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Tricked on the Fourth of July
by Gary North Recently by Gary North: Never Say Retire
I do not celebrate the fourth of July. This goes back to a term paper I wrote in graduate school. It was on colonial taxation in the British North American colonies in 1775. Not counting local taxation, I discovered that the total burden of British imperial taxation was about 1% of national income. It may have been as high as 2.5% in the southern colonies. In 2008, Alvin Rabushka's book of almost 1,000 pages appeared: Taxation in Colonial America (Princeton University Press). In a review published in the Business History Review, the reviewer summarizes the book's findings. Rabushka's most original and impressive contribution is his measurement of tax rates and tax burdens. However, his estimate of comparative trans-Atlantic tax burdens may be a bit of moving target. At one point, he concludes that, in the period from 1764 to 1775, "the nearly two million white colonists in America paid on the order of about 1 percent of the annual taxes levied on the roughly 8.5 million residents of Britain, or one twenty-fifth, in per capita terms, not taking into account the higher average income and consumption in the colonies" (p. 729). Later, he writes that, on the eve of the Revolution, "British tax burdens were ten or more times heavier than those in the colonies" (p. 867). Other scholars may want to refine his estimates, based on other archival sources, different treatment of technical issues such as the adjustment of intercolonial and trans-Atlantic comparisons for exchange rates, or new estimates of comparative income and wealth. Nonetheless, no one is likely to challenge his most important finding: the huge tax gap between the American periphery and the core of the British Empire. The colonists had a sweet deal in 1775. Great Britain was the second freest nation on earth. Switzerland was probably the most free nation, but I would be hard-pressed to identify any other nation in 1775 that was ahead of Great Britain. And in Great Britain's Empire, the colonists were by far the freest. I will say it, loud and clear: the freest society on earth in 1775 was British North America, with the exception of the slave system. Anyone who was not a slave had incomparable freedom. Jefferson wrote these words in the Declaration of Independence: The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. I can think of no more misleading political assessment uttered by any leader in the history of the United States. No words having such great impact historically in this nation were less true. No political bogeymen invoked by any political sect as "the liar of the century" ever said anything as verifiably false as these words.
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4/07/11 8:49 PM
So. limited to domestic commodities essential for the use of the army. And they did not foresee the tax burden in the new nation after 1783. Monetary inflation wiped out the currency system. They could not see what price in blood and treasure and debt they would soon pay. issued a statement from his Reading. and the new nation faced other expenses.. and it was almost impossible to buy any of the domestic commodities needed for the Army. Our Continental Congress first authorized the printing of Continental notes in 1775. yet an opportunity has scarcely ever offered. In a 1776 pamphlet. The debt burden soared as soon as the Revolution began. as a result of the American Revolution. Pork rose from 4¢ to 8¢ a pound. Beef soared from about 4¢ to 100 a pound. commodity prices were 480% above the prewar average.. refusing to pay more than the government-set prices. imported goods then went sky high. "that. America's first economist.com/north/north1002. and often repeated. historians have written that taxes in the new American nation rose and remained considerably higher. Many farmers refused to sell their goods at the prescribed prices. with large families to feed and clothe. "By November.com/north/north1002." This was the winter of Valley Forge.. Some members signed the Declaration on July 4. On December 5. the Army's Quartermaster-General. 1777. or greatly impeded. With more and more paper money in circulation. 1776. 1777. than they were under British rule. 1777. perhaps three times higher. Price controls in 1777 produced the debacle of Valley Forge." It was thought that this would reduce the cost of feeding and supplying our Continental Army. It was expected to reduce the burden of war. Pennsylvania headquarters saying. that has not been either totally obstructed. Some. sold their farm products stealthily to the British in return for gold. Pelatiah Webster. a disciple of Ludwig von Mises and for 17 years an attendee at his seminar. On December 23.. The public in general believed the leaders at the Continental Congress. The prices of uncontrolled." The situation became so bad in Pennsylvania that the people and legislature of this state decided to try "a period of price control. the very nadir of American history. They did not understand what they were about to give up. of taking an advantage of the enemy. "If the farmers do not like the prices allowed them for this produce let them choose men of more learning and understanding the next election. consumers kept bidding up prices. Rabushka gets to the point. The controls were quite arbitrary. As one historian tells us. notwithstanding it is a standing order. on this account…. Few would take the paper Continentals. that the troops shall always have two days' provisions by them. George Washington wrote to the President of the Congress. The Continental Congress declared independence on July 2. The Congress was warned against printing more and more of them. told his fellow men that Continental currency might soon become worthless unless something was done to curb the further printing and issuance of this paper money.Tricked on the Fourth of July by Gary North 2 of 4 http://lewrockwell. For it was only with gold that they could buy the necessities of life which they could not produce for themselves. wrote this in 1972. The people and the Congress refused to listen to his wise advice. the tax burden tripled. In an article on taxation in that era. More money was required for national defense than previously needed to defend the frontier from Indians and the French. that they might be ready at any sudden call. 4/07/11 8:49 PM . we have no less than two thousand eight 2 of 4 http://lewrockwell. Percy Greaves.
