War, Revenue, and State Building

War, Revenue, and State Building: Financing the Development of the American State

Sheldon D. Pollack
Copyright Date: 2009
Edition: 1
Published by: Cornell University Press
Pages: 336
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  • Book Info
    War, Revenue, and State Building
    Book Description:

    In a relatively short time, the American state developed from a weak, highly decentralized confederation composed of thirteen former English colonies into the foremost global superpower. This remarkable institutional transformation would not have been possible without the revenue