Gary North's REALITY CHECK
Issue 63 July 4, 2001
INDEPENDENCE DAY CELEBRATION FOR A NEW MILLENNIUM
Technically, this is the first American Independence
Day celebration for the new millennium.
It's a good day to think back on the world we have
lost. We were handed a great legacy by 56 brave men who
put their lives on the line when they put their names on
the paper. The Declaration of Independence was passed by
the Continental Congress on July 2, but signed on July 4.
They prudently kept their signatures secret for several
months.
www.nara.gov/exhall/charters/declaration/dechrist.html
The split with England had been developing for over a
decade. It became a reality in Massachusetts in the spring
of 1775, with the famous midnight ride of Paul Revere and
the assembling of what became known in retrospect as the
minute men. British troops were coming to confiscate the
guns and ammunition of the local militia. The militia had
other ideas. These ideas later resulted in the Second
Amendment of the U.S. Constitution.
The war had begun over a dispute about taxation. The
colonists wanted to have control over taxation through
their legislatures and local assemblies. They did not want
to submit to England's taxation from London. They also
were unhappy with the Empire's restrictions on trade. John
Hancock was a smuggler, not an insurance salesman.
Not many Americans know what the level of taxation was
in 1775. I did a graduate school paper on this topic over
30 years ago. English taxes were in the range of 1% of
income in most colonies, and possibly as high as 2.5% in
the plantation colonies. For this, they went to war.
The issue was not merely money; it was a matter of
sovereignty. The minority of colonists who followed Sam
Adams and Patrick Henry were convinced that Parliament did
not lawfully possess sovereignty in America, which English
constitutional theory asserted. These men were breaking
with the idea of the British empire.
There was a religious issue, too: the threat of the
Church of England's sending a bishop to the colonies. A
bishop had to ordain priests. The bishop who possessed
this authority over colonial churches was the bishop of
London. It took a long and expensive trip to London for a
man to be ordained. Congregationalists, Baptists, and
Presbyterians preferred it this way. They regarded the
Church of England -- correctly -- as an extension of
British rule in America. (See the 1962 book by Carl
Bridenbaugh, MITRE AND SCEPTRE.)
The war was fought over sovereignty: taxation,
religion, and the proper distribution of powers within
civil government. The colonists who went to war with
England did not trust central government. They regarded
the lawful authority of civil government as one government
among many, sharing authority with self-government, family
government, and church government. They regarded with
hostility Parliament's claim of total sovereignty over the
affairs of British citizens.
Today, most Americans regard such theoretical and
theological issues as quaint, or curious, or naive. The
central government does not officially claim the absolute
sovereignty that British legal theory claimed for
Parliament in 1776, but in fact the invasion of our
liberties is far worse than anything conceived by the most
traditional of Tory political theorists in 1776.
A slogan in the era of the American Revolution was "No
taxation without representation." Today, we have
representation, and our taxes reflect a level of
confiscation that would have been regarded as tyrannical by
citizens of every nation in 1776.
ANCIENT TAXATION TYRANNY
In ancient Israel, when the people came to the prophet
Samuel to request that he ordain a king, he warned them
against doing this.
And he will take the tenth of your seed, and of
your vineyards, and give to his officers, and to
his servants. And he will take your menservants,
and your maidservants, and your goodliest young
men, and your asses, and put them to his work.
He will take the tenth of your sheep: and ye shall
be his servants (I Samuel 8:15-17).
The Hebrews had been enslaved in Egypt. Their
deliverance by God had established them as a nation. Under
Joseph, God had placed Egypt into a form of bondage. The
Pharaoh had collected grain as taxes for seven years,
storing it for a coming famine. Then the central
government sold it back to the people when the famine hit.
Buy the second year, they were ready to sell their land to
Pharaoh.
Wherefore shall we die before thine eyes, both
we and our land? buy us and our land for bread,
and we and our land will be servants unto Pharaoh:
and give us seed, that we may live, and not die,
that the land be not desolate. And Joseph bought
all the land of Egypt for Pharaoh; for the Egypt-
ians sold every man his field, because the famine
prevailed over them: so the land became Pharaoh's
(Genesis 47:19-20).
Then they accepted forced relocation into the cities
of Egypt (v. 21). "Only the land of the priests bought he
not; for the priests had a portion assigned them of
Pharaoh, and did eat their portion which Pharaoh gave them:
wherefore they sold not their lands" (v. 22).
Then Joseph said unto the people, Behold, I have
bought you this day and your land for Pharaoh:
lo, here is seed for you, and ye shall sow the
land. And it shall come to pass in the increase,
that ye shall give the fifth part unto Pharaoh,
and four parts shall be your own, for seed of
the field, and for your food, and for them of
your households, and for food for your little
ones. And they said, Thou hast saved our lives:
let us find grace in the sight of my lord, and
we will be Pharaoh's servants (vv. 23-25).
Egypt was the most bureaucratic tyranny in the ancient
world. But for today's residents of the Western
democracies to return to the level of tax tyranny of Egypt,
it would require tax cuts of at least 50%. To return to
the authoritarian rule of the Hebrew kings, it would take a
tax cut of 75%.
A century ago, no Western nation had a level of
taxation greater than the burden of the Hebrews under the
kings.
What the West has surrendered to the central
government since World War I has been its liberty. We are
not free men by the prevailing standards of 1913.
Americans like to think of themselves as a free
people. We occasionally even sing the phrase, "land of the
free and the home of the brave." But we sing it ever less
frequently. I have not been to a patriotic Fourth of July
parade as an adult. I have never heard a single Fourth of
July political speech. Few Americans under age 55 have.
We shoot off a few firecrackers. We drive out to some
location and watch an hour of tax-funded fireworks. But
that's about all that remains of the Fourth of July.
How many Americans have ever read all of the
Declaration of Independence? Not many. Few students in
high school ever spend as much as one class period studying
its accusations against the king.
"THEY DON'T KNOW THE DIFFERENCE"
My first full-time job was with the Foundation for
Economic Education (FEE), in Irvington-on-Hudson, New York.
Its founder, Leonard E. Read, used to give a speech in
which he surveyed the history of American taxation. He
showed how the rates had grown higher until the state was
extracting 40% or more of our wealth. Step by step,
American voters had adopted the politics of plunder. Read
then concluded: "They don't know the difference between
freedom and slavery."
He was right. Most people don't know the difference.
The number of free societies is declining today. Communism
was a terrible evil, but the governments that replaced
Communist rule are not free societies by 1913 standards.
There is comparative freedom, of course, just as there
are comparatively strong fiat currencies -- compared to
each other today. But World War I destroyed the
international gold standard, the free movement of
individuals (there were no mandatory passports in the West
in 1913), and single-digit taxation.
The voters do not know the difference. They think
there was an eleventh commandment: "Thou shalt not steal,
except by majority vote." They have adopted the politics
of plunder, best described by Frederic Bastiat a century
and a half ago in his great little book, THE LAW. He
presents three choices for a society:
1. The few plunder the many.
2. Everybody plunders everybody.
3. Nobody plunders anybody.
We are clearly in living under system two. To regain
our freedom -- to return to system three -- will take more
than a declaration of independence. It will take a
revolution in our thinking as Americans.
I can think of no better booklet to read on
Independence Day than Bastiat's THE LAW. When British
taxation in 1776 looks like a utopian restoration of
liberty, we have a lot of educational work ahead of us.
www.econlib.org/library/Bastiat/basEss2a.html
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