Thomas Paine's Political & Economic Vision
Thomas Jefferson and Thomas Paine, in my estimation, are the most interesting of the American Founding Fathers. In a previous post, I discussed Thomas Jefferson's Political and Economic Vision. Now I want to discuss Thomas Paine's political and economic vision.
The Form of Government
Thomas Paine, like Jefferson, was a republican. This means that he regarded the purpose of government as securing the public good by maximizing individual liberty. In my post on The Genealogy of Liberty, I explained that the republican tradition―in contrast to the liberal tradition―defined liberty as the absence of domination. The goal of government, as far as republicans were concerned, is to minimize the domination of man over man. You may notice a striking similarity here to Noam Chomsky's definition of anarchism. I have previously noted that the most popular strain of classical anarchism is actually republican in nature. Anarchism, however, entails the firm conviction that the abolition of centralized government is necessary for maximizing human liberty, whereas a republican may or may not agree with that conviction.
"What is called a republic, is not any particular form of government. It is wholly characteristical of the purport, matter, or object for which government ought to be instituted, and on which it is to be employed, RES-PUBLICA, the public affairs, or the public good.... It is a word of a good original, referring to what ought to be the character and business of government; and in this sense it is naturally opposed to the word monarchy, which has a base original signification. It means arbitrary power in an individual person; in the exercise of which, himself, and not the res-publica is the object.
"Every government that does not act on the principle of a Republic, or in other words, that does not make the res-publica its whole and sole object, is not a good government. Republican government is no other than government established and conducted for the interest of the public, as well individually as collectively. It is not necessarily connected with any particular form, but it most naturally associates with the representative form, as being best calculated to secure the end for which a nation is at the expense of supporting it."―Thomas Paine, Rights of Man, Part 2, Chapter 3 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
Paine contrasts the "old system" of government to this "new system" of republicanism. The old system was aimed at maintaining the dominance of a ruling individual or class. The new system is aimed at establishing self-governance for the people and minimizing the domination of man over man.
"Nothing can appear more contradictory than the principles on which the old governments began, and the condition to which society, civilization, and commerce, are capable of carrying mankind. Government on the old system, is an assumption of power, for the aggrandizement of itself; on the new, a delegation of power, for the common benefit of society. The former supports itself by keeping up a system of war; the latter promotes a system of peace, as the true means of enriching a nation. The one encourages national prejudices; the other promotes universal society, as the means of universal commerce. The one measures its prosperity, by the quantity of revenue it extorts; the other proves its excellence, by the small quantity of taxes it requires."―Thomas Paine, Rights of Man, Part 2, Chapter 3 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
Thomas Paine draws a distinction between society and government, seeing society as naturally good and government as but a necessary evil. When societies grow past a certain point, governments become necessary. Paine advocates not minimal government but rather the minimal amount of government necessary to secure the maximization of human liberty (or, what is the same, the minimization of the domination of man over man).
"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 first is a patron, the last a punisher.
"Society in every state is a blessing, but government even in its best state is but a necessary evil; in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamity is heightened by reflecting that we furnish the means by which we suffer."―Thomas Paine, Common Sense [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
Elsewhere, Thomas Paine goes into greater detail on this subject:
"Great part of that order which reigns among mankind is not the effect of government. It has its origin in the principles of society and the natural constitution of man. It existed prior to governments, and would exist if the formality of government was abolished. The mutual dependence and reciprocal interest which man has upon man, and all the parts of a civilized community upon each other, create that great chain of connections which holds it together.... Common interest regulates their concerns, and forms their law; and the laws which common usage ordains, have a greater influence than the laws of government. In fine, society performs for itself almost every thing which is ascribed to government.
"To understand the nature and quantity of government proper to man, it is necessary to attend to his character. As Nature created him for social life, she fitted him for the station she intended. In all cases she made his natural wants greater than his individual powers. No one man is capable, without the aid of society, of supplying his own wants; and those wants, acting upon every individual, impel the whole of them into society, as gravitation acts to a center.
"But she has gone further. She has not only forced man into society, by a diversity of wants, which the reciprocal aid of each other can supply, but she has implanted in him a system of social affections, which, though not necessary to his existence, are essential to his happiness. There is no period in life when this love for society ceases to act. It begins and ends with our being.
