WEBVTT NOTE The American Revolution: Part 3 1 00:00:00.000 --> 00:00:06.240 On to the American Revolution. Now we all know how that came out and it's got a very 2 00:00:06.240 --> 00:00:13.240 interesting history to it. We're not going to cover most of that, of course, but it is 3 00:00:13.240 --> 00:00:21.600 important to understand that the Continental Congress was very much a radical thing to 4 00:00:21.600 --> 00:00:28.700 stand up and to oppose the British Empire with something that you don't do lightly. 5 00:00:28.700 --> 00:00:58.700 So it was a group dominated mostly by the radicals, who fought to found the Continental Congress on a natural law, sort of libertarian perspective and they set out on the usual course of a voluntary government 6 00:00:58.700 --> 00:01:09.700 A boycott against English goods, voluntary boycott where all the colonies agreed not to buy British goods. 7 00:01:09.700 --> 00:01:23.700 This boycott was one of the most effective against the British, shutting down about 95% of imports, British imports into the colonies. 8 00:01:23.700 --> 00:01:46.700 The State of Georgia, their delegation to the Continental Congress was not very radical, and they actually opted out of the boycott, so they sided with the British, those dogs, the colony of Georgia. 9 00:01:46.700 --> 00:02:10.700 However, in this case, even though the boycott was very successful, Parliament was even more obstinate than ever, and instead of repealing the coercive acts, Great Britain decides to step it up a notch and bans the colonies from trading with anyone else. 10 00:02:10.700 --> 00:02:23.700 So basically the British reinforce their naval forces and create a blockade of the American colonies. 11 00:02:23.700 --> 00:02:27.700 I'm sorry, the boycott that you were just talking about? 12 00:02:27.700 --> 00:02:29.700 Yes. 13 00:02:29.700 --> 00:02:35.700 The Continental Congress. 14 00:02:35.700 --> 00:02:38.700 So like what year? 15 00:02:38.700 --> 00:02:55.060 This would be 1775, 1776, would be the first year of the boycott. 16 00:02:55.060 --> 00:03:00.940 Lexington and Concord, of course, is an important component of that history. 17 00:03:00.940 --> 00:03:20.940 For our purposes, it's very important for illustrative purposes. You know, the shot fired around the world. The most important aspect of that story, however, is the results. 18 00:03:30.940 --> 00:03:40.700 At this point, the British were afraid of the Americans. They had their troops stationed 19 00:03:40.700 --> 00:03:49.860 in Boston offshore, in forts and on islands away from the people, because it was just 20 00:03:49.860 --> 00:03:55.380 causing trouble to have the soldiers interact with the people. Well, General Gage had been 21 00:03:55.380 --> 00:04:01.980 Reinforced, and he decided that he had to make it some sort of British presence felt. 22 00:04:01.980 --> 00:04:09.980 So he decided to secretly send a large contingent of British soldiers to capture the radicals 23 00:04:09.980 --> 00:04:15.580 or the rebels' military stores. 24 00:04:15.580 --> 00:04:21.560 So the colony had set up military depots in Concord and Lexington. 25 00:04:21.560 --> 00:04:27.000 When the soldiers reach Concord, British soldiers reach Concord, they are accosted by a group 26 00:04:27.000 --> 00:04:38.840 of American militiamen and the American militiamen are outnumbered and they stand there and fight 27 00:04:38.840 --> 00:04:46.100 shooting at the British and the British are shooting at the Americans in rather typical 28 00:04:46.100 --> 00:04:49.040 European fashion 29 00:04:49.040 --> 00:04:50.380 and the Americans are 30 00:04:50.380 --> 00:04:51.740 cut down 31 00:04:51.740 --> 00:04:53.520 and eventually 32 00:04:53.520 --> 00:04:55.820 end up running away 33 00:04:55.820 --> 00:04:59.720 and the British suffer very few casualties, the Americans suffer 34 00:04:59.720 --> 00:05:06.720 several casualties as a result 35 00:05:06.720 --> 00:05:09.760 the British go to Concord 36 00:05:09.760 --> 00:05:12.560 also successfully raid 37 00:05:12.560 --> 00:05:14.860 the military stores there 38 00:05:14.860 --> 00:05:17.780 and basically at this point in the day 39 00:05:17.780 --> 00:05:21.420 it's a complete british victory 40 00:05:21.420 --> 00:05:27.260 and they start on the way back 41 00:05:27.260 --> 00:05:30.540 back to their 42 00:05:30.540 --> 00:05:33.020 strongholds 43 00:05:33.020 --> 00:05:38.300 and at this point is when the american militiamen independently start 44 00:05:38.300 --> 00:05:40.020 fighting a guerrilla battle 45 00:05:40.020 --> 00:05:43.780 against the british 46 00:05:43.780 --> 00:06:04.280 And so the militiamen are