Bryan Caplan  

Taxes, Independence, and Canada

What is a High-Trust Society?... Beyond the Pale...

In response to yesterday's doubts about the benefits of American independence, many commenters emphasized the importance of taxes - and pointed me to the Declaration of Independence.

But this doesn't really answer my question: Did the Revolution actually lead to lower taxes? I've heard several historians make the sensible point that American taxes were low because the British subsidized colonial defense. Are they wrong?

Peter Jackson adds:

You're question is tantamount to asking whether we'd better off if the world had two Canadas instead of one Canada and the US.
Not quite - the process that made Canada slightly more statist than the U.S. would have worked differently if both the U.S. and Canada remained British colonies. E.g. More Irish would probably have gone to Canada instead of the U.S. if both places were part of the Empire.

In any case, the modern economic policy difference between the U.S. and Canada is pretty small - 8.2 versus 8.0 on the Economic Freedom of the World scale. Indeed, if you think that U.S. branch banking regulations played a big role in the Great Depression, there's an argument that Canada's economic policy has, on average, been better than ours.

Whatever you think about the economic policy edge of the U.S. over Canada, though, isn't it dwarfed by the fact that the British Empire peacefully abolished slavery decades before the U.S. Civil War?

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The author at Asymmetrical Information in a related article titled writes:
    Bryan Caplan, professional contrarian and troublemaker, continues to question the American revolution: In response to yesterday's doubts about the benefits of American independence, many commenters emphasized the importance of taxes - and pointed me to... [Tracked on July 6, 2007 7:36 AM]
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The Man From K Street writes:

Try this counterfactual: suppose Britain had acquiesced in say, 1775, to allowing for North American representation in Parliament. Then what reason can Whitehall give for denying additional parliamentary representation to British sugar planters in the West Indies?

Historically these planters (and their investors back in Bristol, etc.) were richer than anyone else in the 18th century. They didn't see any need to agitate for representation--they simply BOUGHT OFF MPs from British constituencies, rotten or not. But give them elected MPs in addition to those from the royal colonies of the Carolinas, Virginia, etc., and you create a large, well-funded pro-slavery bloc that I could easily see dragging out the abolition of the slave trade for a long time past 1833, and the continuation of colonial slavery for years beyond that.

Cyrus writes:

While British moralists of the 1830s through 1850s loved to denounce Americans as slave-drivers, they did not so readily denounce the British textile industry for purchasing American cotton. And when the Civil War did happen, Britain's commercial interests outweighed its longstanding moral position, and it backed the South.

It is not obvious that Britain would have abolished slavery so soon if the South had still been a part of its empire, nor is it obvious that abolition would have been more palatable to Southern interests coming from London than from Washington.

caveat bettor writes:

We didn't have a William Wilberforce. Another guy, like most of the Scottish Enlightenment thinkers, who derived much of his position and advocacy from a theistic viewpoint.

And not only did his leadership avoid war, he beat the US abolition of slavery by 60 years. And the British Empire was a whole lot bigger and distributed.

Karl Smith writes:

One other side comment.

I am not sure that you can assume the abolition of slavery would have been peaceful if the US were not a British colony.

I think it is reasonable to suspect that the slave holding US would have been just as likely if not more, to revolt if Britain had tried to push abolition.

The British holdings that did have to give up slavery were quite small a geographically isolated compared to the US South.

There is also the strong possibility that had the British tried to impose abolition on the slave holding colonies the colonies might have been successful in rebelling and kept slavery.

William Newman writes:

I think the point about the British backing the South in the Civil War is pretty telling: I have no confidence that had the huge slave-owning area that became the Confederacy been in the Empire, the British would've given up slavery so promptly and smoothly. But if there was even a 40% chance the British would've gotten rid of slavery faster and with less bloodshed, that would've made up for a lot.

On the other hand, the American Revolution did abolish various forms of hereditary aristocratic privilege. Such privilege ended up receding in Britain later, but might that have had something to do with the American example? If the American example of a very successful society without hereditary aristocracy deserves any of the credit for the 1800s tendency of aristocracy to wither instead of growing into something like 1600s India or China, I think that was worth a lot too.

The US also avoided various forms of dreadfulness in the British Empire in the 1800s, like Irish and Indian famines. Though US godawfulness like the Trail of Tears might've had comparable body counts, I dunno offhand.

An interesting book touching both on aristocratic privilege and on dreadfulness in 1800s Ireland is _The Reason Why_. I suspect some of its interpretation is misleading --- I found it breathtakingly bizarre that given the interaction between the Potato Famine and the debate over the Corn Laws, the author seemed to interpret someone's distributing copies of Adam Smith's writings as evidence of clueless heartlessness --- but I doubt it was grossly wrong on the facts. And although plenty of nasty stuff happened in the US in the same period, I'm pleased that by 1800 some of the things described in that book would've seemed quaintly British to an ex-colonist.

Joshua Holmes writes:

If Britain gave representation to the American colonies, soon the other colonies would have demanded it, too. So, there would have been representatives from the West Indies and from Canada. The West Indies, the English slaveowners, and the South would have formed a fairly solid pro-slavery block in Parliament. My guess is that they still would have had problems, as slavery became a great moral crusade in Britain and northern America, and I imagine Canada would have joined the anti-slavery block as well. I think this would have led to a West Indies-South secession, probably about the same time as the American WBtS and for similar reasons.

