The main idea of this book is to demonstrate that contrary to traditional perception Constitution was created because founders believed that regular people could not rule themselves and had to be restricted by elite via strong and powerful federal government, which is, in addition to limiting states activities and resolving disputes, would be also capable to control economy via control of debt, money supply, and international trade.
Introduction: “Evils Which Produced This Convention”
Author begins with the statement that real birthday of America is not 4th of July 1776, but rather 1787 – Year of Constitutional convention. He stresses that his approach is different from traditional and that real objective of constitution was to resolve the issue of revolutionary debt in such way that would stop growing insurrection against taxes that states had to impose on people to repay it. Author reviews specific writings and behavior of founders, description of events in various states, and focuses on people who opposed the Constitution.
I. THE GREAT DEBATE
1. “Bricks Without Straw” – Grievances
Here author first describes grievances created by government debt situation when debt issued during the war and forcibly imposed on supplies, soldiers, and others in lieu of payments was bought out by speculators for pittance and then required to be paid off by states governments in full. Author stresses how much founders like Madison, Adams, and others relied on such payments often needed to finance their land purchases. At this point government debt holders were mainly members of elite, who controlled policies, making the states to increase taxes to levels by far exceeding burden before revolution in order to assure payment and consequently causing growing resistance and multiple tax revolts. Author provides multiple examples of debtholders including details of Abigail Adams’ business trading in debt and land. There is also a very interesting review of methods that bondholders and politicians designed to pass through tax proceeds for debt payment directly thus eliminating opportunities for public officials to help themselves to this cash flow. However, it did not solve the problem. Here is how author describes the eventual solution:” In time Americans would embrace a radical solution to the problem of excessive taxation. The adoption of the U.S. Constitution in 1788 and of a national debt-refinancing law two years later transferred responsibility for redeeming the bonds from the thirteen states to a federal government that was better equipped to handle it and less likely to cave in to taxpayers’ demands for relief. Thus, what historians say about the American and French Revolutions was also true of the Constitution: it might never have come about if the government had not previously run up an enormous war debt.”
2. “The Fault Is All Your Own” – Rebuttals
In this chapter Author discusses resistance to states’ debt payments via excessive taxation. He starts with discussing initial rebellion against British taxation and then proceeds to discuss economic connections with British economy after independence and how it impacted internal economic distress. Author specifically looks at trade in luxury goods, which often generated backlash not only for economic, but also for puritanical reasons. Interestingly enough it was used by elite to accuse regular people in excesses, consuming more than they produced.
3. “To Relieve the Distressed” – Demands
Here author looks at demands for tax relieve that included petition to close courts temporarily, various schemes to discriminate against speculators, and issue paper money for debt payments. During the revolutionary war paper money indeed were issued at such scale that created hyperinflation and author provides multiple examples of victims from George Washington to Joseph Martin. Author makes an important point:” Thus the movement for the Constitution, which prohibited state-issued paper, was rooted partly in state-level struggles over how much property the government should convey from taxpayers to bondholders. Modern claims that pro – currency farmers were simply seeking to defraud their private creditors perpetuate the myth that the constitutional ban on paper money rescued Americans from a failed experiment in self-government.”
4. “Save the People” – Requisitions
Here author makes and interesting statement:” No piece of legislation—at either the state or federal level—did more to advance the movement for the Constitution than the virtually unknown requisition of 1785.” This was basically budget approved by congress in which 30% to be paid in hard currency to foreign landers and $2.5 million to domestic, practically quadrupling previous year payments. Author then discusses payments to military or lack thereof, moving army to the brink of mutiny. It was somewhat resolved by Commutation bonuses, but it also led to formation of Cincinnatus society, which organized former officers and made them into kind of political organization. Author then looks at impact in different states where in some cases it led to rebellion.
Il. VIRTUE AND VICE
5. “Who Will Call This Justice?” – Quarrels
Author starts here with situation of public servants who were not paid because taxes were not paid, while government bonds lost value and compares it with top level politicians, specifically Adams family who get rich buying these bonds at deep discount and then using government to redeem these bonds at full price. He points out that regular Americans understood how it worked, were unhappy about it, and created quarrels about it:” For many Americans on all sides of the dispute over whether tax relief created an injustice or remedied one, the whole question came down to how much money soldiers who had sold their securities should, in their new role as taxpayers, hand over to the speculators who had bought them. Although some of the bondholders’ advocates acknowledged that this transfer of wealth might sometimes be distasteful, they usually went on to insist that it simply could not be avoided.” Author then proceeds to review positions of all sides in these quarrels.
