The Canadian Red Ensign

The Canadian Red Ensign
Showing posts with label Robert Peel. Show all posts
Showing posts with label Robert Peel. Show all posts

Monday, July 15, 2013

The Free Trade Cult

I started Throne, Altar, Liberty in May of 2010, but I had been writing essays on political, theological, and cultural topics for at least a year before then. I distributed these to friends through e-mail and Facebook. Since starting Throne, Altar, Liberty I have reposted several of these earlier essays here. Last year in April and May, for example, I posted nine of them, with new introductions, as a series entitled “GTN Tory Classics”. My main reason for doing this is that I did not want Throne, Altar, Liberty to sit dormant while I researched a couple of topics that I wished to write new essays on.

Among the essays reposted last year, were several from an eight-part series on economic subjects that I had written in 2009. I had intended to include the final essay in that series, “The Free Trade Cult”, but for some reason or another neglected to so. Since I once again wish to buy myself time to complete some new essays, I will make up for that neglect by posting it now.

My argument against free trade in this essay, is built upon the fact that history has demonstrated that free trade does not work the way it is supposed to. Liberalism – and free trade is the cornerstone of economic liberalism – predicts that the more countries reduce barriers to trade the more they will prosper. History, however, shows the opposite. Countries that are industrialized or are undergoing industrialization, become economically strong under protection and decline under free trade. I pointed to two elements of liberal theory as the explanation for why free trade does not work – liberalism’s placing the individual over the family, community, and nation and placing consumption over production.

Liberalism’s exaltation of consumption over production is derived from liberalism’s desire to be fair. Protectionism is not fair. I don’t think anybody ever claimed that it was. A tariff on milk benefits domestic dairy producers at the expense of foreign dairy producers and all domestic consumers of dairy products. A tariff on grain benefits domestic grain producers at the expense of foreign grain producers and all domestic consumers of grain. The same can be said for any tariff on any product. The unfairness of this is manifest for anyone to see.

Free trade, liberalism claims, is fair. Under free trade domestic and foreign producers compete in the market, with no unfair advantage given to either. The advantage is rather to the consumer, who is able to buy goods at a lower price. Since the consumers of any particular good will always outnumber the producers of that same good, free trade is the fairest system possible.

There is a certain logic to this, and even a certain truth. No false doctrine is ever entirely false – otherwise, nobody would ever be deceived, by it. The problem is that this kind of reasoning leads inevitably to the conclusion that the economy should favour consumption over production. It is true in one sense, that the producer must be the servant of the consumer. If a producer were to decide that he was going to produce whatever he wanted regardless of whether anyone else wanted it, and so begin manufacturing such things as manure-flavoured licorice, pills that do nothing but enhance the pain from which one is already suffering, and record albums such as “Chalkboard Scratching: the Greatest Hits”, he would not remain in business very long. The only exception to this rule that comes immediately to mind is the contemporary artist, who is subsidized at the taxpayer’s expense by an arts council that believes that artists are entitled to public support and that restrictions on the artist’s output, such as that it should be something people want to see or hear, squelch creativity.

If it is true that production should and must be the servant of consumption, it is only true, as Evelyn Waugh’s Mr. Milner said to Lord Copper, “up to a point”. Looked at from a different angle, production must take precedence over consumption. Some forms of consumption, such as that of food and drink, are necessary to sustain our existence, whereas other forms of consumption, such as that of the products of the entertainment industry, are not. Whether necessary or not, however, consumption cannot take place without production. If we encounter a person who consumes without producing anything by living off of what he has previously accumulated or by borrowing from others we know that that person will not be able to do so indefinitely. Eventually, he will run out of accumulated resources, credit, or both. Then he must become productive or die.

That this is true of individual persons is not disputed. It is also true of countries. A country cannot survive long with an economy that consists primarily of moving existing wealth around and consuming goods that are produced elsewhere. Only production can increase wealth – consumption always decreases it. The liberal, who seems only the individual as being real and not the country, does not appear to recognize this. He also, and for the same reason, is blind to the fact that in practice, his doctrine, like that of the protectionist he so despises, does actually work to the benefit of one group of producers against another. Large, multinational or transnational companies, that answer to the laws of no one country in particular, are given an advantage over the smaller domestic producers of any country, by free trade.

At some point in the future I will likely compose an essay exploring the reasons why the classical liberal concept of the free market works better within the context of a national economy than when it is extended internationally. For now, I give you "The Free Trade Cult". - GTN


The Free Trade Cult


By Gerry T. Neal
June 30, 2009

Although there is much that economists disagree on, one thing that unites most if not all mainstream schools of economic thought is a belief in free trade. Free trade is one of the earliest concepts of modern economics. Adam Smith argued in the 18th Century that a country would be foolish to produce at home what it is cheaper to import from abroad. David Ricardo built on this theory in the 19th Century and Richard Cobden made it his life’s goal to see free trade implemented.

Libertarian schools of economics like the Chicago School of the late Milton Friedman and the Austrian School of Mises, Hayek and Rothbard believe devoutly in free trade. But so does Paul Krugman, the most prominent contemporary exponent of Keynesianism. Free trade, we find, gets a lot of support from people who are otherwise not big fans of laissez faire. Liberal columnist for the New York Times, Thomas L. Friedman, is a noted advocate of globalization. American Presidents Franklin D. Roosevelt, John F. Kennedy, and William J. Clinton all devoutly believed in international free trade while supporting massive state intervention in the domestic economy.

Free trade’s wide, cross-spectrum support base, among political and economical theorists may suggest to many that it is a basic concept, obviously true, that only a fool would question.

But is it? What is free trade, how is it supposed to work, and where is the evidence that it does work?

Free trade is the expansion of the concept of the free market across international borders. At the time free trade was first being proposed as a theory the Western nations practiced an economic policy known as mercantilism. Mercantilism was the idea that to become wealthy a nation needed to amass gold and silver, and that the way to do so was to have a trade surplus, i.e., to have more products flowing out of your country than flow in. The powers of Europe sought to accomplish this by subsidizing exports and restricting imports by quotas, tariffs, and other measures that today are known as protectionism.

Adam Smith, in his An Inquiry into the Nature and Causes of the Wealth of Nations, challenged mercantilist thought. Wealth, he argued, was the result of production and production was enhanced by the division of labor and specialization. These, in turn, were made possible by trade, which allowed the specialist to concentrate on producing one thing and trading his surplus for everything else he needed. Trade, operates best when buyers and sellers are allowed to come to their own agreements as to price rather than having them set by government.

This was the case for the free market and Smith argued that it applied to nations as well as to individuals within a nation. Tariffs, quotas, etc., Smith argued, only prevent a country from obtaining what they need at the lowest price possible, and so rather than enriching a country, impoverished it.

The argument seems impeccable on paper. If it is true then observing the results of free trade versus protection in practice should bear the theory out. After all, all other predictions of laissez faire theory can be demonstrated to be correct. Laissez faire theory says that minimum wage laws do nothing but eliminate jobs that are not worth minimum wage to the employer, usually starter jobs. It says that price controls cause shortages. It says that rent controls lead to housing shortages and neighborhoods decaying into slums. We can point to case after case where these interventionist measures have had exactly these outcomes.

What have been the results of free trade?

The United Kingdom was the first country to put the theory into practice. This began with the repeal of the Corn Laws, which protected British agriculture from imports, in 1846. This was accomplished by the government of Sir Robert Peel after relentless campaigning by Richard Cobden, “The Apostle of Free Trade” and a league of Manchester manufacturers he led. Over the next two decades the UK would lower its tariffs to the point where the average import duty on the vast majority of goods was 0. This would remain UK policy until the first World War.

Did this help or harm Britain?

The UK was the home of the Industrial Revolution, which had started there in the late 18th Century. At the time Britain began her experiment in free trade she dominated the world of manufacturing. Her steel and textile industries were surpassed by none. By the time her long experiment in free trade came to an end she had been eclipsed by another industrial power – the United States of America.

What was America’s trade policy?

The USA had always been protectionist, but during the period when the UK was practicing unilateral free trade it was taking protectionism to an all time high. The 1860’s had seen the rise of the Republican Party, which succeeded in putting into practice the “American system” of Alexander Hamilton and Henry Clay. The main feature of the “American system” was a tariff wall protecting American industry. Following the Republican institution of this system the average tariff on manufactured goods was around 45%.

Did this help or hurt America?

The century from 1870 to 1970 is often called America’s “Golden Age”. As America became the world’s leading industrial power, profits and wages rose simultaneously as did the average American standard of living. When the War came, and the UK was no longer producing enough to meet her own needs, it was to the USA that she looked for help – help the USA was able to provide.

How does the free trader explain that?

“Other factors were involved”. “That is a post hoc ergo propter hoc argument”.

Perhaps. But the USA wasn’t the only country that fared well under protection in that era. In 1879 Otto von Bismark introduced economic nationalism based upon the American system to Germany. The same year the Conservatives brought in protectionism here in Canada. Both countries did very well under high tariffs.

What happened when America abandoned protection?

FDR, the author of American socialism, obtained for the American president the right to lower tariffs in negotiating treaties with other countries. This set the stage for America’s post-WWII retreat from protectionism. During this period of increased free trade America’s GNP and GDP have continued to rise but the average real wage (wages adjusted for inflation) has gone down as America’s manufacturing base has shrunk and her domestic economy has increasingly come to be based on services.

This era has seen the rise of new industrial giants – most notably Japan. Japan practices protection.

What have the free traders missed? What is wrong with their theory? Why are the results so different from what laissez faire would predict here when elsewhere laissez faire theory is so accurate?

The basic problem with free trade is that it is derived from classical liberal ideology. To classical liberalism individuals are all that matters – families, communities, and nations don’t count. Especially nations.

With the exception of Adam Smith (who made numerous exceptions to his theory of free trade) the classical free traders were contemptuous of nations. They believed in an enlightened age to come in which international trade would foster international friendship, war would disappear, there would be world peace, and we would all be one.

In the real world, however, nations matter. And it matters very much, to a nation, who produces the goods that it consumes. Remember that production creates wealth, consumption uses it up. Consuming more than you produce is not the path to prosperity, for individuals or for nations. It is the path to bankruptcy.

Free trade ideology insists that free trade is superior because it favors the consumer with low prices, whereas protection favors the producer with high prices. Everybody is a consumer, the free trader’s argue, but not everybody is a producer, so it is best to do what is in the interests of the consumer. Free traders are nothing if they are not utilitarian.

