Benefits of the American Revolution: An Exploration of Positive Externalities

It’s true that the American Revolution had some mixed results from the standpoint of liberty. Like all major social upheavals, it was brought off by a disparate coalition of competing viewpoints and conflicting interests. At one end of the Revolutionary coalition stood the American radicals—men such as Samuel Adams, Patrick Henry, Thomas Paine, Richard Henry Lee, and Thomas Jefferson. Although by no means in agreement on everything, the radicals tended to object to excessive government power in general and not simply to British rule. They viewed American independence as a means of securing and broadening domestic liberty, and they spearheaded the Revolution’s opening stages.

At the other end of the Revolutionary coalition were the American nationalists—men such as Benjamin Franklin, George Washington, Gouverneur Morris, Robert Morris, and Alexander Hamilton. Representing a powerful array of mercantile, creditor, and landed interests, the nationalists went along with independence but often opposed the Revolution’s radical thrust. They ultimately sought a strong central government, which would reproduce the hierarchical and mercantilist features of the eighteenth-century British fiscal-military State, only without the British. Of course, any such sharp distinction entails some over-simplification. These differences were arrayed along a spectrum, and individuals over time might alter their perspectives. Thus, John Adams started out as a radical but became a nationalist, whereas James Madison evolved in the opposite direction.

Domestic Benefits

Caplan asks what specific benefits came about because of the American Revolution. There are at least four momentous ones. They are all libertarian alterations in the internal status quo that prevailed, although they were sometimes deplored or resisted by American nationalists.

1. The First Abolition: Prior to the American Revolution, every New World colony, British or otherwise, legally sanctioned slavery, and nearly every colony counted enslaved people among its population. As late as 1770, nearly twice as many Africans were in bondage throughout the colony of New York as within Georgia, although slaves were a much larger percentage of Georgia’s population. Yet the Revolution’s liberating spirit brought about outright abolition or gradual emancipation in all northern states by 1804. Vermont, which, despite participation in the Revolution remained an independent republic until it was permitted to join the union in 1791, was the first jurisdiction to abolish adult slavery—in 1777. In 1786, the Confederation Congress also prohibited the extension of slavery into the Northwest Territory.

There is a tendency to minimize this first emancipation because slavery had been less economically entrenched in the northern colonies than in the southern colonies and because in many northern states slavery was eliminated gradually. But emancipation had to start somewhere. The fact that it did so where opposition was weakest in no way diminishes the radical nature of this assault upon a labor system that had remained virtually unchallenged since the dawn of civilization. Of course, slavery had largely died out within Britain.  But the Somerset court decision of 1772,  which freed a slave brought from the colonies, had a limited reach. Masters continued to bring slaves occasionally into the country and were able to hold them there. Parliament did not formally and entirely abolish the institution in the mother country until 1833.

Even in southern colonies, the Revolution’s assault on human bondage made some inroads. Several southern states banned the importation of slaves and relaxed their nearly universal restrictions on masters voluntarily freeing their own slaves. Through resulting manumissions, 10,000 Virginia slaves were freed, more than were freed in Massachusetts by judicial decree. This spawned the first substantial communities of free blacks, which in the upper South helped induce a slow, partial decline of slavery. By 1810, for instance, three quarters of African-Americans in Delaware were already free through this process.

2. Separation of Church and State: Unlike the case of slavery, the revolutionary separation of church and state was more pronounced in the South than in the North. Although the British colonies prior to the Revolution already practiced a relatively high degree of religious toleration, only four of thirteen colonies had no established, tax-supported church: Rhode Island, New Jersey, Pennsylvania, and Delaware. As a result of the Revolution, the five other southern states and New York disestablished the Anglican Church. With the adoption of the Constitution and then the First Amendment, the United States become the first country to separate church and state at the national level. Several of the New England states, however, retained their established Congregational Church, with Massachusetts becoming the last to fully abolish tax support as late as 1833. In our modern secular age, it is too easy to take these accomplishments for granted, but they were unprecedented.

