Libertarians, Socialists, and the Whiskey Rebellion

In the summer and fall of 1794, President George Washington, Secretary of the Treasury Alexander Hamilton, and General Henry Lee began making mass arrests of American citizens. Authorized neither by warrants nor by any resolution of Congress, federal troops rousted from beds, rounded up, and detained on no charge hundreds of people against whom the executive branch knew it had no evidence. Officers administered warrantless searches and seizures of property and subjected detainees to harsh conditions and terrorizing interrogation. Some victims were told they’d be hanged unless they gave false testimony against the elected officials who had vainly opposed this and other executive-branch policies and operations.

After spending various lengths of time in privation and fear, most of the detainees were released. Detachments of troops meanwhile arrived at every home, in a region defined solely for the purposes of this operation, and required every male over the age of eighteen to sign an oath of loyalty to the government. Not surprisingly, most people complied.

Then, in the winter, the few remaining detainees were marched almost 400 miles to the capital, poorly shod and clothed, under the authority of an officer well-known by his superiors for the pleasure he took in denigrating prisoners. On arrival, the suspects were paraded in the streets as victory trophies, then imprisoned under conditions that were even more extreme than normal. Some still hadn't been charged with a crime. Others had been charged only because the presiding federal judge — whom President Washington’s orders explicitly subordinated to an ad hoc military authority — himself felt intimidated by the federal troops and allowed indictments on what he later said he considered insufficient evidence.

In the end, therefore, juries indicted few and convicted almost none of the prisoners, many of whom had been left in jail for many months. Failure to prosecute didn't inhibit the president from stationing federal troops indefinitely in the region where he’d rounded up those and so many others. The military occupied the area, directing and assisting the civil judiciary. In that process, the sovereignty of the United States was at last established.

Although a disturbingly large number of otherwise well-informed history readers are not aware of those activities of the first executive branch of U.S. government, a good many libertarian students of American history do know about the 1794 suppression, know too that it came in response to a series of protests, petitions, acts of violence against federal officers, skirmishes with soldiers of the U.S. Army, and threats of outright insurrection and regional secession, which Secretary Hamilton — adding insult to injury — trivialized for all time as “the whiskey rebellion.”

Focused on the headwaters of the Ohio River in western Pennsylvania, also involving people in western Virginia and Maryland, as well as in Kentucky, the rebellion has routinely been consigned by mainstream history to a sidebar about a dustup, the details of its awful suppression consigned almost to oblivion — despite the paramount place that both the rebellion and the techniques for its suppression had in the minds of Hamilton, Washington, and others in Washington’s second-term cabinet.

So Hamilton’s insult was well calculated. It achieved the obliteration from history of the seriousness of his rural opponents’ criticisms of federal economic policy.

The rebellion did involve whiskey. Distilled liquor played an important part in the economic and financial lives of people living west of the Appalachians, especially at the Ohio headwaters. The complexities of that relationship, in fact, had made placing a federal tax specifically on whiskey far more important to Hamilton’s famous plan of national and federal finance — and to his visions of commercial empire, powerful government, and military might — than most historians seem to want to acknowledge.

Still, the rebellion and its suppression were not ultimately about booze. They were about the nature and purpose of federal taxation, about government involvement in finance and monetary policy, and about the relationship between democratic republicanism and markets. (Hence their longstanding interest for libertarians.) The “whiskey rebels” had a nuanced grasp of such issues. So did Alexander Hamilton. Modern historians of the founding and federal eras, however, as well as many biographers of Hamilton and Washington, tend not to. In large part they’ve treated the rebellion as a chaotic overreaction, by rural enthusiasts of drinking and abominators of domestic taxation, to a duty that placed new costs on the consumption of a beloved beverage.

Some writers, who do give reasons for what they nevertheless imply was the rebels’ mistaken belief that the federal government deliberately created the conditions of their ruin, see the government too as overreacting — as if the awful effects of the tax and the excesses of its enforcement came mainly from insensitivity, not design. Even the few historians who do acknowledge the rebels’ embodiment of a long and serious (if often distressingly violent) tradition of dissent from finance policies that Hamilton was perfecting and enforcing fail to draw from the decisions that Hamilton made in suppressing the rebellion any conclusions about the degree to which his finance project explicitly contemplated just such a military triumph over the citizenry — had indeed been constructed partly to achieve such a result.

And all of this seeming confusion flies in the face of Hamilton’s very clear statements throughout his letters and reports and the well-known ideas he cogently articulated throughout his career. History has somehow managed to read the Whiskey Rebellion exactly as Hamilton hoped it would.