But how is the consumer going to pay for what he consumes? The answer for the last few decades has been cheap credit. That cannot last forever, however – or much longer, for that matter, if the recent economic crisis is any indication.

A policy that favors consumption over production is a policy that will doom your country to poverty.

A country that wishes to survive, that does not want to bring its people down into poverty, must encourage production, and it must produce more than it consumes. Socialists have attempted to do this by having their government’s seize control of the economy and try to plan it from the top down to be more efficient. All such experiments have been radical failures.

Protection, on the other hand, is historically associated with high productivity.

Today our government’s have got it backwards. They are removing barriers to international trade while doing everything in their power to intervene in their domestic markets with restrictions, and legislation, and red tape. They should be doing the exact opposite – protecting domestic producers while otherwise practicing laissez faire.

But our government’s no longer care about their countries. In lowering tariffs and other protective measures so as to free up international trade, they have surrendered part of their sovereignty to international institutions. The most complete form of this surrender of national sovereignty can be seen in the European Union. But NAFTA provides the basis for a future North American equivalent. On a global basis the long series of GATT talks resulted in the creation of the World Trade Organization. The path down which the free traders are taking us is clear: one market, one currency, one government.

Libertarian free traders will argue that what we are seeing in these developments is not true “free trade” as described in theory, but governments colluding to grant special trade privileges to favored corporations. That is certainly true but it may not be relevant. A one world system – dare I say “New World Order” - is exactly what David Ricardo, Richard Cobden, and the other formulators of classical free trade theory were hoping for.

It will not be the rosy paradise they had in mind however.

Those who do not want to live under the global regime of a global government, who prefer living in their own sovereign countries, and wish to see those countries prosper, should not support a global economy.


Tuesday, July 31, 2012

One Nation


Part One: Disraeli

Does the following story sound familiar to you?

The setting is nineteenth century England in the time just before and after Queen Victoria’s ascension to the throne. The hero is the younger son of an aristocratic family who is persuaded by his mother to run for a seat in the House of Commons. The villain is the hero’s older brother, who has inherited the family title and estate, and who lives up to his reputation as the meanest, skinflint in the country. The heroine is a young woman who has been raised in a convent and is considering becoming a nun herself but who has temporarily returned to live with her father. Her father works in a factory for an employer who is honest and fair but is concerned with the plight of the working poor and has become a leader, along with his best friend, a journalist, of a movement that demands that the rights of the worker be recognized. After an encounter with these three in a churchyard one night, where they shared with him some of their ideas, the hero decides to live among them under an assumed name for a time before taking his seat in Parliament, so that he can see the conditions of the working classes for himself. Later in London, he becomes reacquainted with his friends under his own name. By this time, he has earned a name for himself in Parliament, as a champion of moderate reforms. In speeches to Parliament which receive wide circulation, he calls for government to redress the legitimate grievances of the poor, lest they be become fuel for the fire of revolution. Through these speeches he regains the trust of the heroine. Before finally marrying her, he rescues her twice. The first time it is from the hands of the law, when she is arrested alongside her father when he is accused of conspiracy and sedition. The second time it is from the hands of a mob which has grown out of the movement her father started but which is now beyond his control.

If the story is familiar to you then you have probably recognized it as Sybil, a novel by Benjamin Disraeli that was first published in 1845, and which is the second volume in a trilogy of sorts that begins with Coningsby and ends with Tancred. If you are not familiar with the novel then I have just spoiled the reading of it for you by giving away the plot. If it was the next item on your list of books to read then I apologize, although I am fairly confident such an apology is unnecessary. Most readers today seem to be more interested in books about teenage girls falling in love with bloodsucking re-animated corpses or boys and girls hunting each other down for the amusement of television spectators in a post-apocalyptic world. Of the Victorian era authors who are still widely read, Disraeli is probably the last in a long list including such notables as Charles Dickens, George Eliot, Thomas Hardy, Oscar Wilde, the Brontë sisters and William Thackeray. It is as a statesman rather than as a novelist that Benjamin Disraeli is most remembered, and his novels, especially the three mentioned above, are more often read today for the political views expressed within them than as works of literature.

Benjamin Disraeli was elected to the House of Commons for the first time in 1837, eight years before the publication of Sybil (seven before the publication of Coningsby). He was elected as a member of the Conservative Party which had been re-organized from the old Tory Party in 1834, following the passing of the Whig Reform Bill in 1832. Sir Robert Peel, the leader of the re-organized party, intended by the new name to show that the party now accepted the Reform Bill, which it had vehemently opposed as the Tory Party, as “final and irrevocable.”

Disraeli, who had ran as a Radical prior to joining the Conservative Party and who wished to bring the Radicals into the Conservative Party before they merged with the Whigs to form the Liberal Party instead, might have been expected to have favoured the new direction the Tory/Conservative Party was taking under Peel. He did not. He expressed his contempt for Peel’s vision in Coningsby and in Sybil eulogized the old Tory Party in these words:

But we forget, Sir Robert Peel is not the leader of the Tory Party…In a parliamentary sense, that great party has ceased to exist; but I will believe that it still lives in the thought and sentiment and consecrated memory of the English nation. It has its origin in great principles and in noble instincts; it sympathises with the lowly, it looks up to the Most High; it can count its heroes and its martyrs; they have met in its behalf plunder, proscription, and death. Nor, when it finally yielded to the iron progress of oligarchical supremacy, was its catastrophe inglorious. Its genius was vindicated in golden sentences and with fervent arguments of impassioned logic by St. John; and breathed in the intrepid eloquence and patriot soul of William Wyndham. Even now it is not dead, but sleepeth; and, in an age of political materialism, of confused purposes and perplexed intelligence, that aspires only to wealth because it has faith in no other accomplishment, as men rifle cargoes on the verge of shipwreck, Toryism will yet rise from the tomb over which Bolingbroke shed his last tear, to bring back strength to the Crown, liberty to the subject, and to announce that power has only one duty: to secure the social welfare of the people. (1)

In the late 1840s, Peel, who had become Prime Minister, sought to repeal the Corn Laws, which protected British farmers, and to introduce free trade. As with his position on the Reform Bill this was a reversal of a long-standing Tory position and an acceptance of liberal doctrine. He succeeded in repealing the laws in 1846. This brought his premiership to an end for he won with the support of Whigs and Radicals but without the support of his own party. It was at this time that Disraeli rose to prominence in the Conservative Party as one of the leaders of those who supported the party’s traditional position against the free traders.

Twenty years later, in February of 1868, Disraeli succeeded Edward Smith-Stanley, the Earl of Derby, as the leader of the Conservative Party and the Prime Minister of Great Britain. He was in office for less than a year, losing the general election later that year to William Gladstone’s Liberal Party. He remained Leader of Her Majesty’s Most Loyal Opposition during the Gladstone premiership until winning a majority in the 1874 election, after which he served as Prime Minister again for six years.

Throughout his career in the House of Commons, Disraeli helped to shape the Conservative Party’s response to the changes wrought by industrialization. The process of industrialization, whereby Great Britain was transformed from a primarily rural society with an agriculture based economy to a more urban society with an economy based on manufacturing, had begun in the eighteenth century and continued well into the nineteenth. The economic and social changes this process brought about were so extensive that historians generally refer to this period as the “Industrial Revolution”. These changes were a mixture of the good and the bad. This was to be expected. The Irish have a saying “there are no unmixed blessings in life” (2), although it would perhaps be more precise to say that the blessings in this life do not come without a cost. Industrialization brought about a considerable rise in the general standard of living of industrialized countries. Regarded in itself, this must be regarded as a blessing. It came however, with a heavy cost.

Industrialization meant that many products were now being produced on a much larger scale than before. One of the causes of industrialization was the application of science to production. New tools were invented and new techniques discovered that enabled people to produce larger quantities of goods in shorter periods of time. This kind of production was carried out in large factories and is called mass production.

The production of goods on such a scale meant that there were more goods to go around and that they could be sold at a lower unit cost. This was a large contributing factor in the rising general standard of living but it also contributed to social and economic insecurity. The lower prices made it difficult for smaller producers to compete and they tended to be swallowed up by larger companies. Labourers began to leave the security of rural communities in which they had family and roots to find jobs in the factories in large cities.

Whether or not a producer can make a living depends upon demand for the goods he produces. The demand for goods has always fluctuated but there is a more stable demand for agricultural goods, which have to be constantly replaced, than for manufactured goods. The transition from an agriculture-based economy to a manufacturing-based economy, therefore, meant a tremendous increase in the economic insecurity caused by fluctuations in demand. Furthermore, the scale on which manufactured goods were now being produced, meant that such fluctuations would be much sharper than ever before. When a decrease in demand led to a slowing down of production, large numbers of people could now find themselves out of work, and with nowhere to turn to having been uprooted from their traditional support networks in rural communities.

This increase in economic insecurity threatened the stability of industrialized nations. At the end of the eighteenth century, radicals in France had turned the middle and lower classes against their king, his queen, the aristocracy, and the Church, in a violent revolution that overthrew an ancient, orderly society and replaced it with chaos, terror, and bloodshed which culminated in the rise to power of a maniacal would-be world conqueror. In the nineteenth century the same kind of demagogues that had stirred up this strife in France were more than willing to exploit the grievances of workers who had been alienated from land, community, family and other traditional means of support and left entirely dependent upon employment in factories. Early in the nineteenth century the Comte de Saint-Simon, Pierre Leroux, Pierre-Joseph Proudhon and others began to preach the doctrine of socialism, which called for the private ownership of property to be eliminated, for all things to be owned collectively by society, and for each member of society to be employed to the best of his ability. In 1848 a German economist living in London, would combine this idea with a theory of history in which successive revolutions by working classes against propertied classes would eventually lead to Paradise on earth, and in an influential tract, called for such a revolution.

Sybil, Disraeli’s response to the same conditions, was published three years before Karl Marx’s Communist Manifesto. The two responses display both the similarities which one would expect from two thinkers, commenting in the same time and place on the same conditions and the differences that one would expect to exist between a revolutionary and an avowed supporter of the ancient constitution of church and state. Sybil has the alternative title, The Two Nations, which comes from what is undoubtedly its most frequently quoted passage. In the eleventh chapter, just before the hero Charles Egremont sees the heroine and title character, Sybil Gerard for the first time, he has entered into a discussion with her father and his journalist friend which ends with the following exchange:

‘Well, society may be in its infancy,’ said Egremont, slightly smiling; ‘but, say what you like, our Queen reigns over the greatest nation that ever existed.’


‘Which nation?’ asked the younger stranger, ‘for she reigns over two.’


