Why was there no Coasean solution to the American Revolution?

Sebastian Galiana and Gustavo Torrens have a new NBER paper on this underappreciated question:

Why did the most prosperous colonies in the British Empire mount a rebellion? Even more puzzling, why didn’t the British agree to have American representation in Parliament and quickly settle the dispute peacefully? At first glance, it would appear that a deal could have been reached to share the costs of the global public goods provided by the Empire in exchange for political power and representation for the colonies. (At least, this was the view of men of the time such as Lord Chapman, Thomas Pownall and Adam Smith.) We argue, however, that the incumbent government in Great Britain, controlled by the landed gentry, feared that allowing Americans to be represented in Parliament would undermine the position of the dominant coalition, strengthen the incipient democratic movement, and intensify social pressures for the reform of a political system based on land ownership. Since American elites could not credibly commit to refuse to form a coalition with the British opposition, the only realistic options were to maintain the original colonial status or fight a full-scale war of independence.

You may recall that Adam Smith wanted to see a continuing empire, but with North America as essentially the more powerful partner, though he did not quite use those words.

Comments

I haven't read Bernard Bailyn's Ideological Origins of the American Revolution since 1977, but my vague recollection is that the British Tories had gotten themselves into an ideological corner where, in their minds, they couldn't make a compromise for complex domestic constitutional reasons growing out of the Glorious Revolution. Unfortunately, I don't remember the details of his argument, but I do recall the situation as a good counter-example to the claims that the English tend to be non-ideological and good at compromise.

Keep in mind that the British Tories had reasons to be wary of giving Parliamentary representation to the Americans beyond the obvious one that Americans tended to be Whigs. A bad reason was that drawing up new parliamentary districts in America would be a likely time to redraw old districts in Britain, which hadn't kept up with population shifts (Manchester, I believe, had no representation in Parliament) while some desolate rotten boroughs might have two MPs. It took until the Reform act of 1832 for redistricting.

A better reason was that American aggressiveness in settling the Midwest was disruptive of the balance of power in Europe. The 23-year-old George Washington may have started World War Zero (the 7 Years or French & Indian) War by getting into a firefight with the French at Pittsburgh in 1754. Ben Franklin was forecasting that he who ruled the Great Lakes and the Mississippi River valley would rule the world in the 1900s. Giving parliamentary representatives to the American colonists, who were highly pro-expansionist, likely would have led to more wars with the Indians and their European allies. London hoped to slow the ethnic cleansing of the Indians by putting restrictions on the American colonists in order to keep the Americans from starting another world war.

Indeed, the French monarchy bankrupted itself helping the Americans achieve independence from the British Empire, which slowed Anglo-Saxon world domination. But eventually Franklin's forecast came true and France was reduced to a subordinate role in the world behind the English-speaking powers.

One thing to keep in mind is that the importance of inland North America to future world power is something that 18th and 19th Century leaders and intellectuals only intermittently kept in mind, so it tended to come in and out of focus as a motivation -- and with good reason. For example, the Bourbons paying for the American War of Independence did France a lot of good up in the long run, but the ensuing bankruptcy didn't do the Bourbons any good at all in the medium term.

But American leaders from Franklin onward tended to obsess over projecting future populations. Abraham Lincoln, for example, forecasted to Congress that the U.S. population in 1930 would be 251,680,914.

There's a good book -- Uncouth Nation -- which charts the history of European anti-Americanism. It's not at all clear that the vitriol is actually believed (especially by those in the corridors of power) but it's still remarkably strong and seemingly widespread. It's a litany of biases and xenophobia. Essentially: "America will never amount to anything because of i) the people, ii) the climate, etc etc."

Of course, this just makes the approval of Europe more desirable to our so-called elites. Tom Wolfe has extensively chronicled how American "elites" continue to slobber after European approval, to the extent of said "elites" taking the perceived European snobbishness toward Americans in general and applying it to their own countrymen.

Elites like Trump? Or do you have some other type of elite figure in mind.

Why should I do your homework for you? Go read Wolfe for yourself and get educated (and have a rollicking good time while you're at it). "The Painted Word", "From Baushaus to Our House", and many of the works collected in "The Purple Decades" and "Hooking Up" will get you started.

s/Baushaus/Bauhaus/

You said something vague about elites. So I asked who you were talking about.

