“Paine spoke for the governed against the government and for the living rather than the dead. At best he saw government as only a small part of society.”

Leonard Liggio was the Executive Vice President of Academics at the Atlas Economic Research Foundation, a Distinguished Senior Scholar at the Institute for Humane Studies, and a Research Professor at George Mason University’s School of Law.

By Leonard Liggio


Tom Paine and Revolutionary America
By Eric Foner
Oxford University Press, 1976
326 pp., $13.95/$3.95

By David Freeman Hawke
Harper & Row, 1974
500 pp., $15.00/$3.75

The study of American history would be the study of libertarian people against the State if statism and consensus history were not the basic premise of most historians. The American revolution is especially fertile for libertarian history. The libertarian ideological roots of the American revolution have now been clearly defined by Bernard Bailyn and others; these roots were the radical whigs, the Commonwealthmen, and the Country party, of which Trenchard and Gordon were the most important writers. They were opposed to the statism connected to the development of the modern military budget and the taxing mechanisms used to insinuate it. This taxing revolution is sometimes called the financial revolution since many of the externals of modern finance were associated with it. However, the essential fact was that it was not a market financial revolution which took place at the end of the 17th century but a state financial revolution. The national debt with its money instruments, government bonds, supported by taxes, created the stock market. The Bank of England and other monopoly companies were chartered to be stable lending partners of government debt backed by taxation. Statism was at the core of the financial revolution which everyone has placed at the door of emerging capitalism. If capitalism and statism are incompatible, then a financial revolution based on taxation, a monopoly bank, the national debt and government bonds, must be anti‐​capitalism.

The Country party sometimes is called agrarian because it opposed taxation, national debt, speculation in government bonds, monopoly banking, etc. Thus, many historians equate statism with capitalism. The same situation has applied to American history where laissez‐​faire has been labelled agrarian, and statism as industrialist.

A great value of Eric Foner’s treatment of the American revolution is to describe the difference between economic development helped or hindered by the state, and economic development outside the state. He notes that the Anglo‐​American Country party opposed the “increase of such social types as ‘stockjobbers,’ ‘speculators’ and other men whose bureaucratic positions, pensions or speculation in public funds made them dependent on the government for their wealth.”

Foner indicates the military‐​based rise of statism in America during the revolutionary war. Although there were alternative means of financing and fighting the war, the statist means, more profitable for those associated with government, were used. “The need to supply the army and obtain assistance from France, the issuance of paper currency and the creation of a national debt to finance the struggle stimulated the emergence of large‐​scale business ventures and the development of a national business class.” Government contractors, primary receivers of paper money, speculators in government debt, all accumulated fortunes by a war fought on taxation by inflation. Of course, this ‘capital accumulation’ by state means, the development of state financial institutions, was justified by the argument that it was part of the war effort. Those who opposed this statism were accused of being against private property. But the merchants and artisans said that it was taxation and inflation which was anti‐​property. They said: “our property … (as) the clear‐​earned fruits of our labour” should be “at our own disposal.” They drew a sharp distinction between private property earned by productive activity and free exchange, and ‘property’ resulting from state privileges or government accumulation of capital.

These financial developments were directly related to the military concepts which were debated at the time. There were those such as George Washington who desired to use the war to create a traditional European army as the core for the system of state institutions which developed in Europe. Others wished to avoid those state institutions and to use the strategy of guerrilla warfare. Paine described that strategy: “Like a game of drafts, we can move out one square to let you come in, in order that we may afterwards take two or three for one.… In all the wars which you have formerly been concerned in you had only armies to contend with; in this case you have both an army and a country to combat.”

Paine arrived in America in late 1774 and in little more than a year produced the world‐​shaking pamphlet—Common Sense. He simply put down the English government as a product of illegitimate conquest: “A French bastard landing with an armed banditti and establishing himself king of England against the consent of the natives is in plain terms a very paltry rascally original.” Paine proceeded to undercut the notion that England was “the parent country of America.” He said that as “this new world hath been the asylum for the persecuted lovers of civil and religious liberty from every part of Europe,” America should never feel a special feeling for England. Paine was of course very perceptive, since the question of whether to ally with England due to special ties has been a constant issue in American politics and the root of the U.S. involvement in two world wars. Paine argued that European countries “Never were, nor perhaps ever will be, our enemies as Americans,” but tied to England America would find enemies everywhere. Peace was the natural state of republics where the artificial power of the military would not be permitted by popular control. Paine opposed entangling alliances and advocated friendship and free trade with all nations. [On Paine’s contribution to American isolationism, see Felix Gilbert, To the Farewell Address, Ideas of Early American Foreign Policy (Princeton U. Press, paperback).]

