How the founding fathers made America safe for capitalism
Review of Liberty Is Sweet the Hidden History of the American Revolution by Woody Holton
Our school textbooks told us that the American Revolution was about democratic ideals, that the colonists demanded representation in the British Parliament regarding their fundamental human right as well as their taxes. In this idealized picture, you had all of these white men of the Enlightenment who were determined to create the first government that came from the bottom up, from “the people”. If I read him correctly, Holton wants to show that this is only one part in a vastly more complex story involving personal economic considerations, security issues related to both minorities and Spain, and most important, the pathway to financially viable capitalism. If this is true, much of it remains obscure in standard treatments.
According to Holton, the real start of the troubles was the French and Indian War. Not only did it reveal the depth of the threat that the Native Americans posed, but it cost an awful lot. This set in motion a series of consequences. One the one hand, in order to protect the colonists, the British Parliament decided to station 10,000 troops in the colonies. It was this military force that the new taxes were levied to finance – not just war debts, as I was taught. The troops were also there to ensure order, which translated into a heavier hand from the government as well as enforcement of the new financial obligations that were imposed. On the other hand, to appease the fears of Native Americans, the Parliament imposed restrictions on the ability of colonists to claim land west of the Appalachian Mountain range. This was viewed as a direct attack on the interests of speculators in the Ohio Valley and elsewhere, including by George Washington himself. It caused great bitterness, yet endeared the Parliament to Native Americans in the disputed areas. Up to that point, the colonists were accustomed to being left more or less to their own devices on most domestic matters.
Furthermore, these issues aggravated a number of longstanding issues that colonists had chaffed under for decades. Most apparent was British mercantilism, the economic policy that severely restricted the freedom of American businessmen. Specifically, it prohibited them from developing advanced manufacturing facilities, locking them into providing raw materials for the fashionable goods that were available only from Britain, and restricting their trade partners to those in the Empire. As a result, the well-to-do became chronically indebted to creditors in the home country. American businessmen were strictly prohibited from trading with the French and Spanish colonies, ensuring that there was a massive black market (which the 10,000 troops were supposed to regulate and bring it to an end). There was also a monetary angle: paper money was pronounced unacceptable as legal tender (because it depreciated, hence would stiff overseas creditors); the economic ramification – this limited the money in circulation – severely inhibited the development of domestic trade.
The ham-handed condescension of Parliament did not help matters, but it was the taxes and sanctions that did the most damage to relations with the colonists. As Holton emphasizes, the colonists’ motives were largely economic. Starting in 1764 with the Sugar Act and Currency Act, Parliament imposed a number of coercive measures that generated a growing protectionist movement. The next year, the Quartering Act required the colonies to provide sleeping accommodations and food to soldiers, some of them in private homes. These measures were seen as insulting violations of colonial prerogatives.
Even worse, there was the extremely unpopular Stamp Act, which sought to tax legal and other paper documents; the colonies began to formerly organize themselves into political bodies to fight it. This led to the “no taxation without representation” protests as well as organized boycotts of British imports. While the Stamp Act was repealed in 1766 and other taxes were lowered subsequently, Parliament continued to assert its right (in The Declarative Act) to govern the colonies, in particular with taxes on paint, glass, lead, paper and tea (The Townsend Acts).
Colonial resistance soon led to violence. In 1770, British troops opened fire on a hostile crowd in Boston. This and other incidents deepened the networks of communication between colonies, though their differences and prejudices against each other remained strong. In 1773, to bolster the finances of the East India Company (it had faced violent rebellion in the Punjab and was near bankruptcy), Parliament imposed the Tea Act taxes. This inspired a number of colonists to destroy a tea cargo, i.e. the Boston Tea Party. To punish Massachusetts and force reimbursement, Parliament passed the Coercive Acts, which imposed sanctions and abolished the Massachusetts Charter of Government. Meeting in 1774, the First Continental Congress voted in favor of a general boycott of British goods. Holton argues this was the gauntlet.
Meanwhile, New England began to prepare for war, which took on its own course as a military matter. The war takes up 2/3 of the book and, if a good re-telling, does not add much that’s new in my opinion. Attempting to seize arms caches from the colonists in 1775, British troops engaged in battle in Lexington and then Concord, Massachusetts. Soon thereafter, George Washington was appointed as commander in chief of the colonial army, which was a combination of local militias and largely untrained regulars who signed on for varying periods of a few months to years.
Though the colonist forces faced a highly professionalized army, the Battle of Bunker Hill demonstrated how the odds were in fact stacked against the British, according to Holton: with British manpower limited and supply lines stretched, all the colonials had to do was set up a fortification and wait for the British to attack, only to dissolve into the wilderness and set up new fortifications; this type of engagement proved extremely costly in terms of the British soldiers lost. Adopting “Indian tactics” – firing from behind trees in feral terrains – this war went against the large-force encounters in open fields to which Europeans were accustomed. The idea of colonial strategists was that Parliament would eventually tire of the expense and cut its losses, offering compromise or freedom. In effect, it was an early kind of war of attrition, similar to low-intensity guerilla conflicts, viewed by many contemporary observers as “dishonorable”. As some commanders sought more traditional glory in daring actions, it led to many wasteful and futile encounters.
