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Hamilton's Counterfeit Capitalism

This great article can be found on Mises...here is an excerpt:

The Hamiltonian Revolution of 1913

In 1913, government acquired effective control of the country's wealth and strengthened its rule over the states by passing three laws: the income tax, the direct election of senators, and the federal reserve act. The first two arrived as the Sixteenth and Seventeenth Amendments; the "currency bill" was slipped in just before Christmas. All three, per Hamilton's rhetoric, were promoted under cover of "the public interest." All three were cons — abuses of confidence by public officials. All three "delivered a death blow to the old Jeffersonian tradition in American politics," and brought about "the final, decisive victory for the Hamiltonians."

Were these laws really so bad? Judge for yourself.

Prior to the Seventeenth Amendment, US senators were "ambassadors of the states"; they were appointed by state legislatures. They would speak for their state governments, which would presumably have control over how they voted. Having senators appointed was intended as a check on the powers of the federal government. It limited "senators' ability to sell their votes to special-interest groups nationwide," DiLorenzo explains. Thanks to the Seventeenth Amendment, political corruption has "expanded by orders of magnitude," he says. "U.S. senators now travel all around the country seeking special-interest campaign contributions."

An income tax was not popular in Hamilton's day, but he recognized the need for high taxes to fund the "energetic" government he wanted. The first federal income tax was imposed in 1862, and though it was abolished a decade later, "the experience had whetted the appetites of special-interest groups," DiLorenzo writes. By 1913, American farmers had made a deal wherein they would support an income tax in exchange for lower tariff rates. The income tax became law in 1916, and by 1930 tariff rates had soared to their highest level ever — 59.1 percent, on average. So much for the farmers' deal making.

After the adoption of withholding in 1943, the income tax became entrenched, as Charlotte Twight has written, "both through its administrative apparatus and through its acceptance in the minds of most taxpayers." With its confiscation of enormous amounts of wealth and the army of bureaucrats and agents needed for collection, the income tax renders states as well as citizens hat-in-hand beggars when trying to influence the federal government. In their relationship to Washington, states have become Hamilton's "artificial beings."

Loathing and fearful of competition, big businesses in the late 19th century tried to form voluntary cartels, but such arrangements are notoriously unstable, DiLorenzo points out, so they turned to government to make them work. What the big bankers wanted was a monopoly of the issue of bank notes so they could have a more "elastic currency." Previously, if an individual bank issued too many notes, depositors would get nervous and demand redemption in gold. Because all banks issued more notes or deposits than they had gold in reserve, they were all one bank run away from being exposed.

The currency act that created the Fed in 1913 was a crucial step in eliminating this problem — for the bankers. Two decades later, the government took gold out of the picture, so that covering a member shortfall was no longer a problem. Through the magic of the printing press, the Fed could also provide instant revenue to the government to pay for military adventures.

The Fed and the income tax provided the "funding mechanisms" for getting the United States into the European slaughterhouse called World War I. "Like all wars, World War I permanently ratcheted up the powers of government and fueled the urge among politicians to 'plan' American society in peacetime just as they had planned in war," DiLorenzo explains.

The Fed has the power to do the one thing it shouldn't do: regulate the money supply. By doing so it distorts price relations and guarantees a correction, which, since 1929, the government regards as a clarion call to "do something." Ignoring economic wisdom, it does everything it can to prevent the necessary correction, thereby making the recovery longer and more painful. When the economy pulls out of the depression, government takes the credit, and the Fed begins inflating again, inaugurating another boom-bust-correction/intervention-crisis sequence that will bear heavily on almost everything we hold dear. Between 1789 and 1913, prices remained roughly stable, DiLorenzo notes, and government was little more than a footnote in people's lives. Since 1913, prices have increased twentyfold, while today government intrusion has no limits.

READ THE ENTIRE ARTICLE AT:
http://mises.org/story/3254



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Mises, Keynes, Capitalism,

Mises, Keynes, Capitalism, Socialism. These are THEORIES. Theories NEVER work according to how they are stated, period. Theories are lies.

The Free Market, the Black Market, does not have a theory. It is natural, it just happens. Capitalist, Socialist, with their "theories" prevent and eliminate the Free Market by the very proposal of their theories. Capitalism, Mises, sounds good to some and so they argue in favor of Mises. Socialism, Keynes, sounds good to others, so they argue in favor of Keynes. This back and forth creates two (or more) camps of ideology. In the process the ideology of NO system, Natural Law, is left to be forgotten. And therefore the idea that we MUST have some kind of system is promoted.

