TAXATION without REPRESENTATION

As a native Bostonian, I feel obligated to remind you how this great nation began.  Indeed the exact origins of the philosophical ideas supporting the Declaration of Independence and the US Constitution date to the ancient Greeks, specifically the democracy in Athens.  However, there are events in our recent history that can be said to have inspired the break from Mother England and the incorporation of the former colonies.  One such event was the Boston Tea Party.  Before recalling the particulars of this infamous eve of insurrection, we must consider why it is that the Tea Party must be remembered.  I believe, as many historians have said, that history truly does repeat itself.  In fact, the political/economic climate leading up to the Boston Tea Party is identical, in form, to the current political/economic climate.  By re-examining the events of our history we may find more reason than general bewilderment to be outraged at the latest economic events.

In the late 1760's the British Parliament passed a series of laws that taxed the colonies in the New World on all imports.  Since the colonies only received imports via British shipments conducted by the East India Trading Company, all the taxes on these imports went directly to the crown.  As there were no representatives of the colonies participating in Parliament, these acts were passed without the consent of the colonists.  This is the origin of the famous slogan: "No taxation without representation."  The colonists printed these words, shouted them, and mailed them back to England.  They represent the sentiment that sparked the Boston Tea Party.

A prominent Bostonian, turned smuggler, by the name of John Hancock took 'no taxation without representation,' to heart.  In the early 1770's Hancock smuggled enough tea into Boston Harbor to put the East India Trading Co into the economic 'red.'  Parliament soon bailed them out by passing the TEA ACT.  This allowed the EITC to sell tea in Boston without paying the import tax to the crown, thereby undercutting even the smuggler's price.  When the colonists got wind of their government not only denying their input again, but helping the very corporate giant that was taking advantage of their under-represented position, the last straw had been drawn.

The camel's back broke on the eve of December 16, 1773.  Bostonians, rallying behind Hancock, John Adams, and Samuel Adams boarded the ships of the East India Trading Co and deposited the entirety of its stock of tea into the Boston Harbor.  The damages of the evening have been estimated at about 2 million dollars in 2007 USD.  Needless to say, this is a devastating loss to any company and a priceless victory for the activists.

Two hundred thirty-five years later, the former American colonists are under the thumb of yet another mega corporation.  In fact, we are at the whims of an industry that is currently represented by two companies about to merge.  To boot, the United States government is debating a bailout plan for these companies that have operated without regulation, a freedom given them without the approval of the American public.  The money for the bailout will come from taxpayers; this has been made clear by many government officials, including the President.  

Like the colonists at the whims of the East India Trading Co, Americans in 2008 were subject to the economic oppression by legitimized private corporations (lending institutions like Fannie Mae, Freddy Mac, Bear Sterns, and others).  When lending institutions collapsed, as when tea smugglers put the EITC almost out of business, the government sided against the people.  Then, tariffs were removed. Now, debt is relieved. In both situations, tax payers were burdened and corporations benefitted.

The colonist response to 'taxation without representation' was to dump tea into Boston Harbor.  This action ultimately lead to the American Revolution and much bloodshed.  I'm not exactly sure what a modern analog to that would be.  Should we burn money? Dump stocks into Boston Harbor? Attack wall street? ...The pinstripes are coming... The pinstripes are coming!

Without speculating too much on what we ought to do in this situation, there are a few things we notice when comparing the economies of 1760 and 2008.  First, there is an undeniable connection between government and industry.  The two work in tandem and, we might go so far, cannot function without each other.  Clearly, the British government needed the East India Trading Co.  If it had not, there would not have been a TEA ACT.  Equally, the US government needs investment banks, as evidenced by the $700bn USD bailout plan.  The second thing that we notice in this comparison is that the un-incorporated (aka the people) lose when government and big business team up.  We can see this happening with the import taxes, first being paid by colonists and then removed to undercut colonist trade business.  The modern analog is to be found in the aproximate $3,000 dollars per person in the US, summing to the $700bn bailout fund. Thirdly, 'taxation without representation.' When we ask WHY the governments of 1760 and 2008 are able to conduct their actions against the interest of the people they exist to protect, the answer cannot be clearer: the people bearing the burden, have no voice in their government.

This is a distressing thought.  In the self-proclaimed greatest nation on earth, the head of the free world, the heart of democracy, the land of the free and the home of the brave, the people do not have a say in their government.  This is an hypothesis that we can each test by following the proper channels to support or oppose the bailout plan.  You can: protest, call your congressman, blog, give speeches, and so on, but you will not be invited, nor be allowed to watch, the closed door meetings of the mysterious men and women deciding our economic futures.