted, exaggerated or misrepresented version of that position. This sort of "reasoning" has the following pattern:
- Person A has position X.
- Person B presents position Y (which is a distorted version of X).
- Person B attacks position Y.
- Therefore X is false/incorrect/flawed.
"Any discussion that... Hamilton could have imagined."
This brings me back to my earlier reference to the role of slavery in the founding of our nation. As historians like George William Van Cleave have identified in books like "A Slaveholders' Union," many of the ideas of our Founding Fathers were specifically tailored to guarantee the preservation of slavery in our nation, including ones that strengthened as well as weakened the central state. Why did I neglect to mention this in my editorial, even though it has obvious implications insofar as the question of race in modern America is concerned?
Simple: I did so for the same reason that I decided not to mention the unsavory special interests of Hamilton and his backers, which is that the main goal of my editorial was to refute the charge that our Founding Fathers wanted the republic to be established on laissez-faire principles. Given the wealth of information through which I had to sift in order to explore this argument (as indicated by my list of sources cited at the article's conclusion), it was critical that I provide my piece with focus by only including data which directly pertained to the rebuttal I was providing to the laissez-fairest interpretation of our nation's past, disregarding a lot of other information (much of which I would have loved to include if for no other reason than I find it interesting) so as to keep my eyes on the central point. This also explains why I included a great many details about America's government after the 18th Century (including the Jefferson, Lincoln, and Roosevelt administrations) and mentioned other new powers given to the federal government (imposing uniform tariff policies, dealing with bankruptcy issues, or implementing commercial regulations), all of which Suede overlooked in his desire to disproportionately emphasize the emphasis placed on Hamilton and Washington.
This traces back to the fundamental problem with Michael Suede's editorial; instead of looking at my piece for what it was — an effort to debunk an inaccurate interpretation of history — he instead insisted on injecting a straw man agenda into it alongside the goal that was actually there. Because Suede is clearly very passionate about issues like central banking, he understandably wishes to disseminate his views to others. This is entirely appropriate. Where it becomes inappropriate is when he uses that as an excuse to misinterpret other people's work in order to promote his own ideological agenda. Considering that the very purpose of my editorial was to contest how certain politicians warp the work of our Founding Fathers to suit their own purposes, the fact that Suede attempted to do the same thing with my own words is an ironic footnote to that piece.
Suede posted this comment on the message board under my rebuttal:
"the post-war conflict between debtors and creditors which, as James Madison later wrote, 'contributed more to that uneasiness which produced the Constitution and prepared the mind for a general reform' than any other issue.""
I contest that creating a federal state to deal with lending conflicts is like starting a nuclear war over spilled milk. The notion that somehow a federal state was necessary to deal with lending conflicts is asinine. Unless of course, you happened to be a mercantilist. The monied interests wanted to protect themselves from the great unwashed.
Because Suede persisted in ignoring the points I raised (both the substance of my original argument and the different ways I had rebutted his positoin), I saw no value in continuing the debate. While this was admittedly a pretty anticlimactic end to such an intense editorial war, I'm still quite happy with how things unfolded. Feel free to share any thoughts you may have on our exchange.