Essay on Federalist No. 13

Introduction

Before getting to the plain language summary of Federalist No. 13, I’d like to take a moment to voice my disagreements and intrigue with some statements made by Alexander Hamilton in Federalist No. 13. They are as follows.

1. Hamilton writes that “When the dimensions of a State attain to a certain magnitude, it requires the same energy of government and the same forms of administration which are requisite in one of much greater extent.” Hamilton is saying that there is a specific minimum size that a government must attain, given a a certain amount of territory. However, once the government reaches that size, it will be sufficient for much larger countries as well. Or, a country can keep growing while that absolute size of the government remains the same. Applying this logic to our current situation, we could literally go back to the government we had out our country’s founding. This is perhaps one of the only times I’ll applaud Hamilton’s logic, even if he wouldn’t agree with me using it in this way…to make the government smaller.

2. In Hamilton view the job of the government is to “direct the passions of….society to the public good.” This is absolutely not the job of government. If the government has a job, and that is a mighty big if, it is to secure liberty by protecting property rights. Government’s job is not to influence our opinion. It is not to make us more righteous. It is not to tell us how to live our lives. It is not to educate us and take care of us when we’re sick. It is not to give us all houses and clothes and food. The government should exist to keep other people from robbing and killing us, that’s it. If it can’t even do that job well, we should fire the government by stripping it of all power and allowing it to cease to exist. Government just isn’t necessary beyond that mandate.

Summary

While we are discussing the issue of government revenue, it also makes sense to consider another issue of a similar nature: government thriftiness. Any money not spent one thing can be spent on something else. If the government spends less, the people will have more money to spend as they please. A single national government would entail but one national bureaucracy. The existence of many lesser confederacies would require a multitude of different national administrators and government workers.  At the same time, there would need to be additional civil servants in order to work on coordination between the various confederate governments. Any plan that would require the thirteen states to form thirteen totally separate governments is too dangerous and complicated for any serious person to honestly consider. Those who imagine what America would look like if it were to form itself into separate confederacies tend to envision three distinct nations. The three countries would be made up of the four northern states, the four middle states, and the five southern states. It is unlikely that there would be any more than three confederacies. Under this arrangement, each of the unions would be larger than the country of Great Britain. No educated person will argue that a new country of such size can be governed by any government that is less comprehensive in nature than the one proposed in the new constitution. When a country reaches a certain size, the government must be as active and well organized as governments of much larger countries. Of course, it is impossible to say exactly what size a government should be. There is no way to know how many bureaucrats will be needed to govern various sized populations. When we look at Great Britain and her eight million people, we observe that she is about the same size as each of the separate confederacies would be. By examining the government power needed  to “direct the passions of so large a society to the public good”, it becomes obvious that a government with similar strength would also be able govern a much larger country. Governmental prerogative, if properly organized, can be imposed on great swaths of land. It’s authority can, indeed, be carried out even to the far corners of a “great empire” as long as the correct institutions are in place.

Essay on Federalist No. 12

Introduction

Before getting to the plain language summary of Federalist No. 12, I’d like to take a moment to voice my disagreements and intrigue with some statements made by Alexander Hamilton in Federalist No. 12. They are as follows.

1. Hamilton writes “The prosperity of commerce is now perceived and acknowledged by all enlightened statesmen to be the most useful as well as the most productive source of national wealth.” This statement gives us interesting insight into the prevailing philosophy during the time of our country’s founding. We learn that during the era when the Constitution was crafted, the “prosperity of commerce”, was considered to be the “most useful as well as the most productive source of national wealth.” Oh, how the times have changed! In the twenty first century, war and welfare programs are considered the appropriate way to make our country richer. Corporations are viewed as money grubbing thieves, while politicians are looked upon to make our lives better. The truth is just the opposite. Those who bring products to the market and engage in voluntary business transactions are truly responsible for raising our standard of living.

2. Hamilton writes “By multipying the means of gratification, by promoting the introduction and circulation of the precious metals, those darling objects of human avarice and enterprise, it serves to vivify and invigorate the channels of industry, and to make them flow with greater activity and copiousness.” Note that “precious metals”, gold and silver, used to serve as money. Hamilton here appears to be recommending an inflationary monetary policy to stimulate the economy. He equates “promoting the introduction and circulation of the precious metals” with increasing action in “the channels of industry and to make them flow with greater activity and copiousness.” How could the government inflate the money supply if gold and silver were money? First, the federal government was to be in charge of minting coins. The government could mint more coins and put them into circulation. Second, Hamilton was in favor of a central bank. This would allow the federal government to pyramid paper dollars on top of precious metals. In a sense, Hamilton is right. Increasing the money supply does invigorate the economy, temporarily at least. The downside is that increasing the money supply creates the business cycle. When “greater activity and copiousness” in the economy is due to a government injection of money, a bust will inevitably ensue. Business activities that made sense as long as the money supply was increasing will turn out to be unprofitable as soon as the monetary spigot is turned off. Recessions and depression ensue. It is also useful to understand that when the government officials involve themselves in regulating the money supply, they are interfering with the free market. Gold and silver became money not by government decree but rather as a result of the decisions of individuals on the market. Supply and demand regulate the quantity of money produced. When the government gets involved with altering the money supply, it supersedes decisions made by private individuals. This violates property rights and disfigures the structure of the economy. When the economy is manipulated in this way, it becomes less suited to meet the demands of private actors and more suited to carry out political designs.

3. In an ode to commerce, Hamilton writes “Could that which procures a freer vent for the products of the earth, which furnishes new incitements to the cultivation of land, which is the most powerful instrument in increasing the quantity of money in a state–could that, in fine, which is the faithful handmaid of labor and industry, in every shape, fail to augment that article, which is the prolific parent of far the greatest part of the objects upon which they are exerted?” This is an eloquent expression of the benefits provided by the free market. People work harder. New methods of production are discovered. Output increases. In a material sense, the world becomes a better place as a greater supply of higher quality goods become more accessible to the masses. These effects are all to the good and are the natural results of a free society. Hamilton does error on one point. As long as the government doesn’t get involved, commerce is not necessarily “the most powerful instrument in increasing the quantity of money in a state.” The fact is that free commerce may or may not bring more money into the state. It depends on the preferences of the people living in the state. If the people of a state desire to hold money so strongly that they are willing to trade away other goods and services for it, the quantity of money in the state will increase. If a free people prefer to have goods instead of holding money, money will leave the state. As long a people are permitted the freedom to pursue whatever makes them happiest, it doesn’t really matter one way or the other how much money stays in the state. What does matter though, is that the quantity of goods and the access to services is always increasing. This is the result of a more productive economy not an economy with more money circulating. Greater production is the result of capital accumulation. Capital accumulation can be seen in new and better tools and machinery, new technology, labor saving devices, inventions and discoveries, etc. This can only occur as the result of saving. Saving allows certain people to focus on improving productivity without starving in the meantime. Money is not capital. Money is a medium of exchange. In and of itself money can’t make a society more productive. Only an increase in production resulting from savings and investment can make us better off in a material sense. For that reason, Hamilton is incorrect in listing ” increasing the quantity of money in a state” as a benefit of commerce.

4. In the third paragraph of Federalist No. 12, Hamilton makes some grievous statements. I’m going to go through this paragraph sentence by sentence and discuss what makes this paragraph so disturbing. Hamilton errors right off the bat, writing “The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money in circulation, and to the celerity with which it circulates.” This is false. Hamilton makes a similar statement in a previous paragraph as well. Money itself will do nothing for the government or help it execute its designs. The government needs resources. Money is an intermediary that facilitates obtaining resources. The government can have all the money it wants but without sufficient resources it can’t do anything. Imagine, for example, that the government wants to build a navy. Clearly, tons and tons of gold can’t make that happen if the economy doesn’t have enough wood, metal, and labor available to make that happen. What Hamilton doesn’t seem to understand is that an economy can be highly productive and wealthy without a lot of gold rapidly circulating through it. Hamilton should have written is “The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of goods and services available.” Next, Hamilton writes “Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury.” Hamilton shows his true colors in this passage. A flourishing economy isn’t important to him because it makes the lives of free people better. Nope. That takes a back seat to making “the payment of taxes easier” and facilitating “the requisite supplies to the treasury.” This is a common theme seen throughout the Federalist Papers written by Hamilton. He equates the success and dignity of a country with the wealth and power of its government. By that definition, Hamilton is a raging nationalist. Of course, history shows us that the prosperity of the people and the power wielded by the government move in opposite directions. One must diminish the other. A free people must choose which they prefer because they certainly can’t have both.  Hamilton continues by telling us about the Emperor of Germany. He writes, “The hereditary dominions of the Emperor of Germany contain a great extent of fertile, cultivated, and populous territory, a large proportion of which is situated in mild and luxuriant climates.” This sounds great, right? The Emperor and the people of Germany must be pleased to live in such wonderful surroundings. Think again. Hamilton informs us that “In some parts of this territory are to be found the best gold and silver mines in Europe. And yet, from the want of the fostering influence of commerce, that monarch can boast but slender revenues.” For shame! Here, again, we see that Hamilton does not care one way or the other about the effects of commerce on the people of a nation. His only focus is on the public treasury. Without trade, the government can’t collect taxes. If the government can’t collect taxes, it is able to carry out public projects and start wars. No projects and no wars make a government small an undistinguished. An impoverished, inactive government is the symbol of a poor, weak country. This whole line of reasoning is completely bogus. An impoverished, inactive government is the sign of a free people. It is the sign of a dynamic economy. It is the sign of voluntary cooperation. Hamilton concludes the paragraph, “He has several times been compelled to owe obligations to the pecuniary succors of other nations for the preservation of his essential interests, and is unable, upon the strength of his own resources, to sustain a long or continued war.” This sounds all too familiar. Be it an eighteenth century German Emperor, or a twenty first century Constitutional Republic/Democracy, governments inexorably run deficits, or as Hamilton says it, “owe obligations to the pecuniary succors of other nations for the preservation of his essential interests.” Of course, its ironic that Hamilton appears to laments this. He was well known for his opinion that running a government deficit was actually a good thing for a nation. The people who financed government debt tended to be big industrialists. As Hamilton saw it, government debt was a means for forging a stronger bond between the government and the wealthy class of a country. This would be important for carrying out large public projects, and especially for carrying out wars. Well, he got what he wished for. The government and the rich are very well connected. It hasn’t turned out too well though. In 2011, the economy is reeling and official government debt is now more than 100% of GDP. Finally, we learn from Hamilton that commerce is important because it facilitates war. The poor Emperor was “unable, upon the strength of his own resources, to sustain a long or continued war.” Again, trade and a strong economy aren’t good things because they make our lives better. They are necessary in case we need to carry out a long and sustained war. Of course, the United States hasn’t fought a truly defensive war since the Revolutionary War. Further, the government runs wartime deficits anyways. Even with the largest and most robust economy in the history of mankind, the United States government has run huge war time deficits to fight its numerous interventionist wars.

5. Take a look at how Hamilton describes what happened when the state governments tried to raise taxes on the people. He writes “Tax laws have in vain been multiplied; new methods to enforce the collection have in vain been tried; the public expectation has been uniformly disappointed, and the treasuries of the States have remained empty.” Americans were so stubborn about paying taxes that they had “defeated every experiment for extensive collections, and has at length taught the different legislatures the folly of attempting them.” This is the quintessential American tradition, saying “Hell No!” to the tax man. Where has this attitude gone and how can it be rekindled? The government has come up with many devious ways to rip us off. Deficit financing and monetary inflation are the principal ways that government takes money from us without us realizing it. Americans today lack the courage to stand up to government, at any level, that they once had. It was a magnificent and original quality and it is necessary to protect liberty. Each individual should do their best to fire up a defiant spirit within them. It doesn’t mean that you have to go around raising hell. It means that you must always maintain in your heart a love of liberty that you will sacrifice for no man. Of course, Hamilton saw the State’s inability to collect taxes as great defect in the system. It was a problem to be fixed, not a joy to behold. Indeed, Hamilton was a statist.

6. Hamilton writes that in late eighteenth century Great Britain “the greatest part of the national revenue is derived from taxes of the indirect kind, from imposts, and from excises.” This is interesting as a historical aside. Nowadays, the vast majority of government revenues come from direct income taxation, personal and corporate. Our ancestors never would have tolerated such an infringement.

7. Even though Hamilton seems none to pleased by the attitude of the American people of his time, he gives a very heartening description of how Americans used to be. Discussing taxes, he writes “The genius of the people will ill brook the inquisitive and peremptory spirit of excise laws. The pockets of the farmers, on the other hand, will reluctantly yield but scanty supplies, in the unwelcome shape of impositions on their houses and lands.” Americans hated to pay taxes and the only to get it from them was to not take too much and to take it in a way that was very respectful of the liberties. Times change. People actually think of paying taxes as a patriotic thing to do! We’ve all heard somebody say something to the effect of “I pay my taxes because I’m a good citizen and a decent member of society.” Had they said something similar two hundred and thirty years ago they would have been shouted down. Avoiding taxes at all costs used to be patriotic. Americans understood that giving the government too much power was about the least responsible thing that a decent citizen could do.