running, getting out in front of the British troops who are marching in the redcoats and the militiamen shooting from behind trees, behind walls, from around buildings, start picking off the British one at a time. 47 00:06:04.280 --> 00:06:11.400 there's no real command structure on these soldiers people are just sort of joining in 48 00:06:11.400 --> 00:06:15.260 independently as they hear shooting of course if you hear shooting what do you do you go 49 00:06:15.260 --> 00:06:21.880 get your gun and then if you see your neighbors are shooting at the British the tendency is 50 00:06:21.880 --> 00:06:29.380 for people just to join in and so more and more these militiamen are joining in they're 51 00:06:29.380 --> 00:06:34.000 not getting shot at because they're hardly being seen by the British the British send 52 00:06:34.000 --> 00:06:49.560 And so the British are being slowly cut to pieces as they move back to Boston in their 53 00:06:49.560 --> 00:06:50.560 stronghold. 54 00:06:50.560 --> 00:06:57.960 And if it wasn't for the fact that the British sent reinforcements, almost twice as many 55 00:06:57.960 --> 00:07:02.120 Reinforcements is the original group 56 00:07:02.120 --> 00:07:06.740 and the fact that the British Navy came and picked them up 57 00:07:06.740 --> 00:07:09.800 it probably would have been a complete victory 58 00:07:09.800 --> 00:07:14.720 for the Americans and the reason that this is important 59 00:07:14.720 --> 00:07:19.680 is that it helps to show 60 00:07:19.680 --> 00:07:23.360 the cost and benefits of fighting 61 00:07:23.360 --> 00:07:27.720 different, with different methods 62 00:07:27.720 --> 00:07:32.800 In particular, fighting against the world military power. 63 00:07:32.800 --> 00:07:38.760 If you're just a bunch of miniature little colonies 64 00:07:38.760 --> 00:07:45.080 and you're fighting against the world's leading military power, 65 00:07:45.080 --> 00:07:50.040 guerrilla tactics are very effective 66 00:07:50.040 --> 00:07:54.040 and standard military tactics 67 00:07:54.040 --> 00:07:57.400 are very ineffective. 68 00:07:57.400 --> 00:08:03.520 You can't become a good soldier overnight. 69 00:08:03.520 --> 00:08:09.920 Becoming a good soldier requires months and months and months of basic training 70 00:08:09.920 --> 00:08:14.640 and then years of experience. 71 00:08:14.640 --> 00:08:18.320 And regular farmers, mechanics, 72 00:08:18.320 --> 00:08:20.240 and artisans 73 00:08:20.240 --> 00:08:23.920 aren't going to be able to develop that overnight. However, 74 00:08:23.920 --> 00:08:25.820 anybody 75 00:08:25.820 --> 00:08:32.820 can become a fairly effective guerrilla almost instantly. 76 00:08:34.700 --> 00:08:39.980 Because you're only firing from a position which you can't get hit. 77 00:08:39.980 --> 00:08:46.460 So all you have to do is be able to fire in a general direction 78 00:08:46.460 --> 00:08:51.500 against the standard military target. 79 00:08:51.500 --> 00:08:53.980 This involves no cost. 80 00:08:53.980 --> 00:09:20.980 It involves no standard military structure. You don't need generals, colonels, sergeants, lieutenants, privates. You don't need quarter masters. You don't need a hospital arm to the military. You don't really need anything. 81 00:09:23.980 --> 00:09:45.340 Most of the pain inflicted on the British during the American Revolutionary War came 82 00:09:45.340 --> 00:09:53.020 came from guerrilla tactics, or in some cases it came from a combination of guerrilla and 83 00:09:53.020 --> 00:10:00.260 standard military tactics. One of my favorite tactics that they used, particularly in the 84 00:10:00.260 --> 00:10:17.980 The South was, you get this British army moving through the colonies. 85 00:10:17.980 --> 00:10:24.220 Much bigger, much better armed, much more experienced. 86 00:10:24.220 --> 00:10:27.100 Then you'd have the Americans. 87 00:10:27.100 --> 00:10:34.380 And by this time, later in the war, they had more military competence because the militia 88 00:10:34.380 --> 00:10:41.020 men had been fighting for several years. 