William Hogeland: How John Adams and Thomas Paine Clashed Over Economic Equality

By William Hogeland, the author of the narrative histories Declaration and The Whiskey Rebellion and a collection of essays, Inventing American History who blogs at http://www.williamhogeland.com. Cross posted from New Deal 2.0

In “Common Sense,” Paine pushed for economic equality for ordinary Americans. Which made John Adams a bit queasy.

Here’s John Adams on Thomas Paine’s famous 1776 pamphlet “Common Sense“: “What a poor, ignorant, malicious, short-sighted, crapulous mass.” Then comes Paine on Adams: “John was not born for immortality.”

Paine and Adams may have been alone among the founders for having literary styles adequate to their mutual disregard. “The spissitude [sic!] of the black liquor which is spread in such quantities by this writer,” Adams wrote of Paine, “prevents its daubing.” Paine: “Some people talk of impeaching John Adams, but I am for softer measures. I would keep him to make fun of.”

They went on and on.

The Paine-Adams antipathy wasn’t just personal. Its sources lay in the founding generation’s deep political divisions over economic equality. Those who don’t know there was a founding political division over economic equality can thank the many historians — including even some biographers of finance-savvy founders like Superintendent of Finance Robert Morris — who feel more comfortable with philosophies of government, issues in constitutional law, and (if they get into economics at all) the legacies of Robert Walpole, Jacques Necker, and David Hume than with day-to-day American economic realities, and with the full range of 18th-century thinking from elite to working-class, on monetary and finance policy.

Things John Adams hated about “Common Sense” are revealing. One was the pamphlet’s widespread reputation as the tipping point for America’s declaration of independence from England. Adams thought that was nonsense. The only novel thing in “Common Sense,” Adams believed — and he meant it in a bad way — wasn’t what he cast as its belated, derivative call for American independence. It was what he blasted as Paine’s “democratical” plan for a new kind of American government, which flew in the face of the balanced republicanism that Adams loved. That part of the pamphlet was its only important part to John Adams, but it is often ignored or glossed over in favor of celebrating what Adams thought the pamphlet never did: persuade Americans to support independence.

In proposing a new American government, Paine scoffed caustically at the whole idea of balance and the covalence among branches that we’re taught to revere as exceptionally American, but were really derived from the post-Settlement English constitution. Where Adams saw checks and balances as key to liberty, Paine wanted an executive branch subordinated to a hyper-representative legislature (a single house, with no check from any elite “upper” house) and a judiciary directly elected by the people.

Most horrifying to Adams, Paine wanted citizens to have the vote regardless of property ownership. While in “Common Sense” Paine dialed back his thoughts on equality, arguing only for easy access to the franchise, in other works he promoted smashing the ancient equation that liberty-loving Whigs had always made between property and representation. Paine wanted the less propertied and — horrors! — even the unpropertied not only to vote in a free America, but also to hold office.

Paine’s goal in giving the lower sort and the poor access to political power was economic equality. When ordinary Americans held power, they would pass laws promoting the interests of ordinary Americans — and obstructing, not coincidentally, the interests of finance elites. And that’s just what happened in Pennsylvania beginning in 1776, when Paine’s friends wrote a constitution for that state, based largely on Paine’s ideas, removing the property qualification for the first meaningful time anywhere. Assemblies elected under that constitution passed anti-monopoly laws, worked to bring about government debt relief, and took away the charter of the bank founded by the high financier Robert Morris for the purpose of enriching himself and his friends.

The ideas in “Common Sense” that John Adams feared and loathed became realities in Pennsylvania. Many historians celebrating Paine’s goals of liberty and independence fail to acknowledge that for Paine, those goals were inextricable from political equality for the people he spoke for: ordinary working Americans.

One of the most fascinating moments in Paine’s career therefore occurred when he went to work for the high financier Robert Morris himself, writing at Morris’s behest on behalf of federal taxation in the service of national unity. Paine’s democratic populist friends saw Morris’s taxes, and indeed Morris’s wish for national unity, as a means of shoring up American wealth and pushing back the economic gains ordinary people had made in the Revolutionary period. Paine excoriated Morris for chicanery during the Revolution and helped create the economically democratic government that took away Morris’s bank and made the fat cat investor accountable to public opinion. In the 1780s, sudden support for Morris’s nationalist finance made Paine look like a sellout. He lost friends among his 1776 allies for equality.

But unlike many of his populist friends, Paine wanted a strong national government for America. Many economic populists of the period made the mistake of placing hopes for popular finance in antifederalism and then in the emerging “states rights” thinking of the anti-Hamilton elites. Populists had reason to feel more sympathy for state governments than for a national one: legislatures from time to time had been susceptible to the will of the less enfranchised, expressed through rioting; states had issued paper currencies and established land banks. And nationalists like Morris and Hamilton were indeed out to end all that. They wanted to make finance and monetary policy national matters, empowering suppression of debtor riots and enforcement of taxes collected for the benefit of an interstate money elite.

