NOTE: I am writing this largely from memory, with only a few glances at online sources to confirm that I have dates right for some events, so it obviously is far from comprehensive. As I have a specific focus, there is a lot that will be omitted intentionally, as irrelevant to my case, and likely even more that will be omitted unintentionally, as covering the complexities of the government and economy of a massive nation over a span of nearly two and a half century is more than any one man can hold in his memory. So, if I overlooked something that seems significant, or if one or more of my mileposts is moved a few years out of place, please let me know, but be forgiving, this is a huge topic, and keeping in mind just the facts, much less the many possible interpretations of them is quite daunting. Finally, I would like to apologize in advance for any errors in reporting dates, places or actors. I have tried to confirm what I recall as much as possible, but I have not checked every fact, so it quite possible a faulty memory has introduced an error or two.
In my essay "A Passing Thought"1 I concluded by suggesting that it would make an interesting essay to go through the life of the Unites States, from their foundation to the present, tracking the various points at which the struggle between liberty and intrusive government were fought and lost, at least from the point of view of those promoting liberty. I never did write the essay, but in "Modern Marius and Sulla" , I did something somewhat similar, looking at two events in the 20th century and discussing how they led to the no-holds-barred, vehement, brutal political struggles we have been seeing since the Clinton impeachment, or maybe since the Nixon hearings. Likewise, in later essays, such as "Rethinking the Scopes Trial" (which in some ways revisited arguments from "The Political Spectrum"), "Mistaken Perceptions of the Industrial Age" and "Child Labor and the Industrial Revolution" -- or even "The Inflation Engine"/"Stupid Quote of the Day (January 7, 2012)" and "Medical Regulations"/"Medical Regulation II", though they were obvious interested in but a single aspect -- I discussed the many mistaken beliefs held about the 19th century, as well as the way those beliefs were used in the struggle for more government power.
However, much as I wrote about the topic, I never did do it justice. I never went back and wrote anything akin to the overview I had suggested. And such an overview would have been so very useful. Time after time in my writing, I found myself going back and describing the same eras, the same processes by which liberty was eliminated and big government created. If only I had such as essay, it would have been so easy to publish a link and refer to my own work.
And so, at long last, I am doing just that, taking a look from 1775 to the present, perhaps with a short visit to earlier colonial times -- if only to examine land banks, wild cat banks and similar fiascoes --watching as we go for every sign along the way of efforts to wrench power form the states and individuals and transfer it to the central government.
The difficulty with picking such an early starting point is that it actually somewhat undermines the question I originally set forth in my earlier essays, which was -- though only asked implicitly -- when we turned the corner and went from being a limited federal state as defined in the Constitution, and became the central, nearly unlimited government we are today2. However, if we start our analysis before there was a Constitution, or even before the colonies became free states, that question becomes quite meaningless, and so we need to redefine our purpose. Thus, let us redefine our purpose to be the examination of the various stages of the conflict between the proponents of limited, decentralized government and those of a central, more powerful state, as well as the parallel struggle between recognition of individual rights and government coercion.
However, even having redefined our terms, there remains one other caveat. Early in our analysis, we are examining a period when the concepts in which we are interested are being seriously used as the basis of government for the very first time. That being the case there may be some who seem to be arguing for a larger state or fewer rights, when in fact they are actually champions of liberty, they simply are not willing to go as far as some others. And thus we need to keep in mind that not everyone who deviates from whatever may be our ideal is necessarily trying to move us away from it, some may simply not quite have reached the same conclusions we have, though sharing the same basic values3.
Which actually brings us to the beginning, at least as far as our nation is concerned, the period stretching from the Declaration of Independence, through the Articles of Confederation to the convention which established the Constitution. It is easy, in looking at the various positions adopted during this time to see in those who wanted to establish an American monarchy, or wished to create a centralized government a "reactionary" force, but as we mentioned already, though a few may have had a desire to restrain the revolutionary impulses of others, many were simply unwilling to go as far as others in their break with past practices.
What is interesting in looking at this periodis, through a combination of intent and accident, the first system of government was less centralized than what came after, though this had both good and bad aspects. While allowing for greater autonomy of the states, and thus restricting the power of the central government, it also allowed the states themselves much more leeway in dealing with both citizens and other states, as well as failing to provide all the functions expected from a central government. Thus, while still quite suspicious of central government (as can be seen by the wording of the resolutions adopting the new Constitution, as well as the objections of the few states which delayed ratification), it was recognized that there needed to be some increase in central authority, as well as some method for regulating certain interactions between the states, as well as citizens of different states.
Thus, in a way, I suppose one who truly feared centralize government could possibly argue that the Constitution itself represented the first step in our loss of freedom, as it represented the first step in centralizing power, as well as reducing the power and autonomy of states and citizens. But, is that a fair assessment?
In "The State of Nature and Man's Rights", I discussed how the theoretical "state of nature", much mentioned in social contract theories was something of a fiction, and that "rights" did not truly exist in a pre-government situation, that rights were meaningful only in a social environment including both a society formed of multiple individuals, and one where there existed some form of government to give meaning to the term "rights". In a similar way, I would argue that, while the Constitution represented a small increase in centralization, that the prior government was so weak as to be effectively broken, and thus useless as a government. Looked at this way, the move toward an increase in centralization did not represent a loss of freedom, but a necessary precondition of protecting individual liberty.