8. The topic of Federalist No. 12 is “The Utility of the Union In Respect to Revenue”. The title alone let’s you know that this particular Federalist Paper will discuss why the new constitution is conducive to collecting more taxes. However, there is one paragraph that, at least in my humble opinion, is way over the top. It is no wonder that the Constitution wasn’t initially ratified by New York. Hamilton essentially comes right out and says “Vote for the Constitution and we’ll raise your taxes!” This passage is enough to completely sour my opinion of the American Constitution. If this is what the Founders had in mind for our country, then the Founders were way off base. Hamilton starts of by writing that “that state of things which will best enable us to improve and extend so valuable a resource must be best adapted to our political welfare.” The “valuable resource” referred to is the federal government’s ability to tax the citizenry. In other words, Hamilton believes that the easier it is for the federal government to generate revenue for itself, the better off our country’s “political welfare” will be. Of course, I vehemently disagree. When the government takes resources from the private economy, nine hundred and ninety nine time out of a thousand, it is going to squander them. The money will be spent on paying a bureaucrat to sit at a desk, pushing papers. Such waste is terrible for our  “political welfare” and completely unjust. Hamilton continues “And it cannot admit of a serious doubt, that this state of things must rest on the basis of a general Union.” So, the general Union and the Constitution that preserves it eternally, create the best “state of things” for maximizing government revenue. This, then, is the Hamiltonian view of the government made simple: The Union is good because it gives the government more power. In the same paragraph, commenting on the effect that increased commerce has on taxation, Hamilton writes “As far as this would be conducive to the interests of commerce, so far it must tend to the extension of the revenue to be drawn from that source.” Commerce is good because it can be taxed, not because it makes peoples lives better. After all, if the purpose of commerce is making people better off, why limit it by taxation at all? Would it not be better to get the government out of the way and let commerce continue unhampered? This is not how Hamilton sees the matter. For him, commerce is good because it generates the resources necessary to support federal initiatives. Hamilton concludes “As far as it would contribute to rendering regulations for the collection of the duties more simple and efficacious, so far it must serve to answer the purposes of making the same rate of duties more productive, and of putting it into the power of the government to increase the rate without prejudice to trade.” It must be conceded that a strong federal union does make the collection of taxes easier for the government. However, it has not made the collection of taxes more simple for the citizens. The federal tax code is a monstrosity. It is so bad that citizens have to pay people of near genius intelligence top dollar just to figure out how much tax they owe. Tax money also has to be spent on thousands of bureaucrats to make sure that the correct amounts are being paid. This is not “simple and efficacious”. In Hamilton’s mind, since collecting taxes would be relatively painless, the arrangement would provide for “the power of the government to increase the rate without prejudice to trade.” Bully! Taxes would be so much easier to collect, and the process so efficient, that the government could keep raising rates and nobody would even notice.

9. In paragraph eight of Federalist No. 12 Hamilton makes the claim that a Union is needed because without it there would be too much free trade between the states. The laissez-faire would be so pernicious that it would be impossible to carry out a mercantilist policy of limiting imports and subsidizing exports. He has the gall to point out that Americans wouldn’t be able to carry out the same type of economic policies as Europeans, when it was precisely the European style of government that colonists were rebelling against. Here we go, sentence by sentence. Hamilton starts out by writing “The relative situation of these States; the number of rivers with which they are intersected, and of bays that wash there shores; the facility of communication in every direction; the affinity of language and manners; the familiar habits of intercourse;”. This sounds almost like a paradise doesn’t it? Neighbors live in close quarters using nature provided gifts to travel and carry out trade. They are able to share technology and pass along the latest news across shared bays and up and down convenient river systems. Everybody has the same mother tongue so communication is undertaken with a minimum of effort. The same manners and morals are shared by all. There could be no better situation than this for a new country to grow and prosper. What does Hamilton think of all this? He hates it. He explains “all these are circumstances that would conspire to render an illicit trade between them a matter of little difficulty, and would insure frequent evasions of the commercial regulations of each other.” All of this harmony made it way too easy for free people to carry on relationships without government interference. It was so hard for Hamilton to countenance voluntary interactions between people in the absence of government oversight that he resorts to describing such perfectly legitimate relationships as “illicit”. In his mind, free trade between the citizens of the states is equated with “evasions of the commercial regulations of each other.” What, then, would be the results of all of this liberty? Hamilton answers “The separate States or confederacies would be necessitated by mutual jealousy to avoid the temptations to that kind of trade by the lowness of their duties.” This is the worst of the worst for Hamilton. Open commerce between citizens would undermine the commercial regulations of the states. Under such circumstances, the various States, in order not to be cut out of the trade altogether would loosen up their rules and lower their duties. The market, after all, is very competitive. Those states that don’t comply with the will of the people will be left behind economically. Further, if the States didn’t relax their laws, they’d be making criminals out of their citizens. Putting people in jail for simply doing business is, or was, a sure way to not get reelected. Hamilton disliked this scenario because “The temper of our governments, for a long time to come, would not permit those rigorous precautions by which the European nations guard the avenues into their respective countries, as well by land as by water.” The “rigorous precautions” referred to here are trade barriers and high protective tariffs. Hamilton hates the idea of free trade between the states because it would prevent the country from implementing high import duties. We can see where all of this is headed. A strong federal government is needed to keep the free people of the different states from undertaking rigorous, unhampered commerce. For, if the states lower their duties, it would undermine the high tariff program that the federal government wants to carry out. For Hamilton, that is simply unacceptable. After all, the Europeans had a high tariff policy and look how powerful they were. It must be explained briefly why high tariff policies are bad for regular citizens. Imagine you buy pants made in China. A pair cost ten dollars. Pants are also made in the United States but a pair made in America costs twenty dollars. The quality is essentially the same. So, all things being equal, you prefer to get the more affordable pants. Now the federal government steps in and slaps a ten dollar import duty on all pants made abroad. Now your choices are between a twenty dollar pair of American made pants and a twenty dollar pair of Chinese made pants. Either way, you lose. The winners are the American manufacturers or the American government, depending on which pants you buy. You are not the only loser though. Now there is an additional ten dollars spent on pants that otherwise could have been spent on something else. Some worker will be unemployed to the tune of ten dollars as a result of the tariff. It can be countered that more workers will be employed either by the American manufacturer or the government depending on which pair of pants is purchased and that will create more jobs too. There is a fundamental difference however. In one case employment is being created by the true demand of the people. In the other case the demand is being created by the government through tariff policy. That being the case, even though the same amount of jobs are being created, the economy is becoming disfigured and deformed. It is being structured to suit political needs and not the true needs of the citizens. Further, there is a gross violation of property rights. For all intents and purposes, the government is taking ten dollars from our defenseless pants buyer. Depending on which pair of pants is bought, it either keeps the ten dollars for itself or gives it to the American pants manufacturer. Finally, Hamilton concludes the paragraph “and which, even there, are found insufficient obstacles to the adventurous stratagems of avarice.” “Even there” is Europe and we can see that high tariff and all, the Europeans were unable to completely stifle free trade. Of course, for Hamilton, that is a crying shame. He refers to free market transactions as “adventurous stratagems of avarice”, or in lay terms, adventurous strategies of greed.

10. I hate to beat a dead horse but I must point this out. Hamilton writes “If, on the contrary there be but one government pervading all the States, there will be, as to the principal part of our commerce, but ONE SIDE to guard–the ATLANTIC COAST.” Here, again, is further proof that Hamilton would use the federal government as a tool for restraining free trade. He would have the federal government regulate all commerce and would keep Americans from entering into agreements based on voluntarily negotiated prices. This is an intolerable breach of liberty.

11. In paragraph ten of Federalist No. 12, Hamilton continues with his misguided, protectionist economic policies. In a certain passage, Hamilton mentions the great security provided by the Atlantic ocean. It acts as a giant buffer separating the United States from potentially aggressive European nations. Of course he is correct. However, I couldn’t help but chuckle when I continued reading and learned that Hamilton viewed the Atlantic not as protection against foreign invaders but rather as “a prodigious security against a direct contraband with foreign countries.” This is simply absurd. If businessmen from other countries bring goods to market that people want and are willing to purchase voluntarily, the ocean between them is actually an obstacle not a protection. The government that stands in the way of voluntary transactions is the real threat. It threatens a citizen’s liberty to dispose of their own, hard earned property, as they see fit. It threatens our standard of living by keeping us from purchasing the newest and best products from all over the world. Finally, it threatens the ability of American merchants to take their goods overseas and improve the lives of people in far away lands.

12. Hamilton writes “It is therefore evident, that one national government would be able, at much less expense, to extend the duties on imports, beyond comparison, further than would be practicable to the States separately, or to any partial confederacies.” Arguing that the government will have the ability to collect, “beyond comparison”, more taxes should be a strike against forming a national government, shouldn’t it? Hamilton is an influential guy in American history and he is saying in no uncertain terms that the Constitution will help the government take more money from the people. That isn’t a good thing. Time to rethink the quality of our Constitution. In the same paragraph, Hamilton continues “Hitherto, I believe, it may safely be asserted, that these duties have not upon an average exceeded in any State three per cent. In France they are estimated to be about fifteen per cent., and in Britain they exceed this proportion. [1] There seems to be nothing to hinder their being increased in this country to at least treble their present amount.” Hamilton the protectionist strikes again. He is proposing a tripling of taxes! Why? To be more like the Europeans.

13. Hamilton writes “The single article of ardent spirits, under federal regulation, might be made to furnish a considerable revenue.” To be consistent, a person who is for liberty must oppose a tax on alcohol. I’ve often heard the refrain that marijuana should be legalized and taxed. This is offered as  a win win solution. However, it is an unjust solution. Taxing alcohol and marijuana denies people the write to do what they please with their own body. Our bodies are our primordial property. If we can’t even decide what we can and cannot do with our bodies, it is impossible to secure any further rights for ourselves. Paying the government to enjoy a beer or a smoke is essentially being granted their permission to do what we please. We do not need their permission! I personally don’t drink or use any drugs. However, I understand that being accepting of other individuals who do wish to partake in such enjoyments have a right to do so. Giving the government the power to deny that right will surely lead, in short order, to an erosion of all other rights. Therefore, the proper pro-liberty position is to legalize all substances for self consumption and don’t tax them.

14. Hamilton provides a revealing glimpse into the true nature of government. He writes “And as, on the other hand, the wants of the government can never obtain an adequate supply, unless all the sources of revenue are open to its demands, the finances of the community, under such embarrassments, cannot be put into a situation consistent with its respectability or its security.” This passage should be analyzed in two parts. First Hamilton notes that “the wants of the government can never obtain an adequate supply.” Indeed! This is certainly the case. It appears to be a universal law of government that it is never satisfied with the amount of money it takes from its citizens. The budget keeps growing every single year regardless of the rate of population growth, increase in the size of the economy, or any other metric which could justify the government’s constant snowballing. It doesn’t even matter if it has enough money to pay for its  growing number of functions. What it can’t collect in taxes it borrows or prints. Knowing that the federal government will have an insatiable desire for funds, what is to be done to provide it revenues? Hamilton answers “unless all the sources of revenue are open to its demands, the finances of the community, under such embarrassments, cannot be put into a situation consistent with its respectability or its security.” Hamilton prescribes making “all the sources of revenue are open to its demands.” Nothing is off limits. Whatever the government wants it must have. Otherwise, our country “cannot be put into a situation consistent with its respectability or its security.” Again, we see Hamilton conflating government power with the greatness of a country. I personally see the greatness of a country as being the result of how free it is and how prosperous and enlightened the people are. Hamilton would disagree.

Summary

It has been shown in previous papers that a strong union is good for commerce in the United States. In this paper we’ll see that the Union is also favorable for generating tax receipts for the federal government.

Almost all “enlightened statesmen” now accept that the best way to make a country more prosperous is through extensive private commercial activity. For this reason, the most important goal of many modern politicians is to support trade. By encouraging merchants to produce more goods and by circulating more gold and silver, the government can stimulate the economy. Businessmen and laborers of all sorts are pleased when they can receive more money in exchange for their hard work. It has often been observed that a natural conflict exists between agriculturists and merchants. However, real life experience shows that no such problem actually exists. The extension of profitable commerce  has proved conclusively that their interests are actually inseparable. Land values have increased in the countries where active trade has been allowed to flourish. Of course, all of this is quite logical. Anything that promotes more freedom in taking advantage of natural resources, encourages more citizens to work their land, and brings more money into the country must be beneficial. Commerce increases hard work and ingenuity. Not only that, trade must cause all parts society to become more productive. It is hard to believe that there could be anybody against increasing commercial activity. The fact that some men come out against promoting commerce shows how jealousy and confusion from the over sophistication of ideas can “lead men astray from the plainest truths of reason and conviction.”

As a country accumulates more money, it will be easier for the citizens of the country to pay taxes. The quantity of money in circulation and the number of transactions it facilitates have a direct impact on government expenditures. A strong economy increases both the quantity of money and the velocity with which it circulates. It stands to reason, then, that active commerce will facilitate tax payments by citizens and provide the treasury with the funds it needs to finance the government. The lands of the Emperor of Germany are enormous, filled with people, highly productive, and located in zones blessed with moderate weather. Among the Emperor’s lands are some of the “best gold and silver mines in Europe.” In spite his possessions, the Emperor, due to a lack of commerce, receives very little in the way of taxes from his subjects. In fact, on many occasions the Emperor has been forced to borrow money from other countries in order to carry out the plans of his government.  He cannot even carry on a proper war with his paltry tax revenues.

The Union will be beneficial for generating government revenue in ways other than just promoting commerce. In fact, these additional benefits will bring in even more revenue, and quicker, than promoting trade alone could. It is obvious when observing the American people and looking at past attempts to levy taxes that a direct tax on the people isn’t likely to bring in very much money. A lot of new tax legislation has been passed. Different ways have been tried for collecting taxes owed. Its all been for nothing. The State governments have been unable to get their hands on the taxes they need. Governments of the people, by nature, are unable to collect much in the way of taxes. Additionally, there isn’t much money in the country as a result of a weak economy. That is why every time a state government tries to collect taxes, it ends in failure. After having failed so many times to collect taxes, the state government have given up on even trying.

Nobody who knows about how taxes are collected in other countries will be surprised by this. Even in a country as rich as Great Britain, where the people have much more money with which to pay taxes, and the government is much more active than it is United States, the majority of government revenues come from “taxes of the indirect kind, from imposts, and from excises.” A large portion of the excises collected come from taxes on imported goods.

