Tuesday, January 29, 2013

Thomas Paine on war, commerce, government, and paper money

Thomas Paine, born 276 years ago today in 1737, was a profoundly influential public figure and one of history’s most widely read authors.  John Adams is reputed to have said that without the pen of Paine, the sword of Washington would have been wielded in vain.  Yet Adams, like many others in the forefront of the political cataclysms of the late 18th century, loathed almost everything about Paine.  “The longer John Adams lived,” writes Harvard historian Jill LePore, “the more he hated Thomas Paine, and the more worthless he considered that seventy-seven-page pamphlet” Common Sense that sparked the American Revolution.

During the last years of Paine’s life, rabidly pro-British and firebrand journalist William Cobbett used his widely-read Porcupine’s Gazette to attack Paine on nearly every issue.  Quoting Cobbett in his biography of Paine, author Craig Nelson writes:
Whenever and wherever [Paine] breathes his last, he will excite neither sorrow nor compassion; no friendly hand will close his eyes, not a groan will be uttered, not a tear will be shed.  Like Judas he will be remembered by posterity; men will learn to express all that is base, malignant, treacherous, unnatural and blasphemous, by the single monosyllable, PAINE. [p. 5]
Cobbett had sized up the public’s contempt quite accurately.  After the Quakers had denied Paine his wish to be buried in their cemetery, Paine, who died on the morning of June 8, 1809, was interred on his farm in New Rochelle, NY.   His close friend Marguerite Bonneville recounted the burial:
The interment was a scene to affect and to wound any sensible heart.  Contemplating who it was, what man it was, that we were committing to an obscure grave on an open and disregarded bit of land, I could not help feeling most acutely. . .  Looking round me, and beholding a small group of spectators, I exclaimed, as the earth was tumbled into the grave, “Oh! Mr. Paine!  My son stands here as testimony of the gratitude of America, and I, for France!” [p. 324]
As I wrote in an earlier essay, “The man who inspired the country to secede from a corrupt state had six people in attendance at his funeral, none of whom were dignitaries.”

Yet, amazingly, after Paine’s death Cobbett underwent a radical conversion.  Of all the issues on which he had to concede Paine was right, perhaps none affected him more than Paine’s essay, The Decline and Fall of the English System of Finance, in which the author predicted the Bank of England would fail from “Britain’s never-ending warmongering” and “her escalating national debt, crushing taxes, and overreliance on paper money.” [p. 4]  Aided by Marguerite Bonneville, Cobbett wrote “a definitive Paine biography, doing penance for having been the American publisher of Francis Oldys’s The Life of Thomas Paine, a slanderous attack subsidized by the British government.” [p. 6]

Paine was a polemicist of the highest order who held strong convictions.  He wrote in language that was easily understood by anyone, which because of his radical views often made him subject to the charge of rousing the rabble.  He attacked monarchy and believed the path to peace and prosperity was found in democratic republics.  He did not anticipate the breakdown of “free states” into functional authoritarianism that developed and accelerated in the early 20th century and continues unabated to this day.  So, for example, when he writes: “Government on the old system is an assumption of power, for the aggrandizement of itself,” he was referring to monarchies, but we can apply that observation to any government of today.

In celebration of his birthday, I have collected a few of his insights into war, commerce, government, and paper money.  All italics are in the original.

From the writings of Thomas Paine . . .

On this question of war, three things are to be considered. First, the right of declaring it: Secondly, the expense of supporting it: Thirdly, the mode of conducting it after it is declared. The French Constitution places the right where the expense must fall, and this union can be only in the nation [the people]. The mode of conducting it after it is declared, it consigns to the executive department. Were this the case in all countries, we should hear but little more of wars. - Rights of Man, The Complete Writings of Thomas Paine, Volume 1, p. 285.

Whatever is the cause of taxes to a nation, becomes also the means of revenue to a government. Every war terminates with an addition of taxes, and consequently with an addition of revenue; and in any event of war, in the manner they are now commenced and concluded, the power and interest of governments are increased.

