Old World Economics Led to the Great War

            During the mid-nineteenth century, an economic war and debate was raging throughout the world. The economic principles of free trade and protectionism were hotly disputed during that period history. Efforts were attempted in England by Richard Cobden, a supporter of free trade, to move his nation more towards a laissez-faire economic system. Even though leading European nations like Britain and France made strides to implement free trade, which lead an example for other nations to follow, this “did not mean the abolition of tariffs.”[1] At the same time, the United States of America was being torn apart by Abraham Lincoln, an “old Henry Clay-Tariff Whig” [2] supporter, and his protectionist driven Republican Party; who had passed the Morrill Tariff bill on March 2, 1861, which increased tariffs “by as much as 250 percent on some items” on the eve of the Civil War.[3] During the close of the nineteenth century and right up until the commencement of the First World War, “the free trade system” was continually “under…attack.”[4]

            Opponents of free trade argued that protectionism was the only means to protect national interests. Jules Méline, the French Commerce Minister, Gustav Schmoller, a German economist, and Henry Carey Baird, an American economist all supported the ideals of protectionism. Baird had said that “protection was a policy, which not merely rested on foundations of justice, but it was vindicated by all history.”[5] As the century ended, economists and politicians were attempting to rebrand the old world economic system of mercantilism under a new guise. Free trade or real capitalism was being destroyed through “aggressive imperialism and nationalism,” which created the twentieth century phenomenon of “war collectivism.”[6]

            Unlike the governments that imposed mercantilism in the seventeenth and eighteenth centuries, the governments during the mid-nineteenth century to early twentieth century were not as “brutally frank in [their] class rule, and in [their] scorn for the average worker and consumer.”[7] However, their goals to maintain economic control through a strong centralized government remained the same as before. Thus, the old approach to justify mercantilism received a facelift and the “new ideology of 20th-century liberalism” was born.[8] Citizens were made to believe that nationalism now meant that the government had the welfare of the worker and “the common good of all citizens” in mind when they governed over them.[9] This new ideology created the “corporate” liberal.[10]

            The corporate liberals were responsible for the economic system, which set the stage for the First World War. The United States was drawn into the war as a result of the Federal government joining big businesses in an effort to further “industrial cartelization.”[11] The war overseas drove the Federal governments’ economic plan to create several committees lead by predominant businessmen; which in turn, lead to the creation of the Committee on Industrial Preparedness in 1916.

Next, the Council of National Defense (CND) was created, whose mission was explained by President Wilson as a joint operation between the private and public sectors to promote “Americanism.”[12] The new economic structure and drive of the CND was to form a collective union between the state, the military, the industries, and the public. The CND was formed by key individuals; one of whom was related to the president, and others had great influence and powerful positions in various industries. These men used their sub-committees to promote mercantilism.

Protectionist tariffs and imperialism destroyed free trade and peace throughout the world, which lead to the First World War (even though the French and Indian War can be argued as the world’s first “world war” for the same reasons that contributed to this conflict). The war created an economic crisis that helped governments to promote the destruction of competition through “conservation efforts.”[13] The various committees created by the Federal government to promote war collectivism helped to create a “Standardize[d] American Industry.”[14] This economic system based on old-fashioned mercantilism would be an example to other nations and only help contribute to further wars.

Bibliography

DiLorenzo, Thomas. Lincoln Unmasked: What Your’re Not Supposed to Know About Dishonest Abe. New York: Three Rivers Press, 2006.

DiLorenzo, Thomas. The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War. New York: Three Rivers Press, 2003.

Mulligan, William. The Origins of the First World War. Cambridge: Cambridge University Press, 2010.

Rothbard, Murray N. “War Collectivism in World War I.” Mises Institute, December 13, 2011. http://mises.org/library/war-collectivism-world-war-i.

   

     

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[1] William Mulligan, The Origins of the First World War, (Cambridge: Cambridge University Press, 2010), 186.

[2] Thomas DiLorenzo, Lincoln Unmasked: What Your’re Not Supposed to Know About Dishonest Abe, (New York: Three Rivers Press, 2006), 124.

[3] Thomas DiLorenzo, The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War, (New York: Three Rivers Press, 2003), 127.

[4] Mulligan, The Origins of the First World War, 187.

[5] Ibid, 188.

[6] Murray N. Rothbard, “War Collectivism in World War I,” Mises Institute, December 13, 2011, http://mises.org/library/war-collectivism-world-war-i.