89 00:10:41.020 --> 00:10:48.660 So what they would do is they would take, let's give us a couple of American colors 90 00:10:48.660 --> 00:11:09.660 They would take the untrained guerrillas and they would put them in front and the more standardized army would be hiding in the rear. 91 00:11:09.660 --> 00:11:26.660 So you'd have, you know, this would be trees and fences, and they might put the standard or the untrained military, militiamen, out in front in the open. 92 00:11:26.660 --> 00:11:42.900 And so the idea here was, of course, the British are going to attack in this direction, and 93 00:11:42.900 --> 00:11:51.240 the militiamen would be told, okay, all you have to do is wait until the British get within 94 00:11:51.240 --> 00:12:03.080 in Firing Range, and when they start deploying to fire, you shoot one time, and then run. 95 00:12:03.080 --> 00:12:14.260 And then, so you shoot once, and then run. 96 00:12:14.260 --> 00:12:24.300 The idea here is kill as many British soldiers as possible before they line up to fire. 97 00:12:24.300 --> 00:12:33.300 And then run, get the British running after you, and then join the regular army behind 98 00:12:33.300 --> 00:12:39.820 the wall, behind the trees, in a protected area where they can fire from at the British 99 00:12:39.820 --> 00:12:52.500 But again, it was the guerrilla tactics that inflicted most of the pain on the British. 100 00:12:52.500 --> 00:12:57.540 Conventional warfare methods on the part of the Americans usually resulted in losses to 101 00:12:57.540 --> 00:12:59.260 the British. 102 00:12:59.260 --> 00:13:08.020 Most of the battles that were fought in the American Revolution, the British won. 103 00:13:08.020 --> 00:13:13.380 High School and American History class or your college American History class would probably 104 00:13:13.380 --> 00:13:21.940 tend to talk more about the ones we won, but generally we lost. 105 00:13:21.940 --> 00:13:27.660 George Washington had a terrible military record. 106 00:13:27.660 --> 00:13:33.980 He lost almost all of the battles he fought against the Indians before the American Revolution 107 00:13:33.980 --> 00:13:38.980 and he lost almost all the battles he fought during the American Revolution. 108 00:13:38.980 --> 00:13:47.980 His record, I mean, the record of the Tampa Bay Devil Race would look great compared to George Washington's record. 109 00:13:47.980 --> 00:14:00.980 In fact, his best tactic was to run away from the British Army, so he was constantly moving and the British were constantly following. 110 00:14:00.980 --> 00:14:12.980 And that was his, unfortunately, that was his best tactic, because that gave the guerrillas more of an opportunity to kill the British and to steal their supplies. 111 00:14:12.980 --> 00:14:21.980 In other words, it got them out of their fortresses where the guerrillas could pick them off and steal their stuff. 112 00:14:21.980 --> 00:14:32.980 However, the Continental Army was also hugely expensive. It was the biggest expense of the Continental Congress. 113 00:14:32.980 --> 00:14:45.980 And the Continental Congress was kind of caught in between a rock and a hard place in terms of financing this war. 114 00:14:45.980 --> 00:15:01.980 Because they had mostly radicals in the Congress initially, the radicals didn't want Congress to have the power to tax. 115 00:15:01.980 --> 00:15:11.980 They reasoned and reasoned rightly that if you're going to fight a tax rebellion against Great Britain, 116 00:15:11.980 --> 00:15:18.980 The last thing you want to do is to come in there and say, okay, we are going to be the ones taxing you. 117 00:15:18.980 --> 00:15:27.980 And plus, they realize that if the Continental Congress levied large taxes on the populace, they wouldn't be very popular. 118 00:15:27.980 --> 00:15:35.980 So for that reason, the Continental Congress was not given any taxing authority. 119 00:15:35.980 --> 00:15:50.980 The idea was that they were supposed to be given money by the colonies, now states, in order to finance their expenditures. 120 00:15:50.980 --> 00:16:04.980 The Continental Congress raised money in a variety of ways. They got money from the states, they got foreign loans. 121 00:16:04.980 --> 00:16:08.340 but 122 00:16:08.340 --> 00:16:17.340 their main source of revenue was paper money 123 00:16:17.340 --> 00:16:21.020 and this is a very familiar pattern 124 00:16:21.020 --> 00:16:24.420 that's going to emerge in history 125 00:16:24.420 --> 00:16:29.620 something you should be all too well aware of 126 00:16:29.620 --> 00:16:33.700 by the time we finish this class 127 00:16:33.700 --> 00:16:40.100 about paper money. They said well we're going to need about two million dollars 128 00:16:40.100 --> 00:16:45.380 to fight this war. And of course two million dollars back then 129 00:16:45.380 --> 00:16:50.020 was a lot of money and the population in the United States was 130 00:16:50.020 --> 00:16:56.500 much smaller. There's more people in Alabama now I think than 131 00:16:56.500 --> 00:17:00.780 there were in the colonies. 132 00:17:00.780 --> 00:17:07.780 So it's a small number of people and a dollar was worth a lot more back then. 133 00:17:08.180 --> 00:17:12.260 So two million dollars is a lot of money. 