The Insubordination of the United States. Part 1

The Beginnings of the First Successful Insubordination

Between 1775 and 1783, the thirteen colonies of North America played the main role in the first successful insubordination produced in a place which, for that time, was “the periphery of the international system”. It was evidently not the only insubordination produced in the periphery, but it was the most successful of all because it was able to create the first industrial State-nation, outside of the European continent, and the first Republic of modern times. The American Republic constituted a true democratic revolution that attracted to itself a true sea of immigrants that left old Europe in search of work, justice and freedom.

The struggle began in 1775, when with the mission to capture a colonial store of arms in Concord, Massachusetts, and to suppress the revolt in that colony British soldiers clashed with colonial militiamen, and it lasted until 1783, when Paris Peace Treaties were signed, and by which the independence was declared of the new nation: the United States.

Nevertheless, the United States did not gain its national autonomy un a sole act but rather through a long process that began with the war of independence and ended, in reality, with the civil war. The “founding insubordination” was followed by a long and tortuous process of economic and ideological insubordination.

Immediately after formal independence was obtained, the confrontation began between the sector that wanted complement the political independence with the economic, meaning, continuing with the process of insubordination, and the sector that opposed going farther down the path that began in 1775, because its economic interests were tied specifically to Great Britain and, in general, to the hegemonic structure of world economic and political power that was in force at the time. That confrontation was finally decided on the Gettysburg battle field. Harold Underwood Faulkner correctly states in his work American Economic History that:

The revolution brought political independence, but in no way economic independence. The North American products that were exported to Europe during the colonial period continued having that continent as a market and at the same time continued importing manufactured items from there. The manufacturers that sprung up during the Revolution were smothered by cheaper merchandise that the English dumped into the North American market once peace was restored. […] According to all the indications, North America had to fall once again into a situation of dependence, producing needed raw materials of Europe and acquiring, in turn, the manufactured articles that they provided. It seemed an impossible task to be able to compete with England in the production and sale of these merchandises. (Underwood Faulkner, 1956: 277)

A task all the more difficult if one has in mind, from the dominant ideology, that it was also thought that the fate of the newly independent thirteen colonies was to become a strictly agricultural country. In that sense, Adam Smith himself held that nature itself had destined North America exclusively for agriculture and counseled the North American leaders against any type of industrialization:

“The United States”, Smith wrote, “is, like Poland, destined for agriculture: (quoted by List, 1955: 97). Smith’s ideas were useful to English power to try to gain by persuasion – typical mechanism of cultural imperialism- what it had tried to hinder, by the force of law, during the colonial period. [1]

The British Veto on Industrialization

It turns out to be significant to point out that England carried out an express policy in order to hinder the industrial development of the thirteen colonies because it understood, from early on, that industrialization of the colonies could lead them on to economic independence and that this arena would later lead them to demand political independence. Thus, aware of the economic and political consequences that could be generated by an industrialization process in the thirteen colonies, English policy tried to supervise and boycott their scarce manufacturing companies. [2]

To hinder colonial manufactured goods from competing with the industries of the metropolis, the colonial governors had precise instructions to “oppose all manufacturing and exact reports as to any indication of their existence” (Underwood Faulkner, 1956: 134). The governors were the ones truly in charge of carrying out a real “industrial infanticide”, planned in London by the British Parliament. [3]

The sagacious representatives of the Crown understood the English attitude perfectly, to whom they extended all their sympathy, as the words of Lord Corbury show, Governor of New York between 1702 and 1708, who wrote to the Board of Commerce: “I possess trustworthy reports that in Long Island and in Connecticut wool factories are being established, and I myself have personally seen serge material manufactured in Long Island and any man could use. If they begin making serge, then with time they will also make common cloth and later fine cloth; we have in this province fuller’s earth and terra alba as good as the best; judgements more authorized than mine resolve to what point this all might be in England’s service, but I express my opinion that all these colonies […] should be maintained in absolute subjection and subordination to England; and that will never be if they are allowed to establish the same manufacturers here as the people of England; for the consequences will be that when they see that they can clothe themselves without the help of England, not only with comfortable but also elegant clothes, even those that are not at the moment very inclined to submit to the government would immediately think about putting into execution projects which they have harbored a long while in their chest” (quoted by Underwood Faulkner, 1956: 134). Lord Cornbury perfectly describes the “essence” of “economic imperialism” in terms identical to those used by Hans Morgenthau.

