Austerity and Stimulus in the American Revolution?

A few weeks back, the Course of Human Events blog highlighted a new book about the American Revolution coming from Steven Pincus, the Bradford Durfee Professor of History and co-director of the Center for Historical Enquiry and the Social Sciences at Yale University. His previous books have been about Britain in the turbulent 1600s.

About The Heart of the Declaration: The Founders’ Case for an Activist Government, the blog explains:

Pincus maintains that the American Revolution was a major turning point in not just British or American history but global history, because it was a response to the huge debt crisis that had overtaken the European empires. The patriots and their opponents had differing opinions on how best to respond to a debt crisis. One side wanted to stimulate economic growth “in the most dynamic part of the empire, and that was the American colonies.” The other side argued for pursuing austerity measures and shifting the tax burden away from the English and onto those who couldn’t vote (the American colonists, for example).

The various acts passed in the 1760s and 1770s demonstrate which side won out in this fight between austerity measures and stimulus measures. The Sugar Act (1764) and Stamp Act (1765) taxed the colonies in order to raise revenue, and the first of the Townshend Acts was even called the Revenue Act (1767). Instead of stimulating economic growth in the American colonies, the colonists refused to purchase or even to import British goods because of the taxes imposed upon them. As Pincus explains, “The 1770s saw the first time austerity measures pursued in response to a debt crisis generated revolution, but it wasn’t going to be the last time.”

I read about this thesis a couple of years ago, and on first blush it struck me as too relevant for its own good. “Austerity measures and stimulus measures” have been a huge debate in western polity since 2009. But do those terms (or does that analogy) fit the situation of the 1760s?

There’s no question that the imperial government in London sought to collect more revenue from the North American colonies through various tariffs and the failed Stamp Act. But “austerity” seems like more than paying down the debt, especially when contrasted with an economic “stimulus.” Austerity also means freezing or cutting services, and I can’t think of significant services that the British imperial government provided to the colonies that could be cut.

With peace in 1763, the imperial government did shrink its military, which meant it wasn’t shipping specie into the colonies to pay its soldiers and sailors and mount campaigns. There was no doubt less expended on fortifications. But can we equate those with the sort of investment in infrastructure or other public projects we now consider “stimulus”? Furthermore, the colonists who protested imperial policy of the 1760s usually objected to seeing more soldiers in their cities on the grounds that those troops required local spending as well (the real problem with the Quartering Act).

In one area, Parliament definitely increased spending after the Seven Years’ War: the payroll of the Customs office. The Treasury Department also started to pay gubernatorial and judicial salaries instead of relying on colonial governments to come through with that money. Again, the American Whigs and their allies in Britain objected to that new imperial spending because the money ultimately derived from the new tariffs and went toward enforcing those tariffs.

So what austerity/stimulus does Pincus argue was significant?

TOMORROW: Another of today’s hot-button issues.