Paine, however, was impatient with the anti-nationalism of his fellow democrats. Skeptical of knee-jerk populism, he had high hopes for national finance. The strangest of bedfellows, Paine and Morris were working together at weird cross purposes. Paine’s vision, diametrically opposed to Morris’s, was like Morris’s in being a national one. Along with “the madman of the Alleghenies” Herman Husband, who also saw through state-focused elites’ pandering to populism and thought an egalitarian national government might be better empowered to hold greed in check, Paine’s radical democracy made him an offbeat kind of Federalist. Gazing farther than most of the popular finance activists of his time, he looked for a strong national government that would amplify the democratic gains he’d helped achieve in Pennsylvania.

The United States government, in Paine’s vision, would justify its national power by regulating elite finance throughout the states, promoting the interests of ordinary Americans everywhere, and increasing social equality by law. For Thomas Paine, American finance policy must dedicate itself to economic equality.

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52 comments

  1. Max424

    Thomas Paine, another MMT guy.

    There’s lots of em in our history, but other than Abe Lincoln, and FDR (for parts of the 30s, and especially from 42 to 45*), they’ve mostly been stuck on the periphery.

    * But definitely NOT in 1937, when Roosey lost his marbles and became a Reagan/Obama slash and burn trickle-downer.

  2. RueTheDay

    I was somewhat surprised to see the author did not mention Paine’s, Agrarian Justice. In it, Paine cut the libertarian argument in favor of a moral right to property off at its knees and made one of the first arguments in American history in favor of social insurance.

  3. jake chase

    History is written by winners and their public relations men. I seem to recall that Tom Paine died in the gutter. I suppose that is easy enough to check, but for me the recollection is enough as I do not think of eighteenth century personalities as critically important.

    1. DownSouth

      The struggle of people against power is the struggle of memory against forgetting. ▬Milan Kundera

      Evil may so shape events that Caesar will occupy a palace and Christ a cross, but one day that same Christ will rise up and split history into A.D. and B.C., so that even the life of Caesar must be dated by His name. There is something in this universe that justifies Carlyle in saying, “No lie can live forever.” There is something in this universe which justifies William Cullen Bryant in saying, “Truth crushed to earth will rise again.” There is something in this universe that justifies James Russell Lowell in saying:

      Truth forever on the scaffold
      Wrong forever on the throne
      Yet that scaffold sways the future
      And behind the dim unknown stands God
      Within the shadows keeping watch above his own.

      ▬Martin Luther King, Jr.

      1. DownSouth

        You have to take anything Periferal Visionary says with a grain of salt. To set the record straight, here are some more interesting tidbits about the life of Paine from Wikipedia:

        • In his will, Paine left the bulk of his estate to Marguerite, including 100 acres (40.5 ha) of his farm so she could maintain and educate Benjamin and his brother Thomas.

        • Regarded as an ally of the Girondins, he was seen with increasing disfavour by the Montagnards who were now in power, and in particular by Robespierre. A decree was passed at the end of 1793 excluding foreigners from their places in the Convention (Anacharsis Cloots was also deprived of his place). Paine was arrested and imprisoned in December 1793.

        • Paine was released in November 1794 largely because of the work of the new American Minister to France, James Monroe,[39] who successfully argued the case for Paine’s American citizenship.[40] In July 1795, he was re-admitted into the Convention, as were other surviving Girondins. Paine was one of only three députées to oppose the adoption of the new 1795 constitution, because it eliminated universal suffrage, which had been proclaimed by the Montagnard Constitution of 1793.

        • Paine believed that America, under John Adams, had betrayed revolutionary France and so in September 1798 he wrote an article for Le Bien Informé, advising the French government on how best to conquer America.

        • On noting Napoleon’s progress towards dictatorship, he condemned him as: “the completest charlatan that ever existed”.[45] Thomas Paine remained in France until 1802, returning to the United States only at President Jefferson’s invitation.

        In 1802 or 1803, Tom Paine left France for the United States, paying passage also for Bonneville’s wife, Marguerite Brazier and their three sons, seven year old Benjamin, Louis, and Thomas, of which Paine was godfather. Paine returned to the US in the early stages of the Second Great Awakening and a time of great political partisanship. The Age of Reason gave ample excuse for the religiously devout to dislike him, and the Federalists attacked him for his ideas of government stated in Common Sense, for his association with the French Revolution, and for his friendship with President Jefferson.

        • At the time of his death, most American newspapers reprinted the obituary notice from the New York Citizen, which read in part: “He had lived long, did some good and much harm.” Only six mourners came to his funeral, two of whom were black, most likely freedmen. The writer and orator Robert G. Ingersoll wrote:

        Thomas Paine had passed the legendary limit of life. One by one most of his old friends and acquaintances had deserted him. Maligned on every side, execrated, shunned and abhorred – his virtues denounced as vices – his services forgotten – his character blackened, he preserved the poise and balance of his soul. He was a victim of the people, but his convictions remained unshaken. He was still a soldier in the army of freedom, and still tried to enlighten and civilize those who were impatiently waiting for his death. Even those who loved their enemies hated him, their friend – the friend of the whole world – with all their hearts. On the 8th of June, 1809, death came – Death, almost his only friend. At his funeral no pomp, no pageantry, no civic procession, no military display. In a carriage, a woman and her son who had lived on the bounty of the dead – on horseback, a Quaker, the humanity of whose heart dominated the creed of his head – and, following on foot, two negroes filled with gratitude – constituted the funeral cortege of Thomas Paine.

