Because of the game of teapot that American academic historians have been playing for decades, vital portions of U. S. history are in danger of becoming lost to future generations. Fortunately, scholars just outside the academy, who do tend to be more scholarly, are doing archeological digs, metaphorically speaking, to unearth this country’s past.
What the former usually do is quote each other. The latter actually dig up the primary documents that tell the actual story.
Hoover Institution scholar Alvin Rabushka has done just that in his epic study of taxation in colonial America. “Every framer of the Constitution served in the lower house of their state legislatures so they all had sophisticated experience with taxes,” Rabushka said at the Cato Institute on May 8.
More to the point, they didn’t care much for taxes, a disdain that they shared with their constituents. From 1771 to 1775 “the greatest number of Britons moved to the colonies,” Rabushka noted.
They had “a great conflict with the mother country,” he observed. The source of that strife: tax hikes.
Consequently, for example, “The state of New Jersey went 20 years without levying taxes,” Rabushka reported. “They used the interest on loans to fund the government,” he explained.
This aversion to taxes, Rabushka wryly noted, stands in marked contrast to the manner in which Garden Staters govern themselves today. Incidentally, like many think tanks housed at universities, Hoover, where Rabushka toils, is in but not of Stanford.
History such as that which Rabushka has chronicled follows more of a free market than a Big Government narrative. That may be one reason why most academics do not lecture on it, preferring themes, concepts, and theories, whether they match up with the factual record or not, usually not.
Such a classically liberal approach flies in the face of the ethos of most “Schools of Public Administration.” Incidentally, “$200,000 was the total cost of civic administration in the colonies,” Rabushka said at Cato.
In that sense, those truly were the good old days. Also of interest is the means by which the colonists dealt with inflation.
Rather than accept it as a consequence of rising prices, they tended to view it as a result of an unstable currency. Economic purists tend to deride the “rising prices=inflation” outlook as a “wet sidewalks cause rain” approach that falls short of the mark of explaining the phenomenon.
The colonists tended to share the purist worldview. Coincidentally, they had little inflation.
They had “stabilization of the currency and a species standard,” according to Rabushka. “They would also burn the paper money at the end of the year,” Rabushka recounted.
“There was no Alan Greenspan or Ben Bernanke to fuel the fires of inflation by printing money.” Rabushka possesses an interesting combination of scholarly credentials and street cred. “Remember, communications were not as instantaneous in colonial America as they are today,” Rabushka told the audience of mostly college students and recently minted grads.
“The founders couldn’t go on Facebook to change their status every time they blew their nose or tied their shoelaces.” In relaying the importance of liquor taxes in colonial times, Rabushka said, “Colonists drank like hell.”
“There’s one thing that all drunks like to do—drink.”
Malcolm A. Kline is the executive director of Accuracy in Academia.
