 Libertarians understand better than most that history is something built from the bottom up, from the innumerable and largely unnoticed stream of individual choices, actions, and events. Yet even we have a tendency to fall from mythological history from above, when it suits our own values or interests. For decades, Sheldon Richmond has been a staple of modern libertarianism. His work builds on a long tradition of libertarianism from below, which, while it may emphasize the lives, works, and interests of great men from time to time, decidedly shows that politicians do not build societies. Welcome to Liberty Chronicles, a project of libertarianism.org. I'm Anthony Comegna. So plenty of historians have kind of said that the Articles of Confederation were the logical outcome of the Revolutionary War, the ideas that went into it, the kind of activism that fueled it, and the political coalition that actually made it happen, that naturally, logically, those people would create the kind of government that they did during the 1780s. Can you explain this for us and break it down a bit? That would be the dominant view, but it's not the unanimous view. One of the eminent historians of this whole period is Merrill Jensen, who points out that the men who wrote the Constitution were a very different group of men from those who wrote the Declaration of Independence. And this sort of theme is also picked up by the historian of this period, Gordon Wood, who virtually describes the movement toward the Constitution, the ratification as a counter-revolution, that the revolution was radical, but the movement that led to the Constitution was actually conservative, not radical. So in what regard, then, was the revolution radical in your view? If there was a counter-revolution later, there must have actually been something revolutionary about the revolution. So what really was that? Well, I agree with Wood and other historians who take this perspective that the revolution was, in fact, radical in the sense that not only was it breaking away from this dominant empire, the British empire, but that it was in a very real sense an egalitarian revolution. By egalitarian, I don't mean economically egalitarian, where everyone has the same income and measures of that nature, but rather it was anti-aristocratic. The British were seen as an aristocracy, but not just the British. The individual colonies had their own homegrown aristocracies, which fed off the privileges of the crown, of course, the British crown. But they had a more or less rigid aristocratic structure, and that the constitution, the revolution was really, Jensen puts it this way, sort of Wood, as both an internal and external revolution. Not only was it aimed at throwing off British rule, it was aimed at throwing off homegrown aristocratic rule, and that's what was ushered in to the states, the new states after the victory over Britain in the revolution. That's the counter revolution. There's then a reaction to this egalitarianism, and we might call it radical democracy, although there's a lot of misconceptions about that, but the movement to centralize power that came to fruition in Philadelphia in 1787 and then 1789 was a reaction against this egalitarianism. So let's dig into that egalitarianism a little bit, because I think a lot of libertarians today would be very skeptical about some of the liberties that revolutionaries thought they were protecting or expanding upon, like paper money, for example, the liberty to print their own paper money in the colonies. Well, we're no friends of paper money today, generally speaking, or the freedom to restrict trade at the local or colonial state level. So what do we do with that then? Yeah, these are fascinating issues, and of course, they're complicated. And I want to stress at the beginning that the two large groups that we talk about, the Federalists versus the Anti-Federalists, that by definition, by nature, is a gross oversimplification, of course. History is always complicated, and dangers always lie in trying to simplify. You've got to do it, but you've got to be careful when you do it. The Federalists were not monolithic, and the Anti-Federalists were even less monolithic than the Federalists were. There was a huge range of views. So I plead guilty right at the start to oversimplifying, and plenty of people could come up with counter examples and say, but so and so said this, and so that's just in the nature of the beast. But talking about the two issues you raised, which was money and trade, let's take trade first, because the huge misconceptions about trade, one of the big defenses of the Constitution that libertarians also will invoke is that the Constitution that some people might say, in effect, simply created a free trade zone among the 13 states. And this accounts for economic growth and lots of good things. Well, of course, we're for free trade, and libertarians would want the whole world to be a free trade zone. But the misconception there, as brought up by Jensen and others, is that the period under the Articles Confederation was a free trade zone. It's just a myth that states were erecting trade barriers to each other in this period. Now, the one exception, which is minor, is that I think one or two of the states would demand duties on, say, European goods that came into New Jersey