But who argues in favor of no "system" at all?

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"Ehhh, What's ups Doc?" Bugs Bunny
"Scwewy Wabbit!" Elmer Fudd

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"Ehhh, What's ups Doc?" B.Bunny "Scwewy Wabbit!"E. Fudd
People's Awareness Coalition: Deprogramming Sequence

The idea of "no system at

The idea of "no system at all" is precisely what is supported by those who follow Ludwig Von Mises- if by that you mean no state. I don't see how mises seeks to eliminate the free-market? All Mises does is explain what happens in an economy, whether the state is involved or not- the Austrian theory of the business cycle for example. The difference between that and Socialism/Keynes is that the latter are the ones that proclaim to have a system that works- those in favor of Mises say that there already is a system- and its the free-market. To say that theories never work according to how they are stated isn't true at all. Don't confuse the word "theory" with "hypothesis".

Vote process - the

Vote process - the constitutional way (pre civil war)

Senators are selected by the state legislature

House of representatives are selected by the state legislature

President is selected by the electors of each state,electors are chosen by the legislature of the state.

Article. II. Section. 1. Electors - equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress
Article. II. Section. 1. - .....no Senator or Representative, or Person holding an Office of Trust or Profit under the United States, shall be appointed an Elector.

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"Today government goes roaming at will upon a boundless sea without chart or compass, seeking power wherever it can find it, with little reference to the limitations of the Constitution." - Franklin Pierce

13 No servant can serve two masters; for either he shall hate the one, and love the other, or else he shall lean to the one, and despise the other. Ye cannot serve God and riches. - Luke 16

Yes, I know.

But what about a county-level currency?

Republicae,

Let's take your states rights argument to its logical conclusion. Do you believe in secession? Please provide a link to an article you have written on secession!

Should Senators be appointed by the state legislators or the governors? Should the governors be elected by the people or by the state legislators? Etc.

What do you believe, Republicae? Do you believe in One Man - One Vote? Do you believe in Direct Representation or the Quadrennial Spectacle?

http://www.directrep.org

Republicae's picture

Oh, ABSOLUTELY!!!! So did

Oh, ABSOLUTELY!!!! So did the Founding Fathers, read Jefferson and Madison. Secession is a Constitutional and a Revolutionary Right. Even Lincoln gave lip-service to the Right of Secession when he said:"This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing Government, they can exercise their constitutional right of amending it or their revolutionary right to dismember or overthrow it."

I would strongly suggest you read the work by John Taylor of Caroline entitled: "New Views of the Constitution."

The States, in their Sovereign, Independent and Free capacities as Republics acceded to the voluntary act of creating a reflective union by delegating a limited degree of power to a general federal government. The Right of Secession from this union was not voided by the act of Accession to the union. In fact, some State Constitutions expressed the fact that the Right to return to their former condition as part of their Ratification Conventions when considering the Constitution. North Carolina and Rhode Island did not accede to the union until a couple of years after the Constitution was Ratified, they remained completely outside the framework of the general government that was created by the Constitutional Compact agreed to between the State Republics. We are a federation, a confederation of States, we are not a consolidated Nationalized union otherwise none of the States would have individual Constitutions.

The creator of something is always takes the Preeminence over that which is created and the fact that the federal government is a creation of the States, a reflection of the Will of the People through their Consent as represented by their Agents, the State government, they therefore delegated certain limited powers to the federal government, but retained all others.

The Founders intentionally made it extremely difficult to govern in this country, they placed layers upon layers of checks and balances, both in the election process and in the very process of government so as to blunt the force of a concentration of power, whether that be in the hands of politicians or even a majoritarian rule among the People. They were very concerned with passions, particularly in times of war, they sought to impede the run-a-way passions of not only politicians but also the masses and therefore they made the entire system very cumbersome and clunky, almost planned chaos.

The 17th Amendment was perhaps one of the most damaging transformation ever to occur within the political power structure of this country. Just as the House of Representatives was formed to serve as a direct representation of the People, elected upon their Consent, so too was the Senate formed to serve as a direct representation of the respective State Republics. When the 17th Amendment was questionably ratified, along with several other amendments that cause us all a great deal of distress, the role of the Senate was transformed from an intermediary between the State Body and the federal government. Bascially it placed the Senate in the hands of popular elections and opened the market for even more corruption than was seen prior to the passage of the 17th Amendment. It not only Nationalized the Senate, but also Democratized the Senate placing it on the same level as the House and eliminating very important checks and balances both on the State level and on the federal level. There are some very vital principles behind an indirect representational form of government and so very few people understand its import to both our Liberty and Freedom.