You don't have to do my homework for me, but substantiating or explaining what you say is in many circles considered a fairly routine and important part of conversation.

It sounds to me like you hold rather much of the snobbish attitude that you believe used to run more in the other direction.

But let's be honest, Europeans do still have a bit of that snobbish attitude with respect to Americans. No offense, but it probably has a lot to do with people like you.

You went full snark on me - Trump as an elite? - so I responded in kind.

*plonk*

Steve by the time the American revolution was heating up, the American Indians had no European allies which is part of the reason why the British had such a hard time calming down the colonialists. no real external threat existed to serve as a focus point for colonial hostility.

In other words there was no danger of another world war breaking out with the colonies as a focus point following the Seven Years War. The French had effectively ceded the continent to the English. The English just didn't want the headache of dealing with the Indians.

Correct. Once the British had decisively defeated the French there was no real reason for the colonies to stay in the empire, as there was no externat threat they needed defending from.

" there was no real reason for the colonies to stay in the empire,"

I agree with this but would add the caveat, " there was no real reason for the colonies to stay in the empire, and pay the implicit and explicit taxes the UK government demanded".

The implicit taxes would include monopoly rules requiring the colonies to sale and buy from authorized UK companies.

But the start of the revolution is not the time point that is in question. Rather it is the earlier time period during which the British failed to make the policy changes suggested above.

Clearly you don't know much about this period. There was a grand total of 13 years between the end of the Seven Years War and the Declaration of Independence. Agitation against the British in america began about one year after the end of the Seven Years War. My suggestion would be for you to read a little (a lot more really but start with a wikipedia page or two) on this subject before wading into the discussion.

Excellent post; compare the USA's trajectory to Canada's. A post that should have 100+ comments, like those lame Obamacare posts do, but it won't.

Its not a totally natural experiment because Canada's poorer climate and landscape must play some role.

Wasn't Canada also "owned" by the Hudson's Bay company? And thus the entire state apparatus in Canada was devoted to slowing colonization of the West: colonists were a hindrance to business. (That business being the fur trade.)

Western and northern Canada was under the Hudson bay Company. The original Dominion set up in 1867 included just Quebec, Ontario, New Brunswick and Nova Scotia. Manitoba, British Columbia and Prince Edwards Is were added soon after and the rest more gradually (Newfoundland remained under British rule until after WWII)

Of course with the Obama Administration forcing real American history out of school curriculum in favour of Hip-Hop History it will be no surprise to see that in a couple of yours young people won't even know who George Washington is.

Really? I thought it had already happened. We hear such racism blattering over and over. Just replace "Obama" with the sitting Democratic president and "Hip-Hop History" with "Black History Month" or "Civil Rights".

Nonsense, everyone knows George Washington was a slave-owner who married a wealthy widow for her money, engaged in both fox hunting and cockfighting for recreation, and was a hypocrite who claimed to oppose slavery but did not free the slaves he owned (in his life-time). It's likely that he feared the spread of English Law outlawing slavery to the colonies, and chose to rebel to maintain the status quo. (alright, I made up that last bit, I know not whether it is true or not, but prove me wrong.)

Washington was neither a slave-owner (after the age of 31) nor is there any record of his engagement in cockfighting.

"Washington: The man who freed American slave-owners" -- Oswald de Andrade, Brazilian writer
"Indeed I tremble for my country when I reflect that God is just, that his justice cannot sleep forever." -- Thomas Jefferson
Truth is, American History, with its slavery, internment camps, wars of aggression and genocide, is a dismail subject. It surely was my least favorite subject back at school.

You had American History as a school subject in Brazil?

Well, more like a part of the History class (the grades used to alternate between Brazilian and general History, and the USA got the lion's share-- Salutary Neglect, Intolerable Acts, mentions of the Indian Wars, Paine, Jefferson, Adams-- I think--, Washington, the Revolutxion, the Declaration, the Articles of Confederation, the Constitution, Civil War, Reconstruction, the Robber Barons, Perry's Black Ships, 19th Century/Early 20 th Century Imperialism-- particularly the war against Spain and the Platt Amendment), WW I and WW II, Cold War, Globalization and reactions, the current "monopolar world".