134 00:17:12.260 --> 00:17:14.420 And they pledged that 135 00:17:14.420 --> 00:17:16.340 the states 136 00:17:16.340 --> 00:17:18.100 or colonies 137 00:17:18.100 --> 00:17:21.040 would retire this paper money 138 00:17:21.040 --> 00:17:23.300 after the war was over. 139 00:17:23.300 --> 00:17:28.120 So the Continental Congress was not going to redeem that money in gold because 140 00:17:28.120 --> 00:17:30.220 it didn't have any way of getting the gold. 141 00:17:30.220 --> 00:17:34.380 it said that this money will be redeemed 142 00:17:34.380 --> 00:17:36.080 at the end of the war 143 00:17:36.080 --> 00:17:37.300 so if a 144 00:17:37.300 --> 00:17:38.860 state 145 00:17:38.860 --> 00:17:41.500 were 146 00:17:41.500 --> 00:17:43.220 had a fee 147 00:17:43.220 --> 00:17:46.660 for the federal government say of a hundred thousand dollars that year 148 00:17:46.660 --> 00:17:47.460 it could 149 00:17:47.460 --> 00:17:48.600 send 150 00:17:48.600 --> 00:17:49.960 it could collect 151 00:17:49.960 --> 00:17:51.620 the paper money locally 152 00:17:51.620 --> 00:17:52.800 in taxes 153 00:17:52.800 --> 00:17:55.360 and send it 154 00:17:55.360 --> 00:17:57.280 to the Continental Congress 155 00:17:57.280 --> 00:18:01.960 thereby retiring the paper money. 156 00:18:01.960 --> 00:18:05.680 Well that two million dollar limit didn't hold out for very long. By the end of the 157 00:18:05.680 --> 00:18:07.360 year they had issued 158 00:18:07.360 --> 00:18:09.600 six million dollars 159 00:18:09.600 --> 00:18:14.280 in paper notes. 160 00:18:14.280 --> 00:18:16.300 So the whole money supply 161 00:18:16.300 --> 00:18:18.920 of all of the colonies 162 00:18:18.920 --> 00:18:21.200 combined 163 00:18:21.200 --> 00:18:24.420 was about twelve million dollars. 164 00:18:24.420 --> 00:18:28.060 so before the war there's about twelve million dollars 165 00:18:28.060 --> 00:18:29.720 in species 166 00:18:29.720 --> 00:18:30.940 species 167 00:18:30.940 --> 00:18:32.920 or gold and silver coins 168 00:18:32.920 --> 00:18:34.780 in existence 169 00:18:34.780 --> 00:18:37.700 and they add fifty percent more to that 170 00:18:37.700 --> 00:18:40.860 in the first year of the war 171 00:18:40.860 --> 00:18:42.260 the next year 172 00:18:42.260 --> 00:18:46.540 they had another nineteen million 173 00:18:46.540 --> 00:18:48.900 which is more than doubling 174 00:18:48.900 --> 00:18:50.820 of the money supply that they 175 00:18:50.820 --> 00:18:52.940 the first year they had fifty percent and then they 176 00:18:52.940 --> 00:18:56.060 doubled the whole thing the next year 177 00:18:56.060 --> 00:19:00.220 in seventeen seventy seven they had thirteen million 178 00:19:00.220 --> 00:19:03.340 in seventeen seventy eight they had 179 00:19:03.340 --> 00:19:05.840 sixty four million 180 00:19:05.840 --> 00:19:09.340 again more than doubling the money supply 181 00:19:09.340 --> 00:19:11.520 seventeen seventy nine 182 00:19:11.520 --> 00:19:18.520 they had a hundred and thirty five million 183 00:19:19.540 --> 00:19:21.380 so what 184 00:19:21.380 --> 00:19:26.100 Repeat the numbers, yeah, the money supply is initially six million, 185 00:19:26.100 --> 00:19:28.260 1774, 186 00:19:28.260 --> 00:19:31.340 and then 1775 they had six million, 187 00:19:31.340 --> 00:19:34.300 1776 they had nineteen million, 188 00:19:34.300 --> 00:19:37.620 1777 they had thirteen million, 189 00:19:37.620 --> 00:19:40.300 1778 they had 190 00:19:40.300 --> 00:19:43.200 sixty-four million dollars of 191 00:19:43.200 --> 00:19:46.300 paper money, 192 00:19:46.300 --> 00:19:48.380 1779 they had 193 00:19:48.380 --> 00:19:55.380 for a total of $135 million. 194 00:20:06.260 --> 00:20:08.820 This money was called the Continentals. 195 00:20:08.820 --> 00:20:14.060 When they were first issued, they were supposed to circulate one-for-one against 196 00:20:14.060 --> 00:20:32.700 Coining Money, of course, they rapidly depreciated in value, so that towards the end of the war 197 00:20:32.700 --> 00:20:51.820 where it would take 168 continentals to equal $1. And the common phrase, which is not really 198 00:20:51.820 --> 00:21:01.400 common anymore, is that something was not worth a continental, so it wasn't worth anything 199 00:21:01.400 --> 00:21:17.000 at all. And the economy was experiencing hyperinflation. Prices of goods were rising and they were 200 00:21:17.000 --> 00:21:23.520 rising at an increasing rate. Right along with the inflation of the money supply was 201 00:21:23.520 --> 00:21:36.000 inflation of prices which eventually snowballed into a hyperinflation. 202 00:21:36.000 --> 00:21:43.240 The Continental Congress also borrowed money from foreign governments. 