Foner emphasizes that for Paine, the “central axiom of his political philosophy, (was) the distinction between society and government.” Early in Common Sense, he declared: “Some writers have so confounded society with government, as to leave little or no distinction between them: whereas they are not only different, but have different origins. Society is produced by our wants and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher. Society is in every state a blessing, but government, even in its best state, is but a necessary evil.” Foner notes: “On the basis of passages such as this, which are repeated throughout his political writings, some writers accord Paine a place in the pantheon of anarchist ancestors.”

Paine saw the natural state of society as harmony and order, disrupted by government intervention which corrupted human nature, upset natural relations and introduced oppression. Commerce was the cement that held the natural order of society together. Paine held that “man, were he not corrupted by governments, is naturally the friend of man, and that human nature is not of itself vicious.” Central to his analysis was that taxation caused poverty, exploitation and oppression. Voluntary activity was the essence of social order, and he looked to the immediate reduction of government until it was “nothing more than a national association acting on the principles of society.”

The distinction between society as natural and orderly and government as coercive, oppressive and deranging was the actual state of affairs in America at the beginning of the Revolution. Paine wrote later in The Rights of Man that despite “the suspension of the old governments … everything was conducted” with “order and decorum.” Most of the “order which reigns among mankind is not the effect of government,” he concluded. “It had its origin in the principles of society and the natural constitution of man. It existed prior to government, and would exist if the formality of government was abolished.” Paine posited the Country ideology of the conflict between privilege and production. Production resulted in wealth, credit and property, its legitimate fruits; privilege resulted in speculation, extravagance and debts. Foner adds: “He accepted the cardinal precept of what has been termed ‘possessive individualism’—that individual freedom was inviolable because it was a form of property. In his early antislavery essay of 1775, he criticized slaveowners as thieves, and argued that “the slave, who is the proper owner of his freedom has a right to reclaim it.” And in 1778 he would explicitly assert, “I consider freedom as a personal property.”

For a variety of reasons, Pennsylvania was one of the most radical colonies in America, and this was intensified in the Revolution. The radicals represented the Scotch‐​Irish Presbyterians and were accused of being a “Macocracy.” Connected with the Great Awakening of the mid‐​18th century America, religious enthusiasm and attack on pleasure and enjoyment and imminent millenarianism were secularized. Rather than individualism there was a strong re‐​commitment to the traditional anti‐​individualism of Calvinism, especially strong on corporatism and social control in America. “No King But King Jesus,” looked toward a closed society in which state interference would protect home manufacturers from competition to provide stability, while limiting wealth, social mobility and change. The wealthier Quaker community was accused of every sin “that Sodom was condemned for.” Benjamin Rush, a youthful convert to Calvinism, became the leading ideological opponent of the culture of pleasure and liberty and the leading defender of deference, discipline and social control, as well. This great “reformer” was alarmed by the “excess of the passion for liberty” which developed in the revolutionary situation. He diagnosed this as a new “species of insanity” and gave it the clinical name of “anarchia.”

Equality in the 18th century was viewed as opposed to privilege, whereby action of the state some people gained deference, power or income from the rest of society. Equality was a weapon against the state which interfered with natural society. Thus, by means of government privilege, some men attempted to gain control of vast areas of land which could not be private property by a Lockean definition; only the power of the state against freemen maintained that inequality or privilege. Paine viewed all who benefited from privilege, from state power, as not freemen, but rich slaves who abandoned freedom for state employ. “By servitude I mean all offices or employments in or under the state, voluntarily accepted, and to which there are profits annexed.”

Paine had attacked use of paper money in England and in Common Sense he hoped that Americans would “replace our paper currency with gold and silver.” When the Continental Congress faced financing the war, the mainly wealthy group dodged taxes and borrowed against future taxes, preferring taxation through inflation. In his third Crisis paper in April 1777 Paine declared: “The prices of goods can only be effectually reduced by reducing the quantity of paper money.” Paine held that inflation was a tax on the plain people. Foner notes the strong similarity of thinking between Paine and Adam Smith’s Wealth of Nations, also published in 1776. They both distinguished between society and government, and government as the cause of poverty and inequality was self‐​evident to both. Smith reflected much of the Country party ideology that competition and abolition of privilege would eliminate the beneficiaries of privilege: bureaucracy, army, lawyers, official churchmen and feudal landlords, the “ideal people who produce nothing.”

It was not an accident that in the famous Philadelphia showmakers’ trial of 1806 in which workers demanded freedom of labor from corporatist restrictions of employers, the lawyer for the workers quoted Adam Smith. In The Rights of Man Paine condemned laws limiting wages of workers: “Why not leave them as free to make their own bargains, as the law‐​makers are to let their farms and houses? Personal labor is all the property they have.”