That pretty much covers everything American kids learn with some anti-American axe-grinding thrown in for fun.
Funny how I got pretty much the same thing in Canada. American history with an anti-American spin put on it, mostly in order to highlight how much better Canada was. The lesson I learned was that nothing ever really happens in Canada. America is where it's at.

Funny you say that. A famous Brazilian economist wrote that when she was in Canada people -- specially students--complained nothing ever happened in Canada.
On the other hand, in Brazil, we say nothing important ever happens in Brazil (not even Brazilian history: Santos Dumont, to whom we attribute the invention of the airplane, worked in France, Brazilians were abroad when they discovered the pion, changing Physics forever, and of course Brazil's participation at WW II was at the European War Theatre). A few battles of war against the Paraguayan aggressor were fought in Brazilian territory, though.

The Great Deppression, the New Deal, Roosevelt's Good Neighborhood policy, the Civil Rights movement and the Vietnam War

Not surprised they skipped the Great Southern War of 1891, Thiago. But I know it pains you as an educated man to know about it, and be bothered by it.

There was no such a war! Ever. It is a lie. Brazil was never defeated in war and never waged a war of aggresion -- never will. Brazil's Army is called Caxias' Invincible Sword. All those who tried to destroy us were crushed. The Paraguayan aggressor, forgetting the infinite gifts we blessed them with, attacked us, outnumbered and murdered in cold blood the soldiers guarding our borderes and tried to annex to Brazil -- nothing is more despicable than ingratitute--, but they paid for their unprovoked and dastardly attack when the Brazilian people, in their righteous might, won through to absolute victory.
The stars in our flag will shine forever as Mankind's beacons.

Slavery remained legal under English law until the 1830s. Washington, in the 1770s, would have had no legitimate reason to fear abolition in his lifetime.

But slavery was only legal in the colonies; it was illegal in England. I suppose the hypothetical worry is that if the american colonies became part of England, then they would be governed by the same rules

One the favorite topics of Hip-Hop History is Alexander Hamilton, so I hear.

Actually there's a lot of Hip Hop History on the web, and it's pretty fun: https://en.wikipedia.org/wiki/Epic_Rap_Battles_of_History

Hazel, my experience being educated in Canada was the very same. The amount of smugness amongst Canadians re: America is astonishing to those who have not had the pleasure of experiencing it. (When I was educated in England, the anti-Americanism was far more vicious. But that's because Canadians can combine smugness with politeness better than most.)

Yes, Canadians are very two-faced in that they will totally trash Americans in private to one-another while being genial and polite to Americans in person. Most Americans simply don't believe that Canadians are *that* anti-American because they go to Canada and everyone is so, so nice to them.

Make no mistake, Americans, behind that polite smile, Canadians despise you and hold you in the lowest contempt.*

(*not all Canadians - some of us are above that bullshit, but we're a minority who risk being socially exiled as "brainwashed" and "Americanized" if we say anything about it.)

This is reminiscent of the situation described in Tom Wolfe's essay "The Mid-Atlantic Man" (from 1966 I believe), except that was Britain and America.

I was not aware that the office of the president controls curriculum decisions in local boards and state education departments.

What can be blamed on Obama knows no bounds ...

It's also worth asking why the Empire continued to spawn new countries, and on the whole they have not recombined. And also, why did the thirteen colonies form a federation after independence rather than just enter into a defence treaty with each other.

It has been technically possible ever since independence for the US to recombine with the UK and Canada. This could have happened at any time and in fact has grown more practical over time for a number of reasons both technological and cultural. It probably hasn't happened for the same reasons that it wasn't seen as a solution at the time - the people involved feel themselves to be three groups.

Indeed - it is not clear that Coasean analysis is applicable here since it is likely that Britain and the American Colonies were better off apart than together. Defense in those days wasn't very scalable, and administration neither. And these are just about the only public goods that the continued empire was bringing, against which you have to set off that policies set as a compromise for each country would like lead to less optimal paths for both of them. So there was no prize for them to bargain over to stay together.

And of course, in times of crisis, we do re-combine. It can be seen as a strategic trap. We look like three separate nations, but when push comes to shove you find yourself confronting one.

Probably Canadians and British could do a better job of answering that question. Getting dragged into dumb imperial wars and having to deal with the generally extremely low grade of discourse in political and social affairs would probably be a good enough reason.