It obvious that the federal government of the United States will have to depend on indirect taxes to generate revenue for a long time to come.  Even excise taxes have to be strictly limited. Americans are too jealous of their liberties to tolerate the invasion of privacy and interference with their affairs that excise taxes imply. Farmers are only willing to pay a very small property tax on their lands and they don’t give that up willingly. Personal property is too widely dispersed and hard to keep track of to collect anything but a sales tax on it.

If the above analysis is true, then anything that will help the federal government collect more taxes will be for the good of the country. Of course, the only way to set up a system of greater taxation in the United States is through the maintenance of a strong union. To the same degree that the Union will increase commerce between the states, it will also help the federal government collect more money. Expanded trade will create a larger tax base from which to collect taxes. If a union government can make the collection of taxes easier and more efficient, more can be done with the same amount of tax because there will be less waste. The ease of obtaining tax funds would also permit the government to increase taxes without harming the economy.

The fact that the states are located so close to each other; that they many rivers and bays; that citizens are able to easily communicate with people in other states; that everybody shares the same morals and language; that similar manners and social mores exist throughout the country; all of these factors make it very easy for merchants to carry on illegal trade with people of other states. It is all too easy to ignore the various laws regulating interstate commerce. As a result, the various states or separate confederacies, because of their desire to improve their economy at the expense of their neighbors, would be forced to lower their excises to attract more trade. Under such circumstances, the United States wouldn’t be able to protect its domestic industry the way the Europeans do. In fact, even the Europeans, despite their government’s power to limit imports, are unable to keep rogue merchants from illegally smuggling goods into their countries.

The French keep an army of active duty soldiers on guard to keep goods from coming into the country illegally, that is without paying duties. Jacques Neckar, French finance minister, estimates the number of troops at twenty thousand. This provides Americans with a real life example of how hard it is to suppress illicit trade, especially when neighbors are able to easily communicate with each other. It is easy to see how hard it will be for the government of the United States to collect its taxes, given that it faces circumstances similar to those of the French government. Disunion among the States will cause economic rivalries that mirror the rivalries between France and other European nations. The French soldiers that keep foreign goods out must necessarily be armed. Such a thing would not be tolerated by American citizens.

On the other hand, if there is but one powerful government in charge of all the states, it will only be essential to guard foreign goods from coming in illegally on the Atlantic coast. Foreign boats, loaded up with their precious inventory, would very rarely risk dangerous attempts to evade import taxes by unloading their shipments before they make it to our ports. Ships wishing to avoid duties would have to negotiate our dangerous coastline and avoid being caught in the act by our government officials. It wouldn’t take an overwhelming amount of work to make sure that our deserved revenue is collected. A few armed ships, set up to monitor the sea surrounding our ports, could very affordably make sure that our laws are enforced. Further, because a single government would be in charge over every state, enforcement throughout the entire land would be much more manageable.  The Union provides yet another benefit, one that perishes in the absence of union. There is a long distance between the United States and Europe, and for that matter, between all of the other countries with whom we conduct foreign trade. It is impossible for merchants from other nations to get here in a few hours or overnight, the same way French, British, and other European traders can with their neighbors. Our geographic location secures against having illegal goods smuggled into our country.  However, it would be both easy and risk free to smuggle goods in through one state en route to selling them to end buyers in other parts of the country. Anybody with a brain can see the big difference between having foreign goods imported directly into the country via official channels or having goods come in indirectly and unofficially through various different states, in small quantities, to be traded on the hush in the black market.

Its quite obvious that a single national government would be much more capable, with much less effort, of collecting an extraordinarily larger amount of import duties than would separate states or miniature confederacies. Up until now, import duties haven’t exceed three percent in any state. In France, the tariff rate is fifteen percent. They’re even higher in Britain. There is no reason why our tariffs couldn’t be at least three times higher than they are now. Just allowing the federal government to tax alcohol alone would raise a lot of money for the government. Based on the amount of liquor that the state of New York imports, it can be estimated that at least four million gallons of booze are imported by the U.S. every year. If a shilling per gallon were to be charged, two hundred thousand pounds of tax revenue could be collected by the government. The price of alcohol is low enough that it could easily handle an additional tax without affecting the level of consumption. However, if the effect of the tax is to lower the amount of spirits that Americans drink, that is a good thing for “the agriculture, to the economy, to the morals, and to the health of the society.” The legality of alcohol is, after all, perhaps the most controversial political issue in the country today.

What will happen if the government isn’t able to get its hands on sufficient tax revenue? A government can’t last very long without taxes. It will be forced to surrender its sovereignty and become ruled by some other country. No government will permit this to happen voluntarily. Under any circumstances, taxes must be collected. In the United States, the easiest way to collect revenue is by laying duties on commerce. If this fails, a direct tax on land must be resorted to. As we’ve seen elsewhere in these papers, the American people aren’t likely to tolerate an excise tax on land. Further, in certain states where agriculture is the main industry, there isn’t even enough land to make collecting taxes worthwhile. Estate taxes are hard to collect because it is difficult to figure out who is actually in possession of the estates. The only real way to raise revenues from estates is by taxing consumption. In cities with a lot of people, estate taxes are likely to cause a large uproar without providing significant benefits. However, once you get outside of cities its almost impossible to get taxpayers to comply. No matter what, the federal government will have to get its money somewhere and if it can’t get it from other sources it will, from necessity, resort to taxing land.  Additionally, the federal government will never run out of reasons to want more and more money. Unless the government has access to all possible revenue sources, it will be in constant need of funds. This will endanger the country’s security and respectability. If there isn’t enough money for the government to carry out its projects, it will have collected taxes from land owners in vain. The citizens will have paid for projects that can’t be carried out to completion. Both the public and the private sector will deteriorate and all will damn those who supported disunion.

Essay on Federalist No. 11

Introduction

Before getting to the plain language summary of Federalist No. 11, I’d like to take a moment to voice my disagreements and intrigue with some statements made by Alexander Hamilton in Federalist No. 11. They are as follows.

1. Hamilton mentions “the adventurous spirit, which distinguishes the commercial character of America.” Part of the American character from the very beginning was our our precociousness in commerce. We weren’t known for having the most awesome military. We didn’t go around world trying to make it safe for democracy. Every person didn’t get free health insurance an unemployment benefits. It wasn’t egalitarianism that gave us our reputation. It was our adventurousness in business and commerce that distinguished the United States. That’s what propelled us to riches and grandeur.  To continue on that track we must rekindle the entrepreneurial spirit. Bureaucracy is the opposite of an “adventurous spirit”. Too much government will prevent us from ever regaining our status as the great commercial nation again.

2. Hamilton writes “By prohibitory regulations, extending, at the same time, throughout the States, we may oblige foreign countries to bid against each other, for the privileges of our markets.” Hamilton is proposing a system whereby the Federal government would negotiate with foreign governments to grant them access to our markets. Those who offered the best concessions, for example those who would give us access to their markets in return, would be able to export their goods to the United States under favorable conditions. Favorable conditions would mean low tariffs and duties, negligible paperwork and inspections at the ports, etc. On the other had, those countries that wouldn’t play ball would get the opposite treatment. On the face of it, this might seem like a reasonable way to run the economy. In reality, it is antithetic to free markets and liberty. In the first place, under such a system, the federal government has control over who the American people can do business with. That is a power that the government should absolutely not have. Politicians would be able to play god with the economy, deciding which products would be made available, from where, and at what price. This would surely lead to corruption as key politicians would be bought off by the powerful elite from foreign countries. The disruption to the economy would be immense. Imagine a business that is dependent on a particular product coming from France, for example. If, for whatever reason, a group of politicians in Washington D.C. decide they don’t like the French anymore, the person will no longer be able get the necessary product. Now imagine the impact of on the economy if such arbitrary decision making were to be carried out on a large scale. Further, this same power could be used to subsidize American manufacturing. Indeed, that is exactly what ended up happening under the so-called “American System”. The Whig party, headed by Henry Clay and later becoming the Republican party under Abraham Lincoln, made restrictive tariffs a part of their platform. High tariffs were to be paid on foreign goods so that American made goods would be more affordable. However, without the tariff, foreign-made goods were actually cheaper. The difference in price between the foreign good and the American good was a subsidy to American manufacturers, located mostly in the northern states.The tariffs carried out under this Hamiltonian power were eventually one of the major causes of the civil war. Southern states preferred cheaper European goods, but were forced by tariff policy to subsidize northern manufacturers. The point is that people should be allowed to trade with whomever they wish without any restrictions whatsoever. Once the government gets involved in managing trade, the process becomes corrupt. Commerce and liberty are sure to suffer.

3. In a stunning display of ignorance Hamilton writes “Suppose, for instance, we had a government in America, capable of excluding Great Britain (with whom we have at present no treaty of commerce) from all our ports; what would be the probable operation of this step upon her politics? Would it not enable us to negotiate, with the fairest prospect of success, for commercial privileges of the most valuable and extensive kind, in the dominions of that kingdom?” Would it not also punish all individuals who were carrying on a successful trade with British merchants? Would it not reward exporters while punishing importers? Would it not be totalitarian in nature, infringing upon the rights of citizens to carry out free trade? Would it not possibly lead to a trade war whereby everybody would suffer? This comment by Hamilton shows that not all of the Founding Fathers were for liberty. They wanted to have their own country but they didn’t necessarily care about having a country of free individuals. If the government can step in and completely abolish all trade with another country, liberty has been abandoned. A free people must be allowed to trade with anybody they see fit on voluntarily negotiated terms. Of course, central planners will counter that a free people will only think of themselves and not the good of the whole country. To which I counter, how can the government know what is best for the people as a whole? Who made them gods? Is it more likely that a bunch of suits in a small district on the east coast know what’s best for the people or that the people themselves will know what’s best? An economy formed by the voluntary decisions of hundreds of millions of people day in and day out will be dynamic and conform to the true desires of the decision makers, the people. The centralized economy will run based on decisions made by hundreds of people and will be static and unable to meet true needs and wants of the market.

4. In discussing the creation of an American navy, Hamilton says “There can be no doubt that the continuance of the Union under an efficient government would put it in our power, at a period not very distant, to create a navy which, if it could not vie with those of the great maritime powers, would at least be of respectable weight if thrown into the scale of either of two contending parties.” The important point that I want to note here is that Hamilton was apparently already planning to get the U.S. entangled in foreign wars. Even if the U.S. navy couldn’t “vie with those of the great maritime powers,” it would at least “be of respectable weight if thrown into the scale of either of two contending parties.” Why would it be thrown in the scale unless it was getting involved in a war between two other countries? Discussing the West Indies, he goes into even further detail when he says “A few ships of the line, sent opportunely to the reinforcement of either side, would often be sufficient to decide the fate of a campaign, on the event of which interests of the greatest magnitude were suspended.” He doesn’t stop there though. He continues, “And if to this consideration we add that of the usefulness of supplies from this country, in the prosecution of military operations in the West Indies, it will readily be perceived that a situation so favorable would enable us to bargain with great advantage for commercial privileges. A price would be set not only upon our friendship, but upon our neutrality.” Hamilton was an early American interventionist.

5. Hamilton writes that other nations have “a common interest in being our carriers, and still more in preventing our becoming theirs, they would in all probability combine to embarrass our navigation in such a manner as would in effect destroy it, and confine us to a PASSIVE COMMERCE.” This is pure mercantilism. Mercantilism is the notion that the only way for one country to get rich is by getting all of the money from other countries. It logically follows from this position that the only way for a country to get rich is by exporting way more than it imports. You send the stuff out of the country, the other countries send you their money and you win. A positive trade balance must be maintained. A country must never import more than it exports. Otherwise, money will be flowing out of the country and the country will become poorer. This is why Hamilton says that other countries have “a common interest in being our carriers, and still more in preventing our becoming theirs.” If other countries are our carriers, they can control how much of our stuff leaves our country and goes to their country. Likewise if we are their carriers. Mercantilism, though alive and well even today in modern economies, has been completely demolished as a rational policy. The easiest way to understand why mercantilism is irrational is to pretend that two nations are two people, person A and person B. In the beginning, both person A and Person B have five dollars and five widgets. Over the course of a year, they trade back and forth with each other in series of voluntary trades. At the end of the year person A has three dollars and seven widgets. Person B has seven dollars and three widgets. Can we really say which person is better off? Person A will clearly think that they are in a better position, otherwise they wouldn’t have traded away money for widgets. Person B will think they are better off, for the opposite reason of person A. The truth is that they are both better off than before. Their situation more closely conforms to their preferences than it did before they traded. Mercantilism would deem person B the winner but their is no objective basis for making that proclamation. The truth is that both are winners even though person A has a “trade deficit” and person B has a “trade surplus”. The same logic applies to nations. No matter the scale, voluntary trade between individuals makes everybody, regardless of geography, better off.

6. Regarding creating a navy, Hamilton writes “To the establishment of a navy, it must be indispensable.” Hamilton makes this comment in the context of protecting commerce against foreign attacks. There are not many people who would argue against the notion that a commercial nation needs a navy to protect against the violent destruction of property in international business transactions. However, I would argue that it is beyond the scope of the government to protect business inventory once the products are beyond the country’s borders. In other words, government jurisdiction ends at their borders. Any business person who wishes to engage in international trade should do so at their own risk. After all, the government can only obtain resources by taking money from taxpayers. Why should taxpayers having nothing to do with a particular business be taxed to provide protection for said business? It is a violation of property rights. Further, if every government is in the business of protecting their citizens on the open seas, the likelihood of war is magnified greatly. With many merchants from many countries participating in transporting their wares from one land to another, mistakes and infringements are bound to occur. If each and every conflict is to be sorted out and made right by governments, rivalries will develop and the chances of war will increase. The counter argument is that without government protection on the seas, certain industries would cease to do business and that would adversely affect the economy as a whole. This is true to a certain degree. However, history shows that merchants will go through all types of hell and risk to bring their product to market. In order to properly understand whether a navy to protect commerce would be better on net for the economy, we must analyze whether the resources appropriated from other parts of the economy to be spent on protecting ocean commerce would provide a net benefit. In other words, would the increase in maritime commerce outweigh the decrease in economic activities that must necessarily occur in order to pay for the navy? Another way to think about this issue is: will the sea trade pay for itself? If the answer is no, its not worth it. If the answer is yes, there is no need for government to be involved because the merchants can pay for their own protection as a cost of doing business. So what purpose can a navy have? There is only one purpose: keep other countries from invading us.