203 00:21:43.240 --> 00:21:51.400 Another big advantage of an insurgency fighting a military power doesn't have to be the number 204 00:21:51.400 --> 00:21:59.560 number one military power, but if it's a military power and it's an unfriendly military power, 205 00:21:59.560 --> 00:22:05.200 it has enemies, those enemies will help out insurgencies. 206 00:22:05.200 --> 00:22:16.320 And so the French were very helpful to the Americans and we also got help and supplies 207 00:22:16.320 --> 00:22:34.320 from Spain, from Holland. So as an insurgency against a world power, you very often can get free stuff from the enemies of that world power. 208 00:22:34.320 --> 00:22:48.320 State governments also issued paper money almost as much as the Continental Congress. They issued over $200 million in paper money. 209 00:22:48.320 --> 00:23:00.320 And so that paper money thing is, you know, there's a usual course of events. It's like, gee, we really would like to do this, 210 00:23:00.320 --> 00:23:13.320 But we don't want to pay for it and we don't want to tax the people because they might not like that enough and vote us out of office. 211 00:23:13.320 --> 00:23:23.320 So we'll issue paper money, but we're only going to issue this amount and we're going to redeem it very soon. 212 00:23:23.320 --> 00:23:32.320 and then they issue more and more and more and more and more and they usually don't redeem it 213 00:23:32.320 --> 00:23:38.320 and you get the price inflation and then you get reactions to the price inflation like price controls 214 00:23:38.320 --> 00:23:45.320 and the colonial governments or state governments put on price controls on the economy 215 00:23:45.320 --> 00:23:55.320 in the Economy, this caused shortages of goods and services. 216 00:23:55.320 --> 00:24:04.180 The Continental Army very often resorted to confiscation. 217 00:24:04.180 --> 00:24:13.400 Confiscation is legalized theft, where you just basically take stuff from people and 218 00:24:13.400 --> 00:24:24.400 I won't tell them you'll pay later, so that's a normal sort of thing that you see in history, normal sort of process. 219 00:24:24.400 --> 00:24:33.400 One of the things that we're usually told in history classes is that one third of the people supported the revolution, 220 00:24:33.400 --> 00:24:40.400 one third of the people did not, and the other third were disinterested. 221 00:24:40.400 --> 00:24:46.400 I'm not sure how they came up with that. I know they don't have any polling data from the period. 222 00:24:46.400 --> 00:24:53.400 And I suspect that's just some sort of concoction to tell the story. 223 00:24:53.400 --> 00:25:00.400 There certainly were Tories. There certainly were people who supported remaining with the British Empire. 224 00:25:00.400 --> 00:25:07.400 And there obviously were patriots. I don't think there was a whole lot of disinterested people. 225 00:25:07.400 --> 00:25:15.400 I think this is one of those things where you are either a forum or a guinem type of thing. 226 00:25:15.400 --> 00:25:22.400 Now you may have people that are not as interested as much in a revolution. 227 00:25:22.400 --> 00:25:27.400 You might have people who are more interested in the revolution. 228 00:25:27.400 --> 00:25:33.400 But I don't think you have a whole lot of people who are like sitting on the fence, so to speak. 229 00:25:33.400 --> 00:25:40.400 For one reason, sitting on the fence when people are shooting means that you're the ones that are most likely to get hit. 230 00:25:40.400 --> 00:25:57.400 My theory is that the Tories were probably a smaller percentage than one third. 231 00:25:57.400 --> 00:26:10.480 and that the group of patriots was much larger and that there were very few fence-sitters. 232 00:26:10.480 --> 00:26:22.740 The Tories were successfully suppressed by revolutionary county councils, so local groups 233 00:26:22.740 --> 00:26:28.940 based on local government would form councils to suppress the Tories or who were considered 234 00:26:28.940 --> 00:26:38.940 the traitors. These groups, these people would be disarmed, they would be harassed, they 235 00:26:38.940 --> 00:27:06.940 They would be ostracized, they would be talked about, they would be shunned, and if there was any issue about them informing the British about what the Americans were up to, then physical harm would likely come to them. 236 00:27:06.940 --> 00:27:12.240 to them so that they did a fairly good job of suppressing the Tories or the 237 00:27:12.240 --> 00:27:17.820 opponents of the revolution. One of the most successful aspects of the war was 238 00:27:17.820 --> 00:27:27.280 America's privateer Navy. Later in the war, basically, there was a world war 239 00:27:27.280 --> 00:27:32.680 going on and Britain was forced to spread out its Navy around the world to 240 00:27:32.680 --> 00:27:40.680 to protect all of its colonies and all of its territories. 