Friday, July 8, 2011

The Boston Tea Party was sparked by a corporate bailout, not high taxes

December 16, 1773: John Adams and a band of marauders posing as native Americans raid British ships in Boston Harbor, throwing their cargo of British East India Company tea into the ocean.

They were protesting the taxes levied by the British Parliament on their favorite cuppa, or so most folks have been taught. That, like most historical assumptions by the modern Teapublican party, is butt-end-forward.

What Adams and the original tea partiers were protesting was not a high tax on tea. It was in fact British government subsidies that allowed the East India Company to sell their tea more cheaply than their competition in the colonies, who had been smuggling untaxed tea from the Netherlands. From tax historian Joseph J. Thorndike, writing on

The Tea Party was part of a longer protest against British taxation of the North American colonies. The conflict had its roots in the French and Indian War (known as the Seven Years' War in Europe). Having run up a huge debt fighting the war -- and defending the colonies from external threat -- the British thought the colonists should help pay it back. But the colonists had other ideas, and they resisted British attempts to collect new taxes. In 1765 they objected to the Stamp Act, insisting that Britain could levy taxes only to regulate trade, not raise revenue. London capitulated. The next year Parliament took another run at the colonial purse, imposing the Townshend duties on a variety of goods imported into the colonies, including paper, paint, lead, glass, and tea. Once again the colonists organized boycotts and protests, and once again Britain backed down. But rather than repeal all the Townshend duties, Parliament chose to retain the tax on tea, chiefly to underscore the government's right to impose such a levy.

For a while the colonists seemed content to ignore that imperial assertion. But in 1773 Parliament passed the Tea Act, which left the Townshend duty on tea intact, but repealed another tax on tea imported to Great Britain for subsequent reshipment to the colonies. This amounted to a tax cut on colonial tea, promising lower prices for colonial consumers.

Bostonians responded by dumping their cheap imported tea into Boston Harbor.

So . . . what the original Tea Party was actually agitating against was precisely the kind of government-supported corporatism that its modern counterpart has whole-heartedly embraced. Thorndike continues:

The Tea Party was prompted by a corporate bailout. What's not to like about cheap tea? Plenty, at least when it comes as part of a corporate bailout. Because that's what the Tea Act was: an 18th-century version of corporate welfare.

After Parliament repealed all the Townshend duties except the tax on tea, colonists seemed to ignore the assertion of the right to tax the colonies. Boycotts petered out, and colonial consumers began buying tea again. But not all that tea was taxed. A large portion -- by some estimates as much as 90 percent -- came from smugglers, who sold Dutch tea unburdened by the British duty.

Meanwhile Parliament was struggling to rescue a corporation it had deemed too big to fail: the British East India Company. The company was saddled with a large debt and even larger inventories. Its warehouses were stocked to the rafters with unsold tea (among other things), and lawmakers soon hit on a brilliant idea: lower the tax on company tea, permit its direct exportation to the colonies, and let the company undercut the smugglers.

The original Tea Party was no more a movement of the folk than the Tea Party of today. Even though modern marchers, shouters, and protesters might be deluded commoners, they are bought, paid for, and lied to by a global cabal of corporate fascists who fully intend to take the United States down and feast on its corpse.