Andrew Edwards: How Austerity Pushed American Colonists to Revolttags: American Revolution, economics, austerity, Bloomberg Echoes, Andrew Edwards
As the euro area tries to wrestle member states into fiscal submission through bailouts, austerity and capital controls, it would be well advised to consider a historical precedent: the American Revolution.
In the early 18th century, North America held a role in the British Empire that was similar to the one occupied by Cyprus or Slovenia in the euro area today. Americans were slavers, smugglers, rumrunners and fanatics -- as “opulent, commercial, thriving” as they were irresponsible and fiscally profligate. But as the empire struggled to stay solvent after the Seven Years War, the government of Prime Minister George Grenville attempted to bring the colonists to heel in the name of fiscal austerity.
“The Circumstances of the Times, the Necessities of the Country, and the Abilities of the Colonies, concur in requiring an American Revenue,” wrote Thomas Whately, a Grenville ally, in 1765.
To be sure, the 18th century British Empire and the euro area are very different. But the similarities are still worth noting: A central unelected body (at least not by North Americans), attempted to solve a fiscal problem by inflicting misguided pain on the periphery....
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