As it is, deep state interconnectedness between the countries is beyond troubling in some cases, with many in such circles working far outside the law with flagrant disregard for the general public or their interests. If anything, relations should be less, not more, as a means of democracy preservation. But formal and open relations should certainly be encouraged to expand.

"Such has hitherto been the rapid progress of that country in wealth, population, and improvement, that in the course of little more than a century, perhaps, the produce of American might exceed that of British taxation. The seat of the empire would then naturally remove itself to that part of the empire which contributed most to the general defence and support of the whole." - Adam Smith, Wealth of Nations http://www.econlib.org/library/Smith/smWN17.html

Just the other day I felt the urge to say "Steady on!" I think that it's because I've been watching lots of British shows on Netflix. Anybody watch "Campus"? It's megareal (better than real).

I am not American, so I do not know much about US history, but I would think that after the end of the Seven years War, without the menace of the French, and the possibility of expansion beyond the Appalachians, there was no incentive for the Americans to remain in the empire. In other words, all that no taxation without representation was essentially bs. Why paying for far-away wars and being restricted in the expansion if they were not going to use the very expensive protection of the British? Any empire is riddled by cross-subsidies, if you are not willing "to create a desert, and call it peace", as Tacitus famously said of Pax Romana, the centrifugal forces are enormous.

Q: Why was there no Coasean solution to the American Revolution?

A: Brexit means Brexit.

I read Barbara Tuchman's March of Folly many years ago and seem to remember that her theory was that stupidity and randomness often triumphed over intellligent self-interest - cf. Brexit and Trump today. Here in the UK it is often said that the real causes of the American revolutionary war was the case of Somerset versus Stewart which made slavery illegal in the UK and was the driving force in the South ..

Not sure how either Trump or Brexit can be classed as "stupidity"

Wasn't the South a hotbed of British loyalists? And the revolution driven from Boston?

Slavery was not outlawed in the British colonies until the 1830s.

I read Barbara Tuchman's March of Folly many years ago and seem to remember that her theory was that stupidity and randomness often triumphed over intellligent self-interest - cf. Brexit and Trump today. Here in the UK it is often said that the real causes of the American revolutionary war was the case of Somerset versus Stewart which made slavery illegal in the UK and was the driving force in the South ..

I'm historically challenged, never heard of that case, but it's funny I just posted an attempt to be funny by claiming George Washington fought against the British for just that reason: slavery and preservation of the status quo (in America). Now, I'll have to look it up; Thanks!

Could have been a factor, sure- but there weren't a lot of slave owners at Lexington and Concord, and Bunker Hill.

Slavery and indentured servitude were common in colonial Massachusetts. Witches were hung. While the New England Puritans were the immediate impetus for the revolution much of the subsequent fighting was done by more southern colonialists.

Wow, if witches were hung, maybe that's why they got hanged...

The last witch executions anywhere in the European sphere happened c. 1730 in Scotland. By the 1770s already witch-hunting had much the same negative connotation that is does today. The culture changed very fast on that one.

On reading Tyler's quote from Galiana and Torrens, I was struck by the similarity of the conclusion to Tuchman's coverage of the American Revolution in "March of Folly". If the quoted paragraph is representative of the Galiana and Torrens paper, then there is hardly anything original in it. Tuchman gave us the same conclusions decades ago. Although, I suppose this does validate my thinking that Tuchman was brilliant. I wish she had been alive to comment on the thinking in 1491 (Chas. C. Mann). That would have been interesting.

Q: Why was there no Coasean solution to the American Revolution?

A: Because Brexit means Brexit.

I read Barbara Tuchman's March of Folly many years ago and seem to remember that her theory was that stupidity and randomness often triumphed over intellligent self-interest - cf. Brexit and Trump today. Here in the UK it is often said that the real causes of the American revolutionary war was the case of Somerset versus Stewart which made slavery illegal in the UK and was the driving force in the South ..

The feeling, in this case, was definitely mutual. The leaders on the American side didn't want representation in Parliament. What they wanted was for Britain to leave them be, at least when it came to matters that they felt were beyond the reach of the unwritten agreement between America and Britain, which was: You protect us from foreign dangers and we agree to obey your trade laws (i.e., we agree to trade only with other parts of the British empire) and to help you defend this corner of the empire.

Correction: We agree to obey your trade laws, if you can enforce them.