[7] Ibid.

[8] Ibid.

[9] Ibid.

[10] Ibid.

[11] Ibid.

[12] Ibid.

[13] Ibid.

[14] Ibid. 

Was Thomas Jefferson's Election in 1800 a "Revolution?"

            There was a “revolution” in 1800 when Thomas Jefferson was elected to the presidency of the United States. His ascension to the highest office in the Executive Branch did not come by the literal “blood of patriots,” [1] but it was the result of a bloodless rebellion against the Federalist Party and their “Court party” policies.[2] Through the “might wave of public opinion,” President Jefferson was the appointed leader of “the revolution of 1800,” through whom they hoped would restore the “principles of our government as that of 1776.”[3] Jefferson did restore many republican principles during his presidency; however, he also committed some acts that could be considered unconstitutional. In the end, he can also be criticized for not doing more to promote “American synthesis” or what can be defined as “a unique blend of early liberalism, ‘the rights of Englishmen,’ and republican theory.”[4]

            The first decade of the United States government was controlled by the Federalist Party, which had attempted to reinstate the British System of mercantilism based on old world “Court Party” policies.[5] Republican minded Americans and politicians, who favored liberty and limited government, were dismayed at the resurgence of “standing armies, inflationary public debt, and the rigging of markets.”[6] The American people were again being subjugated to internal and external taxes, which led to eruptions like the Whiskey Rebellion. Other controversial issues arose, which began to tear apart the young nation like Jay’s Treaty, the XYZ Affair, the Quasi-War with France, the French Revolution, and the 1798 Alien and Sedition Acts.

            Spirited debates were had in the halls of government, in newspapers and pamphlets, and in public forums. As tensions rose in the United States, there were many who believed the great experiment was nearing its end. John Adams feared that some of his party members “desired the destruction of the republic, and ultimately, a new constitution;” while others were spreading whispers of a possible “civil war.”[7]

            The revolution did occur in 1800 and Thomas Jefferson became the third American president without any loss of blood. With the mindset of “a government rigorously frugal and simple,” Jefferson went to work downsizing the Federal government.[8] During his presidency, Jefferson reduced taxes and the size of the nation’s standing army. In his First Annual Message to Congress on December 8, 1801, he informed Congress of how he had already taken steps to down size the Executive Branch: “Among those who are dependent on executive discretion, I have begun the reduction of what was deemed necessary. The expenses of diplomatic agency have been considerably diminished. The inspectors of internal revenue who were found to obstruct the accountability of the institution, have been discontinued. Several agencies created by executive authority, on salaries fixed by that also, have been suppressed.”[9] Jefferson’s reductions in the Treasury Department’s personnel “alone reduced the number of federal employees by more than one-third.”[10]

            Jefferson was also successful in downsizing the State Department when he “reduced the number of foreign missions to three;” but despite the reduction in some government spending and programs, his budget for the Department of the Navy did increase from the Federalist average of $1.3 million to $1.5 million a year.[11] However, the use of a strong Navy to protect U.S. commerce and trade would not be considered unconstitutional; especially, since the Constitution itself states that Congress is “To provide and maintain a Navy.”[12] Where Jefferson could be considered taking unconstitutional action was when he “sent a small squadron of frigates into the Mediterranean” to deal with the Barbary Pirates without the consent of Congress.[13] His purchase of the Louisiana Territory was also an action that overstepped his executive authority, which caused many in New England to call for their States to secede; and again the call was made for succession when Jefferson’s administration enacted an embargo act against England and France.[14]

            As evident, there was great change during Jefferson’s presidency and a new “revolution.” It is true that some actions taken by Jefferson and his administration can be considered unconstitutional, but not as damaging to liberty and the spirit of ’76 as the Federalist Party had done during the time in office. The most disappointing aspect of Jefferson’s presidency was that no action was taken to end the institution of slavery. However, it was the Federalists who pushed for and obtained a new Constitution in 1787, which protected the slave owner in Article IV, Section 2, Clause 3: “No Person held to Service or Labour in one State, under the Laws thereof, escaping into another, shall, in Consequence of any Law or Regulation therein, be discharged from such Service or Labour, But shall be delivered up on Claim of the Party to whom such Service or Labor may be due.”[15] In theory then, Jefferson’s inaction to destroy the institution of slavery was in fact him supporting of the Constitution. So in the end, something that has not changed with the election of Thomas Jefferson is the argument of what is or is not constitutional. This is an argument that has continued to the present day in the United States.