"If we examine, with attention, into the composition and constitution of man...we shall easily discover, that a great part of what is called government is mere imposition.
"Government is no farther necessary than to supply the few cases to which society and civilization are not conveniently competent; and instances are not wanting to shew, that every thing which government can usefully add thereto, has been performed by the common consent of society, without government."―Thomas Paine, Rights of Man, Part 2, Chapter 1 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
Paine holds that governments are merely tools for the administration of public matters. They help to coordinate and regulate things better. And, Paine holds that government is necessary in some sense, for it is needed in order to maximize republican liberty (that is, freedom as non-domination), but he also makes it clear that government is also unnecessary in some sense. In the absence of formal government, society still functions and governs itself.
"The instant formal government is abolished, society begins to act. A general association takes place, and common interest produces common security.
"So far from being true, as has been pretended, that the abolition of any formal government is the dissolution of society, that it acts by a contrary impulse, and brings the latter closer together. All that part of its organization which it had committed to government, devolves again upon itself, and acts through its medium. When men, as well from natural instinct, as from reciprocal benefits, have habituated themselves to social and civilized life, there is always enough of its principles in practice to carry them through any changes they may find necessary or convenient to make in their government. In short, man is so naturally a creature of society, that it is almost impossible to put him out of it.
"Formal government makes but a small part of civilized life; and when even the best that human wisdom can devise is established, it is a thing more in name and idea, than in fact. It is to the great and fundamental principles of society and civilization―to the common usage universally consented to, and mutually and reciprocally maintained―to the unceasing circulation of interest, which, passing through its million channels, invigorates the whole mass of civilized man―it is to these things, infinitely more than to any thing which even the best instituted government can perform, that the safety and prosperity of the individual and the whole depends.
"The more perfect civilization is, the less occasion has it for government, because the more does it regulate its own affairs, and govern itself."―Thomas Paine, Rights of Man, Part 2, Chapter 1 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
In spite of the anarchistic nature of his republicanism, Paine, like Jefferson, was not quite an anarchist. Like Jefferson, he was a republican rather than a liberal. The ideal government would not be one that merely provides national defense and security while not interfering in society beyond that. As I said, the republican tradition sought not minimal government but rather the minimal amount of government necessary for the maximization of liberty. Rules, regulations, and taxes would be necessary, but those should be kept at the minimum necessary for achieving a free republic.
As I said before, Thomas Paine saw government as simultaneously necessary and unnecessary―it is absolutely necessary, in one sense, but absolutely unnecessary in another. When societies become too large, certain complications emerge. Humans tend to hoard resources that are necessary for survival. As population grows, scarce resources like land are hoarded. Thus, a more formal government becomes necessary in order to establish rules governing property and distributive justice. Furthermore, large groups of individuals tend to form as society grows and these groups often attempt to impose their will upon others, the establishment of a more formal government is necessary in order to protect people from domination by such groups.
The natural social order is democratic, based upon popular consensus, so the ideal form of government would re-create this natural social order anew. The natural social order tends to fall apart as population grows and society and civilization progress. People begin to be dominated by those who have more resources at their command. The goal of formal government ought to be to manage public affairs in such a way as to minimize the domination that results from largeness and the centralization that naturally comes with it. Primitive stateless societies tend to have forms of direct democracy or even consensus democracy, but such forms of democracy tend to fail as societies grow. It becomes necessary, if you wish to preserve democracy, to introduce delegates or representatives into the equation.
"The only forms of government are, the democratical, the aristocratical, the monarchical, and what is now called the representative.
"What is called a republic, is not any particular form of government. It is wholly charicteristical of the purport, matter, or object for which government ought to be instituted, and on which it is to be employed, RES-PUBLICA, the public affairs, or the public good....
"Republican government is no other than government established and conducted for the interest of the public, as well individually as collectively. It is not necessarily connected with any particular form, but it most naturally associates with the representative form, as being best calculated to secure the end for which a nation is at the expense of supporting it....
