Mises Daily Articles
The Downside of the "Tea Party"
As the tea from the shattered chests of the famed Boston "Tea Party" began to darken the waters of Boston Harbor that night in 1773, a virus infiltrated the moral bloodstream of the embryonic nation that became America.
To this day, Americans' views of such matters remain so poisoned that even voices that otherwise support peace and freedom celebrate the event with twisted reasoning that skirts the fact that a gang of a hundred or so thugs violently deprived their countrymen of access to desirable goods to which the gang had not the slightest claim of ownership, depriving them at the same time of the right to boycott this and other English imports, an entirely laudable exercise of individual discretion that the gang preempted with violent destruction.
This incident was the response of American tea smugglers to the recent act of the English Parliament exempting the British East Indies Company from the tax on importation of tea to North America that was so high that it provided a livelihood to those who brought in tea covertly, circumventing the tax. These Sons of Liberty, as the attackers came to be known by later hagiographers, were already well accustomed to acting under cover of darkness as they did that night in Boston, disguised as Mohawk Indians.
The Tea Act that brought three shiploads of cut-rate tea to Boston threatened the profits of the smugglers even as it brought newly low prices on a luxury good to the general populace, rather like the opening of a town's first Wal-Mart. Of course, this was no more beneficence than Wal-Mart is a charity—the East India Company was badly overstocked with tea, and held a monopoly on legitimately imported tea granted, as all monopolies are, by the government in England.
In Conceived in Liberty, Murray Rothbard renders an account of the event that faithfully and rightly records the extensive transgressions of the British while largely overlooking the wrongs perpetrated by the "tea rioters" (his term) on their countrymen. However important these events are in politics, however, we must not neglect their impact on the principles of free trade.
For among the victims of this caper were the American people themselves, among whom one named Benjamin Franklin expressed the view that the East India Company must be compensated for the cost of the ruined tea. As for the perpetrators, the self-serving logic of their actions was so compelling that the "tea party" actually enjoyed a reprise in New York the following April, by a group of "sea captains."
Outrages enacted by Parliament both before and particularly in retaliation for the incident led to the cloaking of this counter-outrage as an act of righteous defiance by the victors of the ensuing War of American Independence. The provenance of the tea was likewise criticized with accounts of the brutality of the East India Company in India and elsewhere, prefiguring the charges brought today against the Asian producers of inexpensive merchandise found at Wal-Mart and elsewhere.
But the stain of protectionism that it infused into the fabric of American perceptions of right and wrong has led to the systematic ravaging of the welfare, wealth, and very lives of all the millions of Americans who have lived in the 233 years since, not to mention the far greater numbers of foreigners denied the benefits of trade with Americans.
All this was anticipated by the Congregationalist minister Mather Byles, who in that same Boston, in that very time, asked his congregation (referring to King George III of England), "Which is better, to be ruled by one tyrant three thousand miles away, or by three thousand tyrants not a mile away?"
Of the thousands of conveniently located tyrants who succeeded to this legacy, some of the first enacted the Constitution, which reserved the power to lay import duties to the new federal government, promising uniform duties in every port in the nation. Under this arrangement, a low-tariff Connecticut could not undercut a high-tariff Massachusetts in the manner threatened against American tea smugglers by the low-tax East India Company. Uniformly rising tariffs throughout the land were assured, along with a thriving trade for smugglers of every sort. Of such were the glories of Federalism composed.
This systematic, occasionally even popular, plunder of the American many by the American few finally went too far in 1861, when the Morril Tariff went into effect, subjecting imported manufactured goods to tariffs as high as 46 percent. The local tyrants in Charleston, South Carolina revolted (again) against the tyrants who drew their power from the manufacturing states farther north, albeit without night-time orgies of destruction by contingents of disguised hooligans.
Since the Morril Tariff protected the high-cost manufacturing and transportation industries of the North against competition from the cheaper ship-borne imports preferred by consumers in the South, the entire southern half of the "united" states declared their independence (again) and, just as eighty-eight years before, a war between erstwhile compatriots ensued. This time, the rebels were defeated (at a cost of 630,000 American soldiers killed) and the southern half of the preserved Union has lain in economic subjugation to the northern half most of the time since.
Thus it was that the protectionist order was maintained to march onward to such triumphs as the Smoot-Hawley Tariff Act of 1930, providing America's incipient Depression with sufficient impetus and scope to infect the entire world, even while deepening America's own disturbance immeasurably. Arguments that this world-wide Depression triggered World War II are far more widely accepted than is the understanding of how protectionism and the government-corporate favoritism that defines it brings on poverty, hatred, and war.
The American government today, drawing from the largest economy in the world, has far more scope and power to wreak havoc on voluntary exchange across borders, with the prohibition of trade with Cuba entering its forty-fourth year of futile immiseration. The twelve-year embargo visited upon Iraq from 1991 finally erupted in—that's right—war in 2003, and three years hence, it displays vigor and intractability that easily match those of America's War of Independence in its third year. Those who before the US invasion smuggled oil out of Iraq to a world thirsting for cheaper petroleum will be recalled in Iraqi history as heroes of the fight for freedom, with better justification than the Sons of Liberty can claim.
Since 1773, the noxious brew in Boston Harbor has been augmented by many durable toxins such as PCBs, thrown off by the processes of wartime manufacturing. And, just as the industrial chemicals are said to pollute the water supply, the "tea party" continues to befoul American policy and its justifications.
 One awaits the day, not too far off, when a gang of grocery-worker unionists ransacks a Wal-Mart while local police acquiesce. Rich aesthetes may be counted upon to applaud, while the poor who would have benefited from the lower prices remain in the obscurity that is ever their lot. For the time being, the opponents of Wal-Mart have had peaceful recourse to the most-local of tyrants, the city and county governments of San Diego and many other places.