The stranger paused; Egremont was silent, but looked inquiringly.


‘Yes,’ resumed the younger stranger after a moment’s interval. ‘Two nations; between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by a different breeding, are fed by a different food, are ordered by different manners, and are not governed by the same laws.’


‘You speak of—‘ said Egremont, hesitatingly.


‘The Rich and the Poor.’ (3)

Disraeli’s depiction of the conditions of the Rich and Poor as being so different as to warrant referring to them as two alienated nations clearly bears a resemblance to Marx’s contrast between the conditions of the “haves” and the “have nots”. When reading the two, however, it does not take long for the far more substantial differences to become apparent. Marx identifies class, not just the real classes of his own day but class in general, as a cause of the misery and suffering he observes, and calls for a revolution to abolish class. Disraeli, on the other hand, believed that a harmonious relationship, including mutual respect and obligations between the classes, was an essential part of the traditional constitution he defended and that a breakdown in this relationship was the problem, not the existence of class itself.

The American conservative writer Russell Kirk commented on this contrast between the alternate visions of Marx and Disraeli, saying:

Either propounded a theory of classes. Marx insisted that warfare among classes is inevitable, in time must be catastrophic, and will end with the absorption of all classes into the proletariat, establishing a classless society. Disraeli declared that the real interests of classes are not inimical; that they are bound together in the nation’s welfare; and his aim in politics was the reconciliation of classes, reunion of the two nations of the nineteenth century, rich and poor, into one state—but this reunion a vindication and restoration of class, not its abolition. (4)

Disraeli was not a progressive or utopian who believed that misery, evil, and suffering were the result of flaws in the organization of society which could be eliminated by reform, revolution, government planning or gradual progress. He did see a connection between the specific misery he was observing in his own day and the gradual subversion, by the Whigs, of the constitution of church and state, the history of which, from the confiscation of church lands in the reign of Henry VIII to the Reform Bill of 1832, he traces in the third chapter of Sybil. (5)

The ideas Disraeli expressed in Sybil and the two other novels in the trilogy it belongs to became the basis of the interpretation of the Tory tradition that guided Disraeli when he served as Queen Victoria’s Prime Minister later in the nineteenth century. This kind of conservatism has been called “Tory democracy” because in Disraeli’s own Reform Bill, of 1867 (6), the Tories extended the vote, which the Whigs had given to the commercial classes in the Reform Bill of 1832, to the industrial working classes. For progressives with ideals such as “universal suffrage” and “popular sovereignty”, both bills probably appear as successive steps in the same direction. This is not how Disraeli saw it. The 1832 Reform Bill had appeared to be a death blow to the Tory party because by extending the franchise to the commercial classes the Whigs had seemed to have ensured for themselves a perpetual monopoly on power as those classes were largely aligned with the Whigs. Sir Robert Peel believed that the future of the Tory party lay in swaying commercial class voters away from the Whigs. His strategy for doing so involved reversing Tory positions on matters such as protectionism and moving the party’s ideas closer to those of the Whigs. Disraeli believed that the Peelites had conceded too much and had given up the principles and positions which gave the Tories their raison d'être. He therefore sought to build a support base for the Tories among the working classes.

In contrast to populist demagogues, who gather followers by preaching popular sovereignty and attacking the constitutional order, Disraeli was trying to gather support for the constitution among the people.

As Peter Viereck put it:

Disraeli in 1867 argued strongly for his bill giving the vote to urban workers. He based his argument not on a radical faith in innovations or a liberal faith in the masses but on the need for providing a broader base for the same old traditions of monarchy, constitution, established church. (7)

The Disraeli interpretation of the Tory tradition is also called “One Nation Conservatism”. This title is a direct allusion to the two nations of Sybil. As Prime Minister, Disraeli introduced a number of reforms designed to alleviate the misery of the lower classes. The basic idea of One Nation Conservatism was that such reforms, like the extended franchise, would rally the working classes behind the Tory Party, the traditional constitution, the Crown, and the Church, and prevent them from joining subversive, revolutionary, and socialist movements.

That the One Nation concept had as its goal, the security and stability of British society and the thwarting of revolutionary and socialist causes cannot be stressed enough, because there were many in the twentieth century and are still many today who point to Disraeli’s One Nation Conservatism in an attempt to give a conservative pedigree to the welfare state and contemporary left-wing, egalitarian politics. The “Wet Tories” who dominated the Conservative Party in Britain during the 1950’s, ‘60’s and 70’s and the “Red Tories” in Canada are examples of these. The “Wet Tories” supported the “post-war consensus” in which all parties agreed to accept the socialism and welfarism introduced by Clement Attlee’s Labour government in the 1940’s. The “Red Tories” supported the “New Canada” of social liberalism, welfare socialism, and political correctness which the Liberal Party under the leadership of Lester Pearson and Pierre Trudeau had sought to build in the 1960’s and 1970’s. Both groups laid claim to be the heirs of Disraeli’s One Nation Conservatism. Both groups were closer in thought and spirit to the movements Disraeli was trying to thwart.

Of Disraeli’s reforms, Robert Nisbet wrote:

[W]hen, after becoming Prime Minister, he introduced reform bills in 1874, they were hardly the stuff of popular welfare. They were mostly concerned with sanitation, and Disraeli’s own wry, self-mocking comment upon his ‘reform’ bills was: Sanitas, sanitatum, ominia sanitas. Beyond sanitation the bills concerned some shrewd redistricting of voters and contracts between employers and employees. (8)

Nisbet wrote this in the context of explaining how Disraeli, in neither thought nor practice, diverted from Edmund Burke’s position that charity and mercy, while an obligation upon all Christians, was not the province of the magistrate. He may have overstated his case. The bill concerning contracts between employers and employees was the Employers’ and Workmens’ Act of 1875, which provided for lawsuits against employers for breach of contract. The Conspiracy and Protection of Property Act of the same year decriminalized peaceful picketing and legalized trade unions. Disraeli also outlawed the employment of children under 10 and made education compulsory for the same. Referring to Disraeli’s reforms, Labour MP Alexander MacDonald remarked “The Conservative party have done more for the working classes in five years than the Liberals have done in fifty.” (9)

Nevertheless, Nisbet’s point that the Disraeli reforms do not add up to anything remotely resembling twentieth century welfarism is valid. In the decade after Disraeli’s five year premiership another aristocratic, right-winger, Otto von Bismarck, Chancellor of the new, united Germany, introduced social assistance programs, including social security pensions and a national health plan, for basically the same reasons Disraeli brought in his reforms. Even these programs, limited as they were, did not add up to twentieth century welfarism.

The difference between the two is not just one of degree, nor is it merely the fact that the social legislation of Disraeli and Bismarck was passed by men trying to strengthen and preserve their societies’ traditional institutions and constitutions whereas welfare state legislation was passed by men who wished to bring about radical change through progressive social engineering, although it is that. In the welfare state, the distinction between what a man is responsible to do for himself and his family and what the state is responsible to do for him is severely compromised, if not altogether obliterated. There are some things which must necessarily be provided by the state. Government is responsible for passing laws, enforcing them, and dispensing criminal and civil justice, by necessity of definition. Government is responsible for the administration of public property by necessity of definition, and some public property, such as highways and police stations, is publicly owned by necessity of convenience. There are other things which each man is responsible to provide for himself and his family. These include the basic necessities of life, such as food, shelter, and clothing, and luxuries beyond that. Government should never take over this responsibility from a man unless he is incapable of fulfilling it and has no other support network – extended family, community, church – to fall back upon. When government takes over those responsibilities from a man, in any other circumstances, it harms him more than it helps him, because it undermines his character, particularly his sense of duty or responsibility, and over the long run this hurts him more than his suffering from want will.

If a man is incapable of providing these things for himself, and if he has no other support to fall back upon, then government is responsible to provide at the very least the basic necessities for him and his family. The reforms Disraeli and Bismarck introduced were designed to ensure that their governments fulfilled that responsibility at a time when it was particularly necessary that they do so. The welfare states, of the twentieth century, however, have extended their social legislation and programs so far that they are doing the damage described above – the evidence is plain to see all around us.

One Nation Conservatism’s strength is that it made its social programs do the double duty of both providing for the poor and bolstering the strength of traditional institutions and the constitution. Its’ weakness is the dilemma of how to prevent such programs from growing into a welfare state that saps responsibility and undermines character.



Part Two: The Dominion

The One Nation idea has historically had a strong influence over conservatism in Canada. Unlike the United States, which cited liberal ideals in declaring its separation from Great Britain, Canada was founded as a conservative country, built upon conservative principles such as allegiance to royalty. The foremost among the Fathers of Confederation, Canada’s first Prime Minister, Sir John A. MacDonald was leader of the Conservative Party. MacDonald was a Conservative of the Disraeli school, although he became Prime Minister of Canada in the year prior to Disraeli’s becoming Prime Minister of Great Britain for the first time. Interestingly, not only were the two men’s ideas very similar, they also resembled one another in appearance.

The influence of the One Nation concept in Canada can especially be seen in three traditional Canadian conservatives – the dean of Canadian humourists, Stephen Leacock, the premier Canadian philosopher George Grant, and Canada’s last decent Prime Minister John G. Diefenbaker.

Stephen Leacock had the rather singular distinction of being both a professor of economics and a humourist. He taught economics and political science at McGill University in Montreal but he is more often remembered for his volumes of humourous short stories, the first of which, Literary Lapses, was published in 1910, and the most famous of which, Sunshine Sketches of a Little Town, is now a century old (10). Leacock was a member of the Conservative Party and the Church of England in Canada, and was an outspoken supporter of such traditional Tory causes as the British Empire, Canadian nationalism, and the tariff.

In 1920, Leacock wrote a small book or a long essay entitled “The Unsolved Riddle of Social Justice” (11). In ancient Athens, Aristotle had raised the question of distributive justice in his Nicomachean Ethics. That question is simply this: how is a society’s wealth rightly distributed among its members? In the nineteenth century, theologians in the Roman Catholic Church asked the same question in response to the conditions of early industrialism, only now they called it social justice rather than distributive justice. Discussion of this question spread and in 1891 Pope Leo XIII decided that it deserved and required a papal response, which he gave in the encyclical Rerum Novarum. At the time Leacock wrote his essay the discussion of social justice was still largely an ethical discussion among theologians. Leacock tackled the question from the perspective of a professional economist.