"Those who have said that a republic is not a form of government calculated for countries of great extent, mistook, in the first place, the business of a government, for a form of government; for the res-publica equally appertains to every extent of territory and population. And, in the second place, if they meant anything with respect to form, it was the simple democratical form, such as was the mode of government in the ancient democracies, in which there was no representation. The case, therefore, is not, that a republic cannot be extensive, but that it cannot be extensive on the simple democratic form; and the question naturally presents itself, What is the best form of government for conducting the RES-PUBLICA, or the PUBLIC BUSINESS of a nation, after it becomes too extensive and populous for the simple democratical form?"―Thomas Paine, Rights of Man, Part 2, Chapter 3 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
Paine goes on to criticize non-democratic forms of government. He basically asserts that all non-democratic forms of government suffer from a sort of Hayekian knowledge problem. In many respects, Thomas Paine and F. A. Hayek are a lot alike. In The Use of Knowledge in Society, F. A. Hayek had argued that centrally planning an economy in a socialistic fashion is problematic because the knowledge necessary for such direction is distributed throughout society. Individuals are privy to special knowledge with regards to "the particular circumstances of time and place," which knowledge they use to make economic decisions. There is no possible way for a central authority to collect all of that relevant knowledge. Thus, any central power that attempts to direct the economy will inevitably be acting upon ignorance, a lack of knowledge, and will, therefore, not be capable of making truly informed decisions. Like Hayek, Paine was an advocate of free markets, but he was not a market-anarchist. He believed that it was necessary for government to lay out the system of rules and regulations upon which markets are based. A market system only works when there are established rules governing property, a system of courts for dispute resolution, and a system of law-enforcement in place. Just as the knowledge needed for making sound economic decisions is distributed throughout society, such that central planners will always be incapable of making sound decisions, so too is the knowledge needed for creating decent rules and regulations.
"It is possible that an individual may lay down a system of principles, on which government shall be constitutionally established to any extent of territory. This is no more than an operation of the mind, acting by its own powers. But the practice upon those principles, as applying to the various and numerous circumstances of a nation, its agriculture, manufacture, trade, commerce, &c. &c. requires a knowledge of a different kind, which can be had only from the various parts of society. It is an assemblage of practical knowledge, which no one individual can possess; and therefore the monarchical form is as much limited, in useful practice, from the incompetency of knowledge, as was the democratical form, from the multiplicity of population. The one degenerates, by extension, into confusion; the other, into ignorance and incapacity, of which all the great monarchies are an evidence."―Thomas Paine, Rights of Man, Part 2, Chapter 3 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
As Hayek establishes the democracy of the marketplace as a necessary principle for organizing a large society, Paine established political democracy as the necessary principle for establishing the social order without which markets cannot function. And this is not far from Hayek's own thoughts on the matter.
"Referring, then, to the original simple democracy, it affords the true data from which government on a large scale can begin. It is incapable of extension, not from its principle, but from the inconvenience of its form; and monarchy and aristocracy, from their incapacity. Retaining, then, democracy as the ground, and rejecting the corrupt systems of monarchy and aristocracy, the representative system naturally presents itself; remedying at once the defects of the simple democracy as to form, and the incapacity of the other two with respect to knowledge.
"Simple democracy was society governing itself without the aid of secondary means. By ingrafting representation upon democracy, we arrive at a system of government capable of embracing and confederating all the various interests and every extent of territory and population; and that also with advantages as much superior to hereditary government, as the republic of letters is to hereditary literature.
"It is on this system that the American government is founded. It is representation ingrafted upon democracy. It has fixed the form by a scale parallel in all cases to the extent of the principle. What Athens was in miniature, America will be in magnitude."―Thomas Paine, Rights of Man, Part 2, Chapter 3 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
Thomas Paine's Political Economy
Following in the footsteps of the physiocrats and classical economists―as well as of the classical liberals and his own fellow republicans―Thomas Paine advocated a land value tax as a form of ground-rent due to society in compensation for excluding others from their natural right to access land and natural resources. Thomas Jefferson had also advocated land value tax, but Paine held that the revenue from such a tax should be directly distributed back to the people as a citizen's dividend rather than used to fund government projects. The land and natural resources of a nation ought to belong to the nation as a whole. Individuals who claim a piece of a nation's property as their own ought to be required to pay rent to the nation as compensation. The nation is nothing more than the sum total of the citizens that constitute it, so the revenue from this rent collection would belong to all the individuals of the nation rather than to the government.
"It is a position not to be controverted that the earth, in its natural uncultivated state was, and ever would have continued to be, the common property of the human race. In that state every man would have been born to property. He would have been a joint life proprietor with the rest in the property of the soil, and in all its natural productions, vegetable and animal.