          1. DownSouth

            Well actually, you have to be wary of Peripheral Visionary too. There’s a reason why anytime the word “revolution” gets mentioned these guys trot out the French Revolution, the Bolshevik Revolution or the Maoist Revolution.

        1. DownSouth

          And this is also an interestng bit of information:

          Only six people attended his funeral as he had been ostracized due to his criticism and ridicule of Christianity.

  4. DownSouth

    Great stuff, Hogeland.

    It is indeed tragic that the hopes for political and economic equality, as well as the struggles of those like Paine and Jefferson to achieve it, have been all but obliterated from the national consciousness.

    Now Barak Obama and his merry band of fascists are running the show, and rewriting history. They would make Adams and Hamilton proud.

    The United States is now a police state in complete control of the bankers, as these videos from the G-20 meeting in Pennsylvania a year and a half ago testify:

    the national anthem by dumpster fire.

    G20 2009: Police Attack Students at University of Pittsburgh

    It reminds me of the song Memory (On Youtube) from the Broadway Musical Cats:

    Memory
    All alone in the moonlight
    I can smile at the olds days
    I was beautiful then
    I remember the time I knew what happiness was
    Let the memory live again

    To get an idea of the great sense of loss I feel, one only has to compare the images of Pennsylvania from the videos above to the Pennsylvania that existed at the time of the founding:

    And his [William Penn’s] colony, it soon became clear, was to be a refuge not for Quakers alone, but for all those of tender conscience. Before a century of such unusual freedom had passed, Pennsylvania found within its borders an unbelievable hodgepodge of religious groups: Catholics, Protestants, and Jews hardly began to exhaust a list that included Anglicans, Baptists, Presbyterians, Methodists, Lutherans, Moravians, Mennonites, Brethren, Schwenkfelders, and more. Even more unbelievable than the amazing fact that such a mélange could live side by side without killing one another was the even more surprising fact that Pennsylvania actually prospered. Although it had been founded much later than such colonies as Connecticut and Virginia, which enjoyed and preserved their establishments, Pennsylvania grew stronger and richer—-so it seemed—-by the hour. William Penn spoke eloquently on the subject of liberty of conscience, but the prosperity of his colony spoke more eloquently and persuasively to that point. Was it just possible that society and economy could flourish without an establishment of religion? Of course, it was possible and plausible: Behold Pennsylvania! One must not suggest that this colony had no problems, that diversity led to perfect harmony, that Quaker pacifism was not both resisted and resented, that Anglican missionaries could readily adjust to so wild a swarm of fanatics, that denominations themselves did not further quarrel and divide. But despite it all, Pennsylvania prospered.
    ▬Edwin S. Gaustad, “Colonial Religion and Liberty of Conscience”

      1. DownSouth

        Excellent point, and an indication of just how far from its roots the United States has strayed.

          1. DownSouth

            Ah yes, logic, the last fortress of the oligarchs.

            As Benjamin Franklin said, “So convenient a thing is it to be a reaonable creature, since it enables one to find or make a reason for every thing one has a mind to do.”

  5. Peripheral Visionary

    Interesting analysis. In any discussion of equality and revolution, however, the shadow of the French Revolution (and its long aftermath) looms large. Even if the goal is noble, the path taken certainly makes a difference. I am sympathetic to Adams’ means, even as I am sympathetic to Paine’s ends.

    1. DownSouth

      What appeared to be most manifest in this spectacle [the French Revolution] was that none of its actors could control the course of events, that this course took a direction which had little if anything to do with the willful aims and purposes of the anonymous force of the revolution… Yet we need only remember the course of the American Revolution, where the exact opposite took place, and recall how strongly the sentiment that man is master of his destiny, at least with respect to political government, permeated all its actors…

      It was the French and not the American Revolution that set the world on fire, and it was consequently from the course of the French Revolution, and not from the course of events in America or from the acts of the Founding Fathers, that our present use of the word ‘revolution’ received its connotations and overtones everywhere, the United States not excluded. The colonization of North America and the republican government of the United States constitute perhaps the greatest, certainly the boldest, enterprises of European mankind… The sad truth of the matter is that the French Revolution, which ended in disaster, has made world history, while the American Revolution, so triumphantly successful, has remained an event of little more than local importance.
      ▬Hannah Arendt, On Revolution

  6. dictateursanguinaire

    This is great. Irony of ironies that of all the original 76ers to pay homage to in book form, Glenn Beck chose the closest to a modern lefty for his tribute. Paine was the man

  7. F. Beard

    [Paine] Along with “the madman of the Alleghenies” Herman Husband, who also saw through state-focused elites’ pandering to populism and thought an egalitarian national government might be better empowered to hold greed in check, … William Hogeland

    We see how well that has worked!

    We can end all these squabbles about finance if we shall simply agree to “No counterfeiting by anyone!” That would mean in practice that government money was only legal tender for government debts (taxes and fees) and that private monies were only good for private debts.

    We will never agree if we argue over what a single, one-size-fits-all money supply should be.

  8. JTFaraday

    “was what he blasted as Paine’s “democratical” plan for a new kind of American government, which flew in the face of the balanced republicanism that Adams loved. That part of the pamphlet was its only important part to John Adams”

    I can remember watching something on the History Channel in which an Adams historian commented on how tedious it must have been for him to return from his diplomatic post in Britain only to sit, as VP, in the legislature with the morons, who called him “His Rotundity” and accused him of being a monarchist for rejecting their democratical pretenses.