Interestingly, Washington continually expressed his desire to fight the British with larger forces in central locations, such as Manhattan, but he was always talked out of this more “honorable” course of action by his advisors. The book follows the initial stages of the war in the northern colonies, which eventually played themselves out in the south, once the French were openly allied with the colonists and lent their forces under Rochambeau. With the siege of Yorktown, the most significant large-scale battle, British will was essentially broken.
A major element in British strategy was to recruit both Native Americans and slaves to their cause, with promises of autonomy and freedom respectively. Holton argues that this was a crucial factor that motivated the colonists to put asides their regional prejudices in order to fight together. Notably, the fear of slave rebellion was decisive in convincing Georgia, which had balked the longest to join the other 12 colonies in the revolution. He further asserts that the interests at stake were primarily economic, a combination of maintaining the slave economy and opening the west to real estate speculators. In my opinion, this is certainly a valid argument, but I would weight the factors differently, in particular that there was considerable concern for political freedoms in addition to economic determinants.
Needless to say, when it suited them at the conclusion of the war, the British largely abandoned their commitments to Native Americans and “liberated slaves”, returning many of the latter to their former owners or selling them for personal profit. It was a mix of deeply cynical opportunism, callous indifference, and simple convenience. Holton is very clear that the revolution benefitted neither group.
Once the war was done, Holton’s argument again becomes extremely interesting and, at least to me, original. The intervening period of States loosely united under the Articles of Confederation alarmed many of the coastal elites: in the rural areas, violent tax revolts became a common means to coerce local legislators into backing down, repealing them, and sometimes offering debt relief to farmers. According to Holton, the founding fathers were first and foremost interested in attracting foreign investment, which required that America’s fiscal situation be stabilized; in practical terms, this meant servicing debt, enabling creditors to legally seek payment through the courts, and similar measures. In other words, Holton argues, they were preparing the way for capital, most importantly for their own land speculation on the territories ceded by the British, but also for early industrial purposes. To do so, the founding fathers had to make the new country “governable”. What this entailed is a major point that Holton feels has been neglected in his field.
The key distinction that Holton wishes to make is that the Constitution was not anti-democratic even though it restricted the rights of local actors in favor of Federal power, but that it was paternalistic – the elites “knew better” and were prepared to impose their will on everyone else, for the good of capitalism. The basis of Federal power was to make it very hard for anything to be enacted against what the founding fathers wished, i.e. to “protect merchant-creditors and securities investors”. Not only was there the Senate, which were notable-appointees at the time and not directly elected, but there was the Supreme Court, which could pronounce anything “unconstitutional” by interpreting ambiguous language in the Constitution. These “checks and balances” provided a safety value in inaction, an assurance that the House of Representatives would not be able to enact things on a mob whim, as the state legislatures had done in the previous decade.
To prove his case, Holton looks to the Preamble of the Constitution. It would 1) provide for the common defense, an external security consideration; 2) insure domestic tranquility, which in the early years meant Federal protection against the danger of slave rebellions in the south as Washington and Jefferson had explicitly intended; 3) establish justice, which oddly referred to the Federal Government’s capacity to levy taxes and the prohibition against states issuing their own currencies. The intent of the latter 2 provisions, Holton argues, were overwhelmingly economic in nature: slaves represented the basis of much of the economy in both north and south and creditors would be protected against inflated currencies.
What interested me was how much the economic considerations overshadowed the wider freedoms contained in the Bill of Rights, which was not in the original draft of the Constitution but was added on as Amendments, i.e., compromises to address the concerns of the states. While the economic angle was not a surprise to me, the argument that it was the principal concern of the founding fathers was a twist I hugely enjoyed and with which I must agree.
Holton concludes with an overall assessment of who gained and who lost in the Revolution. If anything, he argues, it was free white men who monopolized the gains. Women, native Americans, and slaves derived virtually no benefit and indeed, many of them emerged the worse off: the latter three groups would have to fight over a century for their rights to be extended and in the case of native Americans, they were more likely to be victims of genocide than participants in the emerging capitalist system. To be sure, many slaves went free, but the overwhelming majority of them returned to both the plantation and domestic house work.
What this book accomplishes is not a fundamental reinterpretation of the American Revolution, but a much-needed shift in emphasis. I believe it offers a more realistic view of the forces at work, that is, how the Constitution was established to make America safe for capitalism. Finally, it is beautifully written and a wonderful retelling of many stories young Americans study in school. Just without the blinders.