Main currents in American thought

The intellectual leader of the young Republicans in the great attack on the economics of Federalism was a thinker too little recognized by later Americans. His just fame has been obscured with the cause for which he labored, and his reputation lies buried with the old agrarian régime. Nevertheless John Taylor of Caroline County, Virginia, “the philosopher and statesman of agrarianism,” was the most penetrating critic of Hamiltonian finance and the most original economist of his generation. Unambitious, simple, honest, calm and dignified in bearing, he embodied the heroic virtues of the great age of Virginia. In his Thirty Years’ View, Thomas H. Benton describes him thus:

Taylor was a member of Congress at the time of the funding operations and contributed two notable pamphlets to the public discussion: the first, issued in 1793, entitled An Examination of the Late Proceedings in Congress Respecting the Official Conduct of the Secretary of the Treasury; the second, issued the following year, entitled An Inquiry into the Principles and Tendencies of Certain Public Measures. Twenty years later, in 1814, he embodied his matured convictions in a stout volume, printed at Fredericksburg, entitled An Inquiry into the Principles and Policy of the Government of the United States. The work is tediously prolix—dressed, according to Benton, “in a quaint Sir Edward Coke style”—even more tediously moralistic; but in spite of very evident stylistic shortcomings, it deserves, in the opinion of Professor Beard, “to rank among the two or three really historic contributions to political science which have been produced in the United States” (Economic Origins of Jeffersonian Democracy, p. 323). It was the last of the eighteenth-century works, solidly reasoned, keeping a main eye upon economics and refusing to wander off into the bog of constitutionalism, concerned rather with the springs and sources of political action and the objectives of political parties. It summed up adequately the agrarian argument against capitalism, analyzed the current tendencies, and provided a convenient handbook for the Jacksonian movement, from which the latter drew freely in the dispute over the Bank.

Like Jefferson’s, the agrarianism of Taylor was founded in the Physiocratic economy. He was convinced that the tiller of the soil was the only true economist, and that if republican America were to retain its republican virtues it must guard against every system of exploitation, for in exploitation lay the origin of social caste. America had rid itself of the feudal principle of a landed aristocracy, which in the past had provided the machinery of exploitation, by the abolition of the law of primogeniture and entail, only to be confronted by a graver danger, the new aristocracy of liquid wealth. His main purpose, therefore, was an examination of the sources of power of the capitalistic order, and the successive steps by which it had risen to power. His analysis is acute and reveals a mind concerned with the realities that lie beneath outward appearances. It is the economics of history that concern him most, for as fully as John Adams he was convinced that economics determine the form of the political state. In his analysis of the origins of government, he discovers in every society a master class that becomes the beneficiary of sovereign power: the political state is first erected and thereafter used to safeguard the past acquisitions and to further the present ambitions of a dominant economic group which calls itself an aristocracy; and such an aristocracy imposes its will upon the exploited mass, crudely by the sword and purse, and subtly by the skillful use of psychology.

Once in control of the political state it intrenches itself behind certain fictions which profess to carry moral sanction. This political jugglery plays many tricks to catch the gullible; arrayed in the garb of patriotism, loyalty, obedience to authority, law and order, divine right, it carries a weighty appeal. When these moral fictions fail, the fictions of the law step in, and such doctrines as the sacredness of contract translate the stealings of the master class into vested interests which the state is bound to protect. There is a fine irony in Taylor’s implied references to Burke’s doctrine of a changeless constitution based on a nonrevocable compact, and Hamilton’s doctrine of the public faith, which, he argues, were clearly designed to sacrifice the common good to the interests of a class:

The two theories to which he devotes chief attention are the natural aristocracy theory of John Adams, and the capitalistic aristocracy theory of Hamilton. The first of these takes its bias from stressing the inequality inherent in the nature of men; individuals are biologically unequal; and from this fact Adams deduces that the thrifty rise to opulence and the thriftless sink into poverty by reason of individual qualities. Society can neither keep a strong man down nor thrust a weak man up. Between the rich and the poor, the capable and incapable, a state of war exists, held in check by the strong hand in feudal and monarchical societies, but necessarily open and bitter in a democracy. Hence the inevitable failure of democracy wherever it is tried, and the necessity of nicely calculated checks in a republic to prevent the equal tyranny of an aristocracy and a mob. The second theory, the Hamiltonian, justifies itself by the same theory of human nature. It accepts the fact of social inequality as inherent in men, but it sees no reason to pursue Utopian dreams. Recognizing the universal fact of economic control, it erects the state upon exploitation as preferable to anarchy. This capitalistic state it defends before a gullible public by eloquent appeals to the national faith, the security of property, the fear of lawlessness.