"But the earth in its natural state, as before said, is capable of supporting but a small number of inhabitants compared with what it is capable of doing in a cultivated state. And as it is impossible to separate the improvement made by cultivation from the earth itself, upon which that improvement is made, the idea of landed property arose from that inseparable connection; but it is nevertheless true, that it is the value of the improvement only, and not the earth itself, that is individual property. Every proprietor, therefore, of cultivated land, owes to the community a ground-rent (for I know of no better term to express the idea) for the land which he holds; and it is from this ground-rent that the fund proposed in this plan is to issue....
"There could be no such thing as landed property originally. Man did not make the earth, and, though he had a natural right to occupy it, he had no right to locate as his property in perpetuity any part of it; neither did the creator of the earth open a land-office, from whence the first title-deeds should issue. Whence then, arose the idea of landed property? I answer as before, that when cultivation began the idea of landed property began with it, from the impossibility of separating the improvement made by cultivation from the earth itself, upon which that improvement was made. The value of the improvement so far exceeded the value of the natural earth, at that time, as to absorb it; till, in the end, the common right of all became confounded into the cultivated right of the individual. But there are, nevertheless, distinct species of rights, and will continue to be so long as the earth endures....
"Having thus in a few words, opened the merits of the case, I shall now proceed to the plan I have to propose, which is,
"To create a National Fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property:
"And also,
"The sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age."―Thomas Paine, Agrarian Justice [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
Like Jefferson, Paine thought that the success of a democratic republic would require a certain degree of egalitarianism. If certain individuals become too wealthy and the rest become too poor, relatively speaking, then the wealthier individuals could subvert democracy by buying the politicians. Thomas Paine was neither a socialist nor a proponent of capitalism. Under capitalism, private property in the means of production is concentrated in the hands of the few, the capitalist class, while socialism has no private property in the means of production at all. Paine wanted private ownership to be the norm (distributism) and he saw land value tax (georgism) as a means of achieving that widespread distribution. Both Thomas Jefferson and Thomas Paine can be anachronistically referred to as geo-distributists.
Like Jefferson, Paine can be anachronistically referred to as a social democrat. He was a proponent of progressive taxation and a strong welfare state. He was not an egalitarian extremist. He did not want a total levelling of incomes and wealth, but he did want excessive accumulation that stems from non-productive activities to be put in check.
"Admitting that any annual sum, say for instance, one thousand pounds, is necessary or sufficient for the support of a family, consequently the second thousand is of the nature of a luxury, the third still more so, and by proceeding on, we shall at last arrive at a sum that may not improperly be called a prohibitable luxury. It would be impolitic to set bounds to property acquired by industry, and therefore it is right to place the prohibition beyond the probable acquisition to which industry can extend; but there ought to be a limit to property, or the accumulation of it, by bequest....
"The following table of progressive taxation is constructed on the above principles, and as a substitute for the commutation tax. It will reach the point of prohibition by a regular operation, and thereby supersede the aristocratical law of primogeniture....
"But the chief object of this progressive tax (besides the justice of rendering taxes more equal than they are) is, as already stated, to extirpate the overgrown influence arising from the unnatural law of primogeniture, and which is one of the principal sources of corruption at elections.
"It would be attended with no good consequences to enquire how such vast estates as thirty, forty, or fifty thousand a year could commence, and that at a time when commerce and manufacturing were not in a state to admit of such acquisitions. Let it be sufficient to remedy the evil by putting them in a condition of descending again to the community, by the quiet means of apportioning them among all the heirs and heiresses of those families....
"A progressive tax will, in a great measure, effect this object, and that as a matter of interest to the parties most immediately concerned....