As inflation raged, the Calvinist advocates of traditional “moral economy” demanded price controls. The artisans and workmen of Philadelphia learned from experience the effects of inflation and price controls and abandoned the Calvinist party along with Paine to support free trade and sound money. Paine sought to force Congress and the states to stop printing money and to go to gold and silver. “Paper money, paper money, and paper money is now, in several of the states, both the bubble and the iniquity of the day.” He did not oppose privately issued paper money, as issued by banks, which would be accepted or refused by individuals, unlike state paper money which people were forced to accept.

Foner connects Paine’s view on money with his and the Country party’s distinction between society and government. “Gold and silver are the emissions of nature; paper is the emission of art.” One was legitimate, the other was coercive. Paine even said that any legislator who proposed a law for legal tender paper money should be sentenced to death. (This, the historian Bray Hammond observes, was “going pretty far.”] Some historians, however, feel that Paine did not go too far in his advocacy of punishment for those who taxed the honest fruits of productive labor. Paine said: “The only proper use for paper, in the room of money, is to write promissory notes and obligations of payment in specie.… But when an assembly undertakes to issue paper money, the whole system of safety and certainty is overturned, and property set afloat.”

David Hawke similarly underlines the importance for Paine of opposition to paper money. “He objected to it on ethical as well as practical grounds. Debased money evoked a passionate reaction from him. The man who passed counterfeit bills committed “a species of treason, the most prejudicial to us of any, or all the other kinds.” In 1786, he wrote his Dissertations on Government; the Affairs of the Bank; and Paper Money, which is worthy of re‐​publishing with his other economic writings.

Hawke concentrates on Paine’s life in England and France during the period of the French Revolution. Paine had become a friend of Edmund Burke’s but the French Revolution in 1789, especially the taking from the church the lands granted it by the government over centuries, had a negative effect on Burke. Burke wrote his Reflections in opposition to a 1789 speech of.Dr, Richard Price, a Liberal and supporter of the American and French Revolutions. Price was a friend of Paine’s as were William Godwin, Mary Wollstonecraft, Thomas Hollis, John Cartwright and John Horne Tooke. They felt that it was necessary to restore the English constitution developed by the Anglo‐​Saxons, and purge it of the Norman feudal corruption under which it had labored for centuries. Paine saw the existing government system as “a bargain, which the parts of government made with each other to divide power, profits and privileges.”

Burke defended the existing system and in his Reflections answered the radicals: “But the age of chivalry is gone, That of sophisters, economists, and calculators has succeeded; and the glory of Europe is extinguished forever.” Paine responded with The Rights of Man. Burke had spoken for government, for the authority of the dead over the living; for him the government was a partnership in all science, art and virtue. Paine spoke for the governed against the government, and for the living rather than the dead. At best he saw government as only a small part of society.

Paine’s writings were viewed as threatening by the English government, and he went to France where he was elected to the National Convention. There he expanded his circle of friends from Lafayette to Condorcet, Brissot de Warville, and Etienne Claviere, whose secretary was J.B. Say. In the Convention he served on the committee headed by Condorcet which created one of the less oppressive constitutions in history. One that was much influenced by the revolutionary governments in America, and the strong distinction between society and government. His interest in economics caused him, with an English banker, Sir Robert Symth, as silent collaborator, to publish The Decline and Fall of the Bank of England, in which he analyzed why the English financial system was “ON THE VERGE, NAY EVEN IN THE GULF OF BANKRUPTCY.” Within the year, the Bank of England suspended its specie payment for paper notes.

In the midst of French debates on religion, Paine wrote The Age of Reason, being an investigation of truth and of fabulous theology, describing Christianity as a form of atheism. Dr. Joseph Priestly, in exile in America, wrote a famous Answer. Paine’s religious views were clearly in a Puritan rather than Voltairian tradition, and came into complete collision with Anglo‐​American deism which was Christian. Thus, his reputation was destroyed among deist Americans.

He returned to spend his last years in an America in which pro‐ or anti‐ Paine was, along with foreign policy, a major issue dividing political powers. Against the Federalists he supported the Jeffersonians, most especially on foreign policy. “I love the restriction” the Constitution has imposed on the president’s power in foreign policy “because we cannot be too cautious involving and entangling ourselves with foreign powers.” Thus, he concluded his American career with a major theme with which he had begun in Common Sense.

Leonard Liggio teaches history at SUNY Old Westbury, and has contributed to a number of libertarian and non‐​libertarian publications and books. He recently co‐​edited, with James J. Martin, a collection of essays on New Deal foreign policy, WATERSHED OF EMPIRE. He is an associate editor of LR.