    Nevertheless, with former Speaker of the House Nancy Peolosi clocking in at $21.7 million and the rest of the lower House swamped with other similarly situated equal, democratical citizens (although, new Speaker John Boehner does clock in at a mere $1.8 mil), I can’t help but think it would be nice if we had a little bit of that nice, balanced republicanism today.

    Adams did say:

    “The principal difficulty lies, and the greatest care should be employed, in constituting this representative assembly. It should be in miniature an exact portrait of the people at large. It should think, feel, reason, and act like them. That it may be the interest of this assembly to do strict justice at all times, it should be an equal representation, or, in other words, equal interests among the people should have equal interests in it. Great care should be taken to effect this, and to prevent unfair, partial, and corrupt elections.” (Thoughts on Goverment, April 1776)

    But, we can keep on maintaining Tom Paine’s democratical fiction if people prefer, but I’d prefer to take the millionaire contingent that’s currently overflowing the Senate and send it packing.

  9. kevin de bruxelles

    Great essay – I really like these types of posts (being a non-financial type).

    What we see in the struggle between Paine and Adams are attempts to shape the political battlefield to the advantage of the groups they were representing. What is interesting is how over time the ideas about which shapes are best changes. For example back during the Revolutionary days, protecting “minorities” really meant protecting the rich. In more recent times this term has quite a different meaning. People on the Left even sometimes speak of the “tyranny of the majority”. I wonder if Civil Rights would have been possible with the political architecture Paine was advocating: “an executive branch subordinated to a hyper-representative legislature and a judiciary directly elected by the people” The question becomes: how do you provide enough protection for minorities without overprotecting the rich?

    Paine fought for a full franchise (at least for white men I assume) following the logic that the many if given the vote would use it to promote their economic interests. The history of American has indeed been one of an ever expanding franchise. But this has not necessarily resulted in an improvement in the share of wealth held by the many, certainly not over the last three decades at least.

    I fear the lesson here is that you can shape the battlefield all you want but if your troops don’t show up to fight or just end up fighting among themselves then they are going to lose the political battle to allocate resources no matter what shape the battlefield is.

    1. william

      “For example back during the Revolutionary days, protecting “minorities” really meant protecting the rich.”

      No it wasn’t about protecting the rich specifically, it was about something even more important in the history of the nation …

      Certainly wasn’t about protecting ‘minorities’, what did the checks and balances ever do for the blacks, or the Indians, or women, etc? That wasn’t the kind of ‘minority’ they where thinking of.

      “In more recent times this term has quite a different meaning. People on the Left even sometimes speak of the “tyranny of the majority”. I wonder if Civil Rights would have been possible with the political architecture Paine was advocating: “an executive branch subordinated to a hyper-representative legislature and a judiciary directly elected by the people” The question becomes: how do you provide enough protection for minorities without overprotecting the rich?”

      One presumes that under such a populist government the civil rights movement would have happened a century or so earlier. If you think about it, the majority of America’s population was against slavery long before it ended. Northern states (who made up the majority of the population) had banned slavery long before the Civil War. Jim Crow laws would never have had a chance in such a populist nation, only filibusters, vetoes, and ‘states rights’ could preserve them.

      And know you know the real reason for most of the ‘checks and balances’. Because the Southern States would never have entered into a union that looked populist enough to enforce the will of the majority i.e. banning slavery. ‘Protecting minorities’ in 18th century lingo means ‘protecting the minority of southern states right to own people as slaves’.

      Had Paine prevailed the result would likely have been that the union would have split immediately, the slave holders wouldn’t have stood for it.

      I don’t doubt the logical possibility of a tyranny of a majority -can’t actually think of any time in recorded history it actually happened-. No not the French Revolution, before anyone starts – the Jacobins where elitist, unelected, wealthy landowners who hijacked the later half of revolution they played no part in for the first three years. Many of the people sent to the guillotine where the original Sans-Culottes revolutionaries who overthrew the monarchy, like Danton, and where sent because they had dangerously democratic ideas – like asking “who elected Robespierre?” Frequently (like the filibuster issue we talked about last week) preventing the ‘tyranny of the majority’ means allowing the tyranny of some special interest over the majority.

      Our notions of risk seem bizarrely far out of alignment on this one, our rulers obsessionally focus our attention on the supposed threat of a ‘tyranny of the majority’, but the far more obvious and likely threat of the ‘tyranny of an elite’ seems to go completely ignored.

      1. DownSouth

        Paine was once often credited with writing “African Slavery in America”, the first article proposing the emancipation of African slaves and the abolition of slavery. It was published on March 8, 1775 in the Postscript to the Pennsylvania Journal and Weekly Advertiser (aka The Pennsylvania Magazine and American Museum).[53] Citing a lack of evidence that Paine was the author of this anonymously published essay, some scholars (Eric Foner and Alfred Owen Aldridge) no longer consider this one of his works. By contrast, John Nichols speculates that his “fervent objections to slavery” led to his exclusion from power during the early years of the Republic.[54][dubious – discuss]
        Wikipedia

  10. brian

    Little Johnny was a fascist in the truest sense. He had a design for his new creation that brooked no interlopers. I would be most curious to see how he viewed Napoleon, being a contemporary and fellow narcissist. Even the musical 1776 painted his psychopathic personality for all to see.
    Tom Paine was our representative. We had few others.