I think this is the best explanation. I'm not aware of any of the outspoken Americans agitating for representation; I am aware of complaints about the length and trauma of of voyages. According to Bailyn, the voyages took seven to eight weeks at sea (sometimes as much as three months), plus a week or two in port, and were very seasonal. Representation would have almost certainly meant what would amount to a permanent relocation to London.

"outspoken Americans agitating for representation"

That's poorly stated. What I am getting at is that "taxation w/o representation" was foremost a rejection of taxation, and secondarily, it was used as evidence that the American colonists were not treated as enjoying the liberties of Englishmen, they were being treated as something else. None of the colonies had petitioned for representation as had other English cities/counties w/o representation, a point the British raised many times.

" a point the British raised many times."

If it was a completely invalid point the British would have just offered full representation. However, that wasn't on the table. So the point has merit.

I'm sure I remember reading they did explore an Act of Union at one point. And got told "No".

And I'm not sure I understand why you assume it must have been an obvious move to offer something that the people you are negotiating with don't want.

"I’m sure I remember reading they did explore an Act of Union at one point. And got told “No”."

I'd be glad to read your source that indicates a serious proposal to give the colonies a source of representation that was equal to that internal to the UK. I don't recall any such legislation.

Here is what I found:
"Colonists in America felt that they discharged their obligations when they paid colonial taxes and they resented being compelled to pay taxes levied by a Parliament in which they were not represented. . ... The government in London was unimpressed by the constitutional arguments made by the colonists or the petitions and resolutions adopted by their assemblies. "

http://www.bbc.co.uk/history/british/empire_seapower/american_revolution_01.shtml

The ideal solution (short of independence) from the American POV was to retain George III as king appointing colonial governors while the colonies would have their own legislatures. The British Army and navy would continue to defend the colonies of course, but the colonies would pay only such taxes as their own legislatures authorized (not much).

That may have kicked the can down the road, but if push ever came to shove between a royal governor and a local assembly, you would have the English Civil War all over again.

There is good reason why "Why?" questions are avoided in Science. Of course, History is not science, but still I wonder: do historians really think that way? I can study a subject, and sit down and attempt to list the positive attributes and negative attributes and then explain which way some choice should go based on those attributes. But we know our minds do NOT work that way, we do NOT make decisions that way (perhaps I should say "NOT often"). I think it is a good thing to recognize NEW attributes so that we can better understand the politics which led to any given outcome. But to think that we can put ourselves into the context of the time, and then recognize what was driving a large group of people is delusional. It's like asking what one thing about your spouse or car made you decide to make that choice? It's ridiculous reductionism, and until we can model human behavior and run scenarios where we change the boundary conditions (economics, religions, beliefs, geography, culture, etc. etc.) and allow the models to compute an outcome, all the talk of "why" is mere speculation. “When you can measure what you are speaking about, and express it in numbers, you know something about it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarely, in your thoughts advanced to the stage of science.”

"...the only realistic options were to maintain the original colonial status or fight a full-scale war of independence."

How can people write something like this? Staring them in the face is the Canada/Australia/New Zealand counterexample, where the colonies got to have their own parliament and still remained part of the empire.

Amazing how many people ignore Muller's First Theorem: if it happens, it must be possible.

It's a bit overly emphatic, but the situation America was in circa 1775 was one that the countries you cite never were in.

"The New Zealand Parliament was created by the British New Zealand Constitution Act 1852 which established a bicameral legislature officially called the "General Assembly", but usually referred to as Parliament. It was based on the Westminster model ..." -- https://en.wikipedia.org/wiki/New_Zealand_Parliament#History-

So little New Zealand got a Parliament two generations after the American Revolution. I guess it is true, but I am not sure what it has to do with anything else.

What was possible in 1775 to stave off a Revolution, may or not have been somthing that happened 77 years later and may or may not have occurred without the Revolution.

Which is the whole point, giving New Zealand a parliment in 1852 didn't prove that the American revolutionaries could have been given in 1776 what they wanted. Hence, it may be that "the only realistic options were to maintain the original colonial status or fight a full-scale war of independence."

OK, gotcha.

The Canada / Australia / New Zealand counterexample exists in the context of the previous American example. The government had more incentive to offer a peaceful path to self-government to its culturally Anglo colonies because let's not do that again.

The Admiralty was keen on Australian independence because it knew it would be overstretched defending the Australian colonies, but hoped that a federation would build its own navy. It did.