7. Hamilton describes the effect that the formation of a strong navy would have on society. He writes “Every institution will grow and flourish in proportion to the quantity and extent of the means concentred towards its formation and support.” This is actually, surprisingly, exactly wrong. No government has its own resources. Any and every government activity is financed by diverting resources from private individuals and companies towards projects that the government deems more iportant. Therefore, in absolute contradiction to Hamilton’s statement, every institution will wither and die in proportion to the quantity and extent of the means concentrated towards any government project.

8. In discussing the effect of the Union on the economy, Hamilton writes that the “aggregate balance of the commerce of the United States would bid fair to be much more favorable than that of the thirteen States without union or with partial unions.” This statement is only correct as long as the Union strictly enforces free trade between the states or as Hamilton describes it earlier in the same paragraph “unrestrained intercourse between the States.” However, this has not been the case. The Union government, also known as the federal government, has not promoted free trade between the states. There is a mountainous library of commercial regulations that affect every single economic activity that occurs between business people in different states. Industries in certain state receive subsidies. Federal projects go to certain geographical areas based purely on politics. The states acting on their own could not have mucked things for “unrestrained intercourse between the States” the way the federal government has.

9. Hamilton, totally falsely, writes “A unity of commercial, as well as political, interests, can only result from a unity of government.” This is so off base that it is breathtaking. The examples against this statement, of course, are legion. The American colonies had just banded together to defeat the British Empire. They fought as an extremely loose confederation of states. Magically, they were able to come together and cooperate when their interests coincided. You mean human beings can cooperate without living under a big and powerful national government? Impossible! If a unity of commercial interests can only “result from a unity of government”, then why are we all wearing clothes made in Asia, eating corn and beef from Kansas and Texas, and talking to customer service agents in India? We don’t all have the same governments but our commercial interest are united. A real conundrum…..for Hamiltonians. Anybody who understands the free market knows that individuals are perfectly capable of matching their interests with those of other individuals. In a completely voluntary society where government action is only called upon to protect property rights, the entire economy would be structured in the way that best provides for the interests of everybody, not only those that are well connected to the government.

10. Discussing Europe, Hamilton writes “It belongs to us to vindicate the honor of the human race, and to teach that assuming brother, moderation.” This is surely a pre-Wilsonian statement. For Hamilton, the purpose of the new country wasn’t to protect the liberty of it’s citizens. It wasn’t to provide a place where people could live their lives as they saw fit, keeping the fruits of their labor, raising their children, falling in love, living in peace, and being free from tyranny. No, the destiny of the United States, in the Hamiltonian view, was to “vindicate the honor of the human race.” That’s a pretty lofty goal. How would it be eventually be carried out? At the point of an automatic weapon and through bombs dropping down out of the sky.

Summary

The commercial benefits that are gained by maintaining a strong union are not denied by nearly any intelligent person familiar with the issue. Trade within our own borders and with other nations will be much improved as a result of the Union.

There is evidence that the “the adventurous spirit, which distinguishes the commercial character of America” is making the great sea-faring, European nations nervous. They don’t like the idea of having to compete against America in the shipping business, which is how they make money to support their navies. Those European nations that have territory in America are worried about what the United States has the potential to become. Danger lurks for their colonies that are in close proximity to the United States. For the United states has the desire and all of the necessary resources to develop a strong presence on the seas. It is likely, therefore, that the Europeans will try to divide us up and turn us against each other. This will keep the States from having strong and prosperous commercial relationships with each other, even right here in our own country.   Such a policy would have three outcomes. 1) It would keep us from competing in the shipping business. 2) The Europeans would monopolize our business interests. 3) We would be kept from becoming a great and powerful nation. Even though it isn’t wise to look into the matter to deeply, this disruptive policy could easily be traced back to the European powers.

As long as the States stay united, we can fight off the detrimental policy carried out by those who oppose us. Through the use of tariffs and other “prohibitory regulations” against foreign countries, which will be uniform throughout every State, we can make nations that wish to do business with us compete with one another for the privilege. Anybody who grasps the importance of a market containing three million people, with a fast growing population that is almost entirely agricultural in nature, to manufacturing nations will not fail to see the benefit of this policy. Further, there will be a huge benefit to manufacturing nations in being able to carry their own products in their own ships to the United States instead of having to rely on the ships of a foreign nation to carry their products to U.S. ports. Imagine what would happen if the Federal government had the power to keep Great Britain from selling her products in our markets. Under such circumstances, the U.S. would then be able to negotiate more favorable terms for exporting her own products to Great Britain. However, some commentators have argued that this wouldn’t necessarily be the case. These people argue that the British needn’t change their system because they could simply ship their goods with the Dutch who would buy British goods and then sell them in the United States. This line of reasoning neglects to consider the loss suffered by Great Britain in not being able to ship her own goods. The Dutch would receive more of the profits on the final sale for having taken on ownership of the goods and the risk of bringing them to market. Shipping costs would work against the British as well. By making the process of bringing her goods to market more round about and complicated, the British would be edged out in the competition against competitor nations. British products would have higher prices in U.S. markets and an important part of the British economy, shipping, would be lost to other nations.

An honest contemplation reveals that Great Britain would certainly be disadvantaged by losing access to our ports. The majority of the people in Great Britain are in favor of trade with the United States. Let us not forget the damage that would be done to the West Indies trade. All of these factors would force Great Britain to negotiate a settlement with us whereby we would gain access to markets of the West Indies and other British possessions. Our economy we would receive a mighty boost as a result. It is not likely, however, that the British would accept this arrangement without receiving, in turn, increased access to our markets as well. Other nations, observing the dealings between the U.S. and Great Britain, would be much more likely to open their markets to the United States in order to maintain their trade with us and not fall behind the British.

Another way to bring European nations to the negotiating table is through the creation of a powerful national navy. Assuming that the Federal government has the necessary power to run the country efficiently, there is no doubt that United States will have the resources, in the very near future, to build a navy which would rival many of the world’s great naval powers. Even if the American navy weren’t quite as powerful as some of the other navies, it would still be respectable enough to influence the outcome of a war between two other nations. This would be especially true in the case of the West Indies. It would only take a few ships, sent out to support either side, to determine an outcome of great importance. In this particular case, we have a very strong position. In addition to the aforementioned, we can add the need of American supplies in carrying out a war in the West Indies. These considerations would certainly allow us to negotiate with “great advantage for commercial privileges.” We would not only demand concessions for our participation in a war, but for our neutrality as well. As long as we maintain a strong Union, we’ll be able to decide the outcome of political rivalries in America and in this part of the world. The United States will have the power to manipulate this situation to its advantage.

On the other hand, if we abandon the Union and the States are forced to negotiate separately with foreign nations, all of the “advantages which nature has kindly placed within our reach” will be forfeited. In that situation, our commercial interests would be at the mercy of the various powers who are at war with each other. They would not fear the consequences of their actions and would act without conscience in violating our property and taking advantage of us. Neutrality is only respected when its backed up by a strong military. A nation with a weak military can’t even claim the right of being neutral.

Under a strong and active central government, the resources of the country would be utilized, with the common interest in mind, to keep at bey any European power that would interfere with our economic growth. In fact, our strength would keep European powers from even trying to meddle with us in the first place. Flourishing commerce and an active presence on the seas would be the natural results of this situation.  Any foreign politician who tries to stand in the way of our destiny will be unable to keep us from prospering.

However, if we abandon the Union, foreign powers may be able to keep us from achieving greatness. Those countries with strong navies and an extensive sea trade would take advantage of our weakness and dictate the terms of our existence to us. Since it is good for their economies if they ship our goods and bad for their economies if we ship their goods, they would do all they could to eliminate our ocean presence and reduce us to a state of commercial dependency. We would have no choice but to accept any price offered for our goods. Profits on the sale of our products would kept by those who antagonize us. The unique American zest for commerce, which is so conducive to wealth and prosperity,  would be sapped. America would move towards “poverty and disgrace” and that would be a shame because with a little bit more foresight, the United States could be the “admiration and envy of the world.”

The Union has ownership of certain natural resources that are very much desired in world trade. Specifically, the Union owns various fisheries, trade routes to and on the great lakes, and trade routes on the Mississippi river. If the Union were to break up, there would be serious controversies over which states would have legal rights to the valuable resources mentioned above. There is no doubt that powerful interests would intervene in the deliberations and obtain rights that would hurt the rest of the country. For example, it is well known that Spain is desirous of extending her ownership along the Mississippi river. France and Britain want more control over our fisheries because their trade routes are affected. These powerful nations wouldn’t hesitate for a moment to seize more power over such valuable possessions. After all, ownership of such assets would increase their commerce and prevent us from selling our products at cheaper prices in their domestic markets. Under similar circumstances, any nation would move with haste to weaken the type of dangerous competition that we present to the European powers.

Owning resources that allow for greater sea commerce is good for the entire nation, not just certain states. The states that already have a significant maritime industry will benefit immediately. As other states begin to invest in the sea trade, they’re likely to benefit as well. With the passing of time, the country will evolve from a nation with limited maritime trade to a nation in which every state participates in commerce via our various water transportation routes.  Of course, given such a scenario, the establishment of a powerful navy is absolutely essential.

If we are to have success in the great national project of building a navy, a strong Union between the states is necessary. Every actor and organization in society that dedicates resources and energy to building a strong navy will benefit in proportion to their level of participation. It is a much more obtainable goal to build a navy for the United States than for each state to build their own navy. A United States navy would have its disposal the resources of the entire country, whereas the states could only utilize their own local funds. It just so happens that each region of the country has a unique and essential contribution to make to the construction of the navy. The southern states produce a number important naval commodities such as “tar, pitch, and turpentine.” The south also has the best wood for building dependable, long lasting ships. In fact, ships built with southern wood would be of such high quality that the duration of their service would provide both military and economic benefits. A number of southern and “Middle States” produce large quantities of high quality iron.  The sailors themselves will come from the north. Of course, it is unnecessary to even explain why we must have a navy to protect commerce. Likewise, it is obvious that lucrative maritime commerce will support a powerful navy.

Free trade between the states will cause an  increase in the quantity of economic activity in each state. This will result in greater production for both domestic consumption and for export to foreign markets.  Unrestricted trade will spread commercial activity out across the entire nation. Momentum will feed upon itself and more and more action will ensue as goods are allowed to travel freely from one part of the country to another. The economy will be much more dynamic because the different states offer such a large variety of products. If there is a bad crop in one state, a different state will be able to pick up the slack. In trading with foreign countries both the selection of different types of goods and the quality of goods offered contribute to success. It follows that a country will have more fruitful economic relations when they can offer a large selection of high quality products. Foreign commerce will suffer when a country only has low quality or a limited selection of offerings. There will be times when certain items are in high demand. At other times the same items won’t be able to find a market. However, a nation that offers many types of goods will be able to do business even if some of their products are not in demand. All of their goods won’t be in low demand at the same time. Under such circumstances, businessmen will be continually occupied selling their various wares where demand is highest. Speculators will easily see that these statements are true. None will argue that the commerce of the nation as whole is better off under a union than it would be if organized as thirteen separate states or a number of smaller unions.

Some will respond that with or without the Union, the States will still carry on extensive trade with each other and the resulting variety and quality of the products would be the same as under the Union. This, however, is untrue. There exist a number of complications that would interfere, interrupt, and limit trade between the states. Such problems have already been discussed in previous papers. Cooperation in commercial and political activities can only be obtained if everybody lives under the same government.

There are other ways of looking at this issue which would be very illuminating. However, doing so would take this discussion way off course. It should be observed, though, that an honest assessment of our situation and interests calls for a federal government, superior to the states. The world is divided into four regions, each with their own interests. Europe, though shrewd coercion and trickery, has come to dominate the other three. Africa, Asia, and the Americas have all fallen under dominion. Europe’s success in lording her power over the rest of the world have made her feel invincible. She looks upon the people of the globe as existing only to serve her. Intellectuals have attributed unique physical gifts to the people of Europe while claiming that animals and humans alike “degenerate in America.” This has gone on for too long. It is up to the citizens of the United States to prove Europe wrong and teach her humility. A strong union will make this possible. Disunion will add us to the list of victims. Americans must resist falling prey to the Europeans. Our thirteen states must come together to form a powerful, ever lasting American union that will be able to stand up against foreign intrigue and influence. If we do this, we’ll be able to deal with Europe on our own terms.

Essay on Federalist No. 10

Introduction

Before getting to the plain language summary of Federalist No. 10, I’d like to take a moment to voice my disagreements and intrigue with some statements made by James Madison in Federalist No. 10. They are as follows.

1. Discussing the effect of special interests on the government, Madison writes “The friend of popular governments never finds himself so much alarmed for their character and fate, as when he contemplates their propensity to this dangerous vice.” Madison is correct. The influence of special interests on government degrades government to the point that it is no longer recognizable as a government of the people. The only solution to this problem is to strictly deny the government any power whatsoever to redistribute wealth. Special interests look to persuade politicians into supporting their own schemes and projects because they know that politicians have the power to take property from the people of the country and redistribute it. Stripping the government of the power to redistribute would eliminate the core cause of the problem and effectively cut off all special interests influence. The resources that were spent on buying politicians could then be put to use in better serving consumers, making people happy, and earning honest profits.