3. Republican Governments: As a result of the Revolution, nearly all of the former colonies adopted written state constitutions setting up republican governments with limitations on state power embodied in bills of rights. Only Rhode Island and Connecticut continued to operate under their colonial charters, with minor modifications. The new state constitutions often extended the franchise, with Vermont being again the first jurisdiction to adopt universal male suffrage with no property qualifications and explicitly without regard to color. Going along with this was a reform of penal codes throughout the former colonies, making them less severe, and eliminating such brutal physical punishments as ear-cropping and branding, all still widely practiced in Britain. Virginia reduced the number of capital crimes from twenty-seven to two: murder and treason.

4. Extinguishing the Remnants of Feudalism and Aristocracy: This is probably the most diffuse of the Revolution’s radical consequences. Quit-rents, a feudal land tax that had been paid either to colonial proprietors or to the Crown, had been due in all colonies outside of New England and were now terminated. All the new states abolished primogeniture (the sole right of inheritance to the firstborn son) and entail (a prohibition of the sale, break up, or transfer to outside the family of an estate) where they existed, either by statute or by constitutional provisions. Doing so not only eliminated economically inefficient feudal encumbrances on land titles but also was a blow against hereditary privilege and the patriarchal family, because it undermined traditional patterns of inheritance and facilitated the rights of daughters and widows to possess property. Anyone who has read a Jane Austen novel is aware that these legal props for the landed gentry still persisted in Britain into the nineteenth century. At the same time, all states except South Carolina liberalized their divorce laws.

Even the egregious treatment of Loyalists during the Revolution indirectly contributed to the erosion of feudal entitlements. The claim that only one third of Americans supported the Revolution, one third were neutral, and one third were opposed is still frequently repeated, but it is a misreading of a letter written by John Adams in 1812 referring instead to American attitudes about the French Revolution. The consensus of historians is that between 40 and 50 percent of the white population were active Patriots, between 15 and 20 percent were Loyalists, and the remainder were neutral or kept a low profile.2 Obviously these proportions varied across regions and over time. Yet all the new states passed laws confiscating Loyalist estates. Since many of these estates were proprietary grants to royal placemen,3 the confiscations entailed a redistributionist land reform.

The U.S. Constitution’s prohibition on titles of nobility may seem trivial and quaint to modern eyes. But such titles, still prevalent throughout the Old World, always involved enormous legal privileges. This provision is, therefore, a manifestation of the extent to which the Revolution witnessed a decline in deference throughout society. No one has captured this impact better than the dean of revolutionary historians, Gordon Wood, in his Pulitzer Prize winning The Radicalism of the American Revolution.  He points out that in 1760 the “two million monarchical subjects” living in the British colonies “still took it for granted that society was and ought to be a hierarchy of ranks and degrees of dependency.” But “by the early years of the nineteenth century the Revolution had created a society fundamentally different from the colonial society of the eighteenth century.”4

One can view this transition even through subtle changes in language. White employees no longer referred to their employers as “master” or “mistress” but adopted the less servile Dutch word “boss.” Men generally began using the designation of “Mr.,” traditionally confined to the gentry. Although these are mere cultural transformations, they both reflected and reinforced the erosion of coercive supports for hierarchy, in a reinforcing cycle. In the Revolution’s aftermath, indentured servitude for immigrants withered away, and most states eliminated legal sanctions enforcing long-term labor contracts for residents, thus giving birth to the modern system of free labor, where most workers (outside of the military) can quit at will. Contrast that with Britain, where as late at 1823 Parliament passed a Master and Servant Act that prescribed criminal penalties for breach of a labor contract.5

Wood concludes that “Americans had become, almost overnight, the most liberal, the most democratic, the most commercially minded, and the most modern people in the world…. The Revolution not only radically changed the personal and social relations of people… but also destroyed aristocracy as it had been understood in the Western world for at least two millennia. The Revolution brought respectability and even dominance to ordinary people long held in contempt and gave dignity to their menial labor in a manner unprecedented in history and to a degree not equaled elsewhere in the world. The Revolution did not just eliminate monarchy and create republics; it actually reconstituted what Americans meant by public or state power.”6

Would all of these outcomes have happened without a War for Independence? Surely some and possibly many of them might have eventually, but the real question is whether the American Revolution played a crucial role in initiating and accelerating these developments. Those denying its significance inevitably point to Canada, which remained under British rule and, indeed, harbored many fleeing Loyalists. Today it is a free, democratic polity, with a high standard of living, and as liberal as, or in some respects more liberal than, the United States. To understand why the case of Canada does not prove the point, we need to look back before the Revolution and examine the factors that ignited it.