Having thus analyzed the two theories Taylor seeks to cut the ground from under both by arguing that social classes cannot be historically explained by the fact of biological inequality amongst individuals, but rather by accidental opportunity, unscrupulousness, and brute force. All aristocracies, whether feudal, natural, or capitalistic, take their origin and uphold their dominion, not from superior excellence or capacity, but from exploitation, that beginning in a small way grows by what it feeds on till it assumes the proportions of a colossus. Exploitation breeds a continually augmenting exploitation that conducts inevitably to caste regimentation. All aristocracies are founded in social theft. They are not established in the morality of nature, but exist as parasites on the social wealth; they levy upon the producer; and the only preventive is to destroy the foundations on which they rest by taking from them the means of exploitation.

In conjuring up phantom dangers of feudal aristocracies, Taylor pointed out, John Adams was fighting dead issues. No feudal aristocracy could arise in America; land was too plentiful and the quick jealousy of the people would strike it down. The danger to republican institutions was closer at hand; it was the poison of the new capitalism that was spreading its virus through all the veins of the national life. And in order that the American people might know something of the history of this innovating force which they must reckon with, John Taylor proceeded to open to them a page in the economics of capitalism. The aristocracy of credit, founded on “monopoly and incorporation,” he pointed out, had arisen first in England with the growing power of the middle class; it had gone forward swiftly in consequence of the Napoleonic wars, and through the agencies of the Bank of England and the Consolidated Debt, it had secured control of the public credit. It had arisen first in America in consequence of the financial disturbance resulting from the Revolutionary War, and had further strengthened its position by the War of 1812. Ambitious men had taken advantage of the national necessities to create an artificial paper system identical with that of England. They had profited immensely from the funding operations and the National Bank; they were setting up their private banks in every city and town, and through the manipulation of credit were taking heavy toll of the national production. A money monopoly was the most dangerous of all monopolies, and the master of all.

Taylor had grown up under the traditional domestic economy. He was habituated to think of production in terms of consumption, and of money as a stable measure of exchange. He could not adjust his mind to the theory of production for profit, of middleman speculation, as socially legitimate; and when that speculation extended to the national currency, and exacted its profits from the medium of exchange, he took alarm. Gold and silver are fairly stable commodities that allow of no sudden increase or diminution, and in consequence a specie currency does not readily lend itself to speculative juggling. But a paper system has no natural limitations. Expanded and contracted at the will of speculators, it subjects the business of the country to the exploitation of money brokers. Vast sums had thus been taken from the people by the funding operations. Gold and silver had been driven out of circulation, and with their disappearance a riot of speculation had begun by which only the brokers had profited. Such was the origin of the new money aristocracy that had already taken possession of the state and was using it for the sole end of exploitation. America must make choice between agrarianism and capitalism; the two were incompatible, John Taylor was convinced, and unless the ambitions of the paper-money aristocracy were held in check, the American producer would come under the heel of middle-class exploitation.

So suggestive was the reasoning of Taylor, so interesting for the light it throws on the agrarian mind of the Virginia Republicans, that it will be well to set down his theses in compact form. As summarized admirably by Professor Beard, his argument runs thus:

In the great battle of ideas that followed the conflict of interests, the Virginia agrarians armed themselves with trenchant weapons. In intellectual equipment they were a match for the ablest of the Federalists; in social idealism, in generous concern for the res publica, or common public business, in sober and practical humanitarianism, they were far superior. Between John Taylor of Virginia, spokesman of planter agrarianism, and Fisher Ames of Massachusetts, spokesman of Boston Federalism, the contrast could scarcely be greater. It is a contrast in social culture, in humane ideals, in interpretations of the native genius of America; and in the comparison it is not the Virginia Republican who suffers.