and then passed into New York. They had duties against European goods. They weren't Adam Smith's free traders. They weren't free traders on either side, pure free trader. So New Jersey or New New York might demand the duty that they would have gotten on European goods had they come directly into New York. So if they came through New Jersey, they would impose a duty. But that was, I believe, the exception, and it was minor. What you didn't have were duties against New Jersey goods coming into, say, New York. So there was a free trade zone. And one of the proofs of this is that in the Federalist Papers, Hamilton, in arguing for, of course, the Federalist Papers were what they were sales pitches to the ratification conventions in the states, sales pitches on behalf of ratification of the Constitution. He argued that if the Constitution were to be ratified, the level of tariffs could be tripled against the outside world. In other words, the tariffs weren't high enough. And you could see why they wouldn't be, because the states were basically in a competitive posture against one another. And that might have the effect of driving down tariffs in a way to get goods into the states, into their respective states from Europe and elsewhere. So here's Hamilton saying, we can't be protectionist enough under the articles. We need a central power to set trade policy, which is one of the very big motives for centralizing power, to be able to enact a national trade policy. That's not something that should thrill libertarians. On paper money, well, of course, the federal, the national government didn't exactly end the problem of paper money, did it? I need not say that to libertarians today. I'm thinking of Ron Paul's campaigns of end the Fed, you know, there's a chance of end the Fed. So, and even the Constitution itself didn't end paper money, because although the states were forbidden to emit paper money on their own, they were allowed to chart or banks that emitted paper money. And the country was awash in paper money in the 19th century, in the early 19th century, especially. And the Americans liked paper money. One of the myths is that Americans didn't like paper money. You can read history, financial histories of the United States by various people. My book on the Constitution, America's Kind of Revolution, discusses this in some detail. There was lots of paper money. Americans didn't dislike paper money. And in 1818, Alfred Baring, of the famous financial family in England, the Baring family, speaking to some government commission, and he said, you know, there's more paper money in the United States than in any other country on earth. So Americans were not averse to paper money. Now, paper money is problematic, as you said. Huge problems. The national government during the confederation government during the war issued continentals, and that was a disaster. And of course, we have the famous phrase that comes out of that, not worth the continentals. So that's one thing. And states themselves did issue money for various purposes. But sometimes they ran into problems. But other times they didn't. For some reason, I don't know the reasons, but it was a moderate issuance of money, and it didn't lead to huge depreciation and economic upheaval. They just were careful about it, which is not an endorsement of the paper money regime. But it just shows it's not an automatic disaster. Now, one of the things the paper money did in those days in the confederation period was it functioned in lieu of taxation. And critics of inflation, libertarians among them, often point out that inflation is an implicit form of taxation, because it transfers purchasing power from people, the people, to the politicians. If you issue money, the money appreciates. People can buy less, but the government can take that new money and buy things. So there's a transfer of purchasing power. Well, taxation is a transfer of purchasing power. You hand your money over to the government, you lost the purchasing power, and the government now has the purchasing power. So, as I say, inflation is an implicit form of taxation. That actually didn't work out so badly in many cases in the states, the ones that were more moderate. Because people found that preferable, that form of paying taxes preferable to an armed tax man coming to your farm and confiscating your goods, your crops, your horses, whatever, because you didn't pay your taxes. They actually preferred that. Plus, as a way of mitigating the depreciation effects, it was easy for farmers to evade cash altogether. Most people, of course, were farmers, and you could stay out of the cash economy if you wanted to. You could barter with neighbors with crops and things like that. So that had a way of tamping it down. We shouldn't throw the word paper money around just to scare people. I'm against government currency. I'm for free money. I'm only going to say hard money. I'm for market-based money, which may be hard and may not be hard. Maybe Bitcoin for all I know. But the point is that wasn't an automatic disaster, and it actually had some benefits given the choices available at the time. Can you tell us a bit about the articles of Confederation then, and what exactly were some of the key provisions? Who put them in place, and what interests did the articles protect? During the colonial