241 00:27:40.680 --> 00:27:49.680 France and other European powers were in the war and supporting us. 242 00:27:49.680 --> 00:28:01.680 And with a privateer Navy, you have something that's akin to guerrilla warfare. 243 00:28:01.680 --> 00:28:11.280 And basically, the American government just says, okay, who wants to be a privateer? 244 00:28:11.280 --> 00:28:15.480 And you get a permit from the government. 245 00:28:15.480 --> 00:28:20.480 And that permit allows you to become the American Navy. 246 00:28:20.480 --> 00:28:31.580 And you retrofit your ship so that it's less of a cargo ship and more of a man carrying ship with cannons. 247 00:28:31.580 --> 00:28:39.580 And then you go out and steal ships from the other side. 248 00:28:39.580 --> 00:28:57.580 And privateering, which is basically private navies, was the dominant form of naval warfare before the American Civil War. 249 00:28:57.580 --> 00:29:09.980 If a country was at war, the majority of its ships were privateers. The big man-of-war 250 00:29:09.980 --> 00:29:26.620 type ships were largely unimportant and not very relevant. Navies really can't do anything 251 00:29:26.620 --> 00:29:36.420 at this point. We've got a great big navy. It really can't do anything except suppress 252 00:29:36.420 --> 00:29:46.420 trade. And big navies are not very good at suppressing trade. Their ships don't really 253 00:29:46.420 --> 00:29:52.700 work well for that because they are outrun by trading vessels. So you need other trading 254 00:29:52.700 --> 00:30:16.700 in order to stop the opponent's trade. That's why Germany during World War II didn't have much of a navy. They had one big ship. That's no problem for them. 255 00:30:16.700 --> 00:30:24.040 When they were spending money on naval resources, they built submarines, and they built submarines 256 00:30:24.040 --> 00:30:30.680 not for doing any damage to the opposition, but to damage the opposition's merchant marine, 257 00:30:30.680 --> 00:30:38.600 the trading arm of their opponent. 258 00:30:38.600 --> 00:30:44.880 So America's privateer navy was one of the big keys to its success, because it not only 259 00:30:44.880 --> 00:30:50.220 greatly hampered the British economy, it also greatly hampered the ability of the British 260 00:30:50.220 --> 00:31:01.620 to provision its army in the American colonies. 261 00:31:01.620 --> 00:31:12.360 So the success of the war rests largely with guerrilla warfare, privateers, and to a lesser 262 00:31:12.360 --> 00:31:22.360 to a larger extent on America's foreign friends. 263 00:31:22.360 --> 00:31:40.360 The Continental Congress was really not all that well liked by the citizens, primarily because of the inflation and the Continental Army which not only would take things from farmers or pay with worthless currency, 264 00:31:40.360 --> 00:32:09.860 But they also didn't win very often. And that didn't really matter, as I said. But it's kind of like, you know, the Vanderbilt football team. I mean, you know, the people from Vanderbilt would still like the Vanderbilt football team to win every once in a while. Just for morale purposes. 265 00:32:10.360 --> 00:32:35.960 Okay, who's our first president? 266 00:32:35.960 --> 00:32:45.960 It's a trick question, huh? Does anybody know who our first president was? 267 00:32:45.960 --> 00:32:58.960 Well, it's not George Washington. As a matter of fact, I hate to admit it, if I didn't have it here in my notes, I probably wouldn't remember the guy's name either. 268 00:32:58.960 --> 00:33:10.960 But a man named John Hansen was America's first president under the Articles of Confederation. 269 00:33:28.960 --> 00:33:37.960 The Articles of Confederation 270 00:33:37.960 --> 00:33:50.960 That's a good question. 271 00:33:50.960 --> 00:33:53.960 Yeah, they mean essentially the same thing. 272 00:33:53.960 --> 00:33:59.960 There's a lot of words like that though. Flammable and Inflammable. 273 00:34:07.960 --> 00:34:13.960 I'm not sure what, well I'll have to take a look at that, but they do essentially mean the same thing. 274 00:34:13.960 --> 00:34:18.960 The Articles of Confederation are our first form of government. 