Here are a few of my articles on this and related subjects:

http://www.nolanchart.com/article400.html

http://www.nolanchart.com/article407.html

http://www.nolanchart.com/article408.html

http://www.nolanchart.com/article416.html

http://www.nolanchart.com/article418.html

http://www.nolanchart.com/article3351.html

http://www.nolanchart.com/article3350.html

http://www.nolanchart.com/article3362.html

http://www.nolanchart.com/article3370.html

http://www.nolanchart.com/article3506.html

http://www.1776solution.blogspot.com

"If I want to be free from any other man's dictation, I must understand that I can have no other man under my control." ~William G. Sumner

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

You don't have to write so much,

Republicae.

You really didn't answer my question. You just went on and on with your same argument.

So, if the counties are creations of the states then counties have no right to secede?

Republicae's picture

"Let's take your states

"Let's take your states rights argument to its logical conclusion. Do you believe in secession? Please provide a link to an article you have written on secession!" YES, AND I DID ANSWER THAT QUESTION AND PROVIDED LINKS

Should Senators be appointed by the state legislators or the governors? ANSWERED THAT QUESTION

Should the governors be elected by the people or by the state legislators? Etc.THAT DEPENDS ON THE INDIVIDUAL STATE CONSTITUTIONS

What do you believe, Republicae? ANSWERED THAT

Do you believe in One Man - One Vote?ANSWERED THAT

Do you believe in Direct Representation or the Quadrennial Spectacle?ANSWERED THAT

THE QUESTION IS WHAT DON'T YOU UNDERSTAND? If you cannot deduce my positions from my writings, which are extensive and detailed, then perhaps you may need to brush up on your reader comprehension. MY POSITIONS ARE THE SAME AS MADISON, JEFFERSON, TAYLOR, MARTIN, RAWLE, CALHOUN, DAVIS.

Read the Constitution, the Federalist Papers, the Kentucky and Virginia Resolutions...that is what I believe!

"So, if the counties are creations of the states then counties have no right to secede?" The Consent of the People and the determination of the People is Sovereign, all ultimate Sovereignty resides within the People. What don't you understand?

http://www.1776solution.blogspot.com

"If I want to be free from any other man's dictation, I must understand that I can have no other man under my control." ~William G. Sumner

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

The Constitution

Be more specific. The Constitution was a compromise. You cannot believe in that.

"The Consent of the People and the determination of the People is Sovereign, all ultimate Sovereignty resides within the People."

That's not in the Constitution.

Republicae's picture

I dare say, that while the

I dare say, that while the Constitution was indeed a compromise, the thought and foresight that went into it was shear brilliance. I have studied Constitutional Law and Theory for almost 60 years and to this day I am still amazed at the depth and breadth of its amazing ingenuity. Those who fail to see it for what it is miss so much and the supporting documentation that stands with that Compact between the People and themselves are absolutely astounding. There are few modern minds that appear to either comprehend its incredible insight or the extent of its scope in terms of what it means or what it was seeking to accomplish. If you are not aware of its amazing content then it is indeed a pity.

Oh, yes, I do believe in the Constitution for a number of reasons, but perhaps the most important reason is that after decades of study into the intricacies of its words, the philosophy behind those words and what it sought to accomplish, I am still learning from its vast wisdom that so many obviously overlook or ignore. While I, like the founders, make no claim to its perfection, it is by far the closest legal structure to promote individual Liberty and Freedom that has ever emanated from the minds of men. You would do well to delve into its complexities.

If you don't understand, and obviously you don't, just what the meaning behind the Constitution is then there is simply no way for you to understand what I really mean when I said ""The Consent of the People and the determination of the People is Sovereign, all ultimate Sovereignty resides within the People.", for that is indeed the heart of the Constitution. You really should read Calhoun, Rawle and John Taylor of Caroline if you really are interested in a firm grasp of the meaning behind the words.