Bibliography

Cogliano, Frank and Cogliano, Francis D. Companion to Thomas Jefferson (2nd Edition). Somerset: John Wiley & Sons, 2011.

Jefferson, Thomas. Master Thoughts of Thomas Jefferson. Edited by Catchings, Benjamin S. New York: The Nation Press, 1907.

Jefferson, Thomas. “Thomas Jefferson: First Annual Message to Congress.” The Avalon Project, December 8, 1801. http://avalon.law.yale.edu/19th_century/jeffmes1.asp.

Secession, State, and Liberty. Edited by Gordon, David. New Brunswick: Transaction Publishers,

           2009.

Stromberg, Joseph R.  “The Election of 1800.” Mises Institute, January 4, 2001. http://mises.org/library/election-1800.

Trask, H.A. Scott. ”Was Thomas Jefferson a Great President? Mises Institute, July 12, 2010. http://mises.org/library/was-thomas-jefferson-great-president.

“U.S. Constitution: Article I.” The Avalon Project, accessed on March 10, 2015. http://avalon.law.yale.edu/18th_century/art1.asp.

“U.S. Constitution: Article IV.” The Avalon Project, accessed on March 10, 2015. http://avalon.law.yale.edu/18th_century/art4.asp.

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[1] Thomas Jefferson, Master Thoughts of Thomas Jefferson, edited by Benjamin S. Catchings, (New York: The Nation Press, 1907), 110.

[2] Joseph R. Stromberg, “The Election of 1800,” Mises Institute, January 4, 2001, http://mises.org/library/election-1800.

[3] Frank Cogliano and Francis D. Cogliano, Companion to Thomas Jefferson (2nd Edition), (Somerset: John Wiley & Sons, 2011), 145.

[4] Stromberg, “The Election of 1800.”

[5] Ibid.

[6] Ibid.

[7] Cogliano, Companion to Thomas Jefferson, 148.

[8] H.A. Scott Trask, ”Was Thomas Jefferson a Great President? Mises Institute, July 12, 2010, http://mises.org/library/was-thomas-jefferson-great-president.

[9] Thomas Jefferson, “Thomas Jefferson: First Annual Message to Congress,” The Avalon Project, December 8, 1801, http://avalon.law.yale.edu/19th_century/jeffmes1.asp.

[10] Ibid.

[11] Ibid.

[12] “U.S. Constitution: Article I,” The Avalon Project, accessed on March 10, 2015, http://avalon.law.yale.edu/18th_century/art1.asp.

[13] Jefferson, “Thomas Jefferson: First Annual Message to Congress.”

[14] Secession, State, and Liberty, edited by David Gordon, (New Brunswick: Transaction Publishers, 2009), 135.

[15] “U.S. Constitution: Article IV,” The Avalon Project, accessed on March 10, 2015, http://avalon.law.yale.edu/18th_century/art4.asp.

Brief Summary of Capitalism

It is possible to say that capitalism is greatly misunderstood by the common person, because of the economic agendas of corrupted governments and special interest groups. There is a great confusion between what capitalism and mercantilism actually is. It is true that there is and has been a real exploitation of poor people that capitalism has been blamed for, but that is just not reality. Through political and corrupt corporate rhetoric “in the late 19th and the early 20th centuries,” the true definition of capitalism has been greatly distorted and “condemned.”[1] It is commonplace for purported experts in economics and politicians to cry out that “capitalism has failed; we need more government controls over the entire financial market.”[2] Capitalism has not failed; it just has not been given a fair chance.

Capitalism can be defined as “a system of the free exchange of goods and services between individuals on a voluntary basis under the rule of law and in a system of private property rights.”[3] This means that business is conducted without government regulation or interference and “all parties” in the exchange of goods “are better off.”[4] In other words, this is free trade.

Mercantilism is the opposite of capitalism and is not meant to benefit the consumer, but is meant to secure power for a select few. Not all governments and businesses want to support free trade, because it creates competition that can affect their profits and control. The two are always attempting to work together and are “constantly trying to…erect various rules, restrictions, [and] regulations that help them.”[5]

This struggle has gone on for centuries, since the roots of capitalism took hold during the eighteenth century. This economic premise can be attributed to Adam Smith and his 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations. The collected minds of the era and their various studies of past great thinkers brought forth Adam Smith’s concept of “natural liberty,” Edmund Burke’s “natural society,” and Thomas Jefferson’s “all men are created equal, that they are endowed…with certain unalienable Rights.”[6] These philosophies all contributed to the ideal of capitalism, which when implemented brought great prosperity to those nations engaged in it.