Still, even in this early phase, I suppose it is useful to speak of various strains of thought. There were the optimistic, Lockean thinkers, who basically asserted the beneficial effects of increased liberty, and their opposite number, the more Hobbesian thinkers, who, pessimistic about man's nature, worried that excessive freedom would result in dangerous anarchy. However, not all disputes were so clear cut. For example, in terms of centralization, there were those who argued for centralized government from a fear that state, or regional, interests would lead to interminable conflict, and thus a more powerful central government would remedy such problems, while others, equally worried about regional strife, argued the opposite, claiming a strong central government would be tempting for a given state or region to monopolize and use to enslave the rest. Thus, even seemingly simple arguments often conceal beliefs that are closer to one another than we think.
As this discussion of the early stages of the nation is proving of little benefit, though I believe much of what was discussed here will prove of value later in or discussion, let us look instead at the nation after 1789, once there was a Constitution from which to deviate, creating the groundwork upon which our present state is built, much as it may deviate from the initial concept.
I always found it interesting that those most responsible for the form of the Constitution, at least who were responsible for the shape of much of its "big picture" were not terribly well represented in the first three presidential elections. Granted, they held cabinet posts, and vice presidential seat, but in terms of both the presidency, and leading roles in the legislature and judiciary, it was a largely Federalist government for the first 12 years. In outlook, if not always explicitly in terms of party.
This Federalist slant tends to be viewed by some libertarians, and others of a kindred outlook, in rather anachronistic terms, viewing actions such as Adam's sedition laws as attacks on liberty. However, as before, this is an entirely incorrect view. The many supposedly authoritarian acts of Adams were, from a contemporary perspective, familiar with British and other European nations, not so much an attempt to roll back freedom, as an expression of a more moderate position. It was not that they were removing freedoms that had been traditionally observed. Instead, they were enacting laws seen as fairly ordinary in many lands at the time. That is, they were simply not going so far in pushing liberty as others.
In fact, we can see something similar in Jefferson himself. Though often put forth as a champion of liberty and an optimist in terms of his view of man , Jefferson was also prone to many views that modern minds would reject. For example, his concerns that those who did not hold land might be easily swayed by radical and destructive rhetoric, suggesting some sort of property requirement for voting. Such beliefs, though now seen as reactionary, were at the time seen as acceptable beliefs among those who were otherwise champions of liberty4.
However, though they might have been, in both their minds and the eyes of contemporaries, simply more moderate proponents of freedom, it was the struggle between the Democrats/Democratic-Republicans and the Federalists which gave us the first series of struggles between differing views of the Constitution, its role and the scope of its powers. Not only the first such struggle, but one of the longer examples, lasting as it did -- in one form or another -- well beyond the death of the Federalist party, stretching all the way until the final death of the Second Bank of the US in 1832. However, it is not noteworthy only because it was the first such struggle, or because it lasted for nearly 50 years -- the struggles over the eventual form banking would take lasted even longer5 -- but because, in this single case6, the struggle ended with the victory of the forces of smaller, more distributed government and greater state and individual liberty.
Obviously, banking laws were hardly the only point of contention. There was everything from the role of the Supreme Court to the control the legislature could exercise over the states to the scope of the commerce clause to the question of what functions the central government could exercise. However, the banking laws provide a convenient shorthand for most of these early struggles, providing an easy means of tracking the back and forth between the supporters of more and less centralized government, until the issue of slavery became a more prominent issues, and came to dominate political debate.
The First Bank of the United States, though the pet project of Hamilton, and largely conceived during Washington's administration -- which was much more Federalist than Democratic -- was not chartered until the Adams administration, a charter which was allowed to expire during the Madison presidency. As should be obvious from the presidents involved, the First Bank was a Federalist idea, a central bank which would handle all tax receipts, provide credit to the government and, eventually, serve as the American version of the central banks that were beginning to be created in Europe. Thanks to strong opposition, even among many from the Federalist stronghold of the northeast, the bank never developed into a strong centralized institution. On the other hand, it is quite significant because of an often overlooked first in which it was involved. The bank was the first institution justified by the general welfare clause. Not only that, but the Hamiltonian justification of the bank, saying that the beneficial ends justified the action provided it was not specifically prohibited -- the supposed "implied powers" in the Constitution -- was adopted in McCulloch v Maryland to approve the Second Bank's charter as constitutional, creating the very first chink in the armor of the Constitution7.
Then again, though the pre-Jacksonian era laid the groundwork, in a very remote and general way, for future expansions of government8, it was still one of the most free eras as well. Granted, "civil liberties" types would find some of the restrictions on speech, such as what constituted slander and libel, or what could be considered seditious, quite troubling, as well as the leeway given local law enforcement in dealing with minor disturbances, drunkenness and vagrancy, but by and large, the era was one characterized by generally hands-off government. That Madison could openly argue against subsidizing government roads or aid for famine victims and still have enough public support to win reelection tells you quite a bit about public perception. To most people, the local government was there to solve problems, the state was entrusted with handling the larger problems, and the federal government was there to keep the state's from harming one another, and to keep foreigners in check. It may be a bit of an exaggeration, but not much. There were some state laws, actually many, which hardly fit with a libertarian philosophy, but one could always move if he found them too oppressive, as there were as many versions of government as there were states. And with many decisions being even more local, there were actually more choices than states. Federalism didn't guarantee freedom, but federalism combined with a people generally favorable to local government made it easy to find relatively free places to reside. There may have been some generally mercantilist states, especially in the northeast, doing all they could short of violating the Constitution to enact protectionist measures, but there were also largely laissez-faire states as well, and others simply too lightly populated or newly formed to have much in the way of vested interests, at least yet. So freedom was not perfect, but the nation generally was more free than not9.