His essay included an evaluation of two distinct answers to the question, that of liberal individualism and that of socialism. He found both answers to be lacking. The answer the liberal individualist gives is:

If there is everywhere complete economic freedom, then there will ensue in consequence a regime of social justice. If every man is allowed to buy and sell goods, labour and property, just as suits his own interest, then the prices and wages that result are either in the exact measure of social justice or, at least, are perpetually moving towards it. (12)

Leacock’s response to the liberal position consists of a refutation of the idea of the “fundamental equality of value” in which “each thing and everything is sold (or tends to be sold) under free competition for exactly its cost of production.” Leacock said:

This was the central part of the economic structure. It was the keystone of the arch. If it holds, all holds. Knock it out and the whole edifice falls into fragments. (13)

While that may have been true of the economic structure of liberal individualism as framed by classical economists like Adam Smith, it was not true of that framed by Austrian school economists like Carl Menger, and it would have been interesting to have seen what Leacock would have said in response to an equation of economic freedom with social justice on the grounds of the subjective theory of value. Leacock’s evaluation of socialism is much more interesting.

He began by distinguishing socialism the economic doctrine from the revolutionary violence that often accompanies it. “In its essential nature socialism is nothing but a proposal for certain kinds of economic reform”. As such, Leacock said, the law should have no quarrel with it and should only step in when criminal violence is involved. He then went on to say:

For in the whole program of peaceful socialism there is nothing wrong at all except one thing. Apart from this it is a high and ennobling ideal truly fitted for a community of saints. And the one thing that is wrong with socialism is that it won’t work. That is all. (14)

Even in his serious non-fiction writing Leacock’s ironic sense of humour was on display!

Why won’t socialism work? To answer this question, Leacock describes the utopian society American socialist Edward Bellamy had depicted in his novel Looking Backward:

Mr. Bellamy pictures his elected managers – as every socialist has to do – as a sagacious and paternal group, free from the interest of self and the play of the baser passions and animated only by the thought of the public good. Gravely they deliberate; wisely and justly they decide. Their gray heads – for Bellamy prefers them old – are bowed in quiet confabulation over the nice adjustment of the national production, over the petition of this or that citizen. The public care sits heavily on their breast. Their own particular fortune they have lightly passed by. They do not favour their relations or their friends. They do not count their hours of toil. They do not enumerate their gain. They work, in short, as work the angels.

Now let me ask in the name of sanity where are such officials to be found? (15)

At this point his indictment of socialism kicks into high gear. At every turn human nature will prevent socialism from achieving its Utopia. If the goods produced in a socialist society are distributed unevenly those doing the distributing will allot the larger share to themselves, if they are distributed evenly then people will be motivated to be idle rather than work. The state might solve the latter problem by outlawing idleness and forcing everyone to work. Commenting on this scenario, to which the idea of socialism logically leads, Leacock states that “Socialism, in other words, is slavery”. (16)

In the final chapter Leacock offers his suggestions as to a practical alternative to socialism and liberal individualism. He writes:

Put into the plainest of prose, then, we are saying that the government of every country ought to supply work and pay for the unemployed, maintenance for the infirm and aged, and education and opportunity for the children. (17)

The reforms and social assistance programs proposed by Leacock were far more extensive than those of Disraeli or even those of Bismarck for that matter. His proposals were inspired by the measures government had taken during World War I, which had ended a couple of years before the publication of his book, to ensure that the country’s economy supported the war effort. He reasoned that if government could raise taxes and pass laws to support something destructive like war, it could and should also do so in peacetime to alleviate human misery. In this his reasoning was similar to that of American liberal Democrat Franklin Delano Roosevelt, but the similarity does not extend further than that. FDR was sympathetic to the socialist Left, to the extent that he recognized the Bolshevik government in Russia in his first year in office, ordered the creation of propaganda glorifying the Soviet Union (18), and fawned all over the Communist dictator Stalin into whose greedy clutches he placed Eastern Europe and much of Asia. Leacock despised Communism (19) and his proposals arose out of a sense of justice combined with a fear of socialism on the part of a man who otherwise favoured private enterprise. (20) In this he clearly fell within the One Nation tradition of Disraeli.

George Grant was a philosopher and professor who taught first at Dalhousie University in Halifax, Nova Soctia, then at McMaster University in Hamilton, Ontario, then finally at Dalhousie again. He initially taught in the Department of Philosophy at Dalhousie, became Professor of Religion at McMaster, then finally joined the Department of Political Science at Dalhousie. He became well known throughout Canada in the second half of the twentieth century through his talks on CBC and through a number of books. Some of his books, such as Philosophy in the Mass Age were edited from the scripts of his CBC talks. The book for which he is most often remembered, however, Lament for a Nation, was written as a monograph.

Grant was the grandson of Sir George Parkin, after whom he was named. Parkin like Grant’s father, had been principal of Upper Canada College in Toronto. Leacock, who had taught at the school under Parkin was a family friend. If the humourist had any influence on the formation of the philosopher’s ideas, his biographer does not say, but Grant too was a Conservative in the One Nation tradition. “One cannot understand the Conservatism of Canada” he wrote, “without thinking of Disraeli”. (21) Grant’s conservatism crossed the boundaries of the three fields in which he taught, philosophy, religion, and political science, and indeed, those three fields merged into one in Grant’s thought.

As a critic of the Modern Age, Grant was a philosophical conservative, even a reactionary. This did not mean that he thought everything that was a product of modernity was bad – he was always careful to qualify his critique of technology, for example, by noting the benefits he and others enjoyed because of technology which had not been available to previous generations. It meant that he was critical of general trends which characterized the Modern or Mass Age that he saw as carelessly sweeping away much that was valuable from older, pre-Modern, traditions. For example, traditional restraints upon both the passions and the will of man, were being swept away. In an interview with David Cayley for CBC radio, he described the “emancipation of the passions” as being “absolutely central to modernity”. (22) It was a discussion of the sexual liberation movement and the papal response which had prompted the remark, but Grant explained that it was not just the emancipation of sexual passion but of greed and the passion for power in capitalism and modern politics as well. In the CBC talks which became his first book, Philosophy and the Mass Age, Grant explained how the concept of progress, the driving idea behind modernity, had arisen as a secularization of the Christian view of history in which history is conceived of as being under God’s direction and moving towards the Kingdom of God. In the concept of progress, man takes the place of God:

Nevertheless, in its moral connotation there is nothing more important to its understanding than to recognize how the Christian idea of history as the divinely ordained process of salvation, culminating in the Kingdom of God, passes over into the idea of history as progress, culminating in the Kingdom of Man: how Christianity’s orienting of time to a future made by the will of God becomes the futuristic spirit of progress in which events are shaped by the will of man. ( 23)

Thus the modern concept of progress is a removal of traditional restraints upon the will of man. Grant’s understanding of this was the basis of his criticisms of technology and empire, which were both recurring themes throughout his writings. Man, freed from traditional restraints upon his will, seeks to impose that will upon all of creation. Empire is the expression of the liberated will in pursuit of domination, technology, the synthesis of science with art, of knowing with making/doing, is the means of domination.

Grant’s criticism of empire might seem to be inconsistent with his stated political philosophy. Support for the British Empire was a key element of traditional Canadian conservatism. Traditional Canadian nationalists had sought to strengthen Canada’s position within the Empire and then, after the Statute of Westminster, had sought to strengthen her relationship with the other Commonwealth nations. This inconsistency is not as big as it first seems. It was fear of American imperialism, of the Manifest Destiny sort, that had led to Confederation (24) and American imperialism was inseparable from modern progress because the United States, as Grant pointed out in Technology and Empire, had no tradition that antedated the age of progress. Canada, ironically, is a younger country than the United States, having been established almost a century after the American Revolution. Canada, however, as Grant pointed out in the same book, was founded as a conservative country within the older British tradition which had pre-modern roots to draw upon, rather than as a revolutionary country in rejection of the older tradition.

In Lament For A Nation he explained this at length:

English-speaking Canadians had never broken with their origins in Western Europe. Many of them had continuing connections with the British Isrles, which in the nineteenth century still had ways of life from before the age of progress. That we never broke with Great Britain is often said to prove that we are not a nation but a colony. But the great politicians who believed in this connection—from Joseph Howe and Robert Baldwin to Sir John A. MacDonald and Sir Robert Borden, and indeed to John G. Diefenbaker himself—make a long list. They did not see it this way but rather as a relation to the font of constitutional government in the British Crown. (25)

Grant’s purpose, in writing Lament for a Nation, was to bewail the failure of the Canadian project. The incident which prompted this jeremiad was the defeat of the Diefenbaker government. Diefenbaker had refused to accept nuclear warheads for the Bomarc missiles stationed in Canada against pressure from the Kennedy administration to do so. To Diefenbaker the pressure from the American government had turned it into an issue of national sovereignty. The Liberals, with the support of the NDP and Social Credit parties, were able to bring down the Diefenbaker government in a vote of no confidence over the issue. It was not that Grant saw this incident as the cause of the collapse of Canadian nationalism but rather as its signifier. The causes Grant identified, were the collapse of British power in the first World War, and the fact that the entire course of history in the modern age was on the side of progress and against conservatism:

The impossibility of conservatism in our era is the impossibility of Canada. As Canadians we attempted a ridiculous task in trying to build a conservative nation in the age of progress, on a continent we share with the most dynamic nation on earth. The current of modern history was against us. (26)

In the progressive way of thinking a statement like the one above is an admission that one’s cause is both foolish and wrong. Grant did not think this way and he was at his most conservative when, in the midst of this talk of defeat, he declared, in defiance of the Whig theory of history:

I must dissociate myself from a common philosophical assumption. I do not identify necessity and goodness. (27)

Where Grant departed from the One Nation tradition was in his discussion of socialism. Disraeli had some sympathies with the Chartist labour movement, but the Chartists did not embrace socialism, and Disraeli’s entire One Nation philosophy was built upon the idea of convincing the working classes to support the constitution and the Crown instead of the radical socialist movements he hated. Grant, on the other hand, spoke positively of socialism. He brought up the subject of socialism in chapter five of his Lament For a Nation. After calling the United States the “spearhead of progress” he identified two groups that would object to that characterization for opposite reasons, Marxists and “American ‘conservatives.’” (28) He then proceeds to refute the Marxist position.