Staring them in the face is the Canada/Australia/New Zealand counterexample, where the colonies got to have their own parliament and still remained part of the empire.

This was the status of the American colonies prior to the 1770's, with each electing its own local assembly/legislature until the British attempted to impose colonial governors to enforce their assertion of power over the colonies. So to cede local parliamentary power to the colonies would have been in practice simply to maintain the original colonial status.

The American colonies were given a taste of representative government and then it was repeatedly undermined by British colonial governors and the king.

If I may quote from the Declaration of Independence:

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their Public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness of his invasions on the rights of the people.

The appendix to Common Sense by Tom Paine includes a back of the envelope cost-benefit analysis of staying in the Empire (I don't think it was the original edition, but not sure). Among the costs of remaining in the Empire, Paine points out that a cost of staying in the Empire is a share of the British national debt. But Paine also recognized that you got benefits from that debt, such as protection on the high seas by the Royal Navy (of great value to port towns). Paine then attempts to calculate how much it would cost the colonies to build their own navy to match if independent. His back of the envelope calculation, and widely shared among the colonists? Independence was "common sense."

As others have alluded to, part of the British national debt arose by fighting the 7 years war, which started by trying to assert British claims over French Quebec claims in the Ohio River Valley. However, upon British victory, did Parliament recognize the prior English (American colonists) claims to the Ohio Valley over the French Quebec claims? I encourage people to look up the map of Quebec as defined by the British Parliament in the Quebec Act in 1774. What is now Ohio, Indiana, Illinois, Michigan, and Wisconsin was defined as part of Quebec, not as part of Virginia, Connecticut, and other British colonies with coast-to-coast claims, even though the British won the 7 Years War with help from young Mr. Washington.

The lesson was that even if the British Empire beat the French for you, the American colonists still wouldn't get their western lands. Instead, political insiders of the British Board of Trade would set up their own land companies through the Quebec government.

Recommend "The Mississippi Valley in British Politics" by Alvord.

"the American colonists still wouldn’t get their western lands."

The western lands weren't "theirs". They belonged to the people that already lived there, as the British government well knew.

Correction: the American colonists would not get to treat with the Indians. On the other side of the frontier, the Iroquois had their own version of an empire, in which they sold (yes, sold) land to Europeans. Typically, they sold the land of their subjects, including the Delaware and Shawnee. The revolt of some of these subject Indians against treatment by the Iroquois that contributed to the start of the French and Indian War. Around what is now Pittsburg, the role of the Iroquois is particularly important because Pennsylvania, led by Quakers, typically had trouble defending itself when relations with the Indians broke down. See Jumonville Glen, Penn's Creek, etc. in 1754.

Pittsburgh is 304 miles from the Quaker headquarters at Philadelphia.

This is what struck me when I was in Pittsburgh this summer. Basically if West Virginia isn't separated from Virginia it becomes a lot more clear how much more strategically important Pittsburgh was for Virginians than it was for Pennsylvanians. That's why most of the battles involving fort Pitt were fought with Virginian militia.

The American colonies (most of them at least) had land grants that extended west to the Pacific. See various maps here:

http://www.virginiaplaces.org/boundaries/boundaryk.html

What happened when the French were defeated was that these grants were arbitrarily reduced.

Isn't it interesting that remote, ignorant, inbred monarchs had the wherewithal to sell or give away property that they had never seen that was already inhabited by humans whose mistake was failing to develop a more advanced technology of murder. No doubt the US government even now is considering exactly how to sell the property rights on Venus, Mars and other heavenly locations. Maybe the International Star Registry is licensed by BLM.

Is your point that the colonial charters violated some natural law? That Virginia itself was an illegal entity. Whatever. Perhaps I can explain this to you from a different context. When Indian Tribes had their treaties unilaterally rescinded and rewritten to give them less than they had before, they were justifiably pissed.

You're missing his point. From the colonists point of view they had previously had the legal right, under British governance, to settle lands west of the Appalacians. After the French and Indian War, they expected those lands to be opened for colonization. Instead the British government forbade them from settling there. So (whatever the moral claims of the natives) they were justifiably pissed off that the "deal" had been altered.

"They belonged to the people that already lived there"

Land only "belongs" to those who can hold it. The Indians could not.