For the most part, this era represented the initial victory of the Jeffersonians, followed by a short period more favorable toward Federalist/neo-Whig positions, which then ended in the Jacksonian era, with which we shall next concern ourselves. The first few elections were, though parties were still poorly defined and not fully developed, essentially victories for the Federalists, though in the case of Washington, more a vote of gratitude for the individual than a triumph for either party. Following general dissatisfaction with Adams, the nation saw a mostly unbroken chain of Jeffersonian presidents, as Jefferson was followed by Madison and Monroe. Not that all three followed a strictly libertarian or minimalist position. For example, for all his talk of minimal government, Jefferson was a proponent of public education, a system filled with the potential for mischief and worse10. But by and large, the three Jeffersonian presidents were proponents of less government11.
By the end of this period, there was effectively only one party, the Democratic Republicans. However, that did not mean there was no difference of opinion, and the regional differences led to a strongly contested election decided in congress which put the second Adams in the White House. Though officially a Democratic Republican, Adams had a policy much closer to the old Federalist agenda, including subsidies, protectionist actions, use of land taxes to discourage expansion and encourage investment, and the rest of what could be called the nation's first attempt at a "pro-growth" policy. In some ways it is an exaggeration, as the preceding presidents had, in some small ways, each violated their commitment to limited government and endorsed some form of subsidy for one or more areas they found important, but Adams was noteworthy in the breadth of his policy. While far from anything of our time, or even the second half of the 19th century, he definitely favored more government involvement than his predecessors.
It is tempting to see Jackson's election as a backlash against this deviation from Jeffersonian ideas, and many historians do so, especially as they make such a strong distinction between Jeffersonian and Jacksonian democracy. I disagree. Given the weak support for Adams, and the fact that the election was decided in Congress, I would argue that Jackson and Van Buren were actually the last of the Jeffersonian line. Though the modern historians tend to characterize Jackson as some sort of hick or buffoon -- an ante bellum George W, if you will -- and Jacksonian democracy as the victory of the ante bellum trailer park and Jerry Springer set, in truth Jackson and his political allies had very definite, and well developed, ideas both economic12 and political. I will grant his shows of populist sentiment may seem undignified to those used to more elitist politics, but, on the other hand, as a means to convey the message that the voter -- every voter -- was the ruler of the US, it very clearly made the point13.
Whatever his true place in the political trends of the time, Jackson was very clearly in the same camp as the Jeffersonians, championing small, limited government, as well as the sovereignty of states14. It is, as a result, very tempting to mark the end of the Jackson administration, or perhaps VanBuren, as the turning point in our history, as it was followed by a period of legal wrangling between regional interests, as well as political philosophies, which eventually brought about the Civil War. On the other hand, there were clearly events before Jackson, such as the chartering of the two Banks of the United States, that established the groundwork for such changes. And, though the era between Jackson and the Civil War was clearly one of change, it is arguable whether or not the events of that era made our eventual turn to larger, more powerful and centralized government inevitable15.
The post-Jackson ante bellum period was somewhat chaotic, as is clearly shown by the many quirky elections, be it multiple candidates from the same party, third party candidates or remarkably close outcomes16. A number of issues split the nation, and not just in ways we recall from high school history. For example, few recall that, during the debate over admitting Texas to the Union, Massachusetts threatened to secede, years before the Confederate States made good on a similar threat. Nor were the many, and ever changing compromises on admitting states as slave or free as clear cut as history suggests. For a time, each compromise held things in check, but inevitably some new situations, such as admitting California, would lead to one side or the other seeking a revision of the agreement. Which, inevitably, led to a lack of confidence in any such agreements, heightening regional strife, as each party came to see complete political control as the one sure way of securing their interests.
Nor were the interests entirely limited to slavery. The northeast, being the center of manufacture, had a lively protectionist element, which kept the Whig party alive for some time. On the other hand, in both the northeast and mid-Atlantic, a strong commercial culture created opposition to much protectionist policy, but favored "easy money" policies, though in the days before any large scale national banking laws, these were mostly state policies17. Oddly, the Whigs somehow managed, for a time, to appeal to both, despite the conflicting interests.
The Democrats, on the other hand, were prominent in the South and the western states, at least initially, but they too suffered from some similar issues. For example, being the party of state's rights, they were also the party most obviously opposing any sort of abolition, and fighting for the admission of states as either "slave" states or at least with laws recognizing slaves as property. But there were also Democrats outside of the slave states, mostly in the agricultural areas of the west, who opposed the Whigs largely on the ground of tariffs, though many also endorsed the other elements of the platform as well. And, as in many eras, farmers were often convinced that "easy money" would help them by lightening the burden of debt under which farmers perennially operate18, which resulted in an eventual defection of some of the agricultural vote from the Democrats. Though, it was more of a boon to the newly formed Republican Party than the outgoing Whigs.
There were other issues that arose, some going away quickly, others having influence for several elections. Besides all the issues surrounding slavery, and questions of tariffs, there was debate over how to handle the western territories, the war with Mexico, the admission of Texas, dispute over paper money and a national bank, the scope of public works, the admission of immigrants and so on. As usual, even some fringe issues got attention, such as the ever recurring fear of Catholics, or the short lived Anti-Masonic Party. For the most part, early in the era, the division was mostly clear, with Democrats favoring smaller government, gold money, low tariffs for revenue only, and the expansion of slavery and the Whigs favoring the opposite. In time, the lines became less clear, with the Free Soil Party, for example, embracing essentially a Democrat platform, but with a call for the prohibition of slavery in the territories19.