2. Madison writes that “the public good is disregarded in the conflicts of rival parties, and that measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority.” This passage shows the importance of protecting minority rights. Just because a majority of people vote on something does not make it just. By way of example imagine five kids eating lunch at school. They hold a vote to take the lunch of one and divide it evenly amongst the other four. The results of the vote are four in favor to one against. The four take the lunch of the one and eat it. Is this just? Of course not. The property rights of the one boy should be protected against such majority votes. The rights of the “minor party” must upheld in a civil society.

3. Madison blames the existing governmental structure, the state governments and the Articles of Confederation, for the “prevailing and increasing distrust of public engagements, and alarm for private rights, which are echoed from one end of the continent to the other.” Even today, in 2011, we hear the same cries. However, in present times the cynicism toward government and the infringement of “private rights”  are the result of a highly centralized government. Based on the observation that under both a highly decentralized governmental structure and a highly centralized governmental structure, “distrust of public engagements, and alarm for private rights” can be observed, we must conclude that the problem lies not with what type of governmental structure is adapted but rather with the agency of government itself. All governments, whether local or national, if given the power, will legislate of behalf of special interests and violate property rights. Therefore, the only solution is to strip government of all power to take property from citizens. Government’s sole responsibility, if it should even be trusted with any responsibility, is to protect property rights. This means that the government, including local governments, can run the police force, establish courts for enforcing contracts and protecting private property, and run the military. However, if these institutions even give off a whiff of tyranny, the government should be stripped of these powers as well. From that point forward these institutions should be run by voluntary associations.

4. In discussing factions, Madison writes “A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government.” Madison errors here. “The regulation of these various and interfering interests” is not the job of the government. It is precisely because the government makes this its job that factions are able to exert influence on the government. The government should have one job: protect property rights. Once the government gets involved in regulating the various interests in society, those interests will dedicate more energy to influencing legislators. If the interests knew that they would have no recourse to legislative handouts they would have no choice bu to compete in the free market. Of course, in the free market the only way an interest can get ahead is by convincing other free people to voluntarily hand over their money in exchange for a good or service. Many times, convincing people to voluntarily part with money is much less lucrative than buying off politicians and getting subsidies or having laws written in their favor. This leads us to an interesting conclusion. Powerful interests may actually prefer being regulated. Being regulated allows lobbying and ultimately rich and powerful people can buy off the government. The regulations will then be written in their favor. Whereas if the government isn’t allowed to regulate business, they must compete and those who best serve other free people will be wealthy. Those who don’t will go broke.

5. Madison writes “And what are the different classes of legislators but advocates and parties to the causes which they determine? Is a law proposed concerning private debts? It is a question to which the creditors are parties on one side and the debtors on the other. Justice ought to hold the balance between them.” Madison is mistaken in holding that the legislature should have any authority to write laws concerning private debt contracts. Private citizens should be allowed to voluntarily enter into any type of contract the choose to. The government, rightly, should only be involved in the enforcement of the contract should one of the parties fail to comply with the agreed upon terms. This can happen in the case of fraud or simple non performance. It is job of the courts to determine if the contract has been broken and the job of the police to carry out civil or criminal penalties. Contracts must be enforced because they affect property rights. Fraud, in particular, is akin to theft and must be punished in an objective manner. Just because a party is rich and influential does not mean that they should be allowed evade the hand of justice. Even if the fraudulent party is a large and highly interconnected economic agent, they must be brought to justice by the courts and punished appropriately. Justice and a highly productive, properly functioning economy go hand in hand. It must be stressed again, private contracts fall under the jurisdiction of the courts, not the legislature.

6. Madison ignorantly writes “The inference to which we are brought is, that the CAUSES of faction cannot be removed, and that relief is only to be sought in the means of controlling its EFFECTS.” There is a very simple way to eliminate the causes of factions. Strip the government of the right to redistribute property and regulate commerce. If the government can’t take loot and give it to chosen winners and can’t write laws that favor one industry over another, the causes of special interests disappear. To bring this about citizens must have a philosophical change of heart. They must no longer consent to being ripped off in favor of the elite. People should only be allowed to become wealthy by serving their fellow man, not by slurping at the public trough. It isn’t a matter of making some grand political change. We simply have to hold the belief, and act accordingly, that we don’t need government to regulate our lives.

7. Madison states that elected politicians under a republican form government will “refine and enlarge the public views, by passing them through the medium of a chosen body of citizens, whose wisdom may best discern the true interest of their country, and whose patriotism and love of justice will be least likely to sacrifice it to temporary or partial considerations.” This has proved to be completely false. Madison was terribly off base on this particular issue. American politicians throughout history have been petty and shortsighted, unenlightened, unwise, have acted in their own best interest as opposed to the best interest of the country, have showed a base misunderstanding and outright aversion to justice, and have as a rule acted based on short term considerations. Perhaps a handful of notable politicians stand out as a exceptions. It must be noted that this is not an attack on the American people in general but rather on the political class. Sincere, hard-working, freedom loving people have been duped into believing that our inferiors are actually our superiors. The opposite is true. Politicians, be it under a monarchy, democracy, republic, communism, etc. will always be crooked. Therefor, their power must be strictly limited or perhaps, non-existent.

8. Madison asks the question “Does it consist in the greater security afforded by a greater variety of parties, against the event of any one party being able to outnumber and oppress the rest?” He answers in the affirmative. History has proved him wrong. In fact, the greater variety of special interests hasn’t led to a stalemate amongst them whereby nobody is able to gain at the expense of others. They have simply all been able to get what they want from the government. In that case, every new special interests harms society. It does not provide greater security.

9. Madison observes that “A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union than a particular member of it.” The purpose of quoting Madison here is to show that he considered a “rage for paper money” to be an ” improper or wicked project.”

Summary

A strong and well designed union offers many advantages. Of those advantages, the one that most deserves to be studied and understood is the union’s ability to reduce or eliminate the influence of special interests. Among those who support the idea of self government, the power of special interests is seen as the greatest threat to government. Therefore, anybody who supports self-government will certainly support a plan that puts an end to special interests, as long as the plan does not violate our liberties. Throughout history, governments of the people have always suffered from and even come to an end as a result of the “instability, injustice, and confusion introduced into the public councils” by special interests. Those who argue against granting too much liberty to the people point to the influence of special interests on free government as reason for restricting liberty. The constitutions of the various states have made wonderful improvements to constitutions of the recent and ancient past. However, it would be dishonest to say that the dangers of special interests have been as completely eliminated as we would all like. Indeed, concerns are being constantly voiced by “virtuous citizens, equally the friends of public and private faith, and of public and personal liberty.” They all say that the existing form of government is too chaotic. Public good is being sacrificed for the benefit of those who seek to control government. Majorities are wielding their “superior force”  to pass laws that are unjust and infringe upon the rights of the minority. Even though we all hate to admit that these worries are justified, the facts show us that there is, indeed, cause for worry. When we take a sober and honest look at the situation, it will be seen that the some of the problems that are blamed on government were actually not caused by a malfunction of government. However, it will be found that many of our problems cannot be traced back to any source other than the action of government.  In fact, government can be blamed specifically for the common and increasing lack of faith in government action and the preoccupation with protecting individual rights that is prevalent throughout the entire nation. These developments, and their accompanying “unsteadiness and injustice”, result from the power that special interests exert on the government.

A faction, or special interest, is a group of citizens, constituting either a minority or majority of the entire population, who come together for a common purpose that either infringes upon the rights of other citizens or goes against the best interest of the community as a whole.

There are two ways to fix the problems caused by factions. The first is to remove the causes that bring factions into existence in the first place. The second is to manage the harmful effects of factions after they’ve already occurred.

There are two ways to eliminate the causes of factions. The first is to do away with certain liberties, without which factions could never exist. The second is to give “every citizen the same opinions, the same passions, and the same interests.”

Getting rid of certain liberties in order to do away with factions is a bad solution. In fact, such a solution is worse than the problem itself. However, factions cannot exist without liberty and doing away with liberty would immediately do away with factions. In spite of that, sacrificing liberty is a very foolish idea. Eliminating liberty, which is necessary for a civil society, in order to put a stop to the ill effects of factions, would be like doing a way with air, which is necessary for all life on earth, in order to stop the ill effects of fire.

Of course,  imparting upon every citizen the same opinions, passions, and interests is impossible. As long as man’s ability to reason is imperfect, and man has the freedom to exercise his reason, there will be a broad variety of different opinions. As long as there is a relationship between a man’s thoughts and his desire to better his own life, each man’s beliefs and his wants will influence each other. This being the case, man’s desires will always be driven by how he sees the world. The varying degree of each citizen’s capabilities, which gives birth to the notion of property rights, also stands in the way of imposing the same set of beliefs and thoughts on each and every individual. It is the government’s job to protect each citizen’s right to work and obtain property to the best of his abilities. Each individual, according to the skill and quality of their work, will acquire different types and quantities of property. As the citizens of a society progress, accumulating varying classes and quantities of property, different interests and political divisions will begin to appear.

Therefore, the creation of factions and special interests spring forth from the most basic part of human nature. Which actions will be perused and how vigorously they will be undertaken depends on the particular situation of each faction. Some factions will manifest themselves through expressing their religious beliefs, thoughts on government, and many other topics. Some will practice what they preach while others will say one thing and do another. Some factions will try to promote political leaders at the local and national level. Others follow charismatic leaders who divide citizens into political parties, turn neighbors against each other, and motivate them hate one another instead of working together for the good of all.

It is so common for human beings to fall into conflict with each other, that even where no serious problems exist, minor and petty infractions are often seized upon to stir up bitter passions and start wars. The surest and most common issue that inflames passions among various factions is an unequal distribution of wealth. Those with property and those without property have always formed the two most common special interest groups in society. Similarly, debtors and creditors have always been rivals. Landowners, manufacturers, merchants, bankers, and many other interests come into existence in a free society. These interests divide themselves up into various groups based on their common beliefs and goals. Writing laws that govern all of these different interests is the job of “modern legislation.” As a result, “the spirit of party and faction” is an important and necessary part of running the government.

Men should never be allowed to be both the judge and a party to a legal matter because they would always have a tendency to rule in their own favor and become corrupt. Likewise, when large groups of men come together, neither can they be trusted to judge their own cases. However, as it stands, most laws written by the legislature are nothing more than judgements passed that affect the rights of a large body of American citizens. The legislature is made up of nothing more than men who are there to promote and push for their own private causes. Take for example the problem of private debt. One part of the congress is made up of creditors, the other of debtors. The just solution to such a problem is to find a compromise between the positions of both sides. It is inescapable, though, that the parties must also be their own judges. The most powerful side will win in the end. Take the question of whether American manufacturers should be promoted by placing restrictive tariffs on foreign products. Imagine  if this question were to be decided by large American manufactures. It is likely that they would decide in favor of helping themselves, even if such action wouldn’t coincide with the best interests of the country as a whole. Deciding which taxes will be charged against the various types of property is decision which made with the utmost neutrality. At the same time, there is no other legislative activity that is more likely to cause the dominant factions to wield their power over minor factions, effectively making a mockery of the justice. Any taxes that special interests can pass off on other members of society is money they don’t have to pay themselves.

It is naive to believe that morally upstanding politicians will be able to get conflicting special interests to act in the best interests of the public. For one, there may not always be morally upstanding statesmen running the show. Nor is it an easy task to convince partisan special interests to change their plans without making an appeal to the long term interests of the country.  This is a difficult route to take because most factions care only about the present and are willing to infringe upon the rights of others in order to recognize gains in the short term.

The conclusion we reach is that the causes of factions can’t be eliminated. We can only hope to minimize their effects.

If a faction does not control a majority of votes in the congress, the republican form of government will act as a defense.  The majority will be able to squash the attempt at usurpation. Factions may be able to slow down congressional proceedings and cause furious debates amongst the citizenry, but in the end minority factions will be unable to impose their will on the majority. However, when a special interest is made up of a majority, democracy provides a path for that special interest to “sacrifice to its ruling passion or interest both the public good and the rights of other citizens.” The purpose of this article, then, is to figure out how to serve the public good, protect individual rights, and defend against special interests, while at the same time maintaining a government of the people. Accomplishing the above mentioned goals is the great challenge of republican governments. In fact, the major complaint against republican governments is that they cannot control special interests. If we can solve this problem, the republican form of government can be used in confidence throughout the rest of history.

There are only two ways that our goal can be achieved. Either we must keep the majority of people from ever having the same policy goals or the majority of people, even if they share the same political interests, must be made unable, by geographical or numerical limitations, to carry out their goals. If the majority has both the desire and the means to foist their plan on the rest of society, neither religious nor other moral considerations will keep them from carrying out the scheme. Religion and morality have not proven to be great checks against injustice and greed. This becomes even truer when large groups of people combine together to carry out the injustice.

That being the case, we must conclude that “pure democracy”, defined as a small group of citizens who vote directly and in person on governmental action, have no defense against special interests. It is too common for the majority of people to share some common political goal. Under a pure democracy, ideas and plans are easily communicated throughout the entire society. There is no ultimate defense for the minority or for specific individuals that society has demonized. For this reason, democratic governments are always in a state of turmoil and distress; they have been unable to provide for personal security or protect property rights; and they tend not to last for very long before being dissolved. Politicians who support pure democracy in theory have wrongly assumed that if citizens are granted political equality they will also “be perfectly equalized and assimilated in their possessions, their opinions, and their passions.”

Republics, defined as governments where representatives are elected to make governmental decisions,  on the other hand, provide a cure for the ailments that afflict pure democracy.  We will examine how republics differ from pure democracies. As a result, we will understand why the Union provides us with a cure and to what extent our problems will be solved.