275 00:34:23.960 --> 00:34:38.160 Your standard history course tells us a story that runs something like this. 276 00:34:38.160 --> 00:34:53.280 The Articles of Confederation formed a weak government that could not govern, that couldn't 277 00:34:53.280 --> 00:35:18.280 could not carry out the responsibility of government, could not control the behavior of the states from infighting, from imposing protectionism on one another, 278 00:35:18.280 --> 00:35:34.280 of issuing, depreciating paper currency against one another, could not effectively deal with foreign problems, 279 00:35:34.280 --> 00:35:42.280 could not deal with the Indians, could not deal with the Spanish, could not deal with the British, 280 00:35:42.280 --> 00:36:03.280 could not deal with the pirates, couldn't pay off the national debt. 281 00:36:03.280 --> 00:36:07.280 Let's see, I think that's about it. 282 00:36:07.280 --> 00:36:24.800 and I couldn't do anything. Oh, most importantly, could not get the economy up and running again. 283 00:36:24.800 --> 00:36:41.200 So, yeah, I mean it fought the world's leading military power, made some mistakes, but it 284 00:36:41.200 --> 00:36:50.080 won and now it's just incapable of governing. 285 00:36:50.080 --> 00:37:13.560 So we have to go to a new form of government, the U.S. Constitution. 286 00:37:13.560 --> 00:37:27.700 Now what we're going to find out from economics is that this is just a story really and it 287 00:37:27.700 --> 00:37:42.920 lacks any use of economic analysis. 288 00:37:42.920 --> 00:37:54.400 So there's two main problems. One is that the story just doesn't make sense. But that 289 00:37:54.400 --> 00:38:04.640 also leaves us with a problem in terms of why did we go from the Articles of Confederation 290 00:38:04.640 --> 00:38:15.660 to the U.S. Constitution. Now if I had to sit down and list out all of the agreements 291 00:38:15.660 --> 00:38:24.240 upon which governments have been formed throughout history, the Articles of Confederation and 292 00:38:24.240 --> 00:38:29.500 the U.S. Constitution would probably be in my top ten. So they're both pretty good forms 293 00:38:29.500 --> 00:38:45.500 in terms of government. But I also, at the same time, I have to wonder, well, why did we go from one to another? People are very reluctant to change their form of government. Very reluctant. 294 00:38:45.500 --> 00:38:54.500 You know, as we were saying in the last, after the last class, Alabama's state constitution is over a century old. 295 00:38:54.500 --> 00:38:59.500 And people say, well, let's change the Constitution. Everybody goes, no, no, we can't have that. 296 00:38:59.500 --> 00:39:11.500 And, you know, you could write to your congressman and ask him, what is the likelihood of the U.S. having another constitutional convention to re-look at? 297 00:39:11.500 --> 00:39:22.500 You know, our document maybe make a few changes. Just re-look at it and maybe make a few changes. What is the likelihood of that happening? 298 00:39:22.500 --> 00:39:27.500 What is the likelihood of that happening? 299 00:39:27.500 --> 00:39:42.500 And they would say there's no likelihood of that happening. They might even think it's a crank letter and not even respond to you. 300 00:39:42.500 --> 00:39:47.500 So those are two important questions that we want to take a look at. 301 00:39:47.500 --> 00:40:12.500 Let's get back to the first issue about the ineptitude of the Articles of Confederation and this malaise that overtook the country after the American Revolution, an economic malaise and an economic depression. 302 00:40:12.500 --> 00:40:25.500 Okay, so the economy after a war, after the Revolutionary War, sinks into a recession or depression. 303 00:40:25.500 --> 00:40:44.660 Well, actually that's kind of what we should suspect that economy would go into after a 304 00:40:44.660 --> 00:41:13.700 A War. During the war, you have capital consumption and destruction. That's what war does is it 305 00:41:13.700 --> 00:41:20.460 destroys things and also during war you get capital consumption because 306 00:41:20.460 --> 00:41:27.700 nobody is fixing things and upgrading things 307 00:41:27.700 --> 00:41:29.800 renovating things 308 00:41:29.800 --> 00:41:31.240 we're just consuming 309 00:41:31.240 --> 00:41:38.240 our capital 310 00:41:43.700 --> 00:42:04.700 People are killed, people get older, there are fewer marriages, there are fewer births. 311 00:42:04.700 --> 00:42:10.700 So we should expect that sort of thing. 312 00:42:10.700 --> 00:42:14.700 In terms of American industry after the war, 313 00:42:22.700 --> 00:42:24.700 after the war was over, 314 00:42:30.700 --> 00:42:33.700 there was a pent-up demand for British goods. 315 00:42:33.700 --> 00:42:37.700 You know, Americans had been boycotting the British for a long time, 316 00:42:37.700 --> 00:42:48.700 And it was Britain who was producing some of the highest quality, lowest priced goods in the world. 