War, therefore, from its productiveness, as it easily furnishes the pretense of necessity for taxes and appointments to places and offices, becomes a principal part of the system of old governments; and to establish any mode to abolish war, however advantageous it might be to nations, would be to take from such government the most lucrative of its branches. The frivolous matters upon which war is made, show the disposition and avidity of governments to uphold the system of war, and betray the motives upon which they act. - ibid., pp. 342-343

Why are not republics plunged into war, but because the nature of their government does not admit of an interest distinct from that of the nation? Even Holland, though an ill-constructed republic, and with a commerce extending over the world, existed nearly a century without war: and the instant the form of government was changed in France, the republican principles of peace and domestic prosperity and economy arose with the new Government; and the same consequences would follow the same causes in other nations. - ibid., p. 343

If universal peace, civilization, and commerce, are ever to be the happy lot of man, it cannot be accomplished but by a revolution in the system of governments. All the monarchial governments are military.

War is their trade, plunder and revenue their objects. While such governments continue, peace has not the absolute security of a day. What is the history of all monarchical governments, but a disgustful picture of human wretchedness, and the accidental respite of a few years' repose? Wearied with war, and tired with human butchery, they sat down to rest, and called it peace. - Rights of Man II, ibid., pp. 355-356

Almost everything appertaining to the circumstances of a nation, has been absorbed and confounded under the general and mysterious word government. Though it avoids taking to its account the errors it commits, and the mischiefs it occasions, it fails not to arrogate to itself whatever has the appearance of prosperity. It robs industry of its honors, by pedantically making itself the cause of its effects; and purloins from the general character of man, the merits that appertain to him as a social being. - ibid., p. 356

Government on the old system is an assumption of power, for the aggrandizement of itself; on the new, a delegation of power, for the common benefit of society. The former supports itself by keeping up a system of war; the latter promotes a system of peace, as the true means of enriching a nation. The one encourages national prejudices; the other promotes universal society, as the means of universal commerce. The one measures its prosperity, by the quantity of revenue it extorts; the other proves its excellence, by the small quantity of taxes it requires. - ibid., p. 363

. . . it is nevertheless true, that a great portion of mankind in what are called civilized countries, are in a state of poverty and wretchedness, far below the condition of an Indian. I speak not of one country, but of all. It is so in England, it is so all over Europe. Let us inquire into the cause.

It lies not in any natural defect in the principles of civilization, but in preventing those principles having an universal operation; the consequence of which is a perpetual system of war and expense, that drains the country, and defeats the general felicity of which civilization is capable. - ibid., pp. 398-399

Commerce is no other than the traffic of two individuals, multiplied on a scale of numbers; and by the same rule that nature intended the intercourse of two, she intended that of all. For this purpose she has distributed the materials of manufacturers and commerce in various and distant parts of a nation and of the world; and as they cannot be procured by war so cheaply or so commodiously as by commerce, she has rendered the latter the means of extirpating the former. - ibid., p. 400

When in the last, as well as in the former wars, the commerce of England sunk, it was because the general quantity was lessened everywhere; and it now rises because commerce is in a rising state in every nation. If England, at this day, imports or exports more than at any former period, the nations with which she trades must necessarily do the same; her imports are their exports, and vice versa.

There can be no such thing as a nation flourishing alone in commerce; she can only participate; and the destruction of it in any part must necessarily affect all. When, therefore, governments are at war, the attack is made upon the common stock of commerce, and the consequence is the same as if each had attacked his own. - ibid., p. 401

It is not whether this or that party shall be in or out, or Whig or Tory, or high or low shall prevail; but whether man shall inherit his rights, and universal civilization take place? Whether the fruits of his labor shall be enjoyed by himself, or consumed by the profligacy of governments? Whether robbery shall be banished from courts, and wretchedness from countries? - ibid., p. 404

But as the principles of the present Revolution differed from those which preceded it, so likewise did the conduct of America both in government and war. Neither the foul finger of disgrace nor the bloody hand of vengeance has hitherto put a blot upon her fame. Her victories have received luster from a greatness of lenity; and her laws have been permitted to slumber, where they might justly be awakened to punish. War, so much the trade of the world, has here been only the business of necessity; and when the necessity shall cease, her very enemies must confess, that as she drew the sword in her just defense, she used it without cruelty, and sheathed it without revenge. - Letter to the Abbe Raynal, The Complete Writings of Thomas Paine, Volume 2, pp. 220-221

I shall enumerate some of the evils of paper money and conclude with offering means for preventing them.