Libertarians, by contrast, have read the whiskey rebels as heroic property holders, victims of overly strong government, and the rebellion’s suppression as a dystopian parable, with the distressing quality of having not only actually happened but happened at, and because of, the birth of the United States. It remains a stunning fact that Alexander Hamilton explicitly connected (with a blatancy, even a joyousness, impossible for politicians today) his vision of a federally encouraged and managed national economy — fed by massive federal borrowing; supported by a slate of taxes carefully calculated to achieve social ends; based on the consolidation of industry and finance and the absorption of small enterprises into corporate structures with the closest possible ties to the executive branch of government — with his concomitant vision of a large, privileged military establishment; national unity imposed by brute force of arms; day-to-day policing of the citizenry by the military, when deemed necessary by the executive; and the systematic violation, when deemed necessary, of virtually every one of the individual liberties that had been set out, so reverently and recently, in the first ten amendments to the Constitution.

Hamilton, in other words, was a liberal. An activist of executive power, already running the most bloated executive department, he famously believed in powerful government as older brother to the market, and he was willing — at times eager — to subordinate individual rights to managing the economy for what he perceived as national good. The fact that American liberalism has, since Hamilton’s day, redefined “national good” — yes, Hamilton would be shocked by today’s welfare state (though not as shocked as Jefferson would be) — is less telling in this context than the similarities between post-War American liberalism and the relationships that Hamilton endorsed among federal power, taxation, national ends, and big credit and capital.

Indeed, throughout the twentieth century, a certain kind of libertarian has tried to point out to a certain kind of liberal some impossibilities of separating big-government’s regulatory activism — however apparently laudable its social aims — from the militarism, cronyism, and routine abrogation of individual liberties which Hamilton embraced and in which Hamiltonian finance was born. Can the rise of the welfare state, say, be only coincidentally related to the simultaneous rise of rogue operations of the CIA? By what sleight-of-mind do liberals separate FDR’s court-packing, illegitimate wartime internment of American citizens, and possible goading-to-war of Japan from his social programs in the New Deal? (Also see LBJ.) Liberals who deride and despise the current executive for overreaching seem to forget how greatly the social programs they mourn have depended on just such executive activism, often carried well beyond the pale.

A telling example of apparent liberal naïveté (or worse) can be found in the recent bewilderment of many self-described liberals on finding that it was Justices Scalia, Thomas, and Rehnquist, liberals’ perennial enemies on the Supreme Court, as well as swing-voter O’Connor, who dissented from letting states interpret the doctrine of eminent domain as permitting a government to take property from an owner and assign it to a new owner who will purportedly use it to increase the revenues of the very government that has appropriated the property. The liberal majority — in a move that could only surprise certain contemporary liberals — blithely endorsed legislative social planning’s priority over individual rights of ownership. The failure of many on the anti-developer left to make anything even of their own bewilderment over this issue is a benchmark of a larger failure of intellectual clarity, and perhaps intellectual honesty, in some of today’s left and liberal circles.

In the early 1790’s, at the federal government’s birth, Alexander Hamilton constructed a tax, carefully predicated on the special role played by whiskey in rural economies, to shift economic opportunity away from small-scale, generalist operators, who had long sought fair access to economic opportunity and growth, and had contributed their efforts to the Revolution in order to achieve it. The whiskey tax, linchpin of the whole national finance plan, offered overwhelming advantage to large, government-connected, specialized operators; it pounded the people of the always restless, defiant, independence-minded west; it drove small farmers, independent artisans, and landless laborers alike into the factories of their creditors.

And Hamilton had no scruples about associating that plan with the overwhelming physical force of the newly empowered federal executive. For libertarians the association is a natural.

But there is another group of readers and scholars, equally critical of Hamilton’s policies and “consensus” readings of American history, who have taken the Whiskey Rebellion seriously too. These are neo-progressive historians, influenced by and developing the Marxist critiques of the 1920’s and ’30’s, with backgrounds and sympathies that make them highly skeptical of capitalism, whether the free-market variety aspired to by libertarians or the state-and-corporate-managed forms — which some libertarians don’t dignify with the name of capitalism — squabbled over by today’s mainstream liberals and conservatives.

In the neo-progressive reading, the Rebellion was the expression of a surprisingly advanced populist program of legislated social justice. After decades of pressuring state governments to provide tax relief and easy credit; after a decade when, in Pennsylvania, the Revolutionary state constitution allowed the legislature to break up monopolies, pass legal tender laws, issue paper money, and dictate other forms of advancement of the less propertied; after a breakpoint in the relationship with the mother country, where now not only liberty but also social equality seemed possible at last, the ordinary people of the rural west suddenly saw their ideals of the Revolution betrayed. The U.S. Constitution, returning the rich and propertied to power, was epitomized by a whiskey tax designed to take money from ordinary people in order to pay tax-free interest to a small class of fabulously wealthy investors. The Whiskey Rebellion was thus a class and labor action, intended to overturn the ruling elite and bring greater social equality to America, as promised by the Revolution.