  11. Steve

    Adams, the American, favored the rule of law and republican government. Paine, the foreign agitator and mercenary pen, favored mob rule. Fortunately, Adams prevailed.

    “Post-hoc” analysis is fraught with intellectual peril. Does Hogeland really believe we would have prospered as a fledgling country without republicanism (small r) and property rights? Who knows what the US would be today along a different path?

    After securing loans for us from the Dutch with great difficulty, maybe Mr. Adams knew a thing or two more than Paine about public finance and the need for law and order. (Adams died with an estate of $100,000 and Paine died in the gutter.) I doubt the average citizen in 1800 would have been better off had we not established sound public finances.

    If “We the People” today want a unicameral legislature and a different banking system, we can amend the Constitution and support different Congresspeople. Surely the average voter has more power today than he (and especially she) did in days of yore. But Hogeland’s reflections on the past shed more heat than light.

    1. F. Beard

      (Adams died with an estate of $100,000 and Paine died in the gutter.) Steve

      You should know this is irrelevant if you have read the Bible at all. Job, one of the greatest men in the Bible, went from very rich to poverty to even more rich.

      I doubt the average citizen in 1800 would have been better off had we not established sound public finances. Steve

      Sound public finances? Do you mean perpetual government debt to the usury class? And why on earth did we need loans from the Dutch when the US could issue its own debt-free fiat? Continental Currency worked well enough even in the teeth of massive British counterfeiting of it and Colonial Script worked very well in Pennsylvania according to Ben Franklin till the English outlawed it.

      1. Steve

        Dear F. Beard:

        Thanks for your reply.

        To your first point, I did not mean to imply that Adams was morally superior to Paine because of his superior wealth. I only meant to suggest that he might have had a better grasp of finance (and for sure he had a brilliant wife, which always helps!)

        To your second point: We did not have perpetual government debt. You will recall that Old Hickory Jackson paid it off, even after the earlier massive expense of the Louisiana Purchase and the War of 1812. Our perpetual debt came later. We can all speculate as to the cause of it.

        Our astounding economic performance during our formative years as a nation, based in part on sound public finances, allowed us to retire the debt in Jackson’s time. So I would politely suggest you are incorrectly interpreting the implications of early American financial history.

        1. F. Beard

          So I would politely suggest you are incorrectly interpreting the implications of early American financial history. Steve

          Hind sight is 20-20 so they say. A couple of things we have learned since Colonial days (in part from the Colonials themselves!)

          1) Fiat money can work perfectly well for government debts; PMs are not at all needed.
          2) A national debt is completely unnecessary. Government is force. Why then should that force be used to collect rent for a money supply it could create for itself debt free?

    2. DownSouth

      • Steve said: “…maybe Mr. Adams knew a thing or two more than Paine about public finance and the need for law and order.”

      The envy and rancor of the multitude against the rich is universal and restrained only by fear or necessity. A beggar can never comprehend the reason why another should ride in a coach while he has not bread.
      ▬John Adams, quoted from Zoltan Haraszti, John Adams and the Prophets of Progress

      • Steve said: “If ‘We the People’ today want…a different banking system, we can amend the Constitution and support different Congresspeople.”

      Our whole banking system I ever abhorred, I continue to abhor and I shall die abhorring.
      ▬John Adams, quoted from Kevin Phillips, Wealth and Democracy

      1. F. Beard

        Our whole banking system I ever abhorred, I continue to abhor and I shall die abhorring.
        ▬John Adams, quoted from Kevin Phillips, Wealth and Democracy

        Hurray for John Adams then!

      2. Steve

        You folks are conflating my support for sound public finance (then and now) with support for a predatory banking system. One can support sound public finance and republican government without supporting a predatory banking system (I’m in agreement with you both and Adams on this point regarding the nature of the banking system).

        F. Beard’s second point about “rent-free” and “debt-free” fiat money is absurd. If you don’t consider inflation “rent” collected from savers, you might be right. Print away! See how well that worked for Weimar Germany and countless other examples of governments who wanted something for nothing. As it sounds like you know, only Jesus could multiply loaves and fishes.

        To F. Beard’s first point, who said anything about PMs? We can have fiat money without PMs. But how do you propose to issue government debt without creating the confidence among savers that the debt’s value won’t be eroded by pernicious inflation? Good luck issuing debt without sound public finance – it is what supports a fiat money system. This much should be obvious to you.

        1. F. Beard

          F. Beard’s second point about “rent-free” and “debt-free” fiat money is absurd. If you don’t consider inflation “rent” collected from savers, you might be right. Print away! Steve

          If we had true private money alternatives and if the government were to “Print away!” then who would be hurt by the printing? The private sector? No, the private sector would simply buy that fiat on the open market and pay its taxes with cheaper tax money. Over-printing by government would only hurt the government and those who received its money (government workers, the military, SS recipients, etc). Is that not eminently fair? Indeed it is.

          But how do you propose to issue government debt without creating the confidence among savers that the debt’s value won’t be eroded by pernicious inflation? Steve

          I propose there should be no more borrowing by the government. Capital projects should be pay-as-you-go. The government is an unlimited source of money if only it will spend it wisely. And it would spend it wisely if only we had genuine private money alternatives.