There are two key differences between a democracy and a republic. First, under a republic, the functions of government are turned over to a small group of citizens who have been elected by the rest of society. Second, republics are made up of a greater number of citizens and govern over a far greater stretch of land.

Because only a small number of select citizens are elected to govern, public opinion will become more refined and farseeing. These wise and patriotic citizens will only consider what is best for the country as a whole. Their “love of justice will be least likely to sacrifice it to temporary or partial considerations.” Under a republican government, public opinion, as expressed by our elected representatives, will be more geared toward the good of the country than if the people were to express it themselves. However, it is possible that a republican government can be corrupted. Partisan politicians, those seeking nothing more than local gain, or outright corrupt individuals can  become elected by various means and betray the electorate once they’re in office. The question we must ask ourselves is whether small or large republics are more conducive to good government. For two reasons, we must conclude that a large republic is better.

First, it must be pointed out that no matter how small the republic, a certain quantity of individuals must be elected to keep a small oligarchy from running the government. On the other hand, their must be an upper limit to the amount of people that will be elected as well. Otherwise things will become unorganized and confused. The proportion of representatives to voters will not be the same in both large and a small republics. In fact, in a small republic, the proportion of elected officials to voters will be higher than in a large republic. If, then, there are proportionately more qualified politicians in a large republic than a small republic, the large republic will be a better choice.

In a large republic, each politician will be chosen by a greater number of voters than in a small republic. It will be far more challenging for bad candidates to trick the electorate into voting for them. Also, when men are freer to vote they are much more likely to vote for qualified individuals with sterling reputations.

Like any other important issue, there are great difficulties in determining the proper proportion of voters to representatives. If there too many voters per politician, the politicians will not be well informed on local issues and will lack a connection to local voters. On the other hand, if there are too many politicians they will be overly concerned with local issues and unable to focus on problems of national importance. The proposed Constitution provides an admirable solution to the problem. The law is to be carried out by a combination of national, state, and local governments.

Another important point is that a republican government can handle a far larger number of voters and a far greater amount of territory than can a democratic government. In fact, it is precisely this fact that minimizes the influence of special interests to a much greater extent under a republic than under a democracy. Smaller societies have far fewer special interests. With fewer special interests, it is much more likely that a majority will compose one of those interests.  The smaller the number needed to make up a majority and the smaller the geographical limitations within which to operate, the easier it will be for the majority to impose their will. However, when you have a larger populace spread out of over a much vaster tract of land, there will be a greater variety of special interests.  Under such circumstances, it will be much less likely that a majority will form under a common interest and attempt to infringe upon the rights of others. Even if a majority were to materialize, it would be much more difficult for them to execute their plan. It is always much more difficult for people who are united to carry out a devious scheme to do so as their group gets larger. Distrust grows and communication breaks down.

We can clearly see that the same advantages republics have over democracies in checking the power of special interests, are shared also by large republics over small republics. Logically then, the Union will be better at controlling special interests than the states that make up the Union. Representatives elected to the federal government are more likely to look out for the good of the country as a whole as opposed to being overly concerned with local issues. They are much less likely to hatch unjust schemes as well. Likewise, greater security will be provided to private citizens against special interests by the existence of a much greater quantity and variety of special interests. It will be more difficult for any one faction to impose their will on society. The fact that various states make up the Union will keep any one state from becoming too powerful. In short, the Union makes it much more difficult for any majority to succeed in perpetrating injustice on the rest of society.

The leaders of factions may become powerful in their own states, but it will be impossible to impose their power on the rest of the country. A religious leader might be able influence the people in one part of the country, but the great quantity of religious sects ensures that he won’t be able to take over the government. The desire for paper money, to eliminate debts, to redistribute property, or any other evil plan is less likely to take over the entire country than a mere portion of it. Likewise, it is more likely that such plans will be accepted by cities than by entire states.

The structure of the union, therefore, solves the most difficult problems that have faced republican governments in the past. To the extent that we take pride in being advocates of republicanism, we should support the efforts and accomplishments of the Federalists.

Essay on Federalist No. 9

Introduction

Before getting to the plain language summary of Federalist No. 9, I’d like to take a moment to voice my disagreements and intrigue with some statements made by Alexander Hamilton in Federalist No. 9. They are as follows.

1. Hamilton astutely writes “From the disorders that disfigure the annals of those republics the advocates of despotism have drawn arguments, not only against the forms of republican government, but against the very principles of civil liberty.” Indeed, in times of war and strife, dictators tend to rise up. They argue that only a strong leader with unlimited powers will be able to create stability. Citizens are forced to sacrifice their liberties in exchange for promised security and peace. However, once the dictator has come to power rarely to peace and security follow. More often, when citizens cease to fight for their liberties, the dictator institutes a reign of terror across the entire land. Instead of regional wars, national wars ensue. Those who dare to stand up to the despot are exterminated. There will be no peace in the land. Therefor, it is essential for all free people to resist against ever giving up any of their civil liberties. It is simply unnecessary to sacrifice our rights in the name of security.

2. Hamilton writes “The science of politics, however, like most other sciences, has received great improvement.” This has proved to be completely false. The science of politics has, if anything, gotten much worse. This is likely because the world is now so much richer and there are a great deal more spoils for politicians to argue over.

3. In writing about the benefits of the new constitution, Hamilton writes “To this catalogue of circumstances that tend to the amelioration of popular systems of civil government, I shall venture, however novel it may appear to some, to add one more, on a principle which has been made the foundation of an objection to the new Constitution; I mean the ENLARGEMENT of the ORBIT within which such systems are to revolve.” Hamilton is saying that the new constitution actually givers the government more power than governments have had in the past. The “enlargement of the orbit” means that governments would get involved in an increasing number of activities. For Hamilton, this was a benefit that was in the same league with the independent judiciary and a legislature with dual houses. This passage illuminates the Hamiltonian position on government. He was indeed a centralizer. He wanted the government to be as involved as possible in administering the lives of the citizens of the United States.

4. Hamilton describes Montesquieu as a great man. However, he uses the writing of Montesquieu when they support his position and apparently dismisses off-hand Montesquieu’s conclusions when they do not suit him. When discussing Montesquieu’s notion that the republics must operate within small geographical territories, Hamilton observes that “Neither Virginia, Massachusetts, Pennsylvania, New York, North Carolina, nor Georgia can by any means be compared with the models from which he reasoned and to which the terms of his description apply.” Hamilton does not view this conclusion as acceptable. He writes that “If we therefore take his ideas on this point as the criterion of truth, we shall be driven to the alternative either of taking refuge at once in the arms of monarchy, or of splitting ourselves into an infinity of little, jealous, clashing, tumultuous commonwealths, the wretched nurseries of unceasing discord, and the miserable objects of universal pity or contempt.” From reading just this, we would conclude that Hamilton does not agree with the theories put forth by Montesquieu. However, later on Hamilton writes “the author who has been most emphatically quoted upon the occasion, it would only dictate a reduction of the SIZE of the more considerable MEMBERS of the Union, but would not militate against their being all comprehended in one confederate government.” In this case, he wishes to utilize the writings of Montesquieu as support for the constitution that he so deeply desires to see enacted. It is inconsistent for Hamilton to ignore one part of Montesquieu’s writings when it doesn’t support his argument and employ Montesquieu’s writings when it helps his cause.

5. Hamilton quotes Montesquieu, who writes “If a single member should attempt to usurp the supreme authority, he could not be supposed to have an equal authority and credit in all the confederate states. Were he to have too great influence over one, this would alarm the rest. Were he to subdue a part, that which would still remain free might oppose him with forces independent of those which he had usurped and overpower him before he could be settled in his usurpation.” This is good in theory, but what happens when the confederate or federal government slowly but surely usurps power from the various states? Once the states have sacrificed their power, there is no longer any defense from oppressors. For this reason states and local governments must resist power grabs by the federal government. Once independent governments have lost their power, their is no further line of defense.

6. Hamilton quotes Montesquieu, who writes “the confederacy may be dissolved, and the confederates preserve their sovereignty.” Here is a point of the utmost importance. Confederate republics may be dissolved. It only stands to reason that when various sovereigns form a voluntary league, those same sovereigns may voluntarily opt out of the league if it no longer serves their best interests. This idea has been discredited by modern intellectuals. However, a writer of eminent importance, Montesquieu, clearly states that a confederate republic may be dissolved by the individual sovereigns that form it.

7. Hamilton writes “The proposed Constitution, so far from implying an abolition of the State governments, makes them constituent parts of the national sovereignty, by allowing them a direct representation in the Senate, and leaves in their possession certain exclusive and very important portions of sovereign power.” The seventeenth amendment removed the right of states to choose senators from the state governments and gave it to the people. This strengthened the federal government at the expense of the state governments. Many, myself included, believe that it would be much better for state governments to choose senators. Under such an arrangement, the senators would be forced to represent the interests of the states. As it stands, senators are much more likely to spend their time focused on national issues. This enhances the power of the federal government. Of course, the tenth amendment states pretty clearly, as does Hamilton here, that many powers were to remain with the state governments. Any powers not specifically ceded to the federal government in Article 1 Section 8 of the Constitution were to remain with state governments. This has been constantly cast aside by the federal government throughout American history.

8. Hamilton writes “Yet Montesquieu, speaking of this association, says: ‘Were I to give a model of an excellent Confederate Republic, it would be that of Lycia.’ Thus we perceive that the distinctions insisted upon were not within the contemplation of this enlightened civilian.” Earlier in the same paragraph Hamilton describes the Lycian republic as consisting of “twenty-three CITIES or republics.” Once again we see Hamilton ignoring Montesquieu’s important insight that republics only work for small territories. Instead, he focuses only on what makes his point: Montesquieu believed in confederate republics. The way that Hamilton baldly ignores the implications that don’t suit his thesis is troubling.

Summary

A strong union between the states would be the best way to protect the American people from internal revolutions and rivalries. When reading the histories of the republics of Greece and Italy, one is struck by the constant uprisings that interrupted society and stalled the march towards civilization.  Those societies were kept from existing in a true state of peace. Instead they were always caught between despotic rulers and states of virtual anarchy. Calm only lasted for brief periods of time and was always followed up by more turmoil and violence. Whenever things appeared that they were getting better, it actually caused more sadness than happiness because everybody knew that the good times wouldn’t last. Sooner or latter, the pleasant scene would give away to “tempestuous waves of sedition and party rage.” Likewise, even though things in the United States may appear to be tranquil for the time being, we must keep on guard and prevent the government from abandoning those things that it has done to cause the peace.

Many tyrants have used the chaos and disorder of past republics as examples of why they should impose their despotic order on society. They have claimed that republics cannot provide stability and that civil liberties must sacrificed in order to have security. Such despots claim that all free societies will be disorderly and unorganized, and therefor have rallied against the notion that a free people can govern itself. Thankfully for those who support liberty, there are examples of countries that have had striking successes with free government. Some day, America too would be another such example, proving that people can govern themselves. Others would then emulate the American experiment and make further improvements where necessary.

It is also important to note that those who oppose republics tend to focus on the weaknesses of the original republics. If improvements in form couldn’t be made to the original republics, it would indeed be a bad idea to live under such a government. There were serious flaws in the construction of those ancient republics. However, the “science of politics” has been able to develop various improvements over the ancient governments. Principals of government now exist that didn’t exist during the times of ancient governments. For example, it is now known that the government’s power should be divided among various different branches. The legislative branch is divided into two houses. Judges hold their offices for life as long as they behave well. The people democratically elect their representatives to the national congress. These are all modern inventions and moved government towards perfection. Under these circumstances, a republican government can properly govern a country. Many of the old imperfections have been eliminated.  In addition to the advances mentioned above, it must be added that the Constitution gives the government the power to be involved in the administration of more parts of public life than it has been in the past. This may not seem like a benefit. Indeed, many have rejected the Constitution because of it. The form of government described in the Constitution, if employed by the states or a confederacy of various states, would give those governments more power as well.

The idea that a confederacy of separate states can be used to put down internal revolutions, reduce violence between members, and provide greater security from an external threats is nothing new. It is an idea that has been utilized throughout history and is something that almost all political philosophers agree upon.  Opponents of the proposed constitution attempt to use the writings of Montesquieu to prove that a republican government is impossible for a country as large as the United States. However, they have ignored what Montesquieu wrote in other parts of his works. Nor have they thought through the consequences of their position.

It is true that Montesquieu recommends a small territory for republican republics. In fact, Montesquieu recommends a territory even far smaller than many of the existing states. Virginia, Massachusetts, Pennsylvania, New York, North Carolina, and Georgia would have been unable to function properly as republics according to the theory of Montesquieu. In fact, taking his theory to its logical conclusion, the United States would either have to accept a Monarchy or break itself into many, many, tiny little republics with no power and no protection from each other or external threats. Some objectors to the new constitution have realized the problem their reasoning leads them to. Their response to the challenge is to propose that the various states should perhaps be made smaller. Such a policy would lead to the creation of a ridiculous quantity of unqualified politicians. While this might be good for men who want to extend their political influence locally “it could never promote the greatness or happiness of the people of America.”

Taking a look at the problem from a different angle, we will see that while Montesquieu’s theory would require smaller member states, his theory in no way invalidates the notion of a confederacy between the various states. Indeed, that is the true essence of the issue at hand.

In fact, Montesquieu was not against the idea of a confederate republic at all.  Montesquieu writings teach that a confederate republic is the proper form of government for “extending the sphere of popular government, and reconciling the advantages of monarchy with those of republicanism.”

Montesquieu taught that mankind would have been forced too suffer forever under the oppression of kings had they not come up with constitutions that extended the benefits of republicanism internally while maintaining the benefits of monarchies externally. Such a constitution is that of a confederate republic.

A confederate republic is made up of several smaller states joining together to form a single government. Many societies converge to create a new society. When the various societies join forces, their power increases until they are able to provide security for all the members of the confederacy.