He begins by arguing that because Marxism teaches that in the future state of communism men will no longer be alienated, it must distinguish between a non-preferable state (alienation) and a preferable one (non-alienation) and so “Marxism includes, therefore a doctrine of human good” which means that “Marx is not purely a philosopher of the age of progress; he is rooted in the teleological philosophy that pre-dates the age of progress”. This is so because in modern thought “man’s essence is his freedom” and therefore modernism rejects “any conception of good that imposes limits on human freedom” but instead believes that “the human good is what we chose for our own good”, belief expressed more accurately by North American liberalism than by Marxism. Marxists believe socialism to be “a more progressive form of organization than state capitalism” because Marx taught “that when scientists had eliminated scarcity as the cause of greed and oppression, a society would arise in which the freedom of each to pursue his desires would not conflict with a happy social order” and so socialism “would create a society of freedom in the sense of the emancipated passions”. Marxists, however, are mistaken in this because “it is difficult to deny that greed in some form is a desire that belongs to man qua man” and therefore “to emancipate the passions is to emancipate greed.” (29) Following this line of reasoning he declares:

Yet what is socialism, if it is not the use of the government to restrain greed in the name of social good? In actual practice, socialism has always had to advocate inhibition in this respect. In doing so, was it not appealing to the conservative idea of social order against the liberal idea of freedom? (30)

This entire line of reasoning is absurd, although brilliant, and leads to inevitable conclusions which are fundamentally at odds with Grant’s own stated values. The argument that Marx held to a pre-modern concept of “the good” was incredibly strained, and its conclusion, if we take into consideration what the “teleological philosophy that pre-dates the age of progress” was, translates into the assertion that Marx, who was ethnically Jewish (albeit anti-Semitic) and religiously an atheist, was a Christian. His identification of absolute freedom from all limitations as the essence of the modern would be true if liberalism and modernity were one and the same. Liberalism, however, is only one side of the coin of modernity, and not only did Grant himself know this, he went into great detail about it himself a few paragraphs later when he turned from discussing Marxism to discussing American conservatism and said that at the heart of the American conservative’s argument that his country is conservative rather than progressive is “an interpretation of the history of political philosophy with which the present writer would agree”, (31) i.e., the interpretation that there were two waves of modern political philosophy, the first being the wave of liberalism including Locke, Smith and Hume, the second being the wave beginning with Rousseau that produced Marxism. If this interpretation is correct, and Grant agreed that it was, then this completely undermines Grant’s argument that Marxism is really pre-modern thought that misidentifies itself as being modern.

The answer to Grant’s question “what is socialism, if it is not the use of the government to restrain greed in the name of social good?” is that it is a revolutionary doctrine, invented not to bolster and support social order, but to overthrow it by inspiring envy, which is on par with greed as one of the Seven Deadly Sins (32). This is historically obvious. It was not conservatives, interested in preserving traditional order from the ravages of liberalism who thought up the doctrine of socialism, but revolutionaries who wished to tear that traditional order down, and if socialism insists upon order rather than unlimited freedom it is not conservative order, rooted in tradition and religion but the order of the totalitarian state. Conservatism supports order, to be sure, but not order of any kind.

The social order which traditional conservatives support limits freedom, but is not hostile to freedom. Freedom, after all, is a value, not just of modern liberalism but of pre-modern Christianity as well, as anyone who has read St. Paul knows. Grant himself was well aware of this and wrote:

Liberalism in its generic form is surely something that all decent men accept as good—‘conservatives’ included. In so far as the word ‘liberalism’ is used to describe the belief that political liberty is a central human good, it is difficult for me to consider as sane those who would deny that they are liberals. (33)

This makes his tortured reasoning about socialism seem all the more bizarre. It was not necessary to argue that socialism and Marxism , contrary to the way socialists and Marxists themselves conceive of their movements, are pre-modern, conservative forces, bolstering the traditional social order, in order to argue that large-scale, American corporate capitalism, was and is a force for radical change, the breakdown of tradition and order and progress. The latter argument, which is Grant’s main argument, is certainly true. His argument about socialism is unworthy of him and seems to be an example of the “the enemy of my enemy is my friend” style reasoning. His answer to American conservatism’s position, which followed immediately after, displayed much sounder reasoning. He argued, correctly, that American conservatives, like Barry Goldwater, were actually defending an older, republican form of liberalism against the more modern, progressive form. It is noteworthy, that he considered the defeat of Goldwater to Johnson in 1964 to have demonstrated the triumph of modern progressive liberalism over the older republican liberalism, and declared “The American election of 1964 is sufficient evidence that the United States is not a conservative society”. (34) That judgement is not consistent with his assessment of socialism.

The so-called “Red Tories” consider Grant to have been their prophet but Grant himself rejected that label. (35) Most people who call themselves “Red Tories” today, would dismiss the social conservative opposition to abortion and euthanasia which Grant championed as part of American “neo-conservatism”, as they would similarly dismiss the views on gender, race, and immigration which Leacock frequently expressed. (36) The Red Tory interpretation of Grant’s views, essentially reduces his thought to his position on socialism which, as we have seen, was not Grant at his best.

The last Canadian conservative in the One Nation tradition that we will consider is also the best Canadian example of tradition. John George Diefenbaker was the thirteenth Prime Minister of the Dominion of Canada. Born in Ontario, but raised for the most part in what is now Saskatchewan, Diefenbaker became a practicing lawyer first in the village of Wakaw, Saskatchewan, then later in the city of Prince Albert. He ran several times for the Conservatives, in both federal and provincial elections, and was even the party’s provincial leader for a brief time, but met with defeat after defeat. Then, in 1939, he was nominated the Conservative candidate for the constituency of Lake Centre. Early the next year, Prime Minister Mackenzie King asked for Parliament to be dissolved, and Diefenbaker won his first election. He set his sights on winning the leadership of the party and in December of 1956 was finally chosen as Conservative leader. In the summer of the following year, he became Prime Minister of Canada for the first time with a minority government, and in the spring of the year after that he won the largest majority election in the history of Canada. His government was reduced to minority status in the election of 1962, and defeated the following year, in the vote of no confidence that led George Grant to write Lament for a Nation.

In his memoirs, Diefenbaker described his political philosophy:

My conservatism was rooted in the traditions of Sir John A. MacDonald, of Disraeli, and of Burke. “A disposition to preserve and an ability to improve, taken together, would be my standard of a statesman.” So said Edmund Burke, and so did I believe. (37)

Diefenbaker as a traditional Tory was a strong believer in the monarchy, an economic nationalist who opposed free trade, and a churchgoing Christian (he was a Baptist). As with Grant and Leacock, his Toryism and his Canadian nationalism were intrinsically connected:

I believed in a Canada free from the directing influence of the United States—a belief that served emphasize my devotion to the Monarchy in Canada and to the Commonwealth relationship. Our institutional heritage and our Commonwealth citizenship gave Canada a uniqueness in North America vital to our preservation as a nation. (38)

One does not have to look hard to see the influence of Disraeli upon Diefenbaker’s thought. Indeed, it is evident in the very title of his memoirs, “One Canada”. This title refers to Diefenbaker’s vision of Canada, as a country whose traditions and institutions have the support of all her members, regardless of their particular standing. Diefenbaker thought of this in terms of race as well as of class. He wrote:

I have always considered the official policy of separating our country into various racial groups to be a curse on the realization of a united Canada. One Canada, one nation, my Canada, your Canada, cannot be a hyphenated Canada. (39)

This is a theme Diefenbaker repeatedly and repetitively expounds upon throughout his memoirs. He despised racial intolerance but there is a notable difference between his vision of “One Canada” and the official anti-racism imposed upon the country by the Liberal governments that succeeded him. Diefenbaker emphasized Canada’s British traditions and institutions, such as the monarchy and Parliament, as a national identity to which all Canadians, English or French speaking, whatever their racial or ethnic background, could be loyal, and he believed that to promote such loyalty de jure discrimination, would have to be done away with. The Liberals during the Pearson and Trudeau premierships, in contrast, sought to downplay Canada’s British roots and traditions, and instead promoted a doctrine of “official multiculturalism” that encouraged hyphenated Canadianism. Diefenbaker fought racial injustice by amending or eliminating legislation in which Canadians were treated differently because of their racial origins. The anti-racist liberals tried to eliminate “racist” thinking through name-calling, guilt-by-association, indoctrination in the media and the schools, and outright police state tactics.

Diefenbaker, in the true Disraeli tradition, believed in social legislation but hated socialism. In his memoirs he recalled a conversation he had with Arthur Meighen over old-age pensions, which the latter opposed and Diefenbaker supported. Commenting on their disagreement, he wrote:

I have always been opposed to socialism. I believe that we cannot accept in a country such as Canada any system denying to the individual citizen the courage and initiative necessary to the development of a great country. When a private citizen takes a chance in business or enterprise and loses, he loses. When the state makes a mistake, the taxpayer picks up the loss. There is a vast difference, however, between the state that denies the citizen everything except the right to pay taxes, and the state that denies a decent measure of social security for the aged, the afflicted, and the disadvantaged. (40)

Socialism on the one hand, and the complete absence of a government safety net on the other, are, in other words, two undesirable extremes. The question of how to steer the ship of state away from the Scylla of inadequate support for the needy without falling into the Charybdis of socialism remains the difficulty.



(1) Benjamin Disraeli, Sybil, Or the Two Nations, chapter XLVI. The quotation comes from the last two paragraphs of this chapter, which are found on pages 394 and 395 of Volume I of Sybil in The Works of Benjamin Disraeli, Earl of Beaconsfield (M. Walter Dunne: London and New York, 1904).

(2) “Níl aon suáilce gan a duáilce féin”, which is more literally translated “there is no joy without its own sorrow”.

(3) This is found on page 93 in the edition cited in footnote 1.

(4) Russell Kirk, The Conservative Mind: From Burke To Eliot, Seventh Revised Edition (Regnery Publishing, Inc.: Washington, D. C., 1953, 1985 ) pp. 268-269.

(5) This chapter, entitled “The House of Egremont” gives the history of the Whig ascendancy as the background to the story of the aristocratic family to which the novel’s hero belongs. Russell Kirk summarizes the history, as told by Disraeli, on pages 269-270 of The Conservative Mind.

(6) Lord Derby was Prime Minister and leader of the Conservative Party at the time, Disraeli was his Chancellor of the Exchequer. Disraeli is credited with the bill because he introduced it and persuaded his party to vote for it. See Robert Blake, Disraeli, (Eyre & Spottiswoode, Ltd: London, 1966), pp 450-477.

(7) Peter Viereck, Conservatism: From John Adams to Churchill, (D. Van Nostrand Company Inc: Princeton, N. J., 1956), p. 42.

(8) Robert Nisbet, Conservatism: Dream and Reality (Transaction Publishers: New Brunswick, USA and London, 1986, 2002), p.71 Bold indicates italics in the original.