With tremendous advancements in technology and innovations in commerce, the world was forever changed in the fifteenth century. Great wealth came out of this period and the drive to acquire more launched European colonization. The Revolutionary War was fought with capitalism and freedom at its heart. Americans fought against mercantilism as it reached its height during that period. They struggled to overthrow the “system of statism” and tear down the “subsidy and monopolistic privilege to individuals or groups favored by the state.”[7]

Even though Americans won their freedom to engage in capitalism and other liberties, the modern economic system in America is not based on those ideals of free trade. In fact, capitalism again lost out to the American promoters of mercantilism, which “included Hamilton and the Federalists and later, the politicians of the Era of Good Feelings in the 1820s who eventually became Whigs.”[8] The once greatly opposed British System was now relabeled and packaged as the “American System,” which brought with it the old world problems of “national debt, political corruption, and Court party…”[9]

Bibliography

Carden, Art. “The Myths of Capitalism’s History.” Mises Institute, May 11, 2009. http://mises.org/library/myths-capitalisms-history.

Chamberlain, John. “The Roots of Capitalism.” Mises Institute, March 23, 2010. http://mises.org/library/roots-capitalism.

Davies, Steve. “Capitalism is NOT Imperialism.” Learn Liberty, June 3, 2013. http://www.learnliberty.org/videos/capitalism-not-imperialism/.

DiLorenzo, Thomas J. “Trade and the Rise of Freedom.” January 31, 2000. http://mises.org/library/trade-and-rise-freedom.

Miron, Jeff. “Top Three Common Myths of Capitalism.” Learn Liberty, August 22, 2011. http://www.learnliberty.org/videos/top-three-common-myths-of-capitalism/.

Paul, Ron. “Has Capitalism Failed?” Mises Institute, April 16, 2008. http://mises.org/library/has-capitalism-failed.

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[1] Art Carden, “The Myths of Capitalism’s History,” Mises Institute, May 11, 2009, http://mises.org/library/myths-capitalisms-history.

[2] Ron Paul, “Has Capitalism Failed?” Mises Institute, April 16, 2008, http://mises.org/library/has-capitalism-failed.

[3] Steve Davies, “Capitalism is NOT Imperialism,” Learn Liberty, accessed on March 7, 2015, http://www.learnliberty.org/videos/capitalism-not-imperialism/.

[4] Ibid.

[5] Jeff Miron, “Top Three Common Myths of Capitalism,” Learn Liberty, August 22, 2011, http://www.learnliberty.org/videos/top-three-common-myths-of-capitalism/.

[6] John Chamberlain, “The Roots of Capitalism,” Mises Institute, March 23, 2010, http://mises.org/library/roots-capitalism.

[7] Thomas J. DiLorenzo, “Trade and the Rise of Freedom,” January 31, 2000, http://mises.org/library/trade-and-rise-freedom.

[8] Ibid.

[9] Ibid.

Free Trade and World Peace

            In regards on how to deal with a nation that has strong military, which instills fear into the hearts of nations, I would offer a different approach than meeting force with force. Adam Smith and his economic work, An Inquiry into the Nature and Causes of the Wealth of Nations, promoted the idea of free trade and its economic benefits to the world as a whole. Assistant Professor of Economics at Duquesne University, Pavel Yakovlev, has looked at the principles of free trade and teaches that it can also “promote international peace.”[1]

            Professor Yakovlev explains that it is in a country’s best interest to not wage war if they participate in free trade. Mutual free trade creates an “interdependence [that] gives countries a strong incentive to keep hostilities low.”[2] These hostilities are reduced because of the openness and cultural understanding that comes from free trade. As nations trade openly with one another, they not only exchange goods, but they “exchange…ideas and culture” as well.[3] Thus, nations come to better understand one another, grow to appreciate “each other’s differences,” and are overall more tolerant.[4]

            The opposite approach to trade brings war. The European colonization period is a perfect example of this. The economic pushes of mercantilism by the various European nations lead to the first world war, The French and Indian War or The Seven Years War. The classic liberal and political economist, Frédéric Bastiat said, “If goods can’t cross borders, armies will.”[5] It only stands to reason that if more nations promoted free trade, then more nations would have less need for strong militaries.