But this is not intended to be an essay on the breakdown of the "Second Party System" as it is usually called, but rather a look back at the way our policies and laws changed, so rather than continue delineating the party positions20, let us look at what happened in politics in the 1840s and 1850s.
The period is one of rather bizarre contradictions, to say the least. For example, court cases repeatedly ruled that slaves, being property, had to be recognized as such by the laws of every state. And yet, at the same time, political decisions were frequently reached preventing slave holding in various territories and newly established states. Similarly, in the earliest efforts to extend the meanings of the commerce and general welfare clauses, the federal government's control over trade and tariffs, until then largely seen as means of removing trade barriers between states and raising revenues, respectively, began to be used in order to advance the interests of various branches of industry, to favor specific commercial interests, to build up specific industries seen as significant, to encourage or discourage settlement in various regions and so on. It was far from the degree of intervention that would follow, and nothing compared to the influence exercised today, but there definitely was a mercantilist strain in the policies of the Whigs and later the Republicans. And finally, there was an effort, unsuccessful in this era, to not just revive the defunct Bank of the United States, but to go farther and issue not just large treasury notes, but small circulating notes, in an effort to effectively deprecate the currency. It was not the first such effort at establish a cheap money policy21, but it was the first real national -- rather than local or regional --attempt since the Constitution had been ratified.
There was obviously much more than these simple conflicts. There were Democrats who favored slavery, those who opposed. There were those who favored unlimited expansion of slavery into the territories, those who supported the old Missouri compromise, those who endorsed the "squatter" solution, and those who favored the similar but distinct compromise established in 1850. Then there were the proponents of protectionism, the advocates of free trade, and every position between. Thanks to such positions falling along largely regional lines, the period saw a definite fragmenting of the larger Democrat party into a number of often allied, but sometimes hostile local factions, with the western Democrats pursuing different interests from southern Democrats, and what Democrats remained in the northeast pursuing still different interests. At the same time, the dissolution of the Whigs gave birth to a number of small, but vocal, independent parties, many of which managed to attract substantial, if still rather small, constituencies for one or two elections, then faded into obscurity.
However, none of that really tells much about the state of the law. But that is precisely the problem, there was no real single state of the law. As the back and forth over slavery in the territories and newly admitted states -- as it was fought out between 1820 and 1860 -- shows, the law was in a state of flux, even more so than usual, with large bipartisan compromises that would normally have endured for quite some time, or only been gradually modified, instead facing complete overturn a decade or two after they were reached. Similarly, thanks to the conflicting positions concerning slavery, the multiple inconsistencies within the laws relating to it, the nation was shaken periodically be what amounted to virtual reversals of the law.Add to this the many other regional issues, which only served to reinforce the animosities which grew up around slavery, and it becomes even less stable. Finally, what should have been a source of stability, the total Democrat domination of the political landscape as the Whigs fell apart, became instead a source of greater instability. Because the Democrats were themselves divided by regional interests, the party saw its platform go through a number of subtly, but significant, shifts, resulting in rather peculiar changes in position, as well as opening up opportunities for much smaller parties to exploit internecine strife to exercise an influence far greater than their numbers would normally allow.
If I must characterize the era, I suppose there are two trends which deserve notice, at least in terms of limited government and individual freedom. First, there was the growth of support for protectionism, government subsidies, easy money policies, national bank laws and other interventionist -- mostly mercantilist -- positions, which would enjoy a brief heyday during and following the Civil War, but then largely vanish until the turn of the century, at least in terms of national policy. Second, there was the unfortunate fact that most of the prominent legal cases establishing a strong foundation for absolute property rights were also either cases which related to slavery, or were used to justify slavery. Just as in later years the association of slavery with states' rights had an unfortunate effect on political debate down to the present22, similarly the slavery connection effectively invalidated a number of decisions which otherwise would have been quite useful in defending private property against many assaults it would face in years to come.
There has been much discussion in libertarian -- and some conservative -- circles about the unfortunate impact the Civil War had on government. Starting from destroying the sovereignty of the states by essentially making secession a crime, passing through Lincoln's use of the military to subjugate and effectively occupy states, touching upon the many changes which began the process of ending federalism and substituting a monolithic central state, and finishing with Lincoln's many other policies, such as suspension of habeas corpus, among others, the list is long and well known. Unfortunately, it is also a topic which is difficult to debate unemotionally, as unfortunately, despite being in the right on the issues of state sovereignty, among others, and being the subject of what -- even at the time -- was seen by many as illegal actions by Lincoln and his government, the Confederate States and their sympathizers were also fighting to perpetuate the enslavement of human beings, and thus many will -- admittedly wrongly -- see a criticism of Lincoln's policies as a covert justification of slavery. Again, as I have said in other essays, the fact that Lincoln was, in one very significant respect, fighting on the side of the angels, largely absolves him of his other sins in the eyes of many23.
Still, I have not shied away from writing that might be misunderstood or offend, so let us look at what took place immediately before and during the war, and what effect it had on the nation's future. I won't go into great detail, as this topic has been discussed in such detail elsewhere, but it does need to be mentioned, if only to point out which events were truly significant, and which -- though troubling at the time -- reached no farther than the war's end, despite modern claims to the contrary.