          Since you apparently respect the Bible (good on you!) then I point out that Jesus hinted at the necessity for separate government and private money supplies in Matthew 22:16-22.

          1. Steve

            I see your point, now that you’ve explained your advocacy for private money alternatives to government fiat money and your apparent desire to stop further government deficit spending.

            Sadly, the guy in North Carolina didn’t get far recently with the “private money” idea.

            The Constitution gives Congress the right to create money and oversee the process, value etc. I have no problem with private money in theory. I think the idea will face a lot of resistance. If you draft the Constitutional Amendment petition, I will sign it.

    3. DownSouth

      Steve said: “Paine, the foreign agitator and mercenary pen, favored mob rule.”

      “Favored mob rule”? By allowing people who weren’t property owners to vote? Don’t you think that’s a little bit over the top, especially in light of the historical account of Paine that Hogeland has so meticulously provided?

      On either side of the divide…historians stand ready with tar-brush and gold leaf and instead of the wicked old stereotypes we have a whole new outfit of equally misleading ones.

      [….]

      The need for absolute goodies and absolute baddies runs deep in us, but it drags history into propaganda and denies the humanity of the dead: their sins, their virtues, their efforts, their failures. To preserve complexity, and not flatten it under the weight of anachronistic moralizing, is part of the historian’s task.
      ▬Robert Hughes, Culture of Complaint: A Passionate Look Into the Ailing Hear of America

      1. Steve

        I was referring to his support for the French Revolution and his clear tolerance for the use of violence to achieve political goals.

        Suffrage for non-freeholders was a pretty advanced concept in pre-Revolutionary America. Even Jefferson did not always support it. But surely one can reasonably support universal suffrage and property rights at the same time!

        To your last point, I’m not trying to demonize anyone. I’m simply trying to observe that the rule of law and property rights create the pre-conditions for equality and prosperity. Paine erred in not understanding this. Burke and Adams did, and the US and England prospered as France fell into chaos and dictatorship.

        1. F. Beard

          Burke and Adams did, and the US and England prospered as France fell into chaos and dictatorship. Steve

          Excellent point and in light of John Adam’s hatred of banks what more could one ask?

        2. JTFaraday

          I don’t know that Adams is quite the unqualified champion of property rights that you’re making him out to be. Adams thought property rights were worth defending because he saw property as the byproduct of the virtues of “thrift and industry,” and, being the son of a MA farmer, thought that thrift and industry were virtues worth encouraging because fundamentally necessary.

          “Don’t work, don’t eat” and all that was not just a means of being moralistic scourge in hard scrabble colonial New England. It was a statement of collective fact.

          It’s not like he was a Boston money counter or a war debt speculator or a slave holder. Now there’s a defense of “property rights,” as such.

          And, what is that defense again?

        3. DownSouth

          Steve said:

          •I was referring to his support for the French Revolution and his clear tolerance for the use of violence to achieve political goals.

          •I’m simply trying to observe that the rule of law and property rights create the pre-conditions for equality and prosperity. Paine erred in not understanding this.

          So let me see. According to Wikipedia, “Paine was an enthusiastic supporter of the French Revolution, and was granted, along with Alexander Hamilton, George Washington, Benjamin Franklin and others, honorary French citizenship.” So I suppose using your criteria, Hamilton, Washington and Franklin didn’t understnad the rule of law either?

          Also according to Wikipedia:

          Despite his inability to speak French, he was elected to the National Convention, representing the district of Pas-de-Calais.[35] He voted for the French Republic; but argued against the execution of Louis XVI, saying that he should instead be exiled to the United States: firstly, because of the way royalist France had come to the aid of the American Revolution; and secondly because of a moral objection to capital punishment in general and to revenge killings in particular.

          Is that what you’re referring to when you speak of Paine’s “clear tolerance for the use of violence to achieve political goals”?

          As to your assertion that “property rights create the pre-conditions for equality and prosperity,” I disagree. Since Reinhold Niebuhr does such an outstanding job of debunking your extremeist ideology, I’ll refer to him:

          The achievement of America in developing social policies which are wiser than its social creed and closer to the truth than either Marxist or bourgeois ideology is subject to two important reservations. First, the debate in the western world on the institution of property was aborted in America. Nothing in the conflicting ideologies of Marxism and the bourgeois culture reveals the contrast between them so much as their respective attitudes toward property. Property is the instrument of justice in the creed of the bourgeois world; and the source of all evil in the Marxist interpretation. Both creeds miss the truth about property. Since property is a form of power, it cannot be unambiguously a source of social peace and justice. For every form of power, when inordinate or irresponsible, can be a tool of aggression and injustice. However, since property is not the only type of power in society (not even of all economic power), it cannot be the sole source of injustice. Since some forms of property represent the security of the home, and others are instruments for the proper performance of our social function, some forms of property are obviously instruments of social justice and peace.

