As noted in the May Freeman, American revolutionaries mixed classical-republican and liberal political languages somewhat indiscriminately. Republicanism posited a relation between power and property in which independent proprietors were the bulwark of liberty. English critics of post-1688 Whig mercantilism deployed republican ideas, leading many historians to paint them as agrarians resisting capitalism, modernization, and social change. (Social change routinely looms large when historians wish to discount human agency.)
John Taylors writings show how an anti-mercantilist critique could be a liberal critique, despite detailed agreement with more strictly republican analyses. His Inquiry (1814), for example, was a belated reply to John Adamss Defence of the Constitution of Government of the United States (178788), in which Taylor explicitly rejected Adamss archaic-republican social balance between legally entrenched social orders. For Taylor, even such republican terms as corruption and virtue had different meanings in the American context.
Each of three historical ages, Taylor writes, had its own artificial aristocracy. The newest was a financial oligarchyEnglands modern reality. American Federalists wanted it here. Oddly, he notes, colonial Americans had spotted abusive taxation more quickly than independent Americans did. Having managed to explode . . . the antiquated social compact dogma, they succumbed to modern law charter dogma protecting state-created property as eternally inviolable.
Taylor treats those possessions as property, which are fairly gained by talents and industry, or are capable of subsisting, without taking property from others by law. Absent church establishments and feudal dues, taxation was the only engine for distributing and balancing property and dividing society into payers and receivers. National debt, too, was a key engine of oppression, reflecting the wish to anticipate the riches of posterity and bequeath it [our] misfortunes.
Championing labour and agriculture against paper feudalism, Taylors class-conflict analysis highlighted the role of the state. In a world where numerous interests battened on the state, that analysis was an important tool. Taylors political sociology shares much with the French Restoration liberalism of J.-B. Say, Destutt de Tracy, Charles Comte, Charles Dunoyer, and Augustin Thierry.
Like Jefferson, Taylor was conversant, not just with English economists, but also with Say and Tracy. But Taylor has flashes of complete originality. After all, none (or few) of the French or English writers had looked hard at the rising American system, which they wrongly fancied was repudiating European mercantilism. Taylor was breaking new ground.
In Tyranny Unmasked (1822), written mainly against protective tariffs, Taylor carried forward his political class analysis with great sociological penetration. Taylor writes that no property-transferring policy . . . can enrich workers or merchants in general. A few of the latter gain by becoming bankers, lenders to government, or factory owners. Particular mechanicks or agriculturists might also profit: A few individuals are enriched by every species of tyranny.
Expanding, in Inquiry, on the contrast between true and false (state-created) property, Taylor observes: Despotick power strives to blend itself with a legitimate government, as paper stock does with private property. False property wrapped itself in the protective mantle of justly acquired property, and we must understand Federalist grumbling about leveling political tendencies in that light. Beneficiaries of mercantilist (re)distribution did not want their gains called into question. Finally, Taylor observes that in England, the financial aristocracy profits more from war than feudal aristocrats ever did, by gaining new fields for investment and by funding the war which made the conquest. Increased taxes to pay the interest were a further boon to this class.
Banking and Paper Feudalism
State-connected bankingthe Bank of England and the Bank of the United Stateswas a primary target of Taylors political polemics. Here, a false analogy with everyday commercial borrowing confused matters. In Taylors view, paper stock and public debt are not necessary to commerce, even if, coincidentally, they exist together in England. That paper and debt were the bane of commerce could be inferred from the necessity of England to resort to war and conquest to cultivate her commerce. Paper bills were signs or representations of real things and a tax on monetary circulation. Taylor is happy that the American Revolution succeeded without establishing permanent public debt in lieu of paper currency. Revolutionary currency lost value, to be sure, but it did not linger on as an excuse for future taxation. It disappeared, having done only limited harm.
