Senator John Taylor Believed that States' Rights Were a Tool for Opposing Mercantilism, Subsidies to Corporations Cause an Ocean of Extravagance and Central Banks Cause Economic Gangrene

Perhaps no one more clearly stated the link between states’ rights and opposition to mercantilism than John Taylor, a contemporary of Jefferson’s and a U.S. senator from Virginia. In his book Tyranny Unmasked, Taylor articulated his deep mistrust of Hamilton and what historian F. Thornton Miller calls the “advocates of mercantilist economics.” As Miller writes in his introduction to the 1992 republication of Tyranny Unmasked, Taylor believed that states’ rights were an indispensable tool for opposing mercantilist policies. Indeed, Taylor wrote in his book that British mercantilism was “undoubtedly the best [example] which has ever appeared for extracting money from the people; and commercial restrictions, both upon foreign and domestick commerce, are its most effectual means for accomplishing this object. No equal mode of enriching the party of government, and impoverishing the party of the people, has ever been discovered.” He denounced “protectionist duties, bounties, exclusive privileges, and heavy taxation”—essentially the Hamiltonian/Federalist agenda—as a recipe for economic depression; argued that taxpayer subsidies to corporations would lead to “an ocean of extravagance” that would impoverish the taxpayers; and stated that a government-run central bank would create “economic gangrene.” Taylor “opposed government intervention in the economy and wanted a natural economy, a free market system,” writes Miller, and he also believed that “assertive state rights were necessary to preserve liberty,” particularly economic liberty.

--Thomas J. DiLorenzo, How Capitalism Saved America: The Untold History of Our Country, from the Pilgrims to the Present (New York: Three Rivers Press, 2004), 74-75.

Because the State Can Legally Take Wealth from Its Citizens, Politicians Can Become Skilled Extortion Artists, Little Different from the Mafia

American politicians are fond of making speeches about how they would supposedly enact policies to help “the economy,” meaning capitalism, but in reality they are capitalism’s worst enemies. The reality is that most politicians, especially at the federal level, view businesses as cash cows to be plundered for the benefit of their own political careers. This phenomenon was explained at great length in a 1997 book by Northwestern University law professor Fred S. McChesney entitled Money for Nothing: Politicians, Rent Extraction, and Political Extortion. In this Harvard University Press book Professor McChesney explains that not all government regulation is special-interest legislation, although there is certainly enough of that. Rather, his analysis focuses on how members of Congress often propose onerous legislation that would harm individual businesses or even entire industries and then sit back and wait to be bribed to withdraw or vote against the antibusiness legislation. “Because the state can legally take wealth from its citizens,” McChesney writes, “politicians can extort from private parties payments not to expropriate private wealth.” In other words, many American politicians are skilled extortion artists, little different from the Mafia. McChesney shows how this “political extortion” works. Corporations are pressured into making campaign “contributions” to politicians, paying them for speaking appearances, throwing lavish parties for them, taking them (and their spouses or dates) on all-expenses-paid trips to exotic resorts, giving jobs to their friends and relatives, and various other forms of thinly veiled extortion payments. Rather than paying attention to the process or producing better and cheaper products and services, American businesses are forced to devote considerable time and money to the game of political extortion.

--Thomas J. DiLorenzo, How Capitalism Saved America: The Untold History of Our Country, from the Pilgrims to the Present (New York: Three Rivers Press, 2004), 230-231.