Tuesday, August 17, 2010

Calhoun Contra Publius

My good friend over at The Linton Village posted today a reminder of Publius' (almost surely Madison, in this particular case) argument in Federalist 51. In short, the argument runs thus: While in most cases republics should cover small territory, in our particular case the large variety of interests across the vast U.S. will prevent any one faction from developing a "tyranny of the majority" over the various minorities with different interests. Madison's faith in this idea is great:

By comprehending in the society so many separate descriptions of citizens as will render an unjust combination of a majority of the whole very improbable, if not impracticable... (This) method will be exemplified in the federal republic of the United States. Whilst all authority in it will be derived from and dependent on the society, the society itself will be broken into so many parts, interests, and classes of citizens, that the rights of individuals, or of the minority, will be in little danger from interested combinations of the majority... In the extended republic of the United States, and among the great variety of interests, parties, and sects which it embraces, a coalition of a majority of the whole society could seldom take place on any other principles than those of justice and the general good.

Madison's argument is lofty and reasonable, and it is repeated in American History 101 classes everywhere.

The only problem with it is this: Madison is dead wrong at every turn.

Q. Where are Madison's great variety of interests, parties, and sects today?
A. They're all collaboratively organized in interested combinations known as "Republicans" and "Democrats"

He neglected to consider what America's last great political philosopher, John C. Calhoun, readily understood, albeit a generation of valuable experience later--that absent necessary reform, the American political scene will always revert to a two-party system. Those two parties may be Federalists/Antifederalists, Federalists/Republicans, Whigs/Democrats, Republicans/Democrats, or any other combination, but it will always revert to exactly two. The real driver of the system is economic. The two parties could rightly be labeled:

1) Net Tax Payers
2) Net Tax Consumers

The Immutable Laws of this two party system are as follows:

1) Net tax consumers will always outnumber net tax payers, due to the uneven distribution of wealth combined with progressive tax laws
2) Net tax consumers will always favor a liberal construction of the Constitution, empowering the federal government to do Good Things with the Common (wink, wink) tax money
3) Net tax payers will always be in a minority
4) Net tax payers will always favor a strict construction of the Constitution, limiting the federal government's ability to do Unnecessary Things with their tax money
5) When third parties arise, the interests will quickly re-arrange to find a new equilibrium around the two parties described above

Excerpted from Calhoun's Disquisition on Government:

Few, comparatively, as they are, the agents and employees of the government constitute that portion of the community who are the exclusive recipients of the proceeds of the taxes. Whatever amount is taken from the community, in the form of taxes, if not lost, goes to them in the shape of expenditures or disbursements. The two — disbursement and taxation — constitute the fiscal action of the government. They are correlatives. What the one takes from the community, under the name of taxes, is transferred to the portion of the community who are the recipients, under that of disbursements. But, as the recipients constitute only a portion of the community, it follows, taking the two parts of the fiscal process together, that its action must be unequal between the payers of the taxes and the recipients of their proceeds. Nor can it be otherwise, unless what is collected from each individual in the shape of taxes, shall be returned to him, in that of disbursements; which would make the process nugatory and absurd. Taxation may, indeed, be made equal, regarded separately from disbursement. Even this is no easy task; but the two united cannot possibly be made equal.

Such being the case, it must necessarily follow, that some one portion of the community must pay in taxes more than it receives back in disbursements; while another receives in disbursements more than it pays in taxes. It is, then, manifest, taking the whole process together, that taxes must be, in effect, bounties to that portion of the community which receives more in disbursements than it pays in taxes; while, to the other which pays in taxes more than it receives in disbursements, they are taxes in reality — burthens, instead of bounties. This consequence is unavoidable. It results from the nature of the process, be the taxes ever so equally laid, and the disbursements ever so fairly made, in reference to the public service...

The necessary result, then, of the unequal fiscal action of the government is, to divide the community into two great classes; one consisting of those who, in reality, pay the taxes, and, of course, bear exclusively the burthen of supporting the government; and the other, of those who are the recipients of their proceeds, through disbursements, and who are, in fact, supported by the government; or, in fewer words, to divide it into taxpayers and tax-consumers.

But the effect of this is to place them in antagonistic relations, in reference to the fiscal action of the government, and the entire course of policy therewith connected. For, the greater the taxes and disbursements, the greater the gain of the one and the loss of the other — and vice versa; and consequently, the more the policy of the government is calculated to increase taxes and disbursements, the more it will be favored by the one and opposed by the other.

The effect, then, of every increase is, to enrich and strengthen the one, and impoverish and weaken the other.

Calhoun's entire essay is worth reading and can be found here.

"Democracy is two wolves and a lamb voting on what to have for dinner."


Dave Linton said...

The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.
Alexis de Tocqueville

JWC said...


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