Banking, as practiced, was generally bad. The advantage of coin is the difficulty of multiplying it. Noting that under hard money, any supply of money is optimal, Taylor notices the bankers privilege of keeping fractional reserves. With interest counting as assets, and multiple lendings of the same capital, massive transfers of real goods went forward. Again Taylor calls bank profits a tax paid to privileged corporations. Taylors conclusion? The tyranny of fraud is not less oppressive than that of force.
Taylor compares patronage gained by banking with that obtained by conquest. Where patronage is obtained by foreign conquest, as in the acquisition of India by England, the people still suffer by the unconstitutional power it confers, even though domestic patronage was directly more calamitous.
Taylor has a good grasp of international flows of money and goodspaper, specie, and commoditiesand spots an illusion later central to Keynesian economic policy: [A]n advancement of the price of labour, pari passu, would produce neither gain nor loss. He observes that a paper-military-patronage aristocracy does without titles of nobility, but is no less dangerous for that. Money and armies are the instruments of power, he adds.
Everyday Class Conflict
Taylor believed that great extremes of wealth invariably sprang from extra-economic coercion and deceit. Here, he resembles that self-taught radical, Thomas Paine. Taylor sounds vaguely Marxist, while explaining why protectionism does not help English workingmen: [I]t has established a monopoly which operates only in favour of their employers, increases the expenses of government, and feeds unproductive capital by sacrificing productive labourespecially in agricultural and seafaring occupations, where the workers have very little capital except their bodily labour. Here is Marxs labour-power category several decades early.
Taylor did not need to be a proto-Marxist, however, because liberals already possessed (but did not always employ) a theory of plunder (spoliation) featuring the state apparatus as the major cause of social conflict.
State-promoted business enterprise was at the heart of everything Taylor opposed. Echoing James Harrington (1656), he writes that enormous political power invariably accumulates enormous wealth, and enormous wealth invariably accumulates enormous political power. Asserting the parasitic character of state-created capital, he denounced transfers of real wealth from the economically productive and the aggressive alliance of artificial capitalists, corrupt courtiers, and officials who profited on them.
Taxes raised to pay public debt drained resources away from productive uses, and public credit funded the standing army, an instrument of constitutional subversion and empire. America, Taylor complains, has followed Englands road to ruin, under Federalists and Republicans alike.
These considerations shed light on Jeffersons frequent references to the need for periodic revolutions. Given the ills attending state-subsidized capitalism, the people must have room to undo state creation of wealth and classes. The Yazoo scandal comes readily to mind. Georgia lawmakers handed out millions of acres of western land to those who bribed them. When a later legislature undid the act, Chief Justice Marshall declared the grants a sacred trust under the federal contract clause, in a textbook example of English charter law.
In Taylors day governments still chartered corporations as privileged monopolies for specific purposes clothed with a public interest. Taylor saw hierarchy (the established church) and corporation as innately despotic, since both were appurtenances of sovereignty and, therefore, appurtenances of despotism, because sovereignty is indefinite. Taylors insight seems ideally suited for understanding the triumph of American state capitalism, once we see that general incorporation laws in the Jacksonian Era left state-like corporate privileges intact while widening the base of privilege. (See Frank van Dun, The Modern Business Corporation versus the Free Market? Freeman, March 2003, pp. 2933, and Personal Freedom versus Corporate Liberties, Philosophical Notes, No. 76, Libertarian Alliance [London], 2006, pp. 119.) The deep roots of American corporatism suggest Taylors relevance across most of American history.
Taylor writes that debt financing renders a war twice suffered; by the living, who supply all the expenses of war; by the unborn, who supply an equivalent sum, to take up certificates of the expenses. . . . Debt issues had actually hampered the American Revolution, since war carried on by paper, is starved by peculation, and produces the utmost degree of publick expense, with the least degree of publick spirit. (Here Taylor anticipated several Austrian School economists.)