period, there were two continental congresses, which Britten, I guess, overlooked or the King didn't care about, or I'm not really sure what his attitude is. But the states sent representatives to the continental congress. If you've seen the movie 1776, which is about the writing of the Declaration of Independence, that whole movie takes place inside the second continental congress. It was that congress that declared independence and authorized a committee that included Thomas Jefferson and Benjamin Franklin to write the Declaration of Independence. At the same time, there was a committee writing articles of Confederation looking ahead to when Britten was no longer ruling the colonies. The colonies were then sovereign states, which is what would then be sovereign states, which is how most people saw it. But they'd be in a Confederation, in other words, a club. I think they called it a perpetual union. That would not have any jurisdiction over the internal affairs of the sovereign states, but would have jurisdiction over external affairs that the states were getting together and handled, thinking that individually they couldn't handle them, mainly foreign relations and things of that sort. It had one branch of government. It had Congress. And the Congress elected a president who presided over the Congress. And his title was President of the United States in Congress Assembled. The first president was a guy named Samuel Huntington. We sometimes, historians debate over who should really be considered the first, because Huntington's two-year term straddled the pre-articles period and the post-article period, so some people don't count him. And then the second guy, Richard Henry Lee, I believe, became left early to become governor of Virginia, I think it is. And then so John Hansen is sometimes considered the first president of the articles, because he served the full term, fully within the period of the articles. So technically, we could say he was the first president of the United States, and that was his title. Not George Washington, but, of course, he didn't have the PR that George Washington had. He didn't have wooden teeth. He didn't chop down a cherry tree when he was a kid, so people forget him. But so anyway, we have a president who is a member of Congress, sort of like a prime minister in that sense. You could call it a parliamentary system. It had term limits. You couldn't serve more than, I don't know, three out of six years, stuff like that. There was no separate executive. There was no separate judiciary. It was basically a one-branch government. Importantly, I used the term government, but maybe we should properly call it a quasi-government, because it lacked certain key powers, which all governments have. I think it's part, at least one of them, is part of the definition of government. There was no power to tax. And I think that qualifies it, therefore, as a quasi-government. Now, why was it a government at all? Because its money came from taxation, but it was taxation levied by the states. So it was a second-order taxing power, let's say. They could requisition money from the states. They could basically ask for money. And the states sometimes delayed or said the checker's in the mail or something like that. They didn't always come up with the money when they needed it. So this government could not directly tax people. Was there any central authority to compel a state to act on anything? I don't really think there was a formal authority to compel. There was lots of discussion about that. And lots of discussion during this Confederation Congress about giving Congress some independent power to tax. The most popular proposal was a 5 percent tariff, which relates to my other point. There was no power to regulate trade. These two very important powers, and the third law, I might as well add right here, couldn't raise an army. They had to go to the states to get people men for the army. So imagine a government that could not tax, could not regulate or promote trade, and could not raise an army. That sounds like that's my kind of government, although it's more than I wanted. But I take that as a first step. So that ought to be a great interest to libertarians, that this government lacked these three powers. The proposals to give Congress an independent tariff failed a couple of times. There was an amendment to the articles that had to be unanimously accepted by the 13 states. And one state or another, Rhode Island, I think, comes to mind, would block it on the two occasions. And this gets the nationalists thinking, the people that wanted America to be a great nation. And I say that intentionally, because not only did they use the word, but these days with Trump, it's a relevant phrase. They wanted to make America great. Not again, because it wasn't great yet, but they wanted to make it. They were wearing baseball caps that said, make America great. Okay, just mag, not mag-a. This gets them thinking, look, we can't live with the Articles of Confederation. Fourteen days, less than two weeks, actually, into the period of the articles. Fourteen days after it had been going into effect, James Madison, who was a member of the Second Continental Congress, is looking for ways to expand the power under the articles. He tried. He tried to use the treaty power. He tested various