Federalist Paper #12

We're having our first sing-through for MELISANDE on Friday (we're just singing through two of the songs, but they will be sung by people who aren't me) and part of me is like "why am I thinking about anything else" and the other part is "well, you've already committed to the bit" and I suppose that understanding the Federalist Papers can't hurt me, so let's take a look at Federalist #12.

FEDERALIST No. 12. The Utility of the Union In Respect to Revenue

This is one of the Hamilton essays where I just kind of want to quote the entire thing, it delights me with both its insights and its turns of phrase, here's an example:

The prosperity of commerce is now perceived and acknowledged by all enlightened statesmen to be the most useful as well as the most productive source of national wealth, and has accordingly become a primary object of their political cares. By multiplying the means of gratification, by promoting the introduction and circulation of the precious metals, those darling objects of human avarice and enterprise, it serves to vivify and invigorate the channels of industry, and to make them flow with greater activity and copiousness. The assiduous merchant, the laborious husbandman, the active mechanic, and the industrious manufacturer,—all orders of men, look forward with eager expectation and growing alacrity to this pleasing reward of their toils. The often-agitated question between agriculture and commerce has, from indubitable experience, received a decision which has silenced the rivalship that once subsisted between them, and has proved, to the satisfaction of their friends, that their interests are intimately blended and interwoven. It has been found in various countries that, in proportion as commerce has flourished, land has risen in value. And how could it have happened otherwise? Could that which procures a freer vent for the products of the earth, which furnishes new incitements to the cultivation of land, which is the most powerful instrument in increasing the quantity of money in a state—could that, in fine, which is the faithful handmaid of labor and industry, in every shape, fail to augment that article, which is the prolific parent of far the greatest part of the objects upon which they are exerted? It is astonishing that so simple a truth should ever have had an adversary; and it is one, among a multitude of proofs, how apt a spirit of ill-informed jealousy, or of too great abstraction and refinement, is to lead men astray from the plainest truths of reason and conviction.

The tl;dr is that commerce makes everything more valuable – people, land, ideas, communities, states, nations, probably even planets.

It is, in fact, astonishing that so simple a truth should ever have had an adversary.

(REMEMBER THAT COMMERCE /= CAPITALISM)

(NEVER LET SOMEBODY PUT AN "ISM" AT THE END OF WHAT WOULD HAVE OTHERWISE BEEN A GOOD IDEA)

(ISMS CLOSE SYSTEMS)

(AND RUIN EVERYTHING)

Now that we've gotten that out of the way, Hamilton begins to ponder how the United States should collect its tax. Income tax is one option, but there isn't really a lot of income in the U.S. right now, and any time you start taxing income and property you end up making everyone angry for different reasons.

So Alexander Hamilton proposes that the Union get its revenue from duty tax (since we're thinking really hard about the best ways to trade with other nations) and excise tax, which is essentially "sales tax but only on non-essential goods."

It is also – coincidentally – the tax system that Larry and I have spent many many many many many hours discussing.

Unfortunately, Hamilton ruins everything by using the wrong non-essential good as an example:

The single article of ardent spirits, under federal regulation, might be made to furnish a considerable revenue. Upon a ratio to the importation into this State, the whole quantity imported into the United States may be estimated at four millions of gallons; which, at a shilling per gallon, would produce two hundred thousand pounds. That article would well bear this rate of duty; and if it should tend to diminish the consumption of it, such an effect would be equally favorable to the agriculture, to the economy, to the morals, and to the health of the society. There is, perhaps, nothing so much a subject of national extravagance as these spirits.

He could have picked silk, or coffee, or carpet. He could have picked phaetons, which had just been invented and were the horse-drawn equivalent of ridiculous sports cars.

But he picked alcohol, and then he doubled down by being all sanctimonious about it, and that's why we can't have and/or fund our government on nice things.