Taylors views on war and its financing deepened his critique of the presidency and centralization. The point of Taylors antimilitarism was to avoid the fate of European nations, which exist for the benefit of armies and navies. . . . War was the keenest carving knife for cutting up nations into delicious morsels for parties and their leaders. It swells a few people to enormous size; puts arms into the hands of ambition, avarice, pride, and self-love; and breeds a race of men, nominally heroes, mistaken for patriots, and really tyrants. Finally, party discipline gave 26 percent of the legislatureeffectively controlling 51 percentthe power of declaring war. Alluding to dear old National Security, Taylor reminds us: Conquests abroad are rare, and no compensation for conquest at home.
Britain: The Negative Role Model
nless we uprooted subsidized capitalism, America would become Englandwith Whig oligarchy, class conflict, economic crises, taxes, standing army, constant war, and a confusion of state-created and privately earned property. Britain was our negative role model, whose chief evilsempire and domestic oppressionwere intertwined. Compulsion guarded English commerce: England is enriched, because labour is her slave; goaded by a paper system, and she makes competition shrink by a fleet. Britains relative internal freedom was little comfort to its dependencies, as nearly demonstrated in the relations between England and Ireland, and quite so in India.
Empire, Monarchy, Oligarchy
England brings usand Taylorto the structural logic of empire. The English state was a confederation of parties of interest, excluding the people, and consisting of the church of England, the paper stock party, the East India company, the military party, the pensioned and sinecure party, and the ins and outs, once called whigs and tories, held together by the monarchy. The English nation has no government, and no British nation existed beyond these interest groups. Taylor notes that Samuel Johnson, the best informed tory, favored a brisk circulation of money. But a brisk circulation of power is also produced, and Dr. Johnson neglected to tell us . . . that money attracts power, and power, money.
Taylors works abound with examples of his realistic grasp of social interrelations. He addresses two common arguments for consolidated power: uniformity of religion and the difficulty of governing an extensive territory. Europe had given up the former, and America the latter (in terms of monarchy). Practical knowledge being widely dispersed in a large state, moral geometry limits the knowledge and will of a king. Hence, beyond his orbit, monarchy ceases and some anomalous government ensues; oligarchical, military, deputy-royal, tumultuous, or infinitely variegated by circumstances and neither the virtues nor vices of a monarch are felt at a distance from his person.
Monarchy only succeeds, Taylor says, in armies, garrisons, savage tribes and private families. The wider the sphere, the more a king has only a power of changing oligarchs. This brings Taylor back to patronage, dependent on the very worst kind of oligarchs . . . irresponsible and unknown. Here indeed was a governmentneither republic nor monarchy. Where a republic and a monarchy each had the power of distributing wealth, the monarchy was less burdensome, because it is less expensive to gratify the rapaciousness of one, than of many.
Were America governed as a monarchy, it could only retain the advantage of extensive territory, by an oligarchy composed of deputy-kings, bashaws, satraps or mandarins. As a decentralized confederation of self-governing members, America might expand indefinitely, forming a great nation, by a chain of republicks. Here, Taylor sketches out the possibility of republican expansion, as opposed to Madisons belief in expansion as necessity.
False republics, Taylor says, have the heaviest taxes. The American party system and presidential patronage bring forth oligarchyand presidential power, warspreading patronage and power economically and geographically. Here, domestic and foreign concerns are joined.
Where national security intrudes, Taylor yields little to realist necessities. We Americans can resist the European system more successfully than any other nation. America, possessed of extensive territory, happily removed from real causes of collision with other nations . . . is peculiarly favoured by providence for avoiding the artifice of legal wars, to which small nations succumb.
The Balance of Power
Taylor denied that the laws of nations conferred sovereignty on any American government. In agreement with many liberal thinkers, he doubted the balance of power principle. That doctrine fostered war by assuming inherent hostility between nations, and was thus the most complete invention imaginable for involving one combination of states, in a war with another. (Neither was Taylor impressed with the balance of trade.)