British Designs

The British colonies of North America, through most of their early history, enjoyed a relatively mild imperial regime that Edmund Burke described as “salutary neglect.” Britain’s mercantilist restrictions were either not strictly enforced or non-binding. But in the mid-eighteenth century, as the colonies became more populous and more integral to the British economy, there emerged among imperial officials a clique who wished to impose tighter control upon the colonies. Finally at the end of the Seven Years’ War in 1763 (what in the colonies was referred to as the French and Indian War), in which the British drove the French out of North America, this clique implemented a new colonial policy.

The primary features of the new policy were: (1) stationing in North America during peace for the first time a large standing army, numbering never less than 7,500; (2) issuing the Proclamation of 1763, drawing a line along the western boundary of the colonies beyond which settlement was prohibited; and (3) imposing taxes to help defray the cost of the army. All of these measures aroused the colonists’ suspicions, suspicions that were often quite valid. A 1763 internal memo within the British bureaucracy, for instance, proposed that “under Pretense of regulating the Indian trade, a very straight line be suddenly drawn on the Back of the Provinces,” which “now surrounded by an Army, a Navy and by Hostile Tribes of Indians” will make it easier to “exact a due obedience to the just and equitable Regulations of a British Parliament.”7

Unfortunately for the British, the Proclamation line also alienated those who would become American nationalists, helping to throw them into coalition with the radicals. Until then, major land speculators such as Franklin and Washington had revered the British empire and been enthusiastic supporters of its expansion. But now the fruits of a victory to which they had contributed during the recent war were being denied them. Nor did the Proclamation line presage better treatment of Native Americans. After all, it had been the British army that had helped provoke and then ruthlessly crush Pontiac’s Indian rebellion after France had abandoned the region, even resorting to smallpox-infected blankets to spread disease during the siege of Fort Pitt. If there was ever going to be any real check on settler aggression against the indigenous populations in North America, it had already vanished with the French defeat.

Indeed, it is hard to identify any British settler colony where the aboriginal peoples were not driven from their homelands or otherwise harshly treated. Maybe so in New Zealand, but certainly not in Australia. British acquisition of South Africa in 1806 did result in the abolition of slavery and some restraints on the Dutch-descended Boer population but the country still witnessed ongoing military campaigns against the Xhosa natives, then the Zulu War, and the ultimate emergence of apartheid. As for British Canada, the dispossession of Native Americans was less bloody than in the United States but almost as thorough. The marginalization of the Mi’kmaq of Nova Scotia was completed to provide land for arriving American Loyalists after the Revolution. Canada had two violent uprisings among the Métis, people of mixed French and indigenous ancestry, the first in 1869-1870 and the second in 1885, both suppressed and led by Louis Riel, who was therefore hanged for treason. Beginning in 1847, the Canadian government forcibly removed aboriginal children from their families to boarding schools for assimilation in order to “kill the Indian in the child,” in the words of historian John S. Milloy.8 Canadian Prime Minister Stephen Harper ultimately apologized for this program in 2008.

Following the Proclamation of 1763, the relations between the colonies and the mother country went through three consecutive crises: the first over the Stamp Act (1765-1766), the second over the Townshend Duties (1767-1770), and the third over the Tea Act (1773). The first two involved British efforts to impose new taxes on the colonists, provoking colonial protests and resistance. In both cases, imperial authorities backed down, ushering in temporary but tense lulls. Once colonial opposition effectively nullified the Tea Act, however, the British government responded harshly with a series of Coercive Acts, and outright military conflict erupted in 1775.