(9) Quoted in Viereck, op cit., p. 44.

(10) Ron Dart, “Bred In Our Funny Bone”, Anglican Journal, March 2012. http://www.anglicanjournal.com/nc/other/news-items/article/bred-in-our-funny-bone-10502.htmlRon Dart, who wrote this article about Leacock’s life, humour, and the Sunshine Sketches for the centennial anniversary of its publication is, in addition to being a professor at the University of the Frazer Valley in Abbotsford, an advisor to the Stephen Leacock Museum in Orilia, Ontario, where Leacock had his summer home, on which Mariposa, the little town of the Sunshine Sketches, is based.

(11) Alan Bowker, ed., The Social Criticism of Stephen Leacock, (University of Toronto Press: Toronto, 1973), pp. 71-145. This volume is part of the series “The Social History of Canada”, the general editor of which was Michael Bliss.

(12) Ibid, p. 89.

(13) Ibid, p. 97.

(14) Ibid, p. 119.

(15) Ibid, p. 128.

(16) Ibid, p. 131.

(17) Ibid, p. 140.

(18) http://www.imdb.com/title/tt0036166/

(19) Gerald Lynch, in his afterword to the 1989 reprint of the McLelland & Stewart edition of Leacock’s 1914 Arcadian Adventures with the Idle Rich quotes the humourist as having said “This socialism, this communism, would work only in Heaven where they don’t need it, or in hell where they already have it.”

(20) Ralph L. Curry, Stephen Leacock: Humorist and Humanist (Doubleday & Company: Garden City, New York, 1959), pp. 141-142, 346.

(21) Globe and Mail, 1982.

(22) David Cayley, George Grant in Conversation (Anansi Press: Concord, 1995) , p. 156.

(23) George Grant, Philosophy in the Mass Age (University of Toronto Press: Toronto, 1995), p. 44, the original edition was published in 1959 by Copp Clark Publishing.

(24) Gerry T. Neal, “Canadian Nationalism”, July 1, 2012, http://thronealtarliberty.blogspot.ca/2012/07/canadian-nationalism.html , see “Part Two: The Two Canadian Nationalisms”.

(25) George Grant, Lament for a Nation: The Defeat of Canadian Nationalism (Carleton University Press: Ottawa, 1965, 1989) p. 71-72.

(26) Ibid. p. 68.

(27) Ibid, p. 88.

(28) The scare quotes are Grant’s. He was referring to the kind of American conservative whose conservatism consists primarily of support for free-market capitalism, i.e., liberalism. While Grant does discuss the ideas of conservative intellectuals from Europe, such as Eric Voegelin and Leo Strauss who became involved in the American conservative movement, I do not recall seeing him ever refer to Russell Kirk, Robert Nisbet, Peter Viereck, or Richard Weaver. These men were the leaders of the “traditionalist” wing of the American conservative movement. They supported private enterprise and rejected socialism but this was never their focus. They looked to the same British conservatives – Johnson, Burke, Disraeli – that traditional Canadian conservatives look to for inspiration, and their views of the Modern Age, progress, and technology were quite similar to Grant’s.

(29) Lament For a Nation, p. 56-59.

(30) Ibid, p. 59.

(31) Ibid, p. 60. Grant includes a footnote referring his reader to Leo Strauss’s Natural Right and History for a detailed rendition of this interpretation of political history. Like Grant, I agree with Strauss’ interpretation. Grant was a great admirer of Strauss. His biographer William Christian writes that Strauss “was one of the most important formative influences on Grant’s thought”. William Christian, George Grant A Biography (University of Toronto Press: Toronto, 1993), p. 223. Strauss opened Grant’s eyes to the flaws in Hegel’s philosophy and the two corresponded. Grant went to meet Strauss in Annapolis in 1972, a year before Strauss’s death. (Christian, pp. 292-293) Ironically, among American conservatives, Strauss’ influence is nowhere greater than among the “neo-conservatives”, i.e., members of the “New York Intellectuals” group who had began as Cold War liberals then moved to the right in the 1970’s after the rise of the New Left, and who are most noted for being ardent supporters of American militarism and imperialism, believers in a global Pax Americana of worldwide democracy and capitalism enforced by the United States military.

(32) “If Avarice is the sin of the Haves against the Have-Nots, Envy is the sin of the Have-Nots against the Haves”, Dorothy L. Sayers noted in her address “The Other Six Deadly Sins”, originally given on October 23rd, 1941. http://www.lectionarycentral.com/trinity04/Sayers1.html

(33) George Grant, English Speaking Justice, (House of Anansi Press: Toronto, 1974, 1985), p. 4.

(34) Lament For a Nation, p. 66.

(35) William Christian, George Grant A Biography, pp. 266-267. Christian writes “Indeed he had written to Conservative publicist George Hogan to say that what he most disliked in the general economic situation of North America was the concentration of power that was taking place in Washington, and that he would not have found it impossible, were he an American, to vote in 1964 for right-wing Republican candidate Senator Barry Goldwater, as he would also earlier have supported General Eisenhower”. He also notes, on page 292, that Grant welcomed the victory of Richard Nixon in 1968.

(36) The expression “American neo-conservatism”, as Red Tories and their overtly progressive allies use it, refers not just to the wing of the American right populated by militaristic ex-liberals like Irving Kirstol and Norman Podhoretz, but to American conservatism as a whole.

(37) John G. Diefenbaker, One Canada: Volume I, The Crusading Years 1895-1956 (MacMillan of Canada: Toronto, 1975), p. 140.

(38) Ibid.

(39) Ibid, p. 218.

(40) Ibid, p. 152.

Tuesday, December 14, 2010

The Age of Economism and its Errors

In October of 1793, following the murder of Queen Marie Antoinette at the hands of the filthy riff-raff that had taken over France and in the name of “human rights” established a terrorist state, Edmund Burke gave a speech in which he lamented the death of the era of Christian chivalry. In this speech Burke famously declared:

But the age of chivalry is gone; that of sophisters, economists, and calculators has succeeded, and the glory of Europe is extinguished forever.

Burke’s friend Adam Smith would probably not have appreciated this remark had he lived to hear about it. The author of An Inquiry into the Nature and Causes of the Wealth of Nations and the father of modern economics had in fact died three years previously and so was spared the indignity of hearing his profession slighted by the man of whom he had once said that he was “the only man I ever knew who thinks on economic subjects exactly as I do, without any previous communications having passed between us.”

What exactly did Burke mean when he made this remark?

Burke was mourning, not just the murdered Queen of France, but of the civilized way of life she represented. The world of faith and tradition, honour and chivalry, manners and civility, rank and order, with all that it entailed good and bad, was dying before his eyes, personified in the person of the daughter of Holy Roman Empress Maria Theresa and wife of Louis XVI of France. In its place, he saw a new world arising, where society would be a laboratory for ivory tower intellectuals to test their abstract theories with men and women as their experimental guinea pigs.

That is what is Burke had in mind with those three words “sophisters”, “economists” and “calculators”. People, detached from the realities of human life, who believe that through cold, hard, reason and logic they can draw up a blue print for a society which will be better for all of its members than one which has slowly evolved through history and which naturally arises out of the relationships and interactions of people bound together by ties of kinship, culture, religion and history.

Some might object that the description above applies to economists who are socialists but not to classical or liberal economists who believe in capitalism. It is the former who believe in a planned economy and social engineering. The latter believe in freedom and letting people make their own decisions for themselves.

There is some truth to this distinction. Socialism originally referred, in the 19th Century, to various movements that sought to replace the private ownership of property with the collective ownership of property on the part of either the community or those who worked the property. The theory behind socialism is the idea that injustices occur in society because of inequality in status and wealth and that this inequality arises out of the private ownership of property. From this premise, the socialist logically proceeds to the notion that if we were to eliminate the distinction between “mine” and “thine” and replace it with an all-inclusive “ours”, an ideal peaceful society would arise, where all men are equals and brothers, sharing all things in common, where each “contributes according to his ability” and receives “according to his need”.

Socialism clearly belongs to the age “of sophisters, economists, and calculators”. It is completely out of touch with reality. It treats the evils and injustices which are an unavoidable aspect of the human condition because they arise out of human nature as a disease that can be successfully treated with a political and economic cure. It is therefore unsurprising that every society which has seriously tried to put it into practice has only exponentially magnified the misery of its people.

It does not follow from this that capitalism is categorically any different.

The “capitalism vs. socialism” debate which dominates academic discussion of political matters today reminds me in many ways of the “Calvinism vs. Arminianism” debate which keeps cropping up in discussions of Christian theology. The latter debate, as to whether the view of predestination and free will expressed in the Five Articles of Remonstrance of 1610 is more true and Scriptural than the view expressed in the Canons of the 1618-19 Synod of Dort, is treated by both sides as a debate between the only two logical positions on these matters, despite the fact that it is an in-house debate among the Reformed branch, of the Protestant wing, of the Christian faith.

Likewise, “capitalism” and “socialism” are subcategories of a particular kind of economy – the modern industrial economy. The modern industrial economy is an economy where the primary economic activity is the production and distribution of factory manufactured goods. It differs from the Western economy which immediately preceded the Industrial Revolution, in which the primary economic activity was agriculture and where items that are mass-produced in factories today were produced by skilled craftsmen. This economy was neither “capitalist” nor “socialist”, categories which are meaningless when applied to it.

Capitalism like socialism, is an abstract blueprint for society, drawn up by rationalist theorists who are out of touch with reality. It is more properly called economic liberalism because it is the extrapolation of the liberal worldview into economics. The liberal worldview is as out of touch with reality as the socialist worldviews. Liberalism is based upon the idea that people are by nature good and so like socialists liberals look for a source of evil that is outside human nature and which can be altered through political means. Hence the long history of liberal projects to eliminate evil through “universal suffrage”, “universal education”, and the like, each designed to eliminate a new “source of poverty, crime, and suffering” after the last project proved to be a dud. They all prove to be duds because poverty, crime, and suffering are born out of the human nature that is present in the breast of every human being and which cannot be eliminated by political solutions.

More immediately relevant to economic liberalism is the liberal view of society. Central to liberal theory is the idea that the “individual” is prior to society. An “individual” in liberal theory, is a generic person apart from society, whose identifying traits are not those which distinguish him from other people, but characteristics which liberal theory claims he possesses equally with all other “individuals” – personal sovereignty and natural rights. In reality, no such creature exists. Particular persons exist, but they exist within societies, societies which are both older than them and logically prior to them. People enter the world as members of pre-existing families, and by extension as members of the pre-existing communities and societies to which their pre-existing families belong, which are defined and bound together, by ties of language, culture, history, etc. Liberal theory blatantly contradicts observable reality.