It is ashamed that we are so very limited by our modern language...get a copy of the 1828 Webster's Dictionary, perhaps then you will awaken to the marvelous gift that was left this country.

http://www.1776solution.blogspot.com

"If I want to be free from any other man's dictation, I must understand that I can have no other man under my control." ~William G. Sumner

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Wow, that's kind of rude.

*****

Let the human mind loose. It must be loose. It will be loose. Superstition and dogmatism cannot confine it. John Adams

Ron Paul "Sign Wave Across the USA" -- November 5th!

Troll

Hateful old troll.

Sour grapes?

*****

Let the human mind loose. It must be loose. It will be loose. Superstition and dogmatism cannot confine it. John Adams

Ron Paul "Sign Wave Across the USA" -- November 5th!

Republicae's picture

I beg your pardon....she is

I beg your pardon....she is by far no Troll, you falsely accuse someone who is very far from being a Troll. Such accusations are little more the lack of either confidence or understanding about who you are talking about. You really should apologize to her. There are few people that I have come to respect more on the DP than the very one that you now falsely bring accusation against. It is neither proper nor appropriate and it is definitely not correct. I am sure that many more will agree with me on the matter. I take such offense at those who must resort to such feeble tactics.

http://www.1776solution.blogspot.com

"If I want to be free from any other man's dictation, I must understand that I can have no other man under my control." ~William G. Sumner

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Republicae I agree with you...

She is not a Troll, I have seen her papers. ; )

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Sho Nuff... WTF... 2008

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No peg, that was a receipt for my walker.

*****

Let the human mind loose. It must be loose. It will be loose. Superstition and dogmatism cannot confine it. John Adams

Ron Paul "Sign Wave Across the USA" -- November 5th!

Oh, musta been dark under the bridge then.

.
________________________
Sho Nuff... WTF... 2008

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Everything's dark when you're old like us.

*****

Let the human mind loose. It must be loose. It will be loose. Superstition and dogmatism cannot confine it. John Adams

Ron Paul "Sign Wave Across the USA" -- November 5th!

Have you seen my teeth???

I used them to pop the top on my beer and have not seen them since.
.
________________________
Sho Nuff... WTF... 2008

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I'll check the ashtray in the Pinto.

Could be buried under the roaches.

*****

Let the human mind loose. It must be loose. It will be loose. Superstition and dogmatism cannot confine it. John Adams

Ron Paul "Sign Wave Across the USA" -- November 5th!

Awesome...

I would check under my seat but it also appears to be missing. I will need them for my Doritos and Salmon dip.
.
________________________
Sho Nuff... WTF... 2008

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My hero!

Thanks Republicae. Very sweet. I hope I can return the favor.

*****

Let the human mind loose. It must be loose. It will be loose. Superstition and dogmatism cannot confine it. John Adams

Ron Paul "Sign Wave Across the USA" -- November 5th!

Republicae's picture

Oh, you have on more than

Oh, you have on more than one occasion...there is no favor or debt to be repaid.

http://www.1776solution.blogspot.com

"If I want to be free from any other man's dictation, I must understand that I can have no other man under my control." ~William G. Sumner

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

We are a good group of "back watchers" for the most part.

*****

Let the human mind loose. It must be loose. It will be loose. Superstition and dogmatism cannot confine it. John Adams

Ron Paul "Sign Wave Across the USA" -- November 5th!

How is it that having the

How is it that having the state legislatures vote for the senators decreased the chance of special-interests trying to buy votes?
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"We will never give up. We will never give in." - Dr. Ron Paul

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"We will never give up. We will never give in." - Dr. Ron Paul

Republicae's picture

Here ya go...read my article

Here ya go...read my article on the 17th Amendment and the Nationalized Senate:

http://www.nolanchart.com/article3351.html

http://www.1776solution.blogspot.com

"If I want to be free from any other man's dictation, I must understand that I can have no other man under my control." ~William G. Sumner

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Good

Good read,thanks

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"Evil for evil, a good despotism in a country at all advanced in civilization is more noxious than a bad one, for it is more relaxing and enervating to the thoughts, feelings, and energies of the people." - John Stuart Mill

13 No servant can serve two masters; for either he shall hate the one, and love the other, or else he shall lean to the one, and despise the other. Ye cannot serve God and riches. - Luke 16

bump,

for something of a higher calibre than most of the posts tonight.

Ben Bernanke, fighting fire with gasoline since 2006.

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"the only thing that keeps the banking system from failing is general ignorance about how the banking system works."
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Yeah, "fighting..."

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