The confederate republic is able to protect itself from external attacks while promoting peace internally. This form of government eliminates many problems.

If a single person tries to takeover the government, that person will have a hard time exorcizing authority over all of the states at once. When a person becomes too powerful in one state, the people of other states will get worried. Even though one part of the country may fall under oppression, the states that remain free can fight against the would-be dictator and overthrow him before he takes over the entire country.

When revolutions take place in one state, the other states can come together to stomp them out. If some state governments start to abuse their privileges, other states can keep them in check. Even if the confederacy were to be dissolved, the state governments would remain in existence.

Each small republic lives in happiness and tranquility internally. Meanwhile, they have the same protection that a large monarchy would provide externally.

It is important to look at the writings of Montesquieu at length because they provide essential insights in favor of the Union. The passages quoted above also show that the writings of Montesquieu have bee misused by opponents of the constitution. Nothing in Montesquieu’s writings imply that a confederate republic in the United States would be unworkable. The above passages also make direct mention of the issue that this paper is intended to address: the Union’s ability to put down revolutions and violent conflicts between the states.

Some have written that there is a difference between a ” CONFEDERACY and a CONSOLIDATION of the States.” Under a confederacy the confederate government may only govern the various state governments that make up the confederacy, not the actual people in the states. The federal government would have no authority to take part in the internal governing of the various states. It is also put forth that each member of the confederacy should have an equal vote in the national government. These positions are very weak. They are supported neither by reason nor historical examples. While it is true that some confederate republic governments have been restricted from ruling directly over the people of the member states, it hasn’t been the case in every example. It isn’t strictly necessary that it must be that way. In fact, there are many examples in which the national government has governed directly over the people. Therefor, we can conclude that there is no universal rule governing this issue. It will be shown in future papers that when the national government can’t enforce its laws within the states that “it has been the cause of incurable disorder and imbecility in the government.”

A confederate republic is defined simply as a collection of societies or the merging of two or more states into a single state. The actual authority of the national government will vary depending on the circumstances in each case. As long as the various states remain in existence and they continue to govern locally, even though they are subordinate to a national government, the association would still be defined as a confederate republic. The proposed constitution in no way seeks to eliminate the various state governments. Quite the opposite, the state governments actually make up part of the national government through their representation in the senate. Further, the constitution leaves a large portion of governmental power in the hands of the states. This is entirely consistent with a federal form of government.

The Lycian confederacy was made up of twenty three separate republics. The largest republics had three votes in the national government. The middle republics each got two votes. The smallest republics each got one vote. Under the Lycian confederacy, the national government had the responsibility of  choosing judges and governors for each member of the confederacy. This was, of course, a very serious power to turn over to federal government. If there is one power that member states should retain, it is the ability to select their own local government. However, Montesquieu once wrote: “Were I to give a model of an excellent Confederate Republic, it would be that of Lycia.” This shows us once again that Montesquieu was not against confederate republics. Any who suggest that he was, do so in error.

Essay on Federalist No. 8

Introduction

Before getting to the plain language summary of Federalist No. 8, I’d like to take a moment to voice my disagreements and intrigue with some statements made by Alexander Hamilton in Federalist No. 8. They are as follows.

1. Hamilton makes an important observation when he writes “The disciplined armies always kept on foot on the continent of Europe, though they bear a malignant aspect to liberty and economy, have, notwithstanding, been productive of the signal advantage of rendering sudden conquests impracticable.” The important point to understand here is that powerful armies are not good for the economy and liberty per se. They are harmful to liberty and the economy but are tolerated because they are useful for protecting property against foreign enemies. In other words, armies are a necessary evil, to be avoided as far as possible. They are not something beneficial in and of themselves but only to the extent that they provide protection. Military spending is not a stimulus to the economy and an over-sized military is definitely harmful to liberty.

2. Hamilton writes “In this country the scene would be altogether reversed. The jealousy of military establishments would postpone them as long as possible. The want of fortifications, leaving the frontiers of one state open to another, would facilitate inroads. The populous States would, with little difficulty, overrun their less populous neighbors. Conquests would be as easy to be made as difficult to be retained. War, therefore, would be desultory and predatory.” This whole line of reasoning is a non sequitur. It does not necessarily follow that failure to maintain the Union would lead to total war between the states. In fact, with the Civil War we see the opposite effect: maintaining the Union causing total war. The nations of Europe never banded together to fight a war of independence against a foreign oppressor. The states did. This act surely engendered some brotherhood between the states and would have prevented them from undertaking missions of plunder against their brothers, willy nilly. Further, the act of simply sending representatives to a constitutional convention in and of itself showed a spirit of cooperation that would not be conducive to wars against each other. Even  if the new constitution wasn’t adopted, there was good communication, honest debate, and a spirit of compromise between the states that would have acted to detain the wars that Hamilton describes.

3. In discussing the danger of attack from an external enemy Hamilton writes “Even the ardent love of liberty will, after a time, give way to its dictates.” This is a big problem and it is as true today as it was in Hamilton’s time. No people should ever sacrifice their “ardent love for liberty” for any reason. Once the rulers know what will cause the people to give up their liberty, they will use that knowledge to manipulate the citizens and deprive them of their rights. A good example is the War on Terror. The government manipulated the fears of American citizens to pass legislation and undertake wars that violate first principles of the United States and stand in extreme contradiction of the Constitution. Undeclared wars, torture, illegal search and seizure, illegal spying, detainment without a fair trial, outrageous taxes, debasement of the currency and many more violations of our rights have been undertaken in the name of protecting us from foreign enemies. Indeed, we have sacrificed our liberty for safety and a people who do so, as Benjamin Franklin taught, deserve neither.

4. Hamilton points out that during times of war people “resort for repose and security to institutions which have a tendency to destroy their civil and political rights.” Similar to point 2 above we must note that wars are not good things in and of themselves. They are a necessary evil that will “have a tendency to destroy their civil and political rights.” Wars must only be undertaken to protect ourselves from attack. Offensive wars should never be fought under any circumstance. Liberty is our most important possession and it should never be sacrificed so that politicians can fight wars to enrich lobbyists and glorify themselves.

5. Hamilton makes the important observation that “it is of the nature of war to increase the executive at the expense of the legislative authority.” War makes the executive branch stronger because a society must centralize its decision making during times of military conflict. Dictators throughout history have used wars to strengthen their position. This is another reason why countries should only fight defensive wars.

6. In a very illuminating passage on the ascendancy of the military in society, Hamilton writes “The continual necessity for their services enhances the importance of the soldier, and proportionably degrades the condition of the citizen. The military state becomes elevated above the civil. The inhabitants of territories, often the theatre of war, are unavoidably subjected to frequent infringements on their rights, which serve to weaken their sense of those rights; and by degrees the people are brought to consider the soldiery not only as their protectors, but as their superiors.” Here is another reason to avoid constant war. Soldiers transform from our defenders into our masters. Instead of being looked upon as a person doing a job, they transform into demigods who can do no wrong. The military will violate our rights so commonly that we will forget what are rights really are.

Summary

The purpose of this federalist paper is to take a look at what types of conflicts would occur between the states if the legal union between them were to be dissolved. There would definitely be conflicts and it is impossible to imagine a scenario under which the separate states could live in harmony. All nations that live in close proximity to one another, but do not share a common government, are bound to fall prey to animosities and eventually war.

In the time period right after the states separated from one another, the conflicts would be especially intense.  This is what happens when two nations that don’t have permanent, standing militaries, fight against each other. As an example, let us take a look at the nations of Europe. Even though their standing militaries threaten liberty and harm the economy, they do keep European countries from trying to invade their neighbors on a whim. This is contrary to what happened between the Europeans during the beginning stages of their statehood when they constantly fought ill planned wars of conquest.  The European nations are also well fortified, which keeps invasions from happening. There are big walls and defensive barriers protecting those nations from attack. It isn’t worth the all the trouble for would be invaders to try to break through the fortifications. Its too much work.  However, back before the fortifications were built, an invading army could run straight through to the interior of the country before the victim even knew what was going on. Nowadays, a relatively small army, with the help of it’s military posts, can keep a very large invading army outside of its borders with much less effort. As a result, the wars in Europe are no longer huge wars of conquest with kings and emperors warring against each other but rather regional skirmishes. One or two cities may be taken back and forth but nothing happens on a large scale.

In the United States, the scene would  be much different. There are no standing armies to make states think twice before invading each other. There are no fortifications, making it easy for states to penetrate deep into the territory of other states. It would be quite easy for larger states to occupy smaller states. Victories would be so easy to obtain that no states would hesitate to pursue them.  The wars would be wars of plunder. Non-professional soldiers would pillage their victims and leave destruction in their wake. Atrocities committed by individuals would be characteristic of these wars.

Although the scenario put forth above is accurate, it wouldn’t continue for long. The most important concern of nations is protecting themselves from foreign enemies. People are even willing to sacrifice their precious liberties to be safe from foreign attack. Fear of death and destruction and the never ending sense of danger that accompany war will cause even a people who are intensely jealous of their liberties to “resort for repose and security to institutions which have a tendency to destroy their civil and political rights.” People are willing to be safer but less free.

To protect a nation, an army and fortifications are needed. Many believe that there are no restrictions against a standing army in the new constitution. As such, it would be completely legal to establish a permanent army.  However, there are hurdles that must be overcome if a standing army is to be established under the new constitution. On the other hand, standing armies “must inevitably result from a dissolution of the Confederacy.” There would be constant war and a state of danger which would require military establishments. Smaller states would have to do all they could to protect themselves against larger states with greater resources. They would make up for having less troops by having a more systematic military establishment, better trained troops, and by building stronger fortifications. The executive branch of small state governments would be empowered which would make their governments more and more like monarchies. After all, “it is of the nature of war to increase the executive at the expense of the legislative authority.”

The states which are quickest in building up their militaries will have an advantage over their neighbors. Even though a state has a much smaller population, it can, under an active and focused government, build a powerful and well disciplined militarily, which will allow it to defeat larger states with more natural resources. In fact, there are many examples of this happening throughout history. It is obvious, however, that no large and dignified state would allow its smaller neighbors to maintain such an advantage for very long. Those states would also empower their governments to build strong and well-disciplined armies in order to regain military advantages. Before long, every state would turn over increasing amounts of power to their governments. The United States would end up under the same tyranny that Europe suffers under. It is highly likely that this scenario would play out exactly as described if the Union were to be dissolved.

The warnings above are not mere speculations put forth based on weaknesses in the new constitution, under which all power is placed in the hands of the people and their representatives. Rather, they are logical results based on the true nature of human behavior.

As an objection to the conclusion reached above, we can take a look at the ancient republics of Greece. They were constantly at war with each other but no standing armies were ever established. Many different replies can be given to this objection.  The people of the United States are a hard working, entrepreneurial people. Most of their time is spent on doing business and is “devoted to the improvements of agriculture and commerce.” As such, the people of the United States are not natural soldiers. On the other hand, the Greeks were a nation of soldiers. Means of finance, which have been greatly improved by increased quantities of gold and silver, commercial activity, and credit along with a change in the customs of nations have changed the entire nature of war. Professional soldiers, separate from the other citizens of a nation, are now the ones who do the actual fighting in wars.

There is also a big difference between the armies of those countries who are under the constant threat of an internal rebellion and those who are not. In a nation under the constant threat of rebellion, the rulers must always maintain a well disciplined and alert military. For nations not constantly threatened by upheavals, the rulers must have a good reason for keeping a standing army, if they even decide to maintain an army at all.  In a nation where there isn’t much of an internal threat, the people are not in danger of having to sacrifice their liberties to military domination. They will be unaccustomed to giving up their freedom in order to put down rebellions. Their government will run smoothly and they will not be bothered by the problems that come with internal uprisings. Such a nation will have an army so small that the people won’t be threatened by it. The people will not be used to looking to the military for protection nor accustomed to being under military rule. As a result, they will “neither love nor fear the soldier.” In fact, they will look upon the military as a “necessary evil” and be ready at all times to stand up against any infringements upon their rights. Under such circumstances, the military could be useful to the executive in putting down small uprisings or minor internal dispute. It would never be able to impose its will on the entire people.

In a country that lives under the constant threat of revolution, the opposite of everything described above occurs. The government will be in a constant state of agitation and will always be prepared to stomp out insurrections. Armies must be big enough to fight off threats at any given moment. As a result of being in constant service to the community, the soldier will come to be glorified. Citizens will come to be looked upon as weak and helpless. “The military state becomes elevated above the civil.” Citizens of the nation will be accustomed to constant war. Their rights will be violated so regularly that the citizens will come to devalue their rights. Eventually, the military will be looked upon not only as defenders but as rulers. In fact, it is quite easy for the citizens of a nation that is constantly at war to view the soldiery as their masters. Once this happens, it is very difficult for the citizenry to stand up to the military and take back their rights.

Great Britain is an example of a country that is not very susceptible to threats from abroad. As an island country with a strong navy, a foreign invasion is highly unlikely. The result is that Great Britain does not require a large standing army. All that is required is a big enough army to fight off any sudden attacks until the militia can be deployed. A larger army than this is not demanded by the circumstances and would not be acceptable to the citizens of Great Britain. In addition, there have been no revolutions or internal uprisings for quite some time that would call for the establishment of a large standing army. The result of all of this is the abundant liberty that the people of that country enjoy, even though their politicians are self-serving and corrupt. However, had Great Britain been located on the European continent she would have had to build up a great standing army to protect herself from her neighbors. If that had happened it is likely that “she, like them, would in all probability be, at this day, a victim to the absolute power of a single man.” Of course, it is always possible that citizens can lose their liberties in other ways. In the case of Great Britian, however, the army is to small for their citizens to fall under a military dictatorship.