What’s not at issue in these competing visions are the Whiskey Rebellion’s central importance, wide extent, and impressive success in obstructing federal policy; the denial by mainstream historians of all of those qualities; and the outrage to supposedly fundamental American values of the rebellion’s suppression. What’s at issue: Who the whiskey rebels were; how they viewed the relationships among government, economics, democracy, and liberty; and what they wanted.

So who gets the Whiskey Rebellion right: socialists or libertarians? (We know the mainstream hasn’t.) More accurately: Who goes astray, and where, in yoking the Rebellion to a social and economic critique?

Here the author must abruptly intrude. For my new book The Whiskey Rebellion: George Washington, Alexander Hamilton, and the Frontier Rebels Who Challenged America’s Newfound Sovereignty (Scribner) — a narrative history of the Rebellion for general readers, in which I do not shirk from confronting founding finance — I studied the primary record exhaustively; read the standard sources on colonial and founding finance, on Hamilton, on Washington, and the federalist era in general; read all published material on the Rebellion itself; and delved into everything scholarly I could find on that and all related subjects. The benchmark work on the Rebellion of Thomas Slaughter — emphasizing radical-Whig, country-party ancestry to the Rebellion, grounding resistance to the tax in ancient, liberty-fueled hatreds of all internal taxes — I tempered, to say the least, with close, critical reading especially of the neo-progressives Dorothy Fennell (whom Slaughter also cites) and Terry Bouton, who benefited, in profiling the rebels, from a closer reading than Slaughter’s of class statistics and finance history. And I drew my own conclusions.

Because I present the American populist movement that exploded in the Whiskey Rebellion as rising in part from utopian-socialist-communalist ideas that reach back to England, as well as from the Great Awakening’s little-understood urge toward the redemption of all of American society; because I am unsparing (uniquely so, I think) not only of Hamilton but also of Washington, regarding the incitement and suppression of the rebels and the west; and because there are a multitude of rather loud resonances in this story for the Bush administration’s decisions at home and abroad (and because left-liberals don’t seem to know about any right critiques of those decisions), I understand how my book may be interpreted as left-wing revisionist history. And because I have no personal interest in such branding, I won’t disavow the description.

But I do understand, where some of my liberal readers, for whom I’m of course deeply grateful, seem not to, that Hamilton was a liberal, indeed that he is more realistically associated with Clinton than with Bush. (A new venture of the Brookings Institution, helmed by Roger Altman and Robert Rubin among others, is not wrongly called The Hamilton Project.) As I try to drag the Whiskey Rebellion kicking and screaming into the fat middle of the founding story, where I think it has always belonged, I want the idea of Hamilton-as-liberal to give certain liberal readers pause.

The Whiskey Rebellion does not offer perfect support for anyone’s current agenda; it shakes up much of what is widely assumed across the political spectrum about the founding period. When the dust settles, it offers new clarity. Though libertarians and socialists have long been virtually the only keepers of the Whiskey Rebellion flame, I now believe that living through the Rebellion will challenge not only consensus mainstream historians but also both left and libertarian students of American history.

Libertarians get the Rebellion wrong if they think the rebels were anti-tax, interested in states rights, or opposed to government regulation of the economy. On taxes, including internal taxes, the rebels varied, of course, in their views, and they were at times happy, in a sense by default, to take up the old language of radical Whigism: they did hoist signs saying “Death to Excise.” But just as often their signs said something new: “Equal Taxation.” Again and again they described their opposition to the whiskey tax in progressive terms — literally, when they complained that the tax did “not operate in proportion to property.” That argument (and pace Hamilton, they did have one) was against regressive taxation.

They later proposed a land-tax solution to the regressiveness of the whiskey tax. Not surprisingly, that proposal underwhelmed the liberty-minded landowners who followed Madison and Jefferson in their own attacks on Hamiltonian liberalism. Some of the whiskey rebels, most notably their spiritual inspiration, the frontier preacher and visionary Herman Husband, wanted actual progressive taxation. Certain historians would consider that last statement wildly anachronistic. Herman Husband and the whiskey rebels were indeed wildly anachronistic, and for that they paid a heavy price.

States rights, by which many critics of federal overreaching have been so fatally attracted, meant nothing to the whiskey rebels. Their pre-Revolutionary struggles had been not against British interests but specifically against their state legislatures, which used government power to deny ordinary people equal access to economic opportunity. They hated the Pennsylvania whiskey tax no less than the federal tax: both were earmarked for taking scarce cash from a mass of ordinary people and giving it to a small number of investors in the public debt. What the rebels had hoped for in fighting the Revolution — they were, of course, its footsoldiers, unpaid, in the end, by war profiteers in both federal and state governments — was an end to the cronyism and inside baseball that had made their lives so hard for many generations. Husband (always the most extreme example) was in fact a rank nationalist, a true anti-Hamilton. Manifestly presaging the New Deal and the Great Society, he believed that only an organized national government could check natural human tendencies toward corruption in states and locales.