One of the evils of paper money is, that it turns the whole country into stock jobbers. The precariousness of its value and the uncertainty of its fate continually operate, night and day, to produce this destructive effect. Having no real value in itself it depends for support upon accident, caprice and party, and as it is the interest of some to depreciate and of others to raise its value, there is a continual invention going on that destroys the morals of the country.

It was horrid to see, and hurtful to recollect, how loose the principles of justice were left, by means of the paper emissions during the war. The experience then had, should be a warning to any assembly how they venture to open such a dangerous door again.

As to the romantic, if not hypocritical, tale that a virtuous people need no gold and silver, and that paper will do as well, it requires no other contradiction than the experience we have seen. Though some well- meaning people may be inclined to view it in this light, it is certain that the sharper always talks this language.

There are a set of men who go about making purchases upon credit, and buying estates they have not wherewithal to pay for; and having done this, their next step is to fill the newspapers with paragraphs of the scarcity of money and the necessity of a paper emission, then to have a legal tender under the pretense of supporting its credit, and when out, to depreciate it as fast as they can, get a deal of it for a little price, and cheat their creditors; and this is the concise history of paper money schemes.

But why, since the universal custom of the world has established money as the most convenient medium of traffic and commerce, should paper be set up in preference to gold and silver? The productions of nature are surely as innocent as those of art; and in the case of money, are abundantly, if not infinitely, more so. The love of gold and silver may produce covetousness, but covetousness, when not connected with dishonesty, is not properly a vice. It is frugality run to an extreme. But the evils of paper money have no end. Its uncertain and fluctuating value is continually awakening or creating new schemes of deceit. Every principle of justice is put to the rack, and the bond of society dissolved: the suppression, therefore, of paper money might very properly have been put into the act for preventing vice and immorality.

The pretense for paper money has been, that there was not a sufficiency of gold and silver. This, so far from being a reason for paper emissions, is a reason against them.

As gold and silver are not the productions of North America, they are, therefore, articles of importation; and if we set up a paper manufactory of money it amounts, as far as it is able, to prevent the importation of hard money, or to send it out again as fast it comes in; and by following this practice we shall continually banish the specie, till we have none left, and be continually complaining of the grievance instead of remedying the cause.

Considering gold and silver as articles of importation, there will in time, unless we prevent it by paper emissions, be as much in the country as the occasions of it require, for the same reasons there are as much of other imported articles. But as every yard of cloth manufactured in the country occasions a yard the less to be imported, so it is by money, with this difference, that in the one case we manufacture the thing itself and in the other we do not. We have cloth for cloth, but we have only paper dollars for silver ones.

As to the assumed authority of any assembly in making paper money, or paper of any kind, a legal tender, or in other language, a compulsive payment, it is a most presumptuous attempt at arbitrary power. There can be no such power in a republican government: the people have no freedom, and property no security where this practice can be acted: and the committee who shall bring in a report for this purpose, or the member who moves for it, and he who seconds it merits impeachment, and sooner or later may expect it.

Of all the various sorts of base coin, paper money is the basest. It has the least intrinsic value of anything that can be put in the place of gold and silver. A hobnail or a piece of wampum far exceeds it. And there would be more propriety in making those articles a legal tender than to make paper so. . . .

The laws of a country ought to be the standard of equity, and calculated to impress on the minds of the people the moral as well as the legal obligations of reciprocal justice. But tender laws, of any kind, operate to destroy morality, and to dissolve, by the pretense of law, what ought to be the principle of law to support, reciprocal justice between man and man: and the punishment of a member who should move for such a law ought to be death. . . .

If anything had, or could have, a value equal to gold and silver, it would require no tender law: and if it had not that value it ought not to have such a law; and, therefore, all tender laws are tyrannical and unjust, and calculated to support fraud and oppression.

Most of the advocates for tender laws are those who have debts to discharge, and who take refuge in such a law, to violate their contracts and cheat their creditors. But as no law can warrant the doing an unlawful act, therefore the proper mode of proceeding, should any such laws be enacted in future, will be to impeach and execute the members who moved for and seconded such a bill, and put the debtor and the creditor in the same situation they were in, with respect to each other, before such a law was passed. Men ought to be made to tremble at the idea of such a bare-faced act of injustice. It is in vain to talk of restoring credit, or complain that money cannot be borrowed at legal interest, until every idea of tender laws is totally and publicly reprobated and extirpated from among us. - Dissertations on Government, ibid., pp. 406-409

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