Even though England created a specific legislation to halt all possible industrial development in the thirteen colonies, there were two industries that Great Britain watched over with particular zeal due to considering them strategic and vital for the British economy: textiles and steel. Two laws dictated after such a fashion turn out to be emblematic: the law of 1699, that banned barges of wool, wool thread, or fabric produced in North America from going to any other colony or country, and that of 1750, that banned the establishment, in any of the thirteen colonies, of laminating workshops or those for cutting metal in strips or steel foundries.

Commenting on the first of these emblematic anti-industrial laws, Underwood Faulkner states that:

England was already one of the main wool producing countries and half of its exports to the colonies consisted of articles made of that material. So hostile were the producers of the metropolis towards the competition that on the early dates of 1699 a wool law was voted on, establishing that no woolen article could be exported from the colonies or sent from one colony to another. […] As a consequence of this legislation, textile manufacturing to sell declined and English wool merchants prolonged their dominion of the North American market for a century. (Underwood Faulkner, 1956: 135)

Unlike the textile industry, iron production – which began in 1643 in the founding oven of John Winthrop, closet o Lynn- enjoyed for several years a certain margin of freedom, and he reached considerable proportions around 1750. This situation is explained because “England was in need of iron, and until 1750 opposite interests had hindered legislation from being voted on that would be contrary to its production in the colonies. But in 1750 a law was agreed upon to stimulate the production of raw materials and hinder the manufacturing of iron objects, establishing that: 1) iron bars could be imported royalty free into the London harbor; and iron ingots in any port in England, and 2) that no workshop or iron laminating or strip cutting machine should be established in the colonies, nor any armor forges to work with bascule pile-drivers, nor any kiln to produce steel” (Underwood Faulkner, 1956: 135).

Beyond the laws created by the British Parliament intended to hinder the industrial development of its North American colonies, it is important to point out a significant political fact: the colonies were treated as “outsiders” of the British territories for customs purposes. They were not included in the limits of British customs and, as a consequence, their exports paid common import duties in English ports. Analyzing the English policy towards its colonies of North America, Dan Lacy affirms:

The purpose of the British policy was clear for not considering the colonies as overseas parts of a sole kingdom, whose economic wellbeing was esteemed as equal to that of the motherland. On the contrary, they considered them as inferior communities, whose economy whose economy should always be at the service of the interests of Great Britain. (Lacy, 1969: 49)

While the colonies were young and scarcely populate, the colonists could often outsmart the British laws that dampened the economic development of the colonial territory, but from 1763 on, when the colonial population grew to be the equivalent of one quarter of the English population, England was much more strict with the application of the laws that it had created to maintain them in a subordinated economic position. It is not difficult to agree with Louis Hacker (1935: 259-295) when he states that the British veto on North American industrialization was probably the most powerful of the factors that provoked outbreak of the American revolution.

The Fight for Industrialization

When the thirteen colonies achieved political independence, in order to maintain the economic subordination over them, England had no other choice than to try out the application of “cultural imperialism”. The British reasoning was, in a certain way, simple: if the leaders of the ex-thirteen colonies accepted the theory of the international division of labor and applied a policy of free trade, the ex-thirteen colonies would remain in a situation of “economic dependence”, rendering the political independence in a mere formal fact. The British policy dedicated itself to achieving that objective after the Paris Treaty of 1783 and obtained, of course, excellent results in the Southern states of the brand new republic.

It can be states, without fear of exaggerating, that the United States was able to become and industrial country through an arduous task of ideological-cultural insubordination on the battle fields of Gettysburg. The ideological-cultural process of insubordination was manifest in the confrontation between orthodox liberalism and national liberalism. This means that amongst those that proposed clinging to the international division of work, adopting free trade, and those that proposed the adoption of economic protectionism and the rejection of the theory of free trade, for considering that that adoption would make the United States fall into a new economic subordination that would turn their newly gained independence into mere fiction.

Let us now analyze the ideological-cultural process of insubordination –of the English “cultural imperialism”- and of the internal political struggle that allowed the Unites States to “get out” of the periphery given that if the advocates of free trade and the international division of labor had triumphed, the situation of the United States on the international scene would probably not be very different today than the Federative Republic of Brazil. If the United States would have industrialized too lately, today it would be located in the periphery of the international system. This is the key to the interpretation of what the United States now, having become the “world champion” of free trade –after having profited from the benefits of economic protectionism for one-hundred years-, through the exercise of what Morgenthau denominated “cultural imperialism” and that, more sophisticatedly, Joseph Nye designates “soft power”, has taken upon itself to hide.