Husband and the rebels did bitterly resent the top-down nature of the federal government as constructed by the U.S. Constitution, which they felt perfectly embodied Edmund Randolph’s opening remarks at the Convention, which Randolph said must repair “insufficient checks on the democracy.” As hands-on experts in public finance — to a degree Madison, say, never was — rural people understood that prohibiting the states from issuing money and credit and outlawing legal-tender paper robbed them of the only relief they’d occasionally pressured their state legislatures into providing. (By the way, if libertarians want to make the rebels gold-standard advocates, that’s barking up another wrong tree.) The whiskey rebels fought for “the western country,” not for Pennsylvania. The Virginia-legislature tidewater elites, ancestors of the Confederacy, held no charm for them. Had the federal government broken up cartels, passed anti-monopoly laws, and taxed progressively, the rebels would have welcomed its accession with huzzahs of joy.

Indeed, what the rebels engaged in, when they began tar-and-feathering tax collectors, had long been known as “regulation” and had to do, for all its roughness toward people, with pushing the economy around. The rebels took regulation as far as Hamilton did — farther, really. When the rebels established their rule in the western country, they did so specifically to manage the regional economy for populist ends, forcing the rich to swear loyalty to the western cause and physically banishing, via the verdicts of kangaroo courts and congresses, those they defined as too rich and greedy. Libertarians should be cautious about romanticizing the actions of men who, when they did briefly seize power, give some early rumblings of Mao and Stalin — or at the very least of some of the excesses of organized labor — but certainly not of free markets.

Neo-progressives, romanticizing the rebels too, go wrong, I think, if they imagine the Whiskey Rebellion as a rearguard action against industrialization, economic growth, and the rise of the profit motive in American rural life. (Bouton is good on this: he openly criticizes fellow progressives for just such sentimentality.) What libertarians seem to understand about the whiskey rebels, and some progressives insist on denying, is that primitivist, countercultural ideas about barter economies, ecological harmony, and consensus decision-making held no appeal for the whiskey rebels. Westerners had been reduced to barter, by the overweening policies of eastern financiers. Barter kept rural economies from growing and developing. Crushing debt cycles were the result. Rural people knew, in a way their supposed champion Jefferson didn’t, that it was in growth, development, and industrialization that their only hopes lay. They wanted access to credit (without the crushing terms that drove them into peonage), and they wanted access to markets for their few cash crops. They wanted small profits, then bigger profits. Profit would let them build up their farms and artisan shops, cut down more trees, burn more coal and wood, industrialize, speculate, reap the fruits of development.

Even Herman Husband, with his intimations of a large welfare state, managed to force the wealthy to contribute to helping uplift the poor, wanted development. For all their cooperativeness in resisting federal authority, if the whiskey rebels had gained equal access to the economic bonanzas sewn up by absentee elites and government cronies, each person liberated by that success would have followed his own self-interest, more or less enlightened, toward the material rewards available to a free people. Some would have eschewed industrial success. I think most libertarians will agree that the majority would have pursued it.

What libertarians and leftists share is suspicion of war. It’s interesting, therefore, that libertarians and progressives have also shared an eagerness to ignore the whiskey rebels’ reliance on force. It is a critical fact that the rebels imposed their will on the people of the western country by physical intimidation. Husband, a lifelong pacifist, became filled in his seventies with frustration over government recalcitrance; he abandoned principles and urged a violent solution to oppression, urging the people of the west to root out hirelings of the decadent east. The rebels, taking over the courts, intimidating judges and petitioners, showed no greater commitment to the independence of the judiciary than Hamilton showed when he arrived to scourge the western people. (Far scarier, of course, in Hamilton’s case. The rebels tried to supplant the legitimate government. Hamilton was the legitimate government.) Progressives like Bouton and Wythe Holt seem to view rebel violence and intimidation as the best of grass-roots democracy in action. Libertarians view it as armed defense of free markets and property ownership. I see the rebels’ violence as a concomitant of Hamilton’s. Each side justified — thus permitted, endorsed — the other’s resort to what can only be described as militarism.

The story is thus ironic, in the real and old sense of the term, hence at once tragic and comic. The goal for both sides was unity — if the univocal politics that is the kiss of death for freedom can be dignified with such a name. Socialists and libertarians, in polar opposition, yet ironically allied in caring about the Whiskey Rebellion, might want to give new consideration to that hard lesson of history.

May 8, 2006