          Clearly the Marxist and the bourgeois property ideologies are equally indiscriminate. The Marxists ideology has proved to be more dangerous because, under the cover of its illusions, a new society has been created in which political and economic power are monstrously combined while the illusion is fostered that economic power has been completely eliminated through the “socialization” of property. A democratic society on the other hand preserves a modicum of justice by various strategies of distributing and balancing both economic and political power. But it is not tenable to place the institution of property into the realm of the sacrosanct. Every human institution must stand under constant review. The question must be asked, what forms of it are viable under what specific conditions? In so far as the absence of a Marxist challenge to our culture has left the institution of property completely unchallenged we may have become the prisoners of a dogmatism which will cost us dearly in some future crisis.
          ▬Reinhold Niebuhr, The Irony of American History

        4. DownSouth

          Steve,

          Hannah Arendt also punches some very major holes in your “property rights create the pre-conditions for equality” assertion. As she says, people are now “free without owning property”:

          We have difficulties today in perceiving the great potency of this principle because the intimate connection of property and freedom is for us no longer a matter of course. To the eighteenth century, as to the seventeenth and before it and the nineteenth after it, the function of laws was not primarily to guarantee liberties but to protect property; it was property, and not the law as such, that guaranteed freedom. Not before the twentieth century were people exposed directly and without any personal protection to the pressures of either state or society; and only when people emerged who were free without owning property to protect their liberties were laws necessary to protect persons and personal freedom directly, instead of merely protecting their properties. In the eighteenth century, however, and especially in the English-speaking countries property and freedom still coincided; who said property, said freedom, and to recover or defend one’s property rights was the same as to fight for freedom.
          –Hannah Arendt, On Revolution

  12. Jim

    William Hogeland states that “…unlike may of his populist friends Paine wanted a strong national government for Americans.”

    In my opinion, as our current crisis deepens, it is within this historical populist current, that the structural alternatives to Big Government, Big State and Big Bank (i.e Crony Capitalism and Wall Street Socialism) will be found.

    But contemporary populist sentiments on this blog are also divided, primarily between Big Governnment populists (kinda top down Populists–i.e. Hogeland and many of the New Deal 2.0 commetariat, as well as a majority of the MMT crowd and probably Yves herself) versus a relatively undefined bottom up Populism predicated on local autonomy, direct democracy, genuine federalism and small productive proprietors (which I would characterize as my position).

    Here are some questions/issues about populism/federalism which might help to clarify what may eventually become a key debate determining our political/economic future.

    Is our present federal structure a figleaf for an increasingly irrational national structure of public and private power?

    Is a basic insight of federalism that subunits federate underneath a central state but with significant restrictions on the power of the central state over the federated units and a significant autonomy for these communities to develop their own way of life?

    Is a key motivation for combining federalism and populism the hope that there would be an accountability of decisions within each federated community?

    Is there a danger in bottom-up populism/federalism simply exchanging central state paternalism for a type of local majority tyranny?

    How would local communities in a post-liberal world be governed and how would power be distributed, exercised and limited?

    Is top-down populism advocating a somehow reinvigorated public sphere doomed to failure because calls for national ethical norms tend to deteriorate into national paternalism?

  13. F. Beard

    I have no problem with private money in theory. I think the idea will face a lot of resistance. Steve

    But why? Only legal tender laws for private debts and the capital gains tax would have to be repealed (as far as I know). The Income Tax, sales taxes etc. could remain since all private monies would have a free market exchange rate. The private sector would benefit from stable and flexible money supplies and the government would benefit from a healthy private sector to tax. A win-win!

    If you draft the Constitutional Amendment petition, I will sign it. Steve

    No lawyer am I. But yes such an important principle as that in Matthew 22:16-22 should be placed in the Constitution, imo, in the appropriate words of course.

    I don’t see who could legitimately object.

  14. P. FitzSimon

    Another thread of political-economic history, advocated by Alexander Hamilton, saw the United States evolving into a great industrial power like Great Britain. The landed aristocrats of the South viewed industrialism as positively satanic and advocated for a nation of farmers and small scale artisan/craftsmen. Although Ricardo’s theory of “comparative Advantage” hadn’t yet been explicitly formulated , this view of an agrarian America fit nicely with the English view that the American advantage lay in crops and natural resources. Hamilton wisely challenged this viewpoint. Until reading Mr Hogeland’s history of the whiskey rebellion I hadn’t given much thought to possible other interpretations of Hamilton’s motives for centralized banking and finance. To me it seemed to be an efficient method for the capitalization of a national economy built on technological advancement and manufacturing.

    1. F. Beard

      To me it seemed to be an efficient method for the capitalization of a national economy built on technological advancement and manufacturing. P. FitzSimon

      The road to Hell etc.

      A pesky little moral detail of government enforced or backed fractional reserve banking is that it is based on the theft (or borrowing without permission, at best) of purchasing power from all money holders, including and especially the poor, in which the “credit” is extended.

      And thereupon hangs the whole sorry tale.

    2. DownSouth

      P. FitzSimon said:

      Until reading Mr Hogeland’s history of the whiskey rebellion I hadn’t given much thought to possible other interpretations of Hamilton’s motives for centralized banking and finance. To me it seemed to be an efficient method for the capitalization of a national economy built on technological advancement and manufacturing.

      Yea right. You’re promoting the same fiction that Steve is back up the thread when he talks about “Our astounding economic performance during our formative years as a nation, based in part on sound public finances.”

      Oh, the wicked webs we weave!

