Friday, August 4, 2017

Whiskey Rebellion

"How could it come to this? An army of rabble...peasants. Everything will change. Everything has changed."
--General Charles Cornwallis (The Patriot)

Rothbard discusses one of the many American events that has been distorted by historians: the Whiskey Rebellion. The official narrative is that people in four western Pennsylvania counties refused to pay an excise tax on whiskey that had been levied by the workings of Alexander Hamilton, then Secretary of State, in 1791. Subsequent uprisings drove President Washington to call a federal army of 13,000 into the area to put down the insurrection in 1794.

Consequently, according to the narrative, a local but dramatic challenge to federal taxing power had been defeated, and the forces of federal law and order were reinforced.

Rothbard points out the flaws with the official narrative. The deep seated hatred that Americans had for internal taxes of any kind found widespread resistance to the whiskey tax far beyond a mere four Pennsylvania counties. In frontier areas of several states, no one paid the tax on the whiskey.

Moreover, whiskey was widely produced by back-country farmers and often used as a medium of exchange in local transactions. Back-country people people correctly viewed the tax as a means for large distilleries to cripple their smaller and more numerous competitors.

Western Pennsylvania, Rothbard observed, "was only the tip of the iceberg." It became the focus in large part because it was one of the few back-country areas that made any attempt to collect the whiskey tax. Other areas did not rebel because the taxes were not being collected.

Widespread resistance to the tax ultimately helped motivate formation of the Democrat-Republican party and the forthcoming Jeffersonian movement. In fact, one of Jefferson's first acts as president was to repeal the entire federal excise tax program.

The true story of the Whiskey Rebellion is that it was a widespread, multi-year campaign of civil disobedience in which American citizens refused to pay a hated tax. Rather than being quickly put down, the Whiskey Rebellion was successful in that it eventually led to federal repeal of the tax.

It is easy to see why the story was subsequently distorted. Washington and his cabinet did not want to advertise the extent of their failure. And big government historians certainly did want it known that federal taxing power could be successfully challenged by the people.

When correctly viewed, the Whiskey Rebellion was a victory for liberty rather than for the state. It offers a source of inspiration and hope for American taxpayers who ponder being tax resisters.

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