Economic liberalism is directly derived from the liberal view of the “individual” and society. Economic liberalism or capitalism is the idea that a society’s collective economic interests are best served by its individual members entering into unrestrained voluntary transactions in which their motivation is entirely their own self-interest. When individuals enter into such transactions the impersonal forces of supply and demand which drive the market ensure that the outcome will produce the greatest amount of happiness for the largest number of people.

This theory contains both truth and error.

It is true that under ordinary circumstances, each of us is better qualified to make the decisions that affect our personal economic interests, than the government is to make them for us. As Dr. Thomas Fleming put it:

The one essential insight of free-market economics is that human beings are more efficient at providing for their own needs than any set of other people could possibly be, no matter how enlightened. (The Morality of Everyday Life, University of Missouri Press, 2004, pp. 18-19)

The problem is, that because liberalism sees the individual as being prior to society, and society as existing for the individual, liberalism concludes that a society’s economic interests lies solely in the personal economic interests of its individual members. Society cannot have any collective economic interests, to the liberal, because to the liberal society is an abstract concept created by individuals to serve their own self-interests. To treat collective society as having interests of its own is to commit the fallacy of reification (treating an abstract concept as if it were a concrete reality) to a liberal.

As we have seen, however, liberalism is wrong. Society is the reality. It is liberalism’s concept of the “individual” that is the abstraction. Therefore it is reasonable to expect that a society will have a collective stake in its own economy. Would a society not, for example, have a collective interest in making sure that has sufficient domestic production of all essential goods that would be needed in an emergency wartime situation in which dependence upon foreign suppliers might result in critical shortages if the enemy were to block the supply lines?

In light of the above, we would expect economic liberalism to depart from reality precisely where it denies society a collective stake in the economy, and this is exactly where we find it in economic liberalism’s devotion to the idea of free trade.

Free trade is the idea that a country should eliminate duties and tariffs altogether or lower them to the point where they do not result in a significant difference in price between foreign and domestic goods. The result is supposed to be that all goods will be produced where it is most efficient to produce them, productivity will rise across the board, prices will drop, and all countries will be better off. A country that puts free trade into practice will generally expect reciprocity on the part of its trading partners, but a true economic liberal insists that even a policy of unilateral free trade will be to the benefit of the country that practices it.

What does history tell us about the effects free trade has on a country’s economy?

In the early 19th Century the leading economic country in the world was the United Kingdom. Liberals and radicals were demanding free trade, and in 1846, Conservative Prime Minister Robert Peel, formed an alliance with Liberals and Radicals against the policies of his own party and abolished the Corn Laws (laws protecting British agriculture). This led to the defeat of Peel’s government but it also put the UK on the road to free trade. A couple of decades later the UK had implemented free trade and eliminated its import duties and tariffs. Around the same time Britain was doing this the Republican Party was erecting a tariff wall around the United States. The Republican Party had been founded upon Alexander Hamilton’s economic system, which involved protecting domestic producers with tariffs and using the revenue to fund the government and pay for internal improvement projects like roads, canals, and railroads that would benefit internal commerce.

The UK practiced free trade for approximately the same period of time that the USA followed the Hamiltonian protectionist system of the Republicans – from the late 1860’s till the period between the World Wars. During this period the USA replaced the UK as the world’s leading economic country.

During this same period of time the new Germany which had united under the Prussian monarchy implemented economic nationalism similar to that of the Republicans in the United States. Chancellor Otto von Bismarck applied the economic principles of Friedrich List whose primary influence was Alexander Hamilton. Following this economic policy, Germany became an industrial power in the same decades when those Western European countries that were implementing free trade began to decline.

Liberal Democrats introduced free trade into the American Republic in the 20th Century. Franklin Delano Roosevelt, the author of America’s welfare state moved America towards international free trade in the 1930’s and 40’s, and JFK, LBJ, and Bill Clinton moved America further in that direction. By that time the Republican Party had abandoned its founding platform and adopted free trade as well. During the post-WWII period in which America became a free trade country, Japan adopted America’s old protectionist policies. These decades were the decades of America’s decline as a manufacturing power and Japan’s rise to prominence in the new post-WWII high-tech economy.

None of this seems to faze true believers in free trade. A. E. Housman described free trade as being a fetish to the liberal, which seems accurate enough. In their ongoing devotion to policies that have proven disastrous whenever they have been implemented, economic liberals and socialists are alike.

This is not the only similarity between capitalism and socialism. For two systems which are so widely believed to be polar opposites of one another, they share a surprisingly large number of common goals and values. Both have a materialistic view which equates human happiness with having one’s material needs met. Both envision a classless society – capitalism the society of meritocracy, socialism the society of egalitarianism. Both have a utopian vision of a world where global peace has been established through the breaking down of traditional nations and societies into a one-world order.

Both are antagonistic to traditional, organic society, made up of families rooted in local communities with strong social and religious institutions, inevitably falling in a hierarchical arrangement of some sort.

What alternative to capitalism and socialism is there? Is there anything salvageable from the wreck of pre-modern, civilized, chivalrous Christendom that can guide us through the murky darkness of modernity?

The following principles are a start:

A) Private property is not the source of evil. The ills we face and must live with as human beings come from human nature, which is the nature of each of us. The law can contain human evil, by prohibiting us from hurting each other, and punishing us if we do. It cannot change our nature, however, and the only solution to the problem of human evil is a spiritual rather than a political one. Private property is a traditional social institution that has worked better than most if not all communal property arrangements.

B) Society is prior to the individual person within it. A society has collective needs and interests which must be balanced with the personal needs and interests of its members.

However,

C) Society should not collectively decide for its members things which are best left up to their own personal judgment. This includes personal economic decisions. Socialism treats the personal economic well-being of a society’s members as a collective matter to be handled by the government. Capitalism treats the collective economic well-being of the country as a personal matter to be handled by private individuals. Both are errors.

The principle of subsidiarity applies here. Subsidiarity is the principle that decisions should be made by the lowest level of authority that is capable of making them. A decision that affects your family should be made by the authority within your family. A decision concerning your local neighborhood, should be made by the neighborhood authorities. It is only when a decision affects the entire country that it should be made and must be made by the federal government. This applies in economics as in everything else. In practice it means that most economic decisions and transactions will resemble those in a liberal economy. It is not laissez-faire, however, because the government still has the right and responsibility to make laws and decisions which affect the collective economic good of the society which is distinct from the personal economic good of its members.

These principles are not a blueprint for an ideal society. No such thing can be created by the mind of man. They are however, pretty basic economic common sense, which is sorely needed in the ideological debate between capitalism and socialism.

Wednesday, September 29, 2010

The Trouble With Taxes

Nobody likes paying taxes. We grouse about them, even as we admit that they, like death, are inevitable. If we are honest with ourselves, we will also admit that they are necessary. Do we wish to live in a society without policemen, courts, jails, roads and other public infrastructure, and military defenses? If not, taxes are an essential part of our lives.

There are some who would argue that this is not so. Frank Chodorov, an American libertarian journalist of the early 20th century, wrote an essay entitled “Taxation is Robbery” that was originally published as part of his autobiography.(1) In this essay, Chodorov makes a very logical argument. First, he points out that taxation is by definition compulsory. Then he points out that if a “single unit of society” were to take our property by force, we would “unhesitatingly call the act robbery, a malum in se”. Robbery is defined by an ethical principle which the law “may violate but not supersede”. Therefore, taxation is by definition robbery.

That’s all nice and logical, but the problem is that something that sounds airtight on paper doesn’t always work out very well in real life. Lets imagine that Mr. Chodorov were actually living in the purely voluntary society that he dreamed of. He is sitting at home, minding his own business, when a couple of thugs break into his house, beat him up, and make off with all his valuables. What does he do about it? He goes to the phone and calls the police. He gets no answer, because there are no police. Since his society is purely voluntary, there are no compulsory taxes, and therefore no public revenue out of which to maintain a police service.

Mr. Chodorov leaves his house and by chance he comes across the men who robbed him. His recent experience with home invasion has taught him to never go unarmed and he is able to apprehend the men. Off he goes looking for a judge who will give him justice under the law. He never finds one, of course, for the same reason that the police did not come when he called them.

Eventually, one of the men he has apprehended asks him “Hey buddy, what do you think you are doing holding us captive like this?”

Chodorov responds “You have got a lot of nerve. You broke into my house, beat me up, and stole all my possessions”.

“Yeah, so what?”

“So what? It’s against the law.”

“There is no such thing as the law buddy. This is a voluntary society. Law is by definition compulsory. You cannot force another free individual to behave the way you want him too. There are no laws here.”

A society without taxes is a society without laws. Laws are as compulsory as taxes are. Indeed, they are even more so. Government can impose a voluntary tax. A sales tax on a non-essential item is voluntary. You don’t need the item, you don’t have to buy it, if you don’t buy it, you don’t pay the tax. You do not get to opt out of obeying the law however. You either obey the law or pay the penalty when you break it. If the compulsory nature of taxation makes it “robbery”, does the compulsory nature of law make all of us who live under law, slaves?

Samuel Johnson, the leading figure of eighteenth century English literature, saw the foolishness of this kind of liberal thinking when it was in its infant stage. In a pamphlet, originally published in 1775, entitled Taxation No Tyranny (2) Dr. Johnson argued that it was, a fundamental principle “considered, by all mankind, as comprising the primary and essential condition of all political society” that:

the supreme power of every community has the right of requiring, from all its subjects, such contributions as are necessary to the publick safety or publick prosperity.

Dr. Johnson wrote this tract in response to the rebellion of the American colonists, their position of “no taxation without representation”, and the arguments of their Whig supporters in Parliament. It is important to remember that while the tax Acts passed by Parliament following the Seven Years War were the catalyst of the crisis, the debate was not about the merits or demerits of any particular tax. The American colonies were challenging Parliament’s right (3), as a governing body, to pass taxes. It is to this, that Dr. Johnson was responding by arguing that the American colonies which had been founded by English citizens under a Crown charter, and who had enjoyed from the beginning British military protection of their settlements and trade, could not reasonably expect to enjoy the rights and liberties of English citizens while rejecting the duties of such.

Unfortunately, a question which Dr. Johnson did not raise, was at what point taxation goes beyond “such contributions as are necessary to the publick safety or publick prosperity” and becomes an abuse of government authority on the part of corrupt officials determined to squeeze every last drop of blood out of us possible. That such a point exists, there can be no question, and that we have crossed the line a long time ago in Canada, Britain and the United States, I suspect Dr. Johnson, were he alive today, would fully agree.