For example, though troubling at the time, and certainly contrary to the letter and intent of the Constitution, Lincoln's violation of habeas corpus, occupation of states, use of arbitrary arrest powers and many other abuses of his authority were, by and large, "one off" events. They were recognized at the time as acts technically exceeding his authority, and future presidents never hoped to rely upon them as a precedent. For all the harm they did, in and of themselves they provided little of a hook on which future leaders could hang future extensions of power.
On the other hand, they were significant in a different respect. While no one was likely to use Lincoln's actions to justify eliminating habeas corpus for good, the fact that in a crisis Lincoln felt justified in exceeding his authority was taken as a precedent, and in more than one way.
Most obviously, the precedent was established that, in times of crisis, during emergencies, the Constitution may need to be treated as a mere suggestion, that presidential power -- or congressional for that matter -- might be extended beyond its legal limits for "the common good". I grant it is a principle that has been little used -- except perhaps in war time -- but it is still a precedent that exists, and has, from time to time, been mentioned explicitly by those in power. It is a small enough matter when compared to many issues we shall see in coming decades, limited as it is to crises, but we must also recall that in many cases, powers that were granted in crises were -- unlike many of Lincoln's -- not relinquished when the crisis ended24.
What was far more damaging, though far less recognized, is the fact that this policy, the acceptance that crisis could justify abandoning principles, was the first real appearance of pragmatism as an explicit policy, or at least justification, in American politics, at least openly presented as such without excuse. For the most part, earlier politics had been couched in terms of principles. Having been founded on abstractions such as the rights of man, our early government was dominated by a relatively intellectual approach to politics. That is not to say that there were not those who voted out of self interest, nor is it to say that the masses were all engaged in elevated debate about political science. What I mean is that the issues, when debated, were largely debated in terms of larger philosophies. Those who established the platforms tried to do so by referring to more general principles25. Of course, as with all political realities, they were forced at times to compromise with their opposite number, and in some cases even their explicit platforms were not entirely consistent with their more abstract principles, but by and large, the environment favored debate carried out in terms of general principles, rather than our modern, pragmatic environment, where we accept deception as commonplace, and almost entirely in terms of self-interest and political advantage26.
Unfortunately, the defense of Lincoln's actions, that the serious threat to the union required him to take extraordinary measures, effectively amounted to stating "principles are great, until they get in your way, when you abandon them". And much as this philosophy may seem unobjectionable to many moderns, as an explicit statement of political principle, it was quite unusual at the time. Of course, Lincoln did also offer high minded explanations for why he needed to exceed his authority, the horrors of slavery, the threat to the nation, to its experiment in freedom and self government and so on. But even so, it stood in stark contrast to, for example, Madison's refusal to undertake popular measures, even those with strong emotional appeal, if they exceeded his constitutional authority. In short, Lincoln's actions amounted to an inversion of the past precedent. Where prior politics had placed obedience to the the Constitution ahead of emotional appeal or the desirability of the goal, Lincoln argued that emotional appeal and other factors could justify ignoring the principles of constitutional rule.
It was not a policy explicitly accepted after Lincoln. In fact, for some time it seemed that future presidents made a point of following the example of Madison rather than Lincoln, but it was still there, a precedent which future presidents could cite. And, eventually, they did. Not for many years, but eventually that argument for pragmatic rule took root, and over time we developed the oh so very pragmatic environment we see around us today.
On the other hand, there were some actions which did have long lasting and significant consequences. For example, the principle that states could not secede, as well as the government's right to intrude into many aspects of state government, forcibly if necessary, did provide one of the first steps in the effective elimination of federalism27 and the birth of the centralized, monolithic, near omnipotent states.
However, for the most part what Lincoln established was not larger government, in itself, but rather an environment, the legal precedents and intellectual justifications, that would later grow into a centralized government. Lincoln's government may have enacted many changes, but many of them vanished at war's end, or if not, by the time Reconstruction ended, and so did not themselves create the larger, more powerful state to come.
But, as with all such statements, there was an exception. And that is in the area of money.
However, this essay has grown quite long, and I somehow doubt anyone will bother to wade through if I let it grow much longer. And so, for now, let me end this essay in the middle of the war, and we can come back later this week to examine what happened to banking, money and government debt during Lincoln's time in office, and follow that by looking at the Reconstruction, the -- inappropriately named -- Gilded Age, the fateful year of 1890 and the subsequent shift of the parties, the last old time Democrat Grover Cleveland, the Reform era, the first Roosevelt, the early red --and black [anarchist] -- scares, the Great War, the Federal Reserve and income tax, the 20's and the depression, the second Roosevelt including the Second World War, Ike, the largely irrelevant Kennedy administration, the Great Society, closing the gold window, Carter and Reagan and the rest of the changes leading up to today. It will doubtless be almost as long as this segment, if not longer, but I hope it will prove interesting.
Until I mange to get it completed, I hope my readers find this essay interesting.
1. The same topic was mentioned again more recently in "Noble Goals", and something of a mini-timeline of one particular issue (antitrust laws) and the related legal developments, was undertaken in "The Problem of Antitrust". Parts of those essays will of necessity be incorporated into this one.
2. For the record, I never came up with a definitive answer. At first I proposed an indefinite period, covering the early to mid teens, say 1913 to 1917, during which many powers were stripped from the states, immigration was restricted, banking was centralized and a federal income tax was born. I later argued that all of those changes were actually consequences of earlier changes, and picked 1890 as the best candidate, though in the very same essay I later argued that perhaps that was too late and the Civil War was the turning point. As we will see in this essay, there are good arguments for each period, as well as a number of others.
