In the grade-school version of American history, the Revolutionary War seems like a righteous inevitability. The typical narrative conflates taxes with tyranny, casting the rebellion as a break from British greed and oppression. “King George III didn’t seem to care what the colonists thought,” one children’s book explains. “He needed more and more money, so Great Britain’s Parliament passed more and more taxes on the colonies.”
Such mythologizing is dangerous because it creates the false impression that the nation was conceived out of an allergy to taxation. You see this fable repeated in slogans from the Tea Party, the latest in a long tradition of activists attempting to dragoon the Founding Fathers into their arguments for reducing taxes.
In truth, the British only wanted the colonists to start paying their fair share of public expenses. And the colonists themselves weren’t opposed to taxation in principle; they were angry that they had no official say in the matter, since they had no seats in the British Parliament. As the famous slogan goes, the colonists bristled at “taxation without representation.”
Which raises one of the chief mysteries of that era: Why couldn’t both sides arrive at a peaceful compromise? The prosperous American colonies were a jewel of the British Empire. If the Americans were so incensed at their lack of representation, there seemed to be an obvious solution — just bring the colonists into Parliament.
Economists Sebastian Galiani and Gustavo Torrens think they understand why that never happened. In a new working paper, they analyze the American Revolution through the lens of game theory, the mathematical study of strategy and conflict. The economists argue there was an underlying logic to why both sides deadlocked. They believe their theory, which stresses political machinations rather than patriotic fervor as the engine of schism, might help us better understand how democracies evolve and how voting rights spread.
If it seems strange for economists to weigh in on these matters — it’s not. There is a fertile tradition of economists opining on political institutions, beginning with Adam Smith, who himself wrote about the problems of the American colonies in "The Wealth of Nations."
For the British, the main headache was that the colonies weren’t pulling their own weight. In the 1750s and 1760s, the British spent millions of pounds raising armies to defend the North American colonies against the French in the Seven Years’ War. Parliament subsequently demanded that the lightly-taxed Americans should contribute more to the costs of their own defense.
This was a reasonable idea, Smith argued. And the new taxes were still a pittance compared to what people paid in England. Parliament had never demanded of the colonists anything "which even approached to a just proportion to what was paid by their fellow subjects at home,” Smith noted in his book, which was published in 1776, not quite a year into the American Revolution.
Still, Smith was an advocate for harmony and economic efficiency. If the Americans would not pay taxes without political representation, he argued that the most practical solution was to acquiesce. He recommended that Britain should grant the colonies some number of seats in Parliament, depending on how much they contributed in taxes.
He wasn’t the only one to come up with this idea. In the run-up to the Revolution, several similar proposals had circulated on both sides of the Atlantic. The British politician Thomas Pownall dreamed of a merged Parliament, a “Grand Marine Dominion, consisting of our possessions in the Atlantic, and in America, united into a one Empire.” In 1754, Benjamin Franklin wrote that “such a union would be very acceptable to the colonies, provided they had a reasonable number of representatives allowed them.”
So why didn’t any of these plans come through?
Galiani and Torrens argue that political considerations in Britain wrecked any chance of Americans gaining seats in Parliament. “It was not that such a deal was impossible to reach, or that it was completely crazy,” Torrens said in an interview. “Part of the problem is that this would have consequences for the internal politics of the British empire.”
As they discuss in their paper, the British Parliament at the time was dominated by wealthy landowners, who feared that the nation’s growing democratic movement would diminish their power. The common folk, who made up most of the country, were agitating for more say and more representation in Parliament.
“The landed gentry, who controlled the incumbent government, feared that making concessions to the American colonies would intensify the pressure for democratic reforms, thus jeopardizing their economic and political position,” the economists argue.
“There was this slippery-slope argument,” Torrens said. “How could they give representation to the Americans, while many common people in London did not have proper representation?”
In fact, there were populist factions in the British government who welcomed the colonists — in part, it seems, because they thought the Americans would make good allies. It was a volatile period. According to Galiani and Torrens, the ruling class in Britain believed it was better to risk a war and the loss of some colonies than to risk losing control of the entire empire to a political coalition of the lowborn and landless. Their paper's contribution is to illustrate the strategic logic behind this decision.
Several top historians, when asked about the theory, called it intriguing — but they also pointed out that it misses some nuances, particularly on the American side of the story. First of all, if the British landowners were wary of letting Americans into Parliament, the Americans became equally, if not more skeptical of such an idea. London was too far away, and the colonists suspected they would never amount to more than a token presence in the British government.
“The colonists feared that they would never be the majority, that England would make sure it always had more representatives, and that the colonies would end up getting dragged around being forced to do whatever England wanted to do,” said Eliga Gould, a history professor at the University of New Hampshire.
What the colonists really wanted, historians say, was the right to vote on taxes in their own assemblies. That’s the true significance behind the slogan “no taxation without representation,” Alan Taylor, a history professor at the University of Virginia, explained in an e-mail. The colonists weren’t trying to get into Parliament; they wanted taxes to be handled by their local representatives.
This, too, was a proposal that both sides floated early on. Some suggested that the British could tell the Americans how much they owed for the services of the army and navy, and the colonies could figure out how the raise the money themselves. But these plans still left open the question of who had the final authority to tax. Was Britain sending a bill or passing around a collection basket?
Ultimately, historians say, this was the sticking point that led to the Revolutionary War. When the British passed the Stamp Act in 1765, the first direct tax on the American colonies, they opened a Pandora’s box of questions. “It raised the constitutional problem of who’s in control — where’s the ultimate location of sovereignty,” Brendan McConville, a history professor at Boston University, said.
By the late 1760s, he said, the opportunity for compromise had more or less faded, as the debate turned to these deeper issues of governance and liberty.
The Revolutionary War was never really about taxes; that much, at least, is clear. One popular theory among historians describes it as essentially a war waged over principles — an argument over the rights promised by British constitutional law. Others point out that there were underlying economic tensions created by Britain’s trade monopoly. And surely, stubbornness and pride played a role as well.
As the conflict unspooled, the British made many concessions, which rankled some of London's ruling class. “One of the attitudes in Britain was that it was the British who kept giving way. They felt the patriots were demanding more and more and the only way to deal with them was to get tough,” said Andrew O'Shaughnessy, a history professor at the University of Virginia. But colonists were suspicious of the British promises to back off on taxation. They didn't want cheap talk; they wanted ironclad constitutional guarantees to representation. And if they couldn't locate those rights in the British constitution, well, they would write their own.
Some of these issues are surprisingly relevant today. There is the perennial complaint that a vote counts more in some states than others, and nasty battles over the configuration of congressional districts. Such debates are not so far removed from the questions about representation that the colonists and the British tussled over nearly 300 years ago.
Both sides agreed that the government must be of the people — but to what degree? Then, as now, it was hard to distinguish the moral arguments from more self-interested ones.
At the time, the British stressed the idea of “virtual representation.” They claimed that the members of Parliament had a duty to look after everyone's welfare, even those who couldn’t vote, like the colonists and many English commoners.
The Americans hated the concept. But in one of history's minor ironies, the Founding Fathers would later regurgitate that line of thinking when they created the District of Columbia. In large part thanks to that centuries-old philosophy, the residents of D.C. still have no voting representation in Congress today.
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