Bibliography

Yakovlev, Pavel. “Does Trade Promote Peace?” Learn Liberty. March 13, 2012. http://www.learnliberty.org/videos/does-trade-promote-peace/.

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[1] Pavel Yakovlev, “Does Trade Promote Peace?” Learn Liberty, March 13, 2012, http://www.learnliberty.org/videos/does-trade-promote-peace/.

[2] Ibid.

[3] Ibid.

[4] Ibid.

[5] Ibid. 

1790s Press and the Republic

            The American press during the 1790s played the printed role of today’s electronic media; which like today, was used as a vehicle to attack the principles and policies of the opposing political parties. Since the dawn of a literate public actively engaged in government, politicians have both supported and cursed the effects of the press on the political process. The rapidly growing media of the late eighteenth century was seen as a necessary evil that could serve or destroy the evolution of the new Federal government.

            The United States of America was an experimental constitutional republic in its infancy during the 1790s. Its republican ideals and political theories were affecting the world; and when the French Revolution erupted in Europe, many Americans were becoming very interested in its outcome and in politics in general. As Duke de La Liancourt Rochefoucault observed on his visit to America, “every one here…takes an interest in state affairs, is extremely eager to learn the news of the day, and discusses politics as well as he is able.”[1] The great political debates fostered the development of the two predominant political parties in America, the Democratic Republicans and the Federalists.

            As these new political parties were forming and gathering their supporters, a new revolution was being born, a “reading revolution.”[2] Printed materials played a major part in the Revolutionary War; but technological advancements (“stereotyping, steam-powered printing, machine papermaking, and the introduction of cloth bindings”) and government “subsidies to newspaper publishers” created a new phenomenon, which “helped lay the groundwork for a new information network.”[3]  

            The printed information by the press in the 1790s was biased and often considered to be extremely fraudulent and slanderous to those it opposed. Thomas Jefferson wrote to John Norvell that a newspaper would “be most useful…by restraining it to true facts and sound principles only.”[4] In the first issue of the New York Evening Post, a newspaper established by Alexander Hamilton, Jefferson’s opponent, wrote: “’It is the Press which has corrupted our political morals and it is to the Press we must look for the means of our political regeneration.”[5]

            Both political parties would use the press to their advantage and both would attack the press for the damaging material they printed. The Federalist Party went so far as to attack the First Amendment and freedom of speech, when President John Adams signed into the law the Alien and Sedition Acts. Now, the government had authority to punish any citizen who wrote, printed, or published “any false, scandalous and malicious writing…against the government of the United States.”[6] Clearly, punishing any person for their printed views or opinions found to be contrary to the government could be seen as degrading to political discussion in any republic.

Bibliography

“An Act in Addition to the Act, Entitled ‘An Act for the Punishment of Certain Crimes Against the United States.’” The Avalon Project. Accessed on March 2, 2015. http://avalon.law.yale.edu/18th_century/sedact.asp.

Horrocks, Thomas A. Popular Print and Popular Medicine: Almanacs and Health Advice in Early America. Amherst: University of Massachusetts Press, 2008.

Jefferson, Thomas. Letters and Addresses of Thomas Jefferson. Edited by Parker, William B. and Viles, Jonas. Buffalo: National Jefferson Society, 1903.

Novotny, Patrick. The Press in American Politics, 1787-2012. Santa Barbara: ABC-CLIO, LLC, 2014.

Thomas Paine: Common Sense for the Modern Era. Edited by King, Ronald F. and Begler, Elsie. San Diego: San Diego State University Press, 2007.

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[1] Thomas Paine: Common Sense for the Modern Era, edited by Ronald F. King and Elsie Begler, (San Diego: San Diego State University Press, 2007), 123.

[2] Thomas A. Horrocks, Popular Print and Popular Medicine: Almanacs and Health Advice in Early America, (Amherst: University of Massachusetts Press, 2008), 9.

[3] Ibid.

[4] Thomas Jefferson, Letters and Addresses of Thomas Jefferson, edited by William B. Parker and Jonas Viles, (Buffalo: National Jefferson Society, 1903), 175.

[5] Patrick Novotny, The Press in American Politics, 1787-2012, (Santa Barbara: ABC-CLIO, LLC, 2014), 25.

[6] “An Act in Addition to the Act, Entitled ‘An Act for the Punishment of Certain Crimes Against the United States.’” The Avalon Project, accessed on March 2, 2015, http://avalon.law.yale.edu/18th_century/sedact.asp.