3. A good example would be the criticism directed toward many Federalists, especially by libertarians and others who idolize Jefferson, simply because they were not in agreement with Jeffersonian ideals. This completely overlooks how radical their positions still were in comparison to mainstream European thought of the time. If the Federalists would have had a stronger, more central government, it was still to be a government formed by free men, voting for their peers. That is a far cry from the nearly reactionary portrait some libertarian critics paint. (Also examine the discussion of President Adams in the essay proper, as it reveals a similar anachronistic and Jefferson-centric mistake.)
4. An even more obvious failing would be the acceptance of slavery among those who promoted individual liberty. Even more so given that some had considered -- and rejected -- adopting an abolitionist position during and after the Revolution. Then again, accepting slavery was almost required, as any attempt to eliminate slavery by law would have resulted in, at best, a division between two groups of states, at worst a complete collapse of the newborn union. However, those who even considered abolition were a minority. For most, despite a dedication to liberating their fellows, there was nothing inconsistent in allowing slavery. It may seem difficult to understand viewed through modern eyes, but for a considerable number the two positions were not incompatible. (I do not offer this as a justification or endorsement, simply a reminder that perspectives change over time, and what seems ludicrous to one age may make sense to another, as surely some things we think absolutely ordinary will seem laughable to generations to come.)
5. I suppose it depends on how you group the various issues. But if we look at the struggle to centralize banks, while monetizing debt, it is quite easy to argue it ran from the Civil War until, at the very least 1917. You could even argue it did not end until true fiat currency was established in 1973. So it is possible to argue that it was over a century long, though obviously that struggle overlaps with many other contemporary issues relating to the power of government.
6. Well, if we consider the entire career of the Civil War era greenbacks, I suppose there were two cases where that was the outcome. However, viewed in context of the larger bank question, as well as the many innovations of Salmon P Chase, I don'k know if greenback retirement seen in isolation is important enough to call a victory. Even adding the death of the first federal income tax, it still seems that the general trend was strongly toward powerful central government.
7. if anyone ever doubts my claim that legal principles will always be taken to the logical extremes they imply(cf "Slippery Slopes", "Pyrrhic Victories", "Damn the Torpedoes!", "You Lose When You Think You Win", "The Danger Inherent in Banning "Bad Ideas"", "In Defense of Discrimination", "The Single Greatest Weakness", "No Dividing Line" , "The Lunacy of "Common Sense"", ""Seems About Right", Another Lesson in Common Sense and Its Futility", "A Look at Common Sense", "Res Ipsa Loquitur", "The Shortcomings of Pragmatism", "Pragmatism Revisited", "Pragmatism Revistied, Again", "The Plural of Anecdote is Not Data", "Rules of Grammar and Pragmatism", "The Problem of the Small Picture", "Keyhole Thinking", "Impractical Pragmatists", "In Defense of Zero Tolerance, or, An Examination of Law, Common Sense and Consistency", "No Dividing Line", "The Consequences of Bad Laws", "Questions of Law and Questions of Fact", "In A Nutshell", "Harming Society", "In Loco Parentis", "Hard Cases Make Bad Law" and "Inescapable Logic") this is the single best proof. The First Bank itself was relatively innocuous, perhaps it was unnecessary and may have introduced some small amount of additional corruption, favoritism and other issues, but in general it did little harm. It would be difficult to argue that, in and of itself, the First Bank would result in the collapse of the United States, or even result in significant harm to a substantial number of citizens. However, thanks to the justification offered, we got the Supreme Court decision in McCulloch, which was used for the next two centuries to justify every imaginable expansion of government power. So, before telling me I am "too extreme" in insisting on a rigid obedience to government minimalism, recall how this one, minor, acceptable, pragmatic deviation became the foundation of all we see about us today.
8. It is a bit off topic, but interesting to note (akin to what I wrote in "A Little Bit of Irony") that two presidents of this era, both darlings of the libertarians of today (Jefferson and Madison), fought military actions overseas against nations which had not invaded us, posed no threat of invasion, and in one case (the Barbary Pirates) represented reprisals for actions of private individuals only informally supported by the state. In the other, the actions were not a military threat, but only an "inconvenience", that is stopping and searching our ships without permission. (War of 1812) By the arguments offered during most recent wars, and by the Paul crowd in general, these two wars were wholly unjustified, and both Jefferson and Madison must have been war-mongering imperialists for carrying them out.
9. It says something about how decentralized power was in this era that I continually feel the need to qualify any generalization. The federal government truly did fill a very limited role, with the states handling many functions we now think of as purely federal. Yet, even the states were concerned more with "big picture" issues than they are today. Many issues now handled at least partly on a state level were handled by counties, townships, incorporated cities and the like. Given the number of states, it is impossible to offer a general rule, as you can tell from all the qualifiers I felt the need to include, but if I can make two somewhat imprecise generalizations, they would be that power was far more decentralized than today, and even then many matters in which the government now intrudes were at the time entirely private, at least in some states or localities, and partly private in others. (Eg. Medicine, banking, roads, schools, fired departments, relief for the poor, and much more besides.)