Within the union, the balance-of-power idea fared no better. After the Missouri Compromise, geographical blocs defined by slavery loomed. Balance-of-power politics implied tinkering and brokering outside the Constitution; and a sustained antislavery campaign against the South as a bloc, he wrote, would certainly destroy the union. Taylor foresaw civil war, with massive death and destruction. He makes the unkind aside that, if our consciences tell us that we ought to enslave freemen, to make slaves free, reformers might perhaps crusade in Brazil, Cuba, or Africa, rather than at home.
Slavery and Colonization
Taylor, who himself owned slaves, describes slavery as an evil which the United States must look in the face. To whine over it, is cowardly; to aggravate it, criminal; and to forbear to alleviate it, because it cannot be wholly cured, foolish. He hoped the slaves might be gradually re-exported through colonizationa point where he is no worse than his contemporaries and successors, including Abraham Lincoln. Taylor could be quite realistic about slavery. His frequent assertions that financial exploitation is worse than slavery cut both ways. In mitigation, he pleaded: The profit extorted from the negro slave is moderated by the immediate interest of his master . . . the masters benevolence and . . . respect for his own reputation.
Although Taylor, like most of his contemporaries, believed whites were intellectually superior to blacks, he denied that this justified establishing privileged castes. Free use of intelligence improved church and state, and we should expect the same result with labour. He asks, Are slaves free, because their labour is made more productive . . . by the intelligence of their masters? Is the white population of the world justified in converting to its own use the labour of Africa, on account of superiority of intellect? The answer assumed is no.
Against Institutional Fixity
Taylor writes that If a number of people should inclose themselves within a triangle, they would hear with great astonishment, that they had lost the power of changing the form of the inclosure; and that the dead form of the triangle governed living beings, instead of living beings who created that figure, governing it (italics supplied).
Taylor is not abandoning law, institutions, or everyday morality. He does want to avoid being locked, beforehand, into eternally fixed political institutions, including the federal union. He was eager to discredit artificial intermediate institutions. As, in effect, a liberal methodological individualist, Taylor took the society he knew as given and spent little time on naturally existing intermediate institutions, which in his day remained intact.
Agrarianism and Economic Development
Literary historian M. E. Bradford sees Taylor as a defender of closed, rural, religious, and corporate societies. Such republics were not anti-commercial, but neither did they need the state as economic broker, promoter, and subsidizer. Taylor has of course some agrarian themes, but unlike Jefferson, he never asked to be on the literally isolated footing of China. Taylors society was already agrarian, and he hoped his political liberalism (called republicanism) would, in a decentralized federation, allow agrarian communities to flourish.
Some might suppose that Taylors ideas would, in practice, have blocked American economic growth. Writing of the English Enclosures, French historian Paul Mantoux comments that if the bulk of the rural population remained on the land, the triumph of the factory system might have come later, but it could not have been indefinitely postponed. This suggests that modernization under republican liberalism was feasible enough, and that such modernization might have been slower, more organic, and less chaotic than the state-dependent path actually taken. (The federal center long set a bad example of providing wars for the primitive accumulation of Indian lands, making it unlikely that a market economy without massive state assistance would ever enjoy long-lasting political popularity.)
The Continuing Relevance of John Taylor
Taylor summed up his outlook as follows: Our policy divides power, and unites the nation in one interest; Mr. Adamss divides a nation into several interests and unites power. For a brief period after his death, Taylor became a prophet for hard-money, free-trade advocates in the wider Jacksonian movement.
Taylors work did not have the effect for which he hoped, but it has its merits as a critical benchmark by which to measure what has happened to the Old Republic. In Taylors opinion, artificial aristocrats can only sustain their projects in the long run through some form of political despotismconsolidation, empire, or monarchy. These outcomes are all around us, and John T. Flynn could repeat all of Taylors themes in the 1940s and early 50s. As historian J. G. A. Pocock writes, America may have guaranteed the survival of the forms of corruption it was created to resist. We cannot say that John Taylor failed to warn us.
Reprinted with permission of the publisher. © Copyright 2008, Foundation for Economic Education.