Although Slave Country would have lost the Slave War, the British would have begun the Home Rule Movement. The South and West Indies would probably get some sort of united Parliament, and the rest of BNA would get a Canadian-Yankee Parliament, probably capitaled in New York. Can-Am would probably have similar policies to current Canada, with the exception that it would have gone through the idiocy of Prohibition.

About the only other difference is that the Iroquois petitioned for and were granted protectorate status under the Crown, and their high chief would have the right to sit with the Lords.

Pretty much everything else goes as in our timeline with the exception of sooner entry into World Wars I and II, probably including the sorry history of American relations with Latin America.

TGGP writes:

Read Thomas Sowell's "The Real History of Slavery". The British Empire did NOT peacefully abolish slavery. They waged war on numerous Muslim/African nations to force them to get rid of slavery. Populaces rose up and killed their leaders that had been forced by the british to abolish slavery.

Also, favoring the Confederacy does not indicate that one takes a cavalier view of liberty. Lord Acton did so, and everyone who thinks there is something wrong with a slave-holding territory seceding from a larger country has no place praising the American War of Independence!

Bruce G Charlton writes:

Well done TGGP for pointing out that slavery was abolished by guns as well as moral persuasion.

One problem with the current 20 year celebrations of the abolition of the slave trade in the British Empire (followed at intervals by the progressive abolition of slavery itself) is that the passing of a law did not abolish slavery: it was the enforcement of the law which did that, and it required the military strength and economic wealth of the major world power over many, many decades for this to be (almost) achieved.

For me, this makes abolition even more morally impressive an achievement than if it had been achieved simply by the stroke of a pen.

Jeffrey Rae writes:

As an Australian I may bring a somewhat different perspective to this question but I believe that the American Revolution was a clear net benefit to the world and to Americans. Unfortunately for the latter there have been serious costs to be borne as well as the benefits to be enjoyed.

To my mind the important benefits included the demonstration of the practicality and superiority of: (1) a written constitution; (2) Federal Government; (3) Republican Government; (4)an institutionalized separation of powers; and (5) an institutionalized checks and balances. Australia is a good example of at least four of those principles. Indeed our own Constitution includes provisions copied from the US Constitution. The design of our Upper House is modeled on your own right down to its name.

As for the costs, they certainly include the Civil War, although I am not sure that this particular cost was an inevitable one. I don't believe Britain would have fought a war to free the slaves but would have solved the issue politically. I have always been surprised, as Shelby Foote was, by the fact that US politicians were unable to find a way to avoid a civil war over slavery/States rights: their (British) pragmatism seemed to fail them. My own
interpretation is that the North had decided that there would be War with the South over the frontier States even if the South had seceded, so they might as well get it over and done with.

On the other hand, had the US remained in the British Commonwealth, it would probably have fought in a lot more wars or entered some of the big ones they did fight in much earlier (eg WW1 in 1914 and WW2 in 1939). Indeed it is even possible that neither WW1 or WW2 would have occurred at all! No European country would have been prepared to take on the British Commonwealth in 1914 and, had WW1 not occurred, we probably would not have seen WW2.

Either way the rest of us appreciate what the US has given us.

Colby Cosh writes:

Can-Am would probably have similar policies to current Canada, with the exception that it would have gone through the idiocy of Prohibition.

In fairness, real-world Canada did go through the idiocy of Prohibition. It was introduced as a federal emergency measure in 1918 but the provinces were left to decide for themselves whether to continue after the war; most got out well before the U.S. did.

Mr. Econotarian writes:

We should also remember that the US Civil War was not just about slavery, but also (secondarily) about free trade. In 1860, "The South" was paying 87% of US tariffs.

M.D. Fatwa writes:

I agree with the other commenters that, had the US remained part of the British Empire, it would not have led to the early abolition of slavery. If the South had been part of the British Empire, it would have constituted a too-large a block to buy off. The Empire didn't have the cash, or the military muscle, to make a "plata o plomo" proposal to them like they did to the Caribbean slave holders. Given Southern proclivities (militarized culture, landed aristocracy, nasty independent streak), it seems possible the South would have just declared independence eventually anyway (probably no matter what), and, I'm guessing, quite possibly succeeded. The Brits would have had to do the bulk of the fighting long-distance and I don't think the Northern recruits would have been so willing to die in large numbers against their Southern cousins just to maintain a chunk of the Empire, rather than (as they did) a large part of the US. Consequently, the Empire would have had to rely on large numbers of non-American troops to fight a very nasty war on hostile (and largely unmapped) territory. The result might well have been a much larger Canada, and a hostile Confederacy to the south.

Matt writes:

I'm not knowledgeable in Irish history, but how would things have turned out if immigration patterns remained the same, and the Scot-Irish dominated American South rebelled? Would Ireland and Scotland joined in?

cljo writes:

Was it about the level of taxes or who can impose taxes in general? In Simon Schama's "Embarrassment of Riches" he points out that the Dutch taxed themselves much higher than the Spanish ever did. Yet they spent 80 years fighting "Spanish-Papist" tyrrany.

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