things. He couldn't get anywhere, just did not give them anything to work with. It was like grabbing at a cloud. It just wasn't anything to get your teeth into. And this is what begins to give thought to give people thoughts that maybe we need to get together and come up with a new plan for the government. And that's various events push things in that direction, and that's, of course, what happened. Well, now that's my next question, because it seems that seen in this light, this decade or so, is a very, very special time in history, where these sister nation states are all peacefully cooperating with one another for their mutual benefit under a central organization with no compulsory powers, or at least that can't use them easily, whatever powers there may be hidden in there. And there is what some may characterize as a conspiracy and coup d'état cooked up over the course of the decade to overthrow this government and replace it with one of their own creation. So who were these people? Well, they're names that are well known to us. Alexander Hamilton. Madison is a little bit ambivalent, but he's in Hamilton's camp almost fully at this stage. Later on, he was more Jeffersonian. He's a friend of Jefferson's, and there's a lot of correspondence with Jefferson, who's suspicious of this. We have the two Morris's. We have Robert Morris and Gubinomaris, who are finance guys and merchants and very influential. Gubinomaris was made like super intended of finance during the Confederation Congress and wanted a central bank, basically the Hamilton program or later the Henry Clay America system, a central bank permanent debt standing army. They wanted all these things. They were pushing for these things. And so there was a lot of intrigue. The Morris's were trying to get the officers, the revolutionary officers interested in putting pressure on Congress to basically set up this constitutional convention so they could move toward greater power, the promise being your pensions. You'll have your pensions paid in full. They tried to enlist various interests to push for centralization. There was this near coup in Newburgh, New York that Washington famously quashed by pointing out that he had basically gone blind in the revolution and made this great sacrifice. So please don't do this. He was afraid that there'd be some military coup. And then the creditors, the people that were owed money from the states because of the war, they had lent money or produced goods and gave the government to prosecute the war were owed money. And the centralizers would go to them and say, you'll have a better chance of getting your loans repaid if we centralize power and change this system. I mean, the states, in some different ways, were trying to pay off the debts. But the centralizers would go to the creditors and said, you're going to do better if we centralize power. Look, we'll have a taxing power. We'll be able to promote trade. It'll be good and you'll benefit from all this. So you can see how they tried to put a coalition together. And it was kind of behind the scenes. It wasn't some open thing. It was, you know, I don't want to overplay the conspiracy theory, but it had some whiff of conspiracy. Let's get the creditors, the officers together, and push for centralization. And then one of the crowning blows is you get Shays Rebellion in the 1780s, where, which is a tax revolt in western Massachusetts, because the Massachusetts had a big war debt and really jacked up taxes on the farmers. And it was crushing. And farmers, when they paid their taxes, they couldn't pay their mortgages. So there were foreclosures going on. And this created a little rebellion, right? Shays led a movement that shut down the courts to stop the evictions from the farms. This used to be interpreted as a class struggle, right? You had simply debtors rebelling against creditors. But more historians now understand that it was a tax rebellion. It was not a class rebellion. And the nationalists saw what was going on in Massachusetts and said, we got to do something about this. This is dangerous. They didn't like that state legislatures were enacting, were sort of electing or the people were electing to the state legislatures, working class kind of people, not the elite. And they got very nervous. And then you see what happened as a result of Shays. A new governor is elected, as John Hancock, by the way, is elected. And they moderate the taxes on the farmers. They bow to the pressure. And that's either scared the hell out of the nationalists or at least they pretended to be scared. They spooked George Washington and said, you got to come to the courts. The convention was already being arranged at this point. And Washington wasn't sure he wanted to go. He's the most prestigious man in the country, let's remember. And the nationalists, his friends, people who were aids to him during the war, said, you have to go. Look what's happening in Massachusetts. We have outright rebellion. This is going to happen. It's anarchy. It's foreign fuel. They would talk about these or foreign agents. They scared the hell out of Washington, even though I'm not sure the people trying to scare him totally believed it themselves. And that pushed Washington over the edge. And he decided he'd come and then preside at the Constitutional Convention. So it was this