6. “Idle Drones” – Economics
Here author discusses shortage of gold and silver, how it hampered debtors to repay their debt and need to payoff foreign debt in order to maintain credit. Once again:” In the eyes of many of America’s most prominent citizens, the thirteen states’ frequent recourse to tax and debt relief legislation revealed that they were fundamentally flawed. Again, and again state representatives had yielded to their constituents’ most reckless demands, adopting policies that ended up harming even their intended beneficiaries. The lesson was clear: in their first flush of revolutionary enthusiasm, the Patriots had created governments that were far too sensitive to public pressure.”
Author describes situation as catch 22: without paying off debt there would be no new credit, but heavy taxation, foreclosures, and debt prison suppressed economic activity so it would not produce surplus needed to pay debt.
7. “The Fate of Republican Govt” – Redemption
Here author discusses various measures that could conceivably resolve the problem and debates about them: expanded land ownership that would create collateral and paper money. Author also discusses changes in communication method that allowed building of narratives supporting one or another position: writing novels, massive expansion of orations and debates, eventually leading to division of people into multiple groups and subgroups supporting different solutions.
III. UNRULY AMERICANS
8. “A Revolution Which Ought to Be Glorious” – Disenchantment
Here author first discusses disappointment of population in system of government when people discovered that petitions, and even elections give them too little influence on government decisions. It led to disengagement: in some cases, it was elimination of courts, in others non-election of assemblies, and so on. Author then discusses three way to resolve the problem: expansion of economy and author discusses here economic value of Caribbean goods and slave trade. The second one was shifting the debt to federal level, so it could be repaid through tariffs. Finally, the third way was to expand sales of western land, so in relation to this author discusses relations with Indians, their attempts to form unified front to repulse American expansion, which was initially successful since United States were not ready for war against Indians without which no expansion was possible.
9. “A Murmuring Underneath” – Rebellion
Here author describes multiple rebellions that occurred during this period: burning court houses in Virginia, prevention of foreclosures and auctions in New Jersey, military mutiny in Pennsylvania, court closures in Massachusetts, culminating in Shays rebellion, and similar events all over the country. Here is somewhat detailed description:” One state where the connection between fear and relief was especially clear was South Carolina, where the April 1785 Camden Riot was only the beginning of a wave of activism. During the subsequent spring and summer debtors and taxpayers throughout the state protected their property with a massive campaign of “knocking down of sheriffs.” “Americanus” emphasized that the reason backcountry property seizures had ceased was “not by the neglect of duty, or favor in the sheriff’s officers, but from a dread they stand in of their lives in attempting to serve a writ beyond such a distance from the city” of Charleston. One reason that officials backed down was that they feared that conflict among whites might provide an opening to the enslaved half of the population. Even the Camden rebels shared this concern. In the midst of their effort to shut down the civil court, they “professed an anxious Desire of supporting the Criminal Department.”
10. “Excess of Democracy”? Reform
In this chapter author reviews debates about need to adjust Democracy in America to some other level than the existing one, which led to disfunction. Author looks at groups of Americans who saw solution in expansion of Democracy and others who believe that it should be ruled in to some lower level. For example, James Madison:” wanted to “extend the sphere” of government in order to insulate lawmakers against pressure from below, they wished to make state legislators more responsive to the voters by giving them fewer constituents.” Another well-known publicist Herman Husband:” asserted that the ideal election district would be small enough to give every voter “an Opportunity to converse with the Representative.”. There was overall extensive debate about expanding or contracting electoral franchise. Author describes some suggestion that would bring changes in one direction or another.
IV. REINING IN THE REVOLUTION
11. “The House on Fire” – Credit
In this chapter author concentrates on discussion and then measures, mainly anti-democratic that were implemented in Constitution in order to prevent legislature to be responsive to popular demands such as prevention of states from printing paper money, isolation of congressmen and senator from electorate by removing term limits that existed in Confederation, and link of federal franchise to states legislatures. Another measure was veto for chief executive that allow limit legislative initiative. The final solution was to transfer debtor – creditor relation and money supply to national government.
12. “Divide et Impera” – Statecraft
This chapter is about instructions that could be provided by electorate to representatives that was more or less usual practice. Since it made representative more responsible to will of voters, it was eliminated. Author also discusses direct versus indirect elections and compromises that used 3 different methods: direct for representative, indirect via states legislature for senators, and semi-direct via electoral college for president.
13. “More Adequate to the Purposes” – Revenue
This chapter is about resolution of big gap in Article of confederation – collection of taxes exclusive via states. The new constitution created huge source of revenue completely independent from the states. Initially it was federal tariff so it was practically invisible for population. Author also discusses use of revenues – mainly military for purpose to fight Indians. The federal military would also be very useful to “maintain domestic tranquility”, in other words to be a force independent from local population’s preferences and sympathy as in case of Whiskey rebellion. It was also necessary in case of potential slave revolt, that always was a possibility in Southern states.