      On becoming the first secretary of the treasury in 1789, Alexander Hamilton presented Congress with a bold economic program. To secure the creditworthiness of the new U.S. government, he called for redeeming at full face value not only U.S. wartime debts and certificates but the debt instruments of the various states. Many of the latter had been bought up by speculators at very low prices. The second proposal was to establish in Philadelphia a national depository to be called the Bank of the United States, which would also facilitate the financial operations of the U.S. Treasury…

      Controversy swirled, and in 1785 the Bank of North America’s charter was revoked by the Pennsylvania legislature, if only temporarily, in response to complaints of the bank being controlled by an upper-class clique, giving loans mostly to well-connected merchants in Philadelphia and ignoring the rest of the state…

      “Assumption and funding,” as Hamilton’s debt redemption provisions were called, provided the nation’s first cornucopia for financial speculators. From New Hampshire to South Carolina, cliques of wealthy Federalist supporters and officeholders, using traveling agents, had bought as many of the federal and state debt instruments as possible at cut-rate prices… Lesser profit-seekers prowled through the backcountry, buying up old, unpaid certificates from veterans, widows, and storekeepers. A group of New York investors, given early information on Hamilton’s plans in mid-1789 by his deputy, William Duer, collected for as little as ten cents on the dollar some $2.7 million worth of South Carolina, North Carolina, and Virginia state Revolutionary debt. This was about one-third of the three states’ total…

      James Madison failed with his compromise to redeem at less than face value paper held by speculative (rather than original) purchasers. Still, the whole arrangement was in doubt until Hamilton made a deal with Jefferson, who later admitted not understanding what was at stake…

      Of the overall $40-$60 million disbursed by the federal treasury under the debt assumption and funding program, about half is thought to have gone to speculators. To emphasize its enormity, $40 million would have been almost 15 percent of the estimated U.S. gross domestic product of 1790! Just $20 million to speculators would have exceeded the entire $18 million take of Revolutionary War privateering and three thousand captured ships.
      ▬Kevin Phillips, Wealth and Democracy

      Non-speculators didn’t fare so well in this era of “sound public finances.” Take Pierre L’Enfant, for instance, the architect whom President Washington commissioned to design the new capital city. “He laid out the city on a plan never seen before,” observes Jacques Barzun in From Dawn to Decadence, “which took account of the uneven ground and permitted indefinite extension.” “The government owed L’Enfant a good round sum, which with characteristic congressional thrift was reduced to a pittance,” Barzun continues. “L’Enfant died penniless.”

      And then there was Pierre Augustin Caron de Beaumarchais, the playwright who created the two dazzling comedies The Barber of Seville and The Marriage of Figaro. “Beaumarchais had a double purpose,” Barzun explains. “He relished the idea of a people set free from tyranny.”

      Beaumarchais became the imaginary firm of Rodrigue, Hortalez, and Company. Its activities were officially forbidden, but it was to supply the Continental Congress with 200 cannon, with mortars, with 25,000 firearms and ammunition in scale, including 200,000 pounds of powder, besides clothing and camping equipment for 25,000 men. ..

      The score of ships that played their part at a critical moment in the war of independence were indeed Beaumarchais’ in the literal sense: the agent of Congress had promised to send back produce—-chiefly tobacco—-in exchange for war supplies. Noting came from America….

      Worse yet, when 40 years later Beaumarchais’ daughter, who had fallen into poverty, petitioned Congress for the 2.25 million francs still owed her father (Alexander Hamilton’s estimate in 1793) Congress replied: “Take one third or nothing.”

      These events beg a question. Since Steve and Peripheral Visionary, in light of their comments above, apparently equate being poor with being evil, does that mean that L’Enfant and Beaumarchais’ daughter were evil too?

  15. melior

    I find it most illuminating to separate the secret supporters of royalty from the rest of us by the way their faces pale when I modestly propose a 100% inheritance tax, fully dedicated to universal health care for all children. It’s a good test for discerning who really believes that in a fair competitive system, one can succeed without that helpful head start from daddy (for the few who chose their parents well). And when I add that I don’t recall anything in the Constitution about dead people as having the rights of citizens, it almost always results in the most charming display of spluttering and cognitive dissonance.

    1. F. Beard

      It’s a good test for discerning who really believes that in a fair competitive system, one can succeed without that helpful head start from daddy (for the few who chose their parents well). melior

      A good man leaves an inheritance to his children’s children, and the wealth of the sinner is stored up for the righteous. Proverbs 13:22

      So, you wish that a good man should leave nothing to his children and grandchildren?!

      However, until the money system is reformed, a high, steeply progressive death tax is justified. How many of the uber-rich got that way without benefit of the corrupt, government backed counterfeiting cartel? Only a few, I’d bet.

    2. Mickey Marzick in Akron, Ohio

      Melior,

      It certainly puts paid the notion of “equal opportunity”. For there’s no squaring that inheritance circle! Well said!

    3. JTFaraday

      Your parents don’t have to be dead in order to benefit from their money. You’re just separating the poker faces from the dummies.

  16. ThomasisaPaine

    This Paine despises Obama and the Banksters. Urkel is an Uncle Tom puppet jumping around on the strings of Goldman Sachs. This fact does NOT mean:

    We need higher taxes (do the hyper-rich pay them now?)
    We need more bank regulation
    We need more deficit spending.

    What we need is smaller government controlled as locally as possible and no more subsidies (which are only for the rich/powerful or to reward voting blocks to the detriment of everyone else)

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