317 00:42:48.700 --> 00:43:00.700 Okay, so that, so the Americans have been like boycotting Walmart, you know, so just envision that. 318 00:43:00.700 --> 00:43:09.700 Okay, America is going to boycott Wal-Mart for nine years and then after the war is over with you can go to Wal-Mart. 319 00:43:09.700 --> 00:43:21.700 Okay, you've been forced to buy from Kmart and Sears for seven or eight years and now all of a sudden you can go to Target and Wal-Mart. 320 00:43:21.700 --> 00:43:27.420 okay so there's a pent-up demand for British goods and actually one of the 321 00:43:27.420 --> 00:43:33.940 funny things here is well it's not funny haha but funny in the other way is that 322 00:43:33.940 --> 00:43:42.180 Americans actually have a lot of gold at this time they're not buying goods from 323 00:43:42.180 --> 00:43:50.980 Britain and they've been getting loans hard currency loans from France, Holland, 324 00:43:50.980 --> 00:43:57.340 in Spain which they've been spending in the American economy and Americans have 325 00:43:57.340 --> 00:44:02.940 been hoarding gold and silver and using the continental money to make trades and 326 00:44:02.940 --> 00:44:08.500 exchanges so the continentals the paper continentals have become the medium of 327 00:44:08.500 --> 00:44:18.780 exchange where the gold and silver perform the function of the medium of 328 00:44:18.780 --> 00:44:25.700 of Account, the Unit of Account, and the Store of Value. So Americans have been hoarding 329 00:44:25.700 --> 00:44:36.600 gold and silver money and using paper currency. So there's plenty of gold to buy this British, 330 00:44:36.600 --> 00:44:53.840 by British goods initially at the end of the war. American war industries, they're basically 331 00:44:53.840 --> 00:45:07.200 out of business and American manufacturers 332 00:45:07.200 --> 00:45:15.320 are in trouble because now they have to compete against British goods. 333 00:45:15.320 --> 00:45:21.240 So the prices of everything are falling 334 00:45:21.240 --> 00:45:26.480 and Americans are having a tough time competing 335 00:45:26.480 --> 00:45:33.480 against the British. 336 00:45:36.400 --> 00:45:39.200 Americans are also 337 00:45:39.200 --> 00:45:46.200 at a disadvantage now because they're no longer part of the British Empire. 338 00:45:46.200 --> 00:46:04.840 Okay, so the navigation acts now start to hurt the U.S. Okay, where the American 339 00:46:04.840 --> 00:46:11.560 shippers and traders were free to trade with Britain, they were free to sell 340 00:46:11.560 --> 00:46:16.560 PENT UP DEMAND 341 00:46:41.560 --> 00:46:46.280 You've got the gold and silver, and when the war ends and British goods come freely into 342 00:46:46.280 --> 00:46:51.360 port, they're low cost, they're high quality, they've been boycott. 343 00:46:51.360 --> 00:46:59.360 And so given all these issues as the war ends, it shouldn't be surprising that the economy 344 00:46:59.360 --> 00:47:02.160 goes into a recession. 345 00:47:02.160 --> 00:47:10.960 You've lost capital, you've lost labor, you've inflated, you've hyperinflated your economy. 346 00:47:10.960 --> 00:47:20.600 That's like causing a massive meltdown of economic order. 347 00:47:20.600 --> 00:47:27.480 People don't know the meaning of anything in a hyperinflation, you know, where a loaf 348 00:47:27.480 --> 00:47:37.640 of bread, a keg of beer, a bag of musket balls all have sort of more or less regular continuous 349 00:47:37.640 --> 00:47:50.640 In a hyperinflation, the prices of everything, labor, land, everything become discombobulated. 350 00:47:50.640 --> 00:48:00.640 Given all of that, you would expect a recession after the war. 351 00:48:00.640 --> 00:48:05.640 You really would not expect an immediate return to prosperity. 352 00:48:05.640 --> 00:48:10.640 So as a justification for a change of government, that doesn't make any sense. 353 00:48:13.640 --> 00:48:23.640 And that's really the main justification given by the proponents of the Constitution. 354 00:48:24.640 --> 00:48:29.640 By the time the Constitution rolls around, America is back into prosperity again. 355 00:48:29.640 --> 00:48:53.640 It's just as an economist would expect, you get a recession, you have bankruptcies, bad debts are wiped out, people go out of business, people lose their jobs, and then other people start up business, other people get different jobs and the economy returns to normalcy or prosperity. 356 00:48:53.640 --> 00:48:58.520 That's what a business cycle is, that's what you'd expect, and so that whole 357 00:48:58.520 --> 00:49:03.800 justification of all the economic issues related to that just doesn't hold much water.