V. ESAU’S BARGAIN
14. “Take Up the Reins” – Ratification
In this chapter author once again stresses that necessity of Constitution came from weakness of states that were too much democratic, resulting in negative consequences for private interest: those who speculated in government debt, land, including land still under Indian control, and received proceeds from taxes either as government officials or contractors, or landers. Author describes some positive outcomes: expansion of credit, large infrastructure projects such as canals, and so on. Author also discusses some Anti-Federalist points, but not in great details.
15. “More Productive and Less Oppressive” – Taxes
Here author describes process of ratification and how much shift in taxation from direct at state level to indirect via federal tariffs helped to success of this process. It was also greatly helped by expectation that federal army would be an effective tool to suppress rebellions of farmers and Indian resistance to westward movement. At the final analysis author concludes that the New Constitution gave something of value to nearly every American and successfully eliminated Anti-federalist’s resistance by adding Bill of Rights. Author also describes propagandist effort with misleading statements and sometimes outright lies that were used to promote ratification.
16. “As If Impounded” – Consolidation
In the final chapter author first describes how states decided on method of congressmen elections – generally statewide and how objective of Constitution were in main achieved: link between people in power and popular opinion was indeed weakened, national tariff and debt transfer to federal government with eventual payment in full to speculators did occurred – the process, which author describes in some detail. One positive effect from this was that after British lenders were paid off, the gates opened for massive foreign investment into America. However, the successes of Constitution carried steep political price: decrease in democracy with elimination of one-year term limits, direct representation with instructions, and popular control of money supply.
Epilogue: The Underdogs’ Constitution
Here author reaffirms his main thesis that Founding fathers cared much more about their security from popular rebellion, value of their investments in government bonds, and opportunities for land speculation, than about expansion of democracy. Actually, per author, the whole objective of Constitution was to limit democracy of early America, which rightly or wrongly was perceived as causing economic chaos, rebellion, and weakness against Indians and other enemies. In this version the Bill of Right was not intention of founding fathers, but rather their retreat and compromise without which ratification of Constitution would not be possible. Here is how author describes the historic result: “What Americans admire most about their national charter is that it is, at its best, an underdogs’ Constitution, a document that protects even the most unpopular religions and political ideas, the most mistrusted racial and ethnic minorities—and even people accused of crimes. But this book has argued that an underdogs’ Constitution is precisely what the Framers did not intend to write. While there is no reason to question their claim that they hoped to benefit all free Americans, what they meant to give the ordinary citizen was prosperity, not power. Indeed, many of the Amendments that we most cherish today—the enfranchisement of African Americans and women, the direct election of senators, and others—do not just add to the Constitution. They directly contradict the Framers’ antidemocratic intent. For all the lip service Americans pay the authors of the Constitution, in their actions they have often shown much less respect for them than for the men and women with whom the Framers locked horns in the mid-1780s. There are people today who wish to give up their paper money and return to the gold standard, but they are generally viewed as crackpots. Few believe the wealthy possess special qualities of leadership. Most citizens expect their elected officials to do much more than clear away obstructions to private investment. That the nation’s fundamental charter is an underdogs’ Constitution is, for most Americans, a source of tremendous pride. It is richly ironic that what has arguably become history’s greatest experiment in shielding the powerless began as a slur on the capacities of ordinary citizens.”
MY TAKE ON IT:
This is a very nice history of American elite consolidating power after successful expulsion of naughty British elite from America. I think there is misunderstanding of American revolution as revolt of American patriots against British oppressive colonial rule. In reality it was in main revolt of American elite against British elite, which refused to accept these colonials as equal part of itself. A pretty good example would be colonial colonel Washington who was rejected commission as officer of British army. This book demonstrates that after British were gone, the local elite proved itself much more oppressive by imposing higher taxes, creating mess with economy, and implementing speculative scheme that allowed them obtaining government debt at rock bottom prices from regular people that then were forced under the gun to accept this debt, so elite would be paid full price by state governments they controlled. One had to admire inventiveness of American elite that managed to succeed in such daring endeavor by implementing Constitution that shifted debt payments to federal government and made it to be done via tariffs rather than direct taxes so that regular people would not see it happening. Actually, the success of this brilliant move confirmed that American economic potential was so high that it left enough space for both: enrichment of elite via debt repayment and land speculation and increased prosperity of regular people via land acquisition whether legally or by squatter rights. It clearly demonstrated that option of increasing pie, even if most of it going to elite, is by far superior than fighting for bigger share of smaller pie. The price elite paid in form of Bill of rights was mainly insignificant, since control of all powers, however divided and balanced, always remained in the hands of elite making these rights mute, except in case of elite’s internal struggles. Even if real history presented in this book is very different from typical BS about America, it is still by far superior to any other country’s arrangements and did provide some space for relative prosperity of great many regular Americans.