If the United States is “wise enough to preserve the Union”, we too can live under a pleasant and undisturbed existence. Europe is far away. European colonies in close proximity to us are too weak to present any true dangers. This situation does not call for large standing armies. If the Union breaks apart and the states form their own separate nations or join together to form a number of separate confederacies, “we should be, in a short course of time, in the predicament of the continental powers of Europe.” We would be forced to sacrifice our liberties in order to fight wars against each other.

The ideas presented here are not idle speculations. They are serious issues that must be considered by “every prudent and honest man of whatever party.” Any man who takes the time to sincerely reflect upon these ideas and contemplate our circumstances will put aside any minor objections that he may have and will come to support the proposed constitution. For, if the constitution is rejected, the Union will probably be dissolved. Minor and trivial arguments against the constitution must give way to “the more substantial forms of dangers, real, certain, and formidable.”

Essay on Federalist No. 7

Introduction

Before getting to the plain language summary of Federalist No. 7, I’d like to take a moment to voice my disagreements and intrigue with some statements made by Alexander Hamilton in Federalist No. 7. They are as follows.

1. Hamilton points out that it was well known that some states “had serious and animated discussion concerning the rights to the lands which were ungranted at the time of the Revolution, and which usually went under the name of crown lands.” There is an issue here that is important to discuss. Why should the States have first claim to uninhabited land? The John Locke/libertarian theory of homesteading would give property rights to the first individuals that mixed their labor with the land. The idea that all land must immediately be assigned to some government body is affront to the notion of property rights. Unsettled “crown land” should have remained open and without ownership until a pioneering individual claimed it as his own by improving the the land with his work.

2. Hamilton writes “The competitions of commerce would be another fruitful source of contention.” A couple of sentences later he writes “Each State, or separate confederacy, would pursue a system of commercial policy peculiar to itself.” This is the crux of the issue. It would be the particular policies pursued by the various state governments that would cause conflicts. Naturally occurring competition between economic actors benefits far more people than it harms. However, the few that are harmed by competition tend to seek government intervention to protect them from competition. This leads to policies that cause conflict. If left up to the free market, those producers who satisfied the largest amount of people would win the competition. This is the most equitable solution. It should be pointed out that dueling government policies are the antithesis of the free market.

3. Hamilton writes “The habits of intercourse, on the basis of equal privileges, to which we have been accustomed since the earliest settlement of the country, would give a keener edge to those causes of discontent than they would naturally have independent of this circumstance.” Here we see that trade policy in the United States from the very beginning was “the basis of equal privilege” or free trade between the states. The fact that trade was so free would only serve to highlight the harm caused by trade restrictions. Trade restriction can only be carried out by governments. Again, we see various governments interfering with the naturally occurring state of things: free trade and equal privilege.

4. Hamilton observes “The spirit of enterprise, which characterizes the commercial part of America, has left no occasion of displaying itself unimproved. It is not at all probable that this unbridled spirit would pay much respect to those regulations of trade by which particular States might endeavor to secure exclusive benefits to their own citizens. The infractions of these regulations, on one side, the efforts to prevent and repel them, on the other, would naturally lead to outrages, and these to reprisals and wars.” This passage is so revealing. PEOPLE JUST WANT TO TRADE. The desire to obtain what what one considers beneficial is so strong that laws will be ignored and regulations disdained in order to get it. When artificial barriers are put up so that some industry in one particular state or country can benefit, people are forced to go around the laws to do business. This creates criminals and can eventually lead to war. It would be much easier to just get the government the hell out of the way and let the people trade.

5. Hamilton’s discussion of the effect of national debt on the relationships between the states gives a vivid example of why all national debt should be avoided in the first place. This discussion starts with sentence “The public debt of the Union would be a further cause of collision between the separate States or confederacies.” This is true. Nowadays, under our powerful federal government that Hamilton wanted so badly, it isn’t states that clash over national debt but rather the citizens versus the government. Citizens are sick of it and the government wants to keep borrowing. Going forward, ALL nation debt should be avoided. Indeed, “The public debt of the Union would be a further cause of collision:, between many factions of society.

6. Hamilton notes “the reluctance with which men commonly part with money for purposes that have outlived the exigencies which produced them, and interfere with the supply of immediate wants.” This is crucial to understanding the nature of debt. You get something now without paying. However, some day you’ll have to pay it back. When the time comes, you may not even remember what you spent the money on or why you owe it. Regardless, you’ll have to pay it back and the only way to do that is by giving up something that you would have otherwise enjoyed in the present.

7. Hamilton eloquently observes “There is, perhaps, nothing more likely to disturb the tranquillity of nations than their being bound to mutual contributions for any common object that does not yield an equal and coincident benefit.” Think bank bailouts. Think military-industrial complex. Think bureaucrats making three times as much as average citizens.

8. Hamilton write “America, if not connected at all, or only by the feeble tie of a simple league, offensive and defensive, would, by the operation of such jarring alliances, be gradually entangled in all the pernicious labyrinths of European politics and wars; and by the destructive contentions of the parts into which she was divided, would be likely to become a prey to the artifices and machinations of powers equally the enemies of them all. Divide et impera must be the motto of every nation that either hates or fears us.” Its pretty sill to accept that a nation that just fought and won a war against the greatest military power on the earth would so easily and recklessly give up its recent hard won freedoms. The fact that the won the war under “only by the feeble tie of a simple league” doesn’t seem to matter to Hamilton.

Summary

Hamilton starts off Federalist No. 7 by observing that some of his opponents claim that disunited states would have no reason to start wars with each other. In fact, the states, if disunited, would be motivated to fight wars for the same reasons that any other nation throughout history decided to fight a war. In addition, there were more specific reasons that might cause the various states might fight with one another. These particular motivations were so strong that they could be seen in spite of the restrictions placed on the states by the Articles of Confederation. They would only be made worse if the states were to act as completely separate nations.

According to Hamilton, “Territorial disputes have at all times been found one of the most fertile sources of hostility among nations.” It was likely that more wars had been started over territorial disputes than for any other reason. Of course, amongst the various states there would be an abundance of territorial disputes. Indeed, there was a huge amount of unsettled land within the borders of the United States. Many of the states were in the middle of disputes over which states would have rights to particular unsettled territories. If the states were to be completely independent nations, every single state would likely try to make a claim for some of the uninhabited lands. It was a widely known fact there had been serious disagreements between some states over land that truly belonged to nobody at the time of the Revolutionary War. The lands were generally known as “crown lands.” The states who had the land inside their borders claimed it as there own. Other states argued that crown land should rightly belong to the Union. In the west there existed an enormous amount of uninhabited land that had once belonged to king of Great Britain. Such lands had been ceded to the United States as a part of the peace treaty which ended the war. Many argued that the western land belonged to the Confederacy because it acted as a single country in signing a treaty with a foreign nation. By convincing the states to forfeit their land claims to the federal government, the federal congress was able to keep the peace between the various states. This was only able to be accomplished because the existence of a union provided a forum for settling disputes. If the mechanism for settling disputes, the Union, were to be eliminated, the disputes would once again come back to life. The large, western territory belonged to the Union “by cession at least, if not by any anterior right.” If the Union were to come to an end, the compromise reached by the various states would be terminated, and the various states would move to start reclaiming land in the west. All states would insist on being granted their fair portion of the land. The states would argue that the land was obtained by a war fought by all of the states. The land was ceded to a Union formed by all of the states. Therefor, each state had a right to some of the land. Even in the unlikely event that all of the states agreed to share the western land, there would still exist the the problem of fairly dividing the land. Each state would have its own ideas for the right way to split up the land. All would act in their own best interest in trying to secure lands and it would be nearly impossible for a peaceful solution to be agreed upon.

We can see, therefor, that the issue of dividing up the western lands would provide an “ample theatre for hostile pretensions” if there was no federal government to mediate disputes. If history was any guide, it seemed quite clear that many of the states would resort to violence to enforce their claims. Take, for example, “the dispute between Connecticut and Pennsylvania, respecting the land at Wyoming”. Such an example warned against being naive in thinking that land disputes would be easily settled. The Articles of Confederation required that all parties in such a dispute submit the issue to a federal court for a decision. In the case mentioned above the federal court decided in favor of Pennsylvania. However, Connecticut strongly disagreed with the decision. In fact, it looked as if Connecticut wasn’t going to accept the ruling. Finally, through negotiation and bargaining, a solution was found that compensated Connecticut for some of her perceived loss. The purpose of  mentioning this case was not to insult Connecticut. There was no doubt that she honestly believed that she had been wronged. Rather, it shows that “States, like individuals, acquiesce with great reluctance in determinations to their disadvantage.”

Another example of a conflict between states was the conflict between New York and Vermont. Anybody who had witnessed the inner workings of this conflict first hand could verify that New York not only experienced opposition from the states involved in the case but also from other states who had nothing to do with the case. Those involved in the case could also comprehend the danger posed to the Union had New York decided to enforce her claim militarily. There were two reasons that for the aforementioned conflict. First, Vermont was afraid of how powerful New York was becoming. Second, their were powerful individuals in other states who had received land grants by the state of Vermont. It seemed as if certain states who brought forth titles to land were actually more interested in weakening New York than enforcing their claims. The states most interested in weakening New York were New Hampshire, Massachusetts, and Connecticut. New Jersey and Rhode Island were also strong supporters of Vermont. Maryland also supported Vermont, until she discovered Vermont’s strong connection to Canada. These small states all banded together to stop New York’s “growing greatness.” Similar conflicts would occur between the other states if they became disunited.

Economic competition between the states would also cause problems. States with natural disadvantages would try to leach off of other states with better economies.  Each state would have different economic policies depending on their varying situations. The different policies would favor some products from some states and discriminate against certain products from certain other states. This would cause conflict. Free trade amongst the states had long been common policy; even since the very beginning of the colonies. That fact would make trade restrictions all the more unpalatable. However, it must be realized that these acts, no matter how harmful they may have been, were actually legal acts committed by independent, sovereign nations.  Despite all of this, the commercial spirit which characterized America was not likely to be subdued by laws and trade restrictions. Citizens of one state would certainly ignore the laws and commercial regulations of other states. States would then be forced to treat citizens of other states as criminals. This would lead to “outrages, and these to reprisals and wars.”

Some states would not take kindly to the various regulations imposed by other states. Just such a situation existed between the states of New York, Connecticut, and New Jersey. New York, in order to generate revenue for the government, taxed imports. New York than sold its imports to consumers in Connecticut and New Jersey. As a result of the import tax, consumers had to pay higher prices for the goods they desired. Of course, New York wouldn’t be willing to give up government revenue just so people in other states could pay less for goods. It would have also been quite unrealistic to determine which goods were being sold to people in other states in order to charge them less.  Connecticut and New Jersey weren’t likely to continue putting up with paying import taxes to New York that their states didn’t benefit from. New York wouldn’t be able to continue in their “quiet and undisturbed enjoyment of a metropolis” as long as they continued to benefit in a way that was so despised by their neighbors. Connecticut and New Jersey would surely bring pressure on New York from both sides of its border that New York wouldn’t long be able to ignore.

Public debt would also cause animosity between the states. The act of taking on debt in the first place and then paying it back would certainly lead to disagreement. It would be quite difficult or even impossible to decide how much debt each state would be responsible for. In truth, there was no solution that wouldn’t lead to severe objections. Of course, such objections would be blown out of proportion by opponents of any such plan.  States even disagreed on the basic issue of whether debt should be paid back. Some states didn’t think that national credit was all that important. Citizens of those states had “little, if any, immediate interest in the question” and felt “an indifference, if not a repugnance, to the payment of the domestic debt at any rate.” On the other side of the issue were those citizens who had loaned money to the federal government. They were the creditors of the various states and would do everything they possibly could to be paid back. Any lag in paying back the debt would upset the creditors. It would be difficult for the states to come to an agreement because each state would have a different idea about the best way to handle the problem. Citizens who were owed money would pressure their state governments to do something. Likewise, foreign government would move to secure their financial interests as well. As a result, the states would be thrown into turmoil both domestically and from abroad.

If we imagine a situation in which the states finally did reach an agreement on the debt issue, it is easy to see that the debt burden would have fallen more heavily on some states than on others.   States forced to pay back more of the debt would try to escape their obligation. Other states would be against changing the agreement because it would mean that they’d have to pay more debt themselves. If any state refused to pay back their share, other states would take the opportunity to refuse to pay their part as well. The refusal to comply with debt agreements would cause bitter and hateful disputes. Even if the agreement were in actuality fair and proportional, some states would still be unable to pay.  This could be caused by a lack of funds, financial mismanagement, or governmental errors. Also, men hate to pay money for things that happened far in the past and keep them from taking care of present needs. Any failure to pay obligations would lead to arguments and retaliation. As Hamilton eloquently observes, “There is, perhaps, nothing more likely to disturb the tranquility of nations than their being bound to mutual contributions for any common object that does not yield an equal and coincident benefit.” Indeed men fight more over money than over anything else.

The violation of private contracts by parties in two separate states could also lead to problems. Citizens of one state will force their government to take action to protect their rights from abuses by citizens in other states. It would be unreasonable to expect objectivity from lawmakers in the various states to keep them from acting in favor of their own citizens and against citizens from other states. In fact, left to their own devices, many state legislatures had passed laws in favor of their own citizens. Connecticut was prepared to retaliate with its full strength against laws passed by Rhode Island.  It was reasonable to expect that future conflicts caused by state legislatures would not be solved by reason and compromise but rather by war.

The likelihood that separate states or confederacies would ally themselves with foreign governments and the effect it would have on the peace and prosperity of the country as a whole were discussed in previous papers. If America was not united under a strong federal government, the states would certainly be “be gradually entangled in all the pernicious labyrinths of European politics and wars.” The divided states would become the victims of foreign powers that in reality were enemies of the United States. Divide and command would be “the motto of every nation that either hates or fears us.”