That line of thinking must be what explains eminent domain.

Good comment here too. Not only was there not anything in it for the Americans anymore, but the Brits proved that their protection came at a much large cost, in terms of the ability to access land, than the colonists had previously calculated.

From a public choice perspective, the absence of a parochial motivation(like governing ethnic majorities) from the burgeoning governing elites is also a possible explanation. This was clearly the expropriation strategy in most sub-Sahara Africa colonies.

The decline of the Spanish Empire, followed by the defeat of the French in the French and Indian War meant that there wasn't anything in it for the American colonies anymore. There weren't any enemies they needed the protection of the British to defeat. The colonies participation in the French and Indian war probably also allowed them to develop sufficient local military forces to protect against whatever remaining threat was posed by France or Spain, or at least realize that they didn't need the help of the British, and could build their own ships and gear.

Basically Britain made a terrible mistake by winning. The lack of an external threat caused the empire to fall apart.

I think the mistake was not so much winning, but passing the Proclomation of 1763 to avoid small headache of allowing colonists and Indians go at for control of the Ohio valley and simultaneously trying to make the colonists pay for the war debt via heavy handed mercantilist policies. If the British had just let to colonists settle the Ohio vallley then the American colonies likely remain in the BE for at least fifty more years until slavery issue bubbled over.

Yeah, probably if the British Empire just let the colonies do whatever they wanted, they wouldn't have bothered to break off. But what's the point of having colonies if you can't use them to extract money and hand out favors? See tedm's comment above - the British won the war and was intending to dole out the newly acquired territory to political insiders instead of letting the colonists have it. That's what empires do.

The French foreign minister Choiseul said something similar in 1765 to his King, that America would be Britain's downfall: if the colonies are not enlisted to aid British finances, the state will be ruined; if the colonies are taxed, they will break away as there is little Britain can do to stop them.

While I think there is some attempt to convert a stinging French defeat into a longterm strategic success, it seems prescient, and perhaps more importantly the French began preparing for this eventuality so they would be in a position to strike the historic enemy at the right time.

Perhaps not all decisions are economic decisions.

The British empire was structurally unsound. The parliamentary government wasn't even capable of proper governance for the place it had originally been made for.
There's been a little research here and there on the subject, but given that most modern governments like to run much larger than they should, there's not much popularity or funding.

The constitutional arrangements and tradition were hard to overcome.

One issue preventing Americans serving in Parliament was the distance and time involved. There were not permanent politicians in the 1700s. People had real jobs and needed to do them. Serving in Britain meant one could not advance their career in the colonies -- the sailing time across the Atlantic back and forth would be too long. Of course, the colonies might appoint agents or residents living in Britain to represent them (Franklin lived in London as an agent for Pennsylvania), but that risked the agents being lost to the concerns of the colony the longer they lived in Britain (Franklin gave some bad advice to the king's ministers in the early 1770s precisely because he had been gone to long from Pennsylvania and did not know how the mood had changed). For the most part, Americans did not want to serve in Parliament. They wanted their own colonial legislatures to be responsible for taxation, and had vague notions that the parliament in London only had some regulatory authority, not the power to tax.

The colonies themselves had a hard time instituting an effective government despite the needs of war. It took from 1775 to 1789 to establish the basis for a sound constitutional order. For Britain to work out something with the colonies might have taken even longer. There were those in Britain who might have established such a framework, but they simply weren't in power at the exact time they needed to be.

Just a bit OT, I am curious as to why the agreement suggested by Galiana and Torrens is a "Coasean Solution" rather than just an ordinary negotiated solution to a conflict. ISTM that the adjective "Coasean" has become more of a linguistic tic than a meaningful adjective in many cases.

Not everything is a "Coasean bargain."

Sometimes a deal is just a deal.

Um, hello? It wouldn't work for the same reason most Coasean bargaining doesn't work in the real world: you incentivize people to infringe on your rights in exchange for that sweet sweet danegeld!

Did you know ...

... there's a strong correlation between people who are giddy with excitement about Coasean bargain, and people who don't understand how extortion works?

Everyone is overthinking it. King George once said everyone who disagreed with him must be bad because he himself only meant good.

He's your reason for a lack of compromise on the British side.

George III was the least absolute monarch in Europe at the time. The colonists main problems were with Parliament (which, to be sure, George backed).

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