10. Those who view "public education" in the abstract tend to have warm and fuzzy -- but also terribly vague -- feelings towards it. However, they forget that public education has also been used around the world as a primary means of control, through indoctrination, recruiting of informers and so on. Even when it is not used for so blatant an evil, it is often in the forefront of social engineering programs, many intended to undermine parental choices in child rearing. Even at its best, it tends to produce results far inferior to private education at a much higher cost (at least when we consider the true cost per student). A handful of successful model schools do not redeem a system which, in the past as well as the present, has done worse than the free market. (See "Reforming Education", "You Don't Drown in a Glass of Water - Vouchers Revisited", "Why Vouchers are not the Answer" and "Never Ascribe To Evil, A Discussion of Education" -- One final note: Many of those "public schools", the one room school houses of small towns and the frontier, are held up as examples of public education working. However, they are arguably not truly public schools. They were often funded by general contribution,true, but were not managed by the government. Thus, they were an example of private collective action for a charitable end, that is a free market venture, not the government run schools that "public education" assumes. For that matter, some of the public school schemes Jefferson suggested are more akin to private ventures than government ones. See also "Volunteer Fireman, Barn Raisings and Government", ""...Then Who Would Do it?" ", "Collective Action and Government", "Bar Fights, Riots and Drug Markets - The Limits of Law", "The Written Law","Government Versus Culture - A Forgotten Distinction" and "Why Must The Government Do It? Part I" .)
11. Some would argue that Monroe was in some ways a break with the Jeffersonian tradition, as he had backing of the ex-Federalists in 1808 and during his presidency tended to appoint across party lines. However, in governing, he by and large continued the traditions of Jefferson and Madison, especially in domestic affairs.
12. His economic policies are often blamed for the panic of 1837 and the subsequent depression, without any thought given to the problems caused by earlier ore centralized bank policies. It is interesting that Reagan's efforts to fix Carter's (and Nixon's) inflationary excesses brought about the recession for which Bush was blamed as well. It seems those who remedy the flaws of centralized banks are destined to be blamed for the deflationary consequences. Of course, that doing nothing would eventually have led to a worse crash is never mentioned, as disasters averted cannot be seen. (See "Inflation and Uncertainty", "Bad Economics Part 7", "Bad Economics Part 8", "What Is Money? ", "What Is A Dollar?", "The Gold Question, Not "Why?" But "When?"" and "Bad Economics Part 19".)
13. It is interesting to note that Jackson was the first "plebeian" president. The first several presidents (through Monroe) had all been prominent in the group which initiated the Revolution, all of whom had been prominent in colonial politics as well, mostly as wealthy planters or merchants. The second Adams was not part of the same set, but came from the same prominent family. Jackson was the son of immigrants and was raised in a much less affluent environment. It may be that the characterization of him as excessively populist, as crass and his followers as rude slobs was the result of snobbery on the part of the politicians and press, used to seeing a different sort of individual in office. On the other hand, it is also possible his background did give him a different set of behaviors which may have appeared crass or unrefined. Whatever the cause, his policies were not the result of some sort of thoughtless populism, he definitely had a well established set of economic and political beliefs.
14. The most common objection raised against Jackson (except perhaps his support of slave holding) is his handling of Indian tribes and his support of removal. However, the question itself is not as easily handled as some critics imagine. The original policy toward many tribes, that of treating with them as sovereign nations, was unworkable as soon as states developed enough that tribes were no longer neighbors on the frontiers of civilization, but were instead autonomous nations occupying the same land with populous, established towns and cities. A nation without territorial integrity is a political nightmare, as is attempting to enforce law and order in a land occupied by two groups of individuals comprising two nations. Thus, a change of policy was inevitable. The way it was handled can be criticized, but it is also quite likely even worse would have happened in the future had nothing been done. This is not meant to excuse Jackson, simply to point out the policy itself made some form of conflict almost unavoidable.
15. To be honest, picking one point as a "turning point" may be a fool's errand. It is quite possible that no single point in time made our change of direction inevitable, or even that such a course was ever inevitable. As I discovered in writing "A Passing Thought" , sometimes what seems an obvious choice, such as my nomination of 1890 as the year when things turned the corner toward big, powerful government, on reflection seems much less certain. Still, even if I never establish a definite moment, it is useful to at least review these past changes to understand what happened to bring us to our present condition.
16. Though only mentioning one election of this era, my essay "Four Elections" makes interesting reading in this context.
17. The Whigs in general favored the concept of a national bank and easy credit/paper money, but made little headway in that regard. Thus, the only real hope for easy money policies was on a state level, at least until the Civil War and the birth of the "State Banking System", which did not create a national bank, but established a means of pyramiding debt on a small reserve, and later on government debt, which allowed rather considerable -- and mostly centralized -- inflation. A system which would basically establish the pattern later followed by the Federal Reserve System.
18. The belief easy money favors borrowers is a common one, but also a mistaken one. In the case of current debt, yes it allows one to repay it in dollars of a lower worth, and so has an immediate benefit. And for a brief time it also lowers interest rates as money is dumped on the market. But in the longer term, not only does it do untold economic damage, harming all and sundry, and not only does it consume any savings one might have, it also ends up raising interest rates faster than inflation, making borrowing more not less costly. (See "Inflation and Uncertainty", "Bad Economics Part 7", "Bad Economics Part 8", "What Is Money? ", "What Is A Dollar?", "The Gold Question, Not "Why?" But "When?"" and "Bad Economics Part 19" . For those who dismiss these concerns by using Keynes' foolish quip about "the long run", I also suggest "Stupid Quote of the Day (January 6, 2012)")
19. A few went even farther and called for total abolition. Actually, the Free Soil Party was noteworthy for one other aspect. Unlike the later Republican Party, not only did they seek to end slavery, but also fought against some laws which discriminated against free blacks in the North, a position which no major party embraced until almost a century later.