effort to scare people into thinking this system is unstable. It's anarchic. And everything's going to go to hell unless we come up with a new plan. Now, I want to push back a little bit on using that word conspiracy. Because as I understand his thinking at least, Alexander Hamilton revered the British system for its graft and its ability for conspiracies to thrive, because that's what actually drove policy through. The coalition building, the wheeling and dealing between aristocrats at court and people in parliament and interest groups outside of the government. That's what made the whole great machine turn in Hamilton's mind. So that's sort of what these people thought politics was all about. Making conspiracies and following through on them. Maybe we're using conspiracy in a slightly different way. I guess I was saying there weren't just a bunch of men in a smoke-filled room. George Soros wasn't around yet, right? And yeah, so yeah, I take your point. See, Hamilton and Madison and these others who pushed for the Constitution did have in mind the sort of things you're talking about. They thought, one thing Gordon Wood points out, excuse me, is that by the end of the lives of the various founders, they were all disillusioned. They thought the experiment was a failure with the country, because they didn't get the civic, Republican society they expected. People were too concerned about making a living, looking after their financial interests and not focused on the good, the general welfare. Both sides, the Hamiltonians and the Jeffersonians were bothered by this. Hamilton's view and Madison's view was that if you have a national government and you filter out the sort of hoy paloi, you get the sort of better type of person being a representative, which they figured would happen if you have a small legislature outside of the states, far from the individual states, you're going to get a better class of people. And not that that better class of people would be self-regarding. No, they would be the above the fray mediators of the various interests that were competing and using state legislatures for their advantage. And that's what they wanted. According to Gordon Wood, the Constitution was going to be a sieve. It was going to filter out undesirables, because they were too easily getting into state legislatures. They really wanted to downgrade the states. We talk about how the federalism is sort of a dead letter now, but it was a dying letter back then. Madison wanted the federal government to have the power to veto state laws. John Jay said states should just become counties, as it were, as the way counties are to states. States would become counties in relation to the national government. They really wanted to downgrade the states. Don't forget, states, people's general political identification in those days was with the states. Patrick Henry says, Virginia is my country. The peace treaty with the King of England named the individual sovereign states. It was a separate, in effect, a separate peace treaty with each of the states. When the Constitution is first unveiled and put out for ratification, you have any federalists, you have Patrick Henry, and you have Sam Adams and others saying, what's this we the people? The very first words are we the people, not we the states. They could see that a change was attempting to be affected in the country by the shift. And of course, the ratification conventions were not the state legislatures. They were special, excuse me, special conventions selected for that purpose. Now, a big part of your argument throughout the book is that the intrusiveness and parasitism of government that we're also familiar with by now was not accidental over time. It was actually baked into the design early on by these conspirators, if you will, people like Hamilton. And you juxtapose that with what you call the real Constitution, the sort of average everyday practices of life and rules that govern real, lived experience and real behavior outside the halls of the government. Can you elaborate on that idea of the real Constitution and what exactly was the real Constitution of the day? Well, I have a chapter at the end of my book called The Constitution of Anarchy, which is also a play on Hayek's Constitution of Liberty. And it's, and I'm really just reformulating, I think, some valid, very valid points, important points for libertarians made by Roderick Long, the philosopher, libertarian philosopher, Auburn University, and other people, which points out that any society, by definition, has an implicit Constitution. Because when we say society, we already are referring to the idea of order, right? Otherwise, I don't think we would call it a society. We would call it just, you know, mob or chaos or, you know, Hobbesian situation. Society already suggests the idea of customs, mores, implicit rules, rules which might not be written down anywhere or even articulated, but just the day-to-day expectations that people have that most people most of the time observe doesn't mean that nobody does. Of course, there are outlaws and people who break the expectations. But by and large, if we're talking about a society, that's what we need. That's the very idea of it. So I wanted to make the point that you don't need a written Constitution to have a Constitution. England, for one