Saturday, September 27, 2008

Democracy, rye, and money, then and now...

We need to think structurally about what's gotten the nation into this economic turmoil. And as a historian, I'd like us to look all the way back to the Revolution and the years that followed.

"Make no mistake: the founding elite constricted the meaning and practice of democracy in fundamental ways that continue to shape our government and society today." So says historian Terry Bouton.

Clearly, these aren't your father's Founding Fathers.

I'm not a historian of the Revolutionary War or Early National era. But now and then--as any rye drinker and patriot should--I like to read around in the latest work in those fields. I've just finished a pair of provocative books on the political economy of that era that reshapes our understanding of the Revolutionary generation as well as the context in which the Constitution emerged. I think they might even tell us a fair bit about our era as well.

The first, Woody Holton's Unruly Americans and the Origins of the Constitution (New York: Hill and Wang, 2007) claims that in order to create the financial stability necessary to attract investment, the founders curtailed the power of average white men and clamped down on democratic tendencies. By centralizing power in a federal government, elites deliberately weakened the state legislatures who's policies too often (in their eyes) reflected the economic interests of the majority (mostly small farmers).

The printing of money in the years immediately following the Revolution proved especially divisive. With soaring debt from incurred during the war with Britain, a reduced supply of gold and silver, and a regressive tax system, rural debtors revolted when they faced foreclosures on their homes and farms. That little money circulated through local economies drove them to demand that the legislatures print money to increase supply and offer a way out of debt.

Elite landowners and merchants, on the other hand, saw these debtors as delinquent and the printing of money as problematic. Their own economic fortunes were tied to stabilizing the economy and making money off the government. The young nation's innumerable IOUs (which they had bought up on the cheap from those who made actual sacrifices for the new nation) could turn a cheap investment into a hefty payback--but only if money was kept in short supply and foreclosures were enforced. State governments started to engage in policies that strengthened the hand of rural people, and in the eyes of elites, they needed to be stopped through the creation of a powerful central government.

The second book, Terry Bouton, Taming Democracy: "The People," The Founders, and the Troubled Ending of the American Revolution (New York: Oxford University Press, 2008) uses Pennsylvania as a case study for understanding how elites and small farmers banded together to create a revolution in the 1770s and how their alliance fell apart in the 1780s and 1790s.

Ultimately, Bouton claims that "the founding elite attempted to obliterate that idea of politics during the 1780s and 1790s and to confine political self-expression within an electoral system replete with barriers against democracy." Defining democracy not only as political rights but also as economic rights, farmers in rural areas lost out in their effort to insure that their financial interests (low taxes, paper money, protection from creditors) be represented in government. Instead, the economic interests of the elite--taking money and credit out of the hands of the people and imposing new taxes payable only in gold and silver--won out.

Bouton says: "The Revolution had convinced many ordinary Pennsylvanians--and common folk across the colonies--that they had a right to monitor the government, to shape policy, and to regulate the government if they believed that their leaders were not responding to the popular will. For these people, politics was not just about casting ballots...To them, regulating the government to act on behalf of the governed happened mostly outside the polling place. And 'the people' expected to participate not just on Election Day but 365 days a year. Indeed, many Pennsylvanians believed they had a sacred right to regulate their government and that it was their duty to exercise that right to preserve democracy."

By the end of the so-called "Whiskey Rebellion" (which Bouton prefers to call the "Pennsylvania Regulations," and rightly so) in 1794, that right and duty had been crushed by a 10,000 man strong army sent west by the federal government. The farmers' effort to keep barrels of rye whiskey free from a federal excise tax was about much more than that tax. It was deeply tied to a deeper struggle over who would control the government and run the country. At stake was whether or not democracy would be practiced every day or just once every four years.

Why do these two books matter? Well, if the Constitution emerged as an effort to create a stable national economy at the expense of an equitable distribution of wealth, the current predicament makes sense. Our governmental system--structurally--embodies an effort to protect wealth.

Though rural people of the Revolutionary era imagined democracy as something they could participate in every day of the year (even to the point of rejecting legal decisions and calling out militias to defend the liberties of the poor to own land and homes), that vision was co-opted into a set of procedures in which a most could express themselves once a year at a ballot box. Bouton even suggests that patriarchal and racist tendencies among ordinary white men intensified in the early national period because of this removal of political power unleashed by the success of the Revolution--an effect with legacies we all know too well.

And what does that have to do with today? Plenty.

First, it suggests our adulation of the Constitution as a hallmark of democracy in a world of tyrants, monarchies, and dictatorships needs to be rethought. Second, we should venerate the Bill of Rights (one of the things that people against the Constitution and this consolidation of power and wealth by the elite succeeded in extracting from the Founders as they sought approval for the new government) more than the Constitution. Third, the nation's origins rest not only in the protection of wealth but in the effort to insure that wealth be unequally distributed. Fourth, in their attempt to protect their rye whiskey from a painful tax, the last flicker of democracy in the new nation briefly burned hot but then flamed out. Rye whiskey is democracy in a bottle.

If the government itself is structured to protect and foster the unequal distribution of wealth, we have a problem. To be sure, reforms introduced in the 1930s New Deal and the 1960s Great Society mediated this structure. But it is no wonder that members of both political parties now are scrambling to bail out Wall Street over massive public opposition. They are working to conserve their own power. They are following in the founders' footsteps.

Rye drinkers, on the other hand, need to follow in the footsteps of those humble farmers and "regulators," patriots all.

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