so the cost of British tea went lower than the smugglers' cost on non-British tea." He criticized anarchists. Frederick Engels wrote an article. The Tea Party had stopped the unloading of the tea by throwing privately owned tea off a privately owned ship – a ship in competition with Hancock's ships. Copyright © 2011 Gary North 3 of 4 http://lewrockwell. 46. Parliament in 1773 had cut the tax on tea imported by the British East India Company." Only after the price control law was repealed in 1778 could the army buy goods again. dissolve. Visit http://www. "On Authority. "Treason doth never prosper: what's the reason? Why.. this army must inevitably be reduced to one or other of these three things: starve. This had cost Hancock a pretty penny. He was hopping mad. The revolutionaries are not remembered as treasonous. 2011 Gary North [send him mail] is the author of Mises on Money. 4/07/11 8:49 PM . So. The Boston Tea Party was in fact a well-organized protest against lower prices stemming from lower taxes.. I shall not celebrate the fourth of July. What would libertarians – even conservatives – give today in order to return to an era in which the central government extracted 1% of the nation's wealth? Where there was no income tax? Would they describe such a society as tyrannical? That the largest signature on the Declaration of Independence was signed by the richest smuggler in North America was no coincidence. They had not committed treason. none dare call it treason. But the hyperinflation of the continentals and state-issued currencies replaced the pre-Revolution system of silver currency: Spanish pieces of eight. bayonets and cannon – authoritarian means." The victors write the history books. They were not willing to swear allegiance to the new colonial governments. July 4. if it prosper.garynorth. because they are barefoot and otherwise naked…. John Harrington told us why sometime around 1600.com/north/north1002.000 American loyalists fled to Canada. An Economic Commentary on the Bible. After the American Revolution. whom he called anti-authoritarians.. if such there be at all. He is also the author of a free 20-volume series. A revolution is certainly the most authoritarian thing there is. or disperse in order to obtain subsistence in the best manner they can. it must maintain this rule by means of the terror which its arms inspire in the reactionists. I am now convinced beyond a doubt. In 1872. The retained their loyalty to the nation that had delivered to them the greatest liberty on earth. it is the act whereby one part of the population imposes its will upon the other part by means of rifles. unless some great and capital change suddenly takes place. that. hundred and ninety-eight men now in camp unfit for duty. His description of the authoritarian character of all armed revolutions should remind us of the costs of revolution. and surely not in North America. and if the victorious party does not want to have fought in vain.com/north/north1002. once again..Tricked on the Fourth of July by Gary North 3 of 4 http://lewrockwell. There was no British tyranny.com. The proponents of independence invoked British tyranny in North America.
Tricked on the Fourth of July by Gary North 4 of 4 http://lewrockwell. 4/07/11 8:49 PM ..com/north/north1002... The Best of Gary North Back to LewRockwell.com/north/north1002.com Home Page 4 of 4 http://lewrockwell..