Some commonly stated facts about American History do not hold up. Below are five arguments and assumptions frequently made by conservatives, along with evidence to the contrary.
5. Low taxes have correlated to a booming economy
The Myth: Our periods of greatest economic expansion have corresponded with periods of low taxes, and vice versa.
The Reality: The record is mixed, and does not offer a clear indication that tax cuts grow the economy, or that tax increases depress it.
Income taxes were low or (more often) non-existent until 1913. Far from guaranteeing continuous growth, there were a number of steep downturns in this era of tax history. Other eras of low taxes were the 1920s through 1932, and the 2000s. Both of these time periods witnessed growth, but also contained steep downturns.
The converse of this is the idea that tax increases retard economic activity and reduce revenue. Yet the economy grew at historically high rates from the late 1940s through about 1970, even though income taxes were much higher.
Many conservatives give particular focus to the highest marginal tax rate — thus the two charts below.
If low tax rates always led to economic growth, the U.S. would be enjoying its fastest expansion since 1932.
4. The founders were in agreement that the scope of government should be limited
The Myth: As evidenced by the Constitution, our founders placed very strict limits on the scope of the federal government.
The Reality: Anti-Federalists (later Democratic-Republicans) and Federalists competed viciously over the scope and interpretation of the new Constitution and government.
Alexander Hamilton envisioned an industrial economy financed by a strong central bank. He advocated for a strong military that would gain the respect of foreign powers and guard the United States’ commercial interests. He took an expansive view of the “necessary and proper” and “general welfare” clauses of the Constitution and hoped that they would give Congress latitude to fund internal projects and improvements.
John Adams imposed a federal property tax that might cause riots in our current climate. He also introduced the Alien and Sedition Acts which made it illegal to criticize or defame government officials or policies, and he raised the first standing army in a time of (tenuous) peace.
Across the spectrum everyone favored a smaller and more restricted government than that of England. Within that range however, the room for debate was quite high.
3. The United States’ imperialist past was limited
The Myth: With a few exceptions, the United States never sought to build an empire, or to occupy other countries.
The Reality: The exceptions destroy the rule in this case. The United States began as a scattered series of isolated colonies on the eastern seaboard. It is now the 4th largest country in the world.
In the process of American expansion, nearly every native tribe was destroyed, nearly destroyed, or relocated to an area of greatly reduced size and fertility. Hundreds of treaties were signed, and nearly all of them were violated. This wasn’t a mere offshoot of settling native lands, but a conscious policy by a society that cared little for the American Indians and struggled to even find humanity in them.
Take the words of William T. Sherman. As the Commanding General of the U.S. Army from 1869-1883, he was the man in charge of opening the plains to white settlement and investment:
“The more Indians we can kill this year the fewer we will need to kill the next, because the more I see of the Indians the more convinced I become that they must either all be killed or be maintained as a species of pauper. Their attempts at civilization is ridiculous…”
The Mexican-American War resulted in the appropriation of 900,000 square miles from Mexico. The U.S. didn’t “briefly occupy” the land it gained in this case. Rather it appropriated the land entirely and kept it in perpetuity, incorporating it directly into the U.S. in the form of California, Arizona, Texas, and so on.
None of this even covers U.S. foreign policy and the manipulation of other national governments by business interests, most of all in Latin America.
2. Opportunity in America has been equal to all
The Myth: Unlike the embedded aristocracy of Europe, social class was fluid in the United States.
The Reality: The United States was very stratified for most of its history — just less so than Europe.
In the early 1800s, traders and planters lived in prosperity near the east coast while settlers on the frontier lived on dirt floors and survived as subsistence farmers, at constant risk of being killed by irritated natives. The lower classes were crammed into ramshackle tenements in the big cities, without plumbing or sewage.
Later in the nineteenth century there was a massive influx of immigrants. For generations they lived below the standard of the native whites. While the latter group might send their kids to school and even college, the former would send them straight to work at low wages.
For their part, blacks, Mexicans, and Chinese couldn’t obtain bank loans, could barely find jobs, and found their physical safety at risk from working whites when they did. It was impossible to rise above this situation until late in the twentieth century.
That being said the class system was generally not enshrined by law, and perhaps that makes all the difference. There was also the protection of personal freedom — freedom to travel, speak, worship, and work as one chose. But at any given time, most of the people who were prosperous were born that way.
1. The United States has been (until recently) a free market
The Myth: Historically the United States prospered because it was a free market society with little government intervention. The nineteenth century ended in the heights of laissez-faire capitalism.
The Reality: Most large businesses prospered from their close ties to the government, which subsidized companies and acted in their favor at all levels.
In the Civil War, immigrants and farmhands went straight to the front lines, while the wealthy hired substitutes and turned their energies to entrepreneurship. The word “shoddy” was invented to describe the products of such people, and many of them became the millionaires of the Gilded Age.
After the war any railroad company worth its salt bribed officials to procure land grants and favorable routes. Well-connected speculators made fortunes while naive investors were fleeced. Everything depended upon one’s proximity to the leaders of railroads, or their allies in government. Without strong connections to government officials, it was impossible to get a piece of this action.
When businesses were challenged by labor unions, the state nearly always sided with business. State militia and even federal troops were called out to fire upon strikers when their momentum seemed threatening, as in the Pullman Strike of 1894.
The national government has also consistently used immigration policy to benefit business. For fifty years after the Civil War, immigration from Europe proceeded with almost no controls. The mass of broke, destitute arrivals virtually ensured that wages would remain depressed and that unions could be easily broken.
In spite of the rhetoric about the free market, behind any large business there has nearly always been bribery and manipulation of the local, state, and federal governments.
**See also “5 Liberal Falsehoods of American History“**