Colonial objections to the Tea Act can be puzzling, because the act itself did not directly tax the colonists. Instead it was essentially a bailout of the British East India Company, the quintessential mercantilist monopoly, which was struggling financially. Before the act’s passage, the company was required to sell its tea exclusively in London where it paid a duty. Tea destined for shipment and eventual sale in North America would be purchased by private merchants. The colonists then had to pay an additional import tax on tea, the one Townshend Duty that had not been repealed in 1770. Under the Tea Act, the company was now given a monopoly on re-shipment of tea to the colonies along with a rebate of the British duty. The act, therefore, had the ironic effect of reducing the price of tea in the colonies.

The colonists nonetheless defied the Tea Act for several reasons. Radicals, who had been boycotting the legal importation of tea, viewed the act as a clever ruse to get the colonists to accept Parliamentary taxation in principle. The act hurt American merchants, not just those importing tea legally, but also, because it undercut the price of smuggled Dutch tea, those doing so illegally. Most important, the East India Company embodied the colonists’ worst fears about British plans. If the company could be given a monopoly on tea, it could also be given a monopoly on other activities. The colonists were well aware of the company’s horrendous record in India, where its control over taxation in Bengal had contributed to a massive famine in 1770 that had killed up to ten million people, one third of Bengal’s population.

John Dickinson of Pennsylvania, a conservative who would later oppose the Declaration of Independence in the Continental Congress, put it this way:  “Their conduct in Asia, for some Years past, has given ample Proof, how little they regard the Laws of Nations, the Rights, Liberties, or Lives of Men…. Fifteen hundred Thousand… perished by Famine in one Year, not because the Earth denied its Fruits, but this Company and its Servants engrossed all the Necessities of Life, and set them at so high a Rate, that the Poor could not purchase them. Thus,… they now, it seems, cast their Eyes on America, as a new Theatre, wherein to exercise their Talents of Rapine, Oppression and Cruelty. The Monopoly on Tea is, I dare say, but a small Part of the Plan they have formed to strip us of our Property.”9

If the colonists needed any further evidence of British designs, Parliament, along with the Coercive Acts, passed the Quebec Act in 1774, establishing a new government for the former French territory. Although the act granted full religious toleration to Catholics, it also extended the province’s boundaries into the northwest territory, reinforcing the Proclamation line. With respect to governance, it vested all authority in a royally appointed governor and council, with no provision for a colonial assembly; it re-instituted compulsory tithes to the Catholic Church; and it restored the French seigneurial system, with its feudal privileges for distributing and managing land. Even the colonies’ French peasants (known as habitants), who constituted an overwhelming majority of the population, resented the act’s aristocratic features.

In short, there is ample evidence for a claim that historian Leonard Liggio emphasized. Without the American Revolution, British hard-liners intended to fasten on North America an imperial regime in many respects similar if not identical to British rule in India. As Justin de Rivage concludes, a group that he identifies as “authoritarian reformers” had seized control of policy to implement a sweeping “transformation of the British Empire.”10

Global Repercussions

The potentially deleterious impact of these foiled British designs on North America is hinted at in a short article by Nobel Prize-winning economist Robert Lucas. The article was a response to an essay in which Harvard historian Niall Ferguson, based on his several books on the British Empire, glorified the empire’s role in spreading economic development. Lucas responded with the obvious. The only colonies to enjoy sustained economic growth were Britain’s settler dominions: Canada, Australia, and New Zealand. Looking at other colonies in Africa or Asia, Lucas concludes: “The pre-1950 histories of the economies in these parts of the world all show living standards that are roughly constant at perhaps $100 to $200 above subsistence levels.” British imperialism thus failed “to alter or improve incomes for more than small elites and some European settlers and administrators.” India is the premier case, not experiencing significant sustained growth until the late twentieth century, and Lucas could have also included among the colonies that remained poor the British West Indies and Ireland.11

The impact of the American Revolution on the international spread of liberal and revolutionary ideals is well known. Its success immediately inspired anti-monarchical, democratic, or independence movements not only in France, but also in the Netherlands, Belgium, Geneva, Ireland, and the French sugar island of Saint Domingue (modern Haiti).12 What is less well understood is how the Revolution altered the trajectory of British policy with respect to its settler colonies. Imperial authorities became more cautious about imposing the rigid authoritarian control they had attempted prior to the Revolution. Over time they increasingly accommodated settler demands for autonomy and self-government. In short, the Revolution generated two distinct forms of British imperialism: one for native peoples and the other for European settlers.