The First State Impulse

It is in the course of the war against England when an incipient manufacturing industry is born in the environment of the thirteen colonies. Without a doubt, North American industry, in its first stage of expansion, is the “daughter” of the war of independence (East, 1938).

On one hand the very situation of war had interrupted the flow of merchandise from the metropolis, naturally leading to an incipient process of substitution of imports. On the other hand, the situation of insubordination had in fact put an end to the restrictions that the British Parliament had imposed in order to hinder industrial development and limit the colonies to the production of raw materials.

Furthermore, all the governments of the thirteen colonies –now, in fact, new independent States- went ahead with a policy of State impulse, in an attempt to achieve industrial development. All of them made huge efforts –from the State- to stimulate the production of munitions, war equipment and products of basic needs, like wool fabric and linen that until then had been imported from England, in large quantities. In Connecticut, where small ammunition factories sprung up, the State in 1775 offered “a premium of one shilling, six pennies for each rifle key produced and five pennies for every complete set up to three thousand” (Underwood Faulkner, 1956: 162). In Rhode Island and Maine “premiums were granted for the manufacturing of steel”. Massachusetts “offered premiums for sulfate extracted from native beds and Rhode Island for gunpowder” (162). Likewise, in 1778, the Congress of the incipient United States “had workshops set up in Springfield where cannons were hollowed out” (162).

Nevertheless, the State impulse was not only fundamental for the production of war material but also in the manufacturing of materials of “basic needs”. To give an example, it can be quoted that Connecticut lent “Nathaniel Niles, from Orwich, 300 pounds for a period of four years to produce carding tooth wire” and Massachusetts “granted a premium of 100 pounds for the first 1,000 pounds of good carding wire to sell, produced by any watermill situated within its territory, with iron from the North American states” (Underwood Faulkner, 1956: 162).

The State impulse, directed at promoting industrial development, was decidedly accompanied by a large part of the population that, already during the boycotts that followed the outburst of hostilities, had refused to buy English merchandise. During the course of the war, the majority of historians affirm that many people committed to not even eat sheep or lamb’s meat and to not buy from the butchers that sold them so that the wool could be used for making clothes. In the south the rich farmers employed their poorest white neighbors to weave or knit and they themselves set up weaving and knitting workshops and taught their slaves that new task. Even the richest men belonging to the agrarian aristocracy were dressed in homemade fabrics. Thus, the state of revolt and political independence prepared the structural foundations for the economic independence that England had tried to hinder through the dictation of anti-industrial laws and that would try to avoid, when independence was a consummated fact, through the preaching of the “international division of labor” so that the young republic would leave the privilege of producing manufactured goods for the “motherland”, which “nature” had supposedly “destined” her for.

Due to this the orientation and economic reorganization that would follow the war consisted of key issues that would determine the position of the new State on the international stage.

The First Protectionist Laws

The end of hostilities between the Republic of the United State and Great Britain gave way to mass importation of European manufactured merchandise cheaper, of course, than those produced locally, a situation that rapidly quickly left the incipient North American industry in ruins, which had been developed throughout the course of the war for political independence. In 1784 the commercial balance of the young republic already gave a disastrous result: imports totaled approximately 3,700,000 pounds and exports just 750,000 pounds. The new State was living a process of de-industrialization, indebtedness and monetary chaos. To further aggravate the situation of the ex-thirteen colonies, the British Parliament voted in the Law of Navigation of 1783, under which “only ships built in England and with English crews could enter the Antilles ports, and heavy duties were placed on the tonnage of North American ships that touched in any English port” (Underwood Faulkner, 1956: 167). This measure of boycotting the infant naval industry of North America, that competed in quality and prices with that of Britain, was complemented by the Parliament of Great Britain with the law of 1786, “destined to hinder the fraudulent registration of North American vessels, and with yet another in 1787, that banned the importation of North American merchandise, through foreign islands” (167).