Government today, has expanded its role in society, far beyond its traditional functions of administering the law, providing for the common defense, and maintaining the infrastructure of the commonwealth. It now seems to see its role as being that of an all-purpose provider – providing us with education, health care, income security and everything else we may need or want. There are some who seem to see only a positive side to this – that with government providing education, health care, etc. these things are now universally available in a society, rather than limited to those who can afford them. There are, however, three major negatives which far outweigh this questionable positive. The first is that the quality of education and health care goes down when government is the provider. The second, is that the more the government provides for us, the more intrusive it becomes and the less freedom we have. (4) The third negative, and the one we are interested in here, is that it drives taxes through the roof.

The rise of the nanny state in the 20th and 21st centuries occurred, not coincidentally, simultaneously with the introduction of the income tax. Today, the income tax is something we are all used to, however much we dislike it. We look for every deduction possible, we race to get our tax paperwork in on time, we save our receipts for years in case the government audits us, and we grumble and complain about it, but we seldom think about how recent an innovation it is.

In Canada, the income tax was introduced in 1917. In the United States, the first income tax was passed in 1861 but the permanent income tax was not brought in until 1913 when the Sixteenth Amendment Passed. In Great Britain, the first income tax was introduced in 1799. (5)

The income tax raises far more government revenue than any other kind of tax. Why did governments in the English-speaking world wait so long to introduce them? The reason is that an income tax says something about the status of the people who pay it. It says that the product of their industry, whether they be farmers, businessmen, merchants or laborers, belongs primarily to the government rather than to themselves, that the government has first claim on their income, and will assert its rights by collecting a percentage of their income in taxes. This is the relationship, between a master and a slave. The English-speaking peoples, however, had long considered themselves to be free peoples, subjects but not slaves of their kings. Income tax was not for them.

Income taxes were therefore initially introduced as “temporary” measures to pay for wars. (6) In Canada, the Borden government brought in the income tax to raise funds for the first World War. They promised Canadians that the tax was temporary and would be lifted after the war was paid for. In Britain, Pitt the Younger made similar promises, when he introduced the first income tax at a time Britain was at war with revolutionary France. In the United States the Republicans brought in the first income tax to fund the North’s war with the South. (7)

The English-speaking peoples would never have accepted income taxes if they had not been introduced as emergency measures. The problem with government, however, is that things which begin as “temporary” often tend to become permanent.

What are the objections to an income tax?

First and foremost, there is the already mentioned objection that it is a form of slavery. This is not true of other forms of taxation. A poll-tax is the government charging you for the right to vote in elections. A head tax is the government billing you for the right to live under the security its laws provide. A sales tax is the government charging you for the use of the market system which is only possible because the rule of law protects property rights, enforces contracts, and penalizes fraud. (8). A tariff is the government charging people outside the country for access to a country’s domestic market. None of these taxes imply a master-slave relationship between government and people. The income tax, which asserts the governments prior “right” to the product of industry, does. (9)

Secondly, income tax enables the government to take much larger amounts from us than it otherwise would. The government can only charge so much in sales tax. If it raises the sales tax too high it drives people out of the legitimate market. Thus, sales taxes are set at a considerably lower rate than income taxes (10) and since the rate you pay in sales tax is charged on the price of what you are purchasing, a 5% sales tax will not take 5% of your income.

At present, the Canadian government charges 15% on the first $40, 970 of taxable income, 22% on the next $40, 970, 26% on the next $45, 080 and 29% on all taxable income over $127,021. Those are the federal tax rates and do not include the provincial income tax rates. In my province, Manitoba, the provincial income tax starts at 10.8% on $31, 000 of taxable income, goes up to 12.67% for the next $36, 000, and then to 17.4% on all income above $67, 000 (11) Thus, someone in Manitoba, is paying in federal and provincial income taxes combined, over 25% on their first $40, 000, and it gets considerably higher after that. (12)

That is obscene! At the lowest tier in the income tax system, we are already paying over a quarter of our income in taxes, in income tax alone. If the government were to try to take that much from us through other forms of taxation the rates would be so high they would never get away with it.

Thirdly, income tax requires a large government bureaucracy to collect the taxes, keep extensive records on people, and to investigate people if they are suspected of “cheating on their taxes.” Apart from being expensive, the problem with a bureaucracy like this is that it can be used by government to harass and persecute law-abiding citizens. (13)

A fourth objection to income tax, is that it punishes industry. Frank Chodorov argued that this is true of all forms of taxation and he may be correct on that, but it is not true of all kids equally. The income tax is particularly punitive of industry. The more productive you are, the more you earn, the more the government takes from you. This is a problem that could conceivably be removed by taxing all income at a flat rate but a flat tax will still have all the other objectionable qualities of an income tax.

From these objections it can be seen that the income tax is indeed an oppressive tax that demands of people far more than “such contributions as are necessary to the publick safety or publick prosperity” and reduces free people to the slavery which the American colonists claimed the significantly smaller customs and duties that the Parliament of the 1760’s and ‘70’s was reducing them to. It ought to be abolished, and replaced with a sales tax or tariffs, set at a rate high enough to raise revenue to support the essential functions of government, but low enough as to not seriously effect the economy. Government should be trimmed down to where it is small enough to be supported on these smaller taxes. It is there to provide society with the protection of the rule of law, with defences against foreign enemies, and the maintenance of roads and public properties. It is not there to provide every citizen with his every need and wish.

(1) Frank Chodorov, Out of Step: The Autobiography of an Individualist (New York: Devin-Adair, 1962). It can also be found as the second essay in the anthology The Paleoconseratives: New Voices of the Old Right, edited by Joseph Scotchie and published by Transaction Publishers (New Brunswick, New Jersey) in 1999, or as an etext at the Ludwig Von Mises Institute’s website: http://mises.org/etexts/taxrob.asp

(2) J. P. Hardy, ed., The Political Writings of Dr. Johnson, (London: Routledge & Kegan Paul, 1968) pp. 100-132. It can also be found online here: http://www.samueljohnson.com/tnt.html

(3) Poor old King George III is still much-abused in history books which often recycle uncritically, 18th century American claims that he was attempting to set himself up as a tyrant, but Johnson set the record straight ages ago:

The other position is, that "the crown," if this laudable opposition should not be successful, "will have the power of taxing America at pleasure." Surely they think rather too meanly of our apprehensions, when they suppose us not to know what they well know themselves, that they are taxed, like all other British subjects, by parliament; and that the crown has not, by the new imposts, whether right or wrong, obtained any additional power over their possessions.

(4) To demonstrate how this works, look at current anti-smoking legislation as an example. It is an obnoxious and oppressive abuse of power for governments to tell business and other property owners that they cannot decide for themselves whether to allow smoking on their property and in their own establishments. However, government can argue, when there is a universal, single-payer health system, that it has the right to pass laws like these, in the name of decreasing the cost to the public of treating emphysema and lung cancer. The more the government provides for the public, the more intrusive its regulations become, although it has disguised this loss of freedom by undermining the authority of other social institutions such as the family and the church.

(5) The tithe, in Ancient Israel and the Medieval Church, was not the same thing as an income tax, being paid to religious authorities rather than the secular power.

(6) In Britain and the United States, the first income taxes were temporary in a sense. Pitt’s tax was abolished by Addison, who replaced it with another one, itself abolished at the end of the Napoleonic Wars. Robert Peel brought the income tax back in 1842, again promising it was temporary, but this time it stuck. In the United States, the initial income tax was repealed in 1872, and temporarly brought back by the Democrats in the 1890’s until the Supreme Court ruled unapportioned income tax to be unconstitutional in 1895, and so the Sixteenth Amendment had to be passed before the income tax could be brought back in 1913.

(7) The income tax would become the preferred tax of progressives and socialists. It is interesting, therefore, that the first income taxes were brought in by Conservative governments in Canada and Great Britain, and by the Republicans, widely if probably erroneously, regarded as the American “conservative” party, in the United States. Let this be a warning to conservatives. What you introduce as a temporary measure in times of war, may be used by progressives for other purposes in times of peace

(8) Liberal economists, for all their talk of “laissez-faire” and the wonders of the “free market”, often fail to realize that the market simply would not function very well in the absence of law.

(9)In chapter 2 of The Communist Manifesto, entitled “Proletarians and Communists”, Karl Marx and Friedrich Engels list a series of measures that they regards as “unavoidable as a means of entirely revolutionizing the mode of production”. The second is “A heavy progressive or graduated income tax.” In practice, Communist countries reduced their populations to slaves of the Communist Party. Progressives in the West frequently offered the naïve opinion that this was because the Soviets or the Maoists or the Khmer Rouge were “not really Communists”, they were really fascists who were not living up to the ideals of Marx. In fact, however, universal slavery was a goal of Communism from the beginning.

(10) Unless, of course, the tax is on something like alcohol or tobacco, which the government wishes to punish you for using without actually declaring it illegal.

(11) http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

(12)Astonishing as these percentages are, these are not the highest rates in income tax that people have had to put up with. Before the Reagan presidency, the top tax rate in the United States was 70%, from 1951 to 1963 the top tax rate in the USA was 91%, and it was even higher briefly in the 1940’s. These are not the percentages an American would have had to pay on his total income, only on the highest bracket of his income, but even still it is amazing to think that a government would have the audacity to charge so much. Consider, however, the following:

Another means of reducing inequality was to tax both the profits of a firm and the personal capital gains of the owners. This could raise an individual’s tax rate to astronomical heights, approaching or even exceeding 100 percent. The height of absurdity was reached in 1976, when Sweden’s most famous citizen, film director Ingmar Bergman, was arrested on charges of tax evasion. The case was complex, involving the director’s corporate as well as personal earnings. The bottom line was that Bergman was being taxed at a rate of 139 percent. - Thomas Fleming, Socialism, (Benchmark: Marshall-Cavendish, 2008). p. 73.

(13) Dr. Mario Pei, in his book The America We Lost (New York: World Publishing, 1968) points to the example of gangster Al Capone, who the state of Illinois had been unable to punish for his actual crimes, but was finally incarcerated by the American federal government on charges of tax evasion. This, Dr. Pei argued, was nothing to rejoice over, for while Capone was hardly a law-abiding citizen, what could be done to him, could be done to others. Compare Edmund Wilson’s autobiographical account in The Cold War and the Income Tax: A Protest (New York: Farrar, Straus, and Giroux, 1963).