20. In this case, party identity did not play a significant role in change. Though the eventual rupture of the Democrats gave power to the Republicans, who grew out of the remnants of the Whigs,a long with some anti-slavery Democrats, the parties themselves did not drive the change, at least not as happened between, say, 1890 and 1910, when the metamorphosis of the Democrats played a major role in changing our political ideas. (See "The Political Spectrum" and "A Passing Thought".)
21. Though the government had issues paper money under the Articles of Confederation, largely during the war, this was not intended as an inflationary measure, despite the fact that that was what it eventually became. No, the efforts at cheap money date mostly from the colonial era, when various states flirted with inflationary "land banks", where the difficulty of redeeming notes for land, or even accumulating notes for redemption, allowed massive inflation, which many states encouraged exporting to neighbors for their own benefit. Similarly, during the colonial era, and even afterward, "wild cat" banks, with or without the sanction of local governments, established themselves in remote locations, printing tremendous quantities of notes, and then relied upon their geographical isolation to prevent redemption sufficient to bankrupt them. (And fell back on state legislators for protection when such schemes failed.) However, as I said, the Whig/Republican attempt to impose national banking rules, and favor the printing of government sponsored circulating bank notes -- which would eventually yield some fruit during the Civil War -- was the first real attempt to enact similar policies nationally.
22. For a brief discussion of this unfortunate association, see "Noble Goals".
23. Nor did it hurt that Lincoln also suffered what many consider a martyr's death. In many ways, Lincoln has become something of a secular saint, the man who saved the union, ended slavery and was then struck down for doing so. It is a very effective myth, but like all myths, it obscures many of the uncomfortable realities. See "Noble Goals" and "A Passing Thought".
24. Recall that many of he policies against which Thatcher fought had been created as part of emergency policies establishing "war socialism" during the Second World War. Likewise, recall the relatively recent brouhaha in conservative circles over the discovery that we continued to pay a tax on phone calls that had first been created as a wire tax to fund the Spanish-American War. (Not entirely accurate, but pretty close. It had been repealed between the Spanish-American War and World War I, but excepting that detail, the description is fairly accurate. Remember the Maine!) Clearly emergency powers can be quite long lived.
25. This relates indirectly to a personal story. In my undergraduate work, I had studied history, with a special focus on the development of the English legal system from the end of the Roman colonial period through 1689. In my studies, I spent a fair amount of time reading abstract legal writers, such as Blackstone, who wrote about law in terms of the larger principles, and the general themes the law tried to follow. When I graduated, I attended law school, and was quite shocked to find modern law largely "pragmatic", with little interest in general principles, and quite willing to accept contradictory, even absurd, precedents, as that was what courts used to make decisions. It is one of the reasons I did not go beyond my first year. In a bit of irony, the one group I found that did speak of general principles, and tried to establish an abstract theory, was the group trying ardently to create a tremendously expanded right to sue for liability. (See "The Virute of Novelty and the Value of Tradition", "Consumer Protection", "Skewed Perspective , or, How Big Government Becomes Inevitable", "Still More on Liability Law", "Liability Law and Cost-Benefit Analysis", "Victim as Judge" and "The "Right To Sue" As Our Only Right" ) However, that was less because of any opposition to the general pragmatic approach, and more because they initially lacked precedents for the goal they desired, and so had to fall back on theory.
26. For a look at what I believe to be problematic with modern politics see "Deadly Cynicism", "Self-Serving Cynicism and Our Cultural Immaturity", "The Presumption of Dishonesty", "Bar Fights, Riots and Drug Markets - The Limits of Law", "Patronage" and "Flashback - Thomas Sowell Imitates Me Again!". To see a more general discussion of my objections to pragmatism and "common sense" in the law and politics, I suggest reviewing "The Lunacy of "Common Sense"", ""Seems About Right", Another Lesson in Common Sense and Its Futility", "A Look at Common Sense", "Res Ipsa Loquitur", "The Shortcomings of Pragmatism", "Pragmatism Revisited", "Pragmatism Revistied, Again", "The Plural of Anecdote is Not Data", "Rules of Grammar and Pragmatism", "The Problem of the Small Picture", "Keyhole Thinking", "Impractical Pragmatists", "In Defense of Zero Tolerance, or, An Examination of Law, Common Sense and Consistency", "No Dividing Line", "The Consequences of Bad Laws", "Questions of Law and Questions of Fact" ,"Beware Populist Deception", "How Conservatives Defeat Themselves", "The Single Greatest Weakness", "What We Deserve", "Who Is To Blame?", "Don't Blame the Politicians", "You Lose When You Think You Win" and "Tyranny Without Tyrants".
27. Though many point to LIncoln's actions, and the Civil War in general as the beginning of the end for true federalism -- and to a point I do agree -- it is interesting to note that the true final nail in the coffin came not from the stick, but the carrot. That is, after all the early attacks, Lincoln's changes, the direct election of senators, the creation a federal income tax, the birth of the FBI and so on (see "Minimal Reforms"), the last blow was struck when the federal government began funding a considerable part of state expenditures. Thanks to the ability to grant or deny funding, the federal government gained much more control than it ever had through more coercive measures. (See also "The Glory of Eisenhower?" .)
I had originally intended this to a be a single essay, but once I saw the size, I decided it would be better to split it in half to make it a bit more readable. Once I have completed the second part, for the convenience of future readers, I will ad a link here, and perhaps at the end of the essay itself as well..