WHY America was Built - LQD - the issue was much more than taxes

LQD signifies "Lazy Quote Diary," in which I present an excerpt or extended quote that pretty mcuh stands on its own without the benefit of added commentary. Most of my LQDs will be in the series "How America Was Built," presenting the actual history of how the United States developed and built itself as an advanced industrial economy. This history completely contradicts the libertarian and conservative versions of American history, as it features an important, even crucial, active and positive role by the federal and state governments.

This post, however, addresses the question of why, rather than how. Hence the screaming caps at the beginning of the title.

This excerpt, pages 160 through 164, from Louis M. Hacker, The Triumph of American Capitalism: The Development of Forces in American History to the End of the Nineteenth Century (New York: Simon and Schuster, 1940), lists the many causes of unrest and discord that led to the American revolt against England. The popular mythology, of course, is that the American Revolution was largely a tax revolt: taxation without representation. In actual fact, the founding fathers and mothers were fighting against the English system of mercantile capitalism, which sought to freeze the American colonies in an economically subservient position as supplier of agrarian raw materials, while ensuring that the British East India Company could monopolize trade between the colonies and the rest of the world. English policy was to stymie, hinder, and outright prohibit, the development of industrial enterprises in America, and the maritime capacity of Americans to trade with the rest of the world.  The American Revolution, in short, was a fight to control our own economic destiny, by breaking the English shackles designed to prevent our economic and industrial development.

If in the raising of a colonial revenue lay at the heart of the difficulty, how are we to account for the quick repeal of the Stamp Tax and the Townshend Acts and the lowering of the molasses duty? And, on the other hand, how are we to account for the tightening of the enforcement of the Acts of Trade and Navigation at a dozen and one different points, the passage of the Currency Act, the placing of iron on the “enumerated” list, English seizure of control of the wine trade, and the attempt to give the East India Company a monopoly over the colonial tea business? The struggle was not over high-sounding political and constitutional concepts: over the power of taxation or even, in the final analysis, over natural rights. It was over colonial manufacturing, wild lands and furs, sugar, wine, tea, and currency, all of which meant, simply, the survival or collapse of English mercantile capitalism within the imperial-colonial framework of the mercantilist system.... [I disagree here; "high-sounding political and constitutional concepts" were an essential component of the American cause. I refer the reader to the posts I have done which include references to Bernard Bailyn's The Ideological Origins of the American Revolution, here and here. I believe Hacker errors here by failing to see how political ideology is bound up with economic aspirations; i.e., political economy.]

The revenue acts of 1764 and later were used as a screen to conceal the work of compressing the economy of colonial mercantile capitalism within even narrower limits and reducing it to an even more dependent status. The Act of 1764 and the Stamp Act of 1765 called for the payment of duties and taxes in specie, thus further draining the colonies of currency and contracting the credit base. To divert colonial capital into raw materials, the first measure increased the bounties paid for the colonial production of hemp and flax, placed high duties on the colonial importation of indigo, and removed the English import duties on colonial whale fins. To cripple the trade with the foreign West Indies a high duty was fixed on refined sugar and the importation of foreign rum was forbidden altogether. Lumber was put on the “enumerated” list. To give English manufacturers a firmer grip on their raw materials, hides and skins (needed for the boot-and-shoe industry), pig and bar iron (needed in the wrought-iron industry), and potash and pearl ashes (used for bleaching cloth and soapmaking) were placed on the “enumerated” list. To maintain the English monopoly of the colonial finished-goods market in 1764 certain kinds of French and oriental drygoods were taxed for the first time at the point of entry; in 1765, the importation of foreign silk stockings, gloves, and mitts was altogether forbidden; also the drawbacks of duties paid on foreign goods landed in England and re-exported to the colonies were rescinded. To extend the market of English merchants in Europe, in 1766 Parliament ordered that all remaining “nonenumerated” articles (largely flour, provisions, and fish) bound for European ports north of Cape Finisterre be landed first in England. And to weaken further colonial commercial activity, in 1764 high duties were placed on wines from the wine islands and wine, fruits, oil from Spain and Portugal brought directly to America (in American ships, as a rule), while such articles brought over from England were to pay only nominal duties.

As has been said, the revenue features of these acts were quickly abandoned; the Stamp Act was repealed; and in 1770, three years after their passage, the Townshend duties on paper, paint, and glass were lifted. Only the slight tax on tea remained and even this was lightened in 1773 when the new Tea Act Provided for a full drawback of English import duties on British tea shipped to the American colonies.

But it was exactly this new Tea Act which clearly revealed the intention of London: that not only was the economic vassalage of the American colonies to be continued but the interests of colonial enterprisers was to be subordinated to every British capitalist group that could gain the ear of Parliament. For, to save the East India Company from collapse, that influential organization was to be permitted to ship in its own vessels and dispose of, through its own merchandising agencies, a surplus stock of 17,000,000 pounds of tea in America, and in this way drive out of business those Americans who carried, imported, and sold into retail channels British tea (and indeed, foreign tea, for the British tea could be sold cheaper even than the smuggled Holland article).

The merchants all over America were not slow to read the correct significance of this measure. Their spokesmen sounded the alarm. As Arthur M. Schlesinger has put it, pamphleteers set out to show “that the present project of the East India Company was the entering wedge for larger and more ambitious undertakings calculated to undermine the colonial mercantile world. Their opinion was based on the fact that, in addition to the article of tea, the East India Company imported into England vast quantities of silks, calicos and other fabrics, spices, drugs, and chinaware, all commodities of staple demand; and on their fear that the success of the present venture would result in an extension of the same principle to the sale of the other The result would be, as a Philadelphia pamphleteer signing himself “A Mechanic” warned:

They will send their own factors and creatures, establish houses among us, ship us all other East India goods; and in order to full freight their ships, take in other kind of goods at under freight, or (more probably) ship them on their own accounts to their own factors and undersell our merchants, till they monopolize the trade. Thus our merchants are ruined, ship building ceases. They will then sell goods at any exorbitant price. Our artificers will be unemployed, and every tradesman will groan under dire oppression.