In the midst of this disastrous economic situation produces by the end of the war –and aggravated by a weak central government and by rivalry between the States of the Union- an anti-hegemonic train of thought, directed by Alexander Hamilton, pleaded for a means of economic development in which the federal government would shelter the new industry through open subsidies and protective tariffs. The luck of history made George Washington, due to the rejection of Robert Morris, the “financier of the Revolution”, offer the position of Secretary of Treasury to Alexander Hamilton. On July 4^th 1789 the federal government approved the first tax law, with mildly protectionist characteristics.

That law contained eighty-one articles, and in more than thirty of them it established specific rights; the rest of them were subject to estimated assessments, according to value. Nevertheless, the most important aspect of the new law was that, following Hamilton’s line of thought, it imposed “different rights to favor the steel and paper factories of Pennsylvania, the distilleries of New York and Philadelphia, the glass manufacturers of Maryland, the iron and rum breweries of New England. Products from farms were also protected through taxes on nails, boots and shoes, and ready-to-wear clothes” (Underwood Faulkner, 1956: 181).

The sectors that fought for economic independence did not tarry in discovering that the mild tariffs of 1789 did not provide true protection for the young industry and, after fiery disputes, they managed to have the tariffs raised in 1790, 1792 and 1794. But these increases also turned out to be insufficient due to the opposition of political sectors that, ideologically subordinated by Great Britain, hindered the adoption of higher tariffs because, to them, taxes should have the main objective of producing income and not protecting a newborn industry. In reality, the industry that benefited the most from the protection laws and in which the State impulse had a more decisive impact was shipping. Naval riggers and builders had thrown in with the most ardent defenders of independence and the laws that favored them did not meet great opposition in Congress.

The first law in favor of the naval industry was also passed on July 4^th, 1789. By it a discount of 10 percent was obtained on import duties of merchandise that entered the United States in ships built in the United States and being property of American citizens. The second law did not only have as its objective the promotion of the naval industry but, furthermore, that naval trade stay exclusively in the hands of American citizens. The law sought to have ships that performed foreign trade or local trade be the property of American citizens and be built in their country.[4] This second law was written on July 20^th of 1789. By it an assessment of six cents per ton on ships of American construction and ownership that entered the ports of the country, but ships built in that country but of foreign ownership were charged thirty cents per ton, and fifty cents the ships of foreign bud and ownership. The law also informally established a monopoly of domestic trade for American ships. To this end the law established that the ships of that country that work in coastal trade would only pay duties once a year, but foreigners should pay them each time they touched an American port. In these two laws is the origin of the powerful American merchant navy. Good proof of this is that “tonnage registered for foreign trade increased from 123,893 in 1789 to 981,000 in 1810. Imports that were transported in American barges increased in that same time period from 17.5 percent to 93 percent, and exports transported in ships of the same flag from 30 percent to 90 percent” (Underwood Faulkner, 1956: 253).

To be continued...

Footnotes

1. Adam Smith publishes his famous The Wealth of Nations the same year as the Declaration of Independence of the United States.

2. Let us remember that during the reign of the Stuarts the emigration of qualified workers to the colonies of America was banned and “in 1765 the Parliament once again applied in an even stricter way the old prohibition of the Stuarts on qualified worker emigration. In 1774 it took a longer step upon banning the exportation of mechanic models and blueprints and the machines themselves. After the Revolution, these measures became more extent and they were enforced with greater rigor” (Miller, 1961: 165). For more on the British veto on the industrialization of the thirteen colonies and the established policies for hindering industrial development, see especially the works of Charles M. Andrews (1924), George L. Beer (1912), Hugh E. Egerton (1924), John W. Horrocks (1924), GustavSchmoller (1931).

3. The colonial farm was the cradle of American industry. In the left over free time they had during the hard North American winter months, farming families made nails, tillage tools, barrel staves, oak casks and tobacco containers, rum, molasses and fish. Many of these items were easily exported to the Antilles. One of the very important domestic industries was the making of drinks –rum, beer and cider- that were produced in New England, were molasses from the Antilles was distilled to which rum was later exported. Few were the homes in which there could not be found a spinning wheel and a hand loom. In 1640 the first relatively important foundries of Massachusetts. For more see Rolla M. Tryon (1917).

4. These two laws approved by the Congress of the Young republic were inspired by the Navigation Laws voted in by the British Parliament in 1651 and in the “law for stimulating and increasing voyages and navigation” that in 1660 reinforced the Law of Navigation of 1651. The law of 1660 stipulated that any product being taken to or from England should not only be transported in ships manned by the English but also should be built in England or in the English colonies.

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