This was immediately apparent in Canada. Parliament’s Constitutional Act of 1791 divided Quebec into two colonies, Upper and Lower Canada, each with its own elected assembly. The act also ended quit-rents. Paradoxically, contributing to these outcomes was the influx of American Loyalists, many of whom embraced republican principles despite opposing independence. Nova Scotia, half the population of which was already from New England, had a representative assembly as early as 1758, and the Revolution’s outbreak forced the royal governor to propose reforms in order to maintain the colony’s loyalty. Nova Scotia received three times as many Loyalists as Quebec, leading in 1784 to the partitioning off of New Brunswick, with its own assembly.

Although Australia upon initial British settlement in 1788 began as a penal colony with autocratic rule, agitation for representative government emerged early and was consummated with the Australian Colonies Government Act of 1850. British New Zealand was originally part of the colony of New South Wales in Australia, but it was separated in 1849 and got a representative government three years later. South Africa fell under sustained British rule in 1806. By 1854, the Cape Colony had its own parliament. Even in the slave colonies of the British West Indies, as the Revolutionary crisis still raged, the colonial assemblies asserted co-equality with the British House of Commons. As Sir Guy Carleton, commander-in-chief of British forces in America during the war, complained: “It is not in the Revolted provinces alone that a Republican spirit is to be found, but the tint has . . . has spread to other parts of America and to the West Indies.”13

That brings us back to the question of slavery. A Parliamentary act of 1833 abolished slavery throughout Britain and its colonies, effective in 1834, although with an explicit exception for territories controlled by the East India Company. The act’s passage had partly been assisted by a major slave revolt in Jamaica during the previous two years, along with a tight symbiotic relationship between American and British abolitionists. The oft-repeated argument is that, without American independence, this act would have simultaneously abolished slavery in what became the United States. But this ignores the facts that British emancipation had to overcome the stiff political opposition of West Indian planters and that emancipation, by precipitating a collapse of production in the sugar islands, was costly for the British economy.

The only conceivable way Britain could have held on to all its American colonies was through political concessions to colonial elites. If American cotton, tobacco, rice, and sugar planters had still been under British rule, they inevitably would have allied with West Indian sugar planters, creating a far more powerful pro-slavery lobby. Moreover, by 1833 American cotton had become more essential to the British economy than Caribbean sugar. Bear in the mind that it was the spread of cotton cultivation in the United States in the early nineteenth century that had reversed what little anti-slavery impulse had emerged during the Revolution in the southern states, inducing slaveholders to cease apologizing for slavery as a necessary evil and start defending it as positive good. Thus it is likely that, without U.S. independence, slavery would have persisted in both North America and the West Indies after 1834 and, indeed, possibly after 1865.

Conclusion

Any revolution that brings about benefits for a large sector of the population faces serious free-rider problems. Revolutionary activity is extremely risky and, once the revolution succeeds, excluding from any general benefits those who did not participate is difficult if not impossible. This explains why revolutions are always so messy and produce mixed results. It also explains why so few revolutions actually bestow genuine benefits. Gordon Tullock, in a classic 1971 article, contended that “Historically, the common form of revolution has been a not-too-efficient despotism which is overthrown by another not-too-efficient despotism with little or no effect on the public good.”14 Nonetheless, sometimes people will eschew the free-rider incentive to bring about a better world, bearing costs that exceed any individual material gains. The anti-slavery movement, first sparked by the Revolution, is one clear case.

The American Revolution is another such case. The embattled farmers who stood at Lexington green and Concord bridge in April 1775 were only part-time soldiers, with daily cares and families to support. Their lives were hard. The British redcoats they faced were highly trained and disciplined professionals serving the world’s mightiest military power. Yet when they fired the “shot heard ’round the world” that touched off the American Revolution, they initiated a cascade of positive externalities that not only U.S. citizens but also people throughout the world continue to benefit from today, more than two centuries later. They had no hope—indeed no thought—of charging for these non-excludable benefits. Nonetheless, they took the risk. What better reason to celebrate the 4th of July?