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.
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 — not to mention Maryland’s Catholics. They regarded the Church of England — correctly — as an extension of British rule in America. The king was the head of the church. (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. By 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 Egyptians 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:
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.
July 4, 2001
Gary North [send him mail] is the author of an eleven-volume series, An Economic Commentary on the Bible. The latest volume is Cooperation and Dominion: An Economic Commentary on Romans. The series can be downloaded free of charge at www.freebooks.com.