thing, doesn't have a written Constitution. And then on the other end of the spectrum, the Soviet Constitution said some good things, right? Didn't the Soviet Constitution declare that it'd be freedom of speech and freedom of press? But, of course, we know there wasn't freedom of speech and freedom of press under the Soviet Union. So what's written down may not be what the real rules are. Another person who's very good at spelling this out, well, Eleanor Ostrom, for example, Nobel Prize winner who talks about how common pool resources have been governed without government, and James C. Scott in seeing like a state stresses this point too. The real rules may not be the rules that are written on parchment or hanging in the National Archives or any formal rule. The real rules are the rules that are being observed every day by people, that form people's expectations and that people build their whole, you know, build plans around and build their lives around because they're generally observed. That's the true Constitution of any society. Now, we have a Constitution that says some things, and libertarians and others lament that the certain constitutional provisions have just sort of disappeared, although they haven't disappeared from the document. For example, Congress is supposed to have the power to declare war. But Congress has not declared war since, I think it declared war in Germany in what, 1942. So that was the last time there's been a declaration of war. Other things have gone away. Supposedly, imminent domain was only supposed to be for taking property for public use. But now with the Kilo case from the 2000s, the Supreme Court said, well, if it's for private use, but there's going to be some public benefit, that's good enough. That satisfies it. So, first of all, constitutions like laws are never written down in a final form. In other words, they're always going to be subject to interpretation. And so what's written down may not be what governs at some later time. This brings us into the subject of a living Constitution. My point is that constitutions necessarily are always living because people have to interpret them. We can't say, well, what did Madison mean by this? Let's just do what Madison meant, or that would be one originalist approach. Another originalist approach would be, well, what did people think the words meant in those days? But that doesn't get you anywhere, because which people? And how do you know what they thought? It's a hopeless thing. So the Constitution was a political document. It was the product of compromise. You had many different views represented in the convention. It wasn't just a whole bunch of Madison's or a whole bunch of Hamilton's. They had different views. There were some anti-Federalist types in the convention. George Mason, I think, was in the convention. They had to hammer out a compromise. And Hamilton and Madison did not go leave Philadelphia believing that the lines between the three branches of government or the lines between the federal government and the states had been defined, clearly, once and for all. They were under no such illusion. They knew those things were going to be fought out politically in the coming years. So a Constitution, by definition, is living. So it just seems quixotic to say, we have to fight this idea of a living Constitution. Thomas Sowell was a big critic of the Constitution. He once said, a living Constitution is a dead Constitution. Well, in a way, he's got a point. How can it, it can't be a set of fixed rules if it's subject to interpretation, but his mistake is in thinking there's some alternative. It's always going to be subject to interpretation. And any interpretation, as Wittgenstein put it, any interpretation is floating in the air alongside the rule that it's interpreting. Because then all we do is we shift the argument to what the interpretation means. We never can get out of this. So the Constitution cannot be, this written Constitution cannot be some sort of anchor. And there's no way to, we sometimes think people talk as if the Constitution is, is there some computer somewhere that has the right interpretation of the Constitution programmed into it. And all we need to do is take any dispute, feed it in, and it can spit out the right thing to do. That's ridiculous. Any legal system is internal to the society. It's not as if you can go to the Wizard of Oz or something and say, what's the right thing to do under the Constitution? That's impossible. And I think that, but I think that colors a lot of people's thinking about the Constitution and how the political system should work. Sheldon Richmond is the executive editor of the Libertarian Institute, chairman of the Board of Trustees at the Center for a Stateless Society, and a contributing editor at antiwar.com. He writes a weekly column for the American Institute for Economic Research, and his latest books include America's Counter-Revolution, The Constitution Revisited, Separating School and State, Tethered Citizens, and Your Money or Your Life, Why We Must Abolish the Income Tax. Liberty Chronicles is a project of Libertarianism.org. It is produced by Test Terrible. If you've enjoyed this episode of Liberty Chronicles, please rate, review, and subscribe to us on iTunes. For more information on Liberty Chronicles, visit libertarianism.org.