"Although an enquiry into the origin of those estates be unnecessary, the continuation of them in their present state is another subject. It is a matter of national concern. As hereditary estates, the law has created the evil, and it ought also to provide the remedy. Primogeniture ought to be abolished, not only because it is unnatural and unjust, but because the country suffers by its operation. By cutting off (as before observed) the younger children from their proper portion of inheritance, the public is loaded with the expense of maintaining them; and the freedom of elections violated by the overbearing influence which this unjust monopoly of family property produces. Nor is this all. It occasions a waste of national property. A considerable part of the land of the country is rendered unproductive.... In short, the evils of the aristocratical system are so great and numerous, so inconsistent with everything that is just, wise, natural, and beneficent, that when they are considered, there ought not to be a doubt that many, who are now classed under that description, will wish to see such a system abolished."―Thomas Paine, Rights of Man, Part 2, Chapter 5 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
Taxation is necessary for ensuring the widespread distribution of property and thereby securing democracy. Nevertheless, Paine was opposed to war and thought that free trade should be used to establish lasting peace between nations. He was also opposed to big government, holding that the government ought to have the goal of maximizing liberty. If the maintenance of big government and a standing army are not desirable, then how ought this revenue to be spent? Paine's answer is this: on a variety of redistributive social welfare measures. When government has money, the bulk of it ought to be given back to its citizens. Here is a list of some of Paine's proposals for what government revenue ought to be spent on:
"2. Provision for two hundred and fifty-two thousand poor families, at the rate of four pounds per head for each child under fourteen years of age; which, with the addition of two hundred and fifty thousand pounds, provides also education for one million and thirty thousand children.
"3. Annuity of six pounds (per ann.) each for all poor persons, decayed tradesmen, or others (supposed seventy thousand) of the age of fifty years, and until sixty.
"4. Annuity of ten pounds each for life for all poor persons, decayed tradesmen, and others (supposedly seventy thousand) of the age of sixty years....
"7. Allowance of twenty thousand pounds for the funeral expenses of persons travelling for work, and dying at a distance from their friends.
"8. Employment at all times for the casual poor in the cities....
"9. Allowance of three shillings per week for life to fifteen thousand disbanded soldiers...."―Thomas Paine, Rights of Man, Part 2, Chapter 5 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
Thomas Paine, just like Jefferson, thought that government had an obligation to provide for the poor and needy. He advocated a generous welfare state. Nevertheless, he was an advocate of markets and free trade. It was his conviction that free trade would eventually eliminate war and establish everlasting peace. Thomas Paine was an advocate of free markets, but not of the laissez-faire libertarianism that we see today. He saw a role for government in determining rules governing property and distribution.
"The commerce of America is perfectly free, and ever will be so. She will consign away no part of it.... Trade flourishes best when it is free, and it is a weak policy to attempt to fetter it."―Thomas Paine, The American Crisis, VII [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
"In all my publicans, where the matter would admit, I have been an advocate for commerce, because I am a friend to its effects. It is a pacific system, operating to cordialize mankind, by rendering nations, as well as individuals, useful to each other. As to mere theoretical reformation, I have never preached it up. The most effectual process is that of improving the condition of man by means of his interest; and it is on this ground that I take my stand.
"If commerce were permitted to act to the universal extent it is capable, it would extirpate the system of war, and produce a revolution in the uncivilized state of governments. The invention of commerce has arisen since those governments began, and is the greatest approach towards universal civilization....
"It is possible that a nation may be the carrier for the world, but she cannot be the merchant. She cannot be the seller and the buyer of her own merchandize. The ability to buy must reside out of herself; and, therefore, the prosperity of any commercial nation is regulated by the prosperity of the rest. If they are poor she cannot be rich, and her condition, be it what it may, is an index of the height of the commercial tide in other nations....
"When, therefore, governments are at war, the attack is made upon the common stock of commerce, and the consequence is the same as if each had attacked his own.
"The present increase in commerce is not to be attributed to ministers, or to any political contrivances, but to its own natural operations in consequence of peace. The regular markets had been destroyed, the channels of trade broken up, the high road of the seas infested with robbers of every nation, and the attention of the world called to other objects. Those interruptions have ceased, and peace has restored the deranged condition of things to their proper order.
"It is worth remarking, that every nation reckons the balance of trade in its own favour; and therefore something must be irregular in the common ideas upon the subject.
"The fact, however, is true, according to what is called a balance; and it is from this cause that commerce is universally supported. Every nation feels the advantage, or it would abandon the practice."―Thomas Paine, The Rights of Man, Part 2, Chapter 5 [in Paine: Collected Writings, Common Sense, The Crisis, Rights of Man, The Age of Reason, Pamphlets, Articles, & Letters]
The economic system advocated by Thomas Paine is neither capitalist nor socialist, but geo-distributist and social democratic. It is a market system with widespread distribution of property, maintained through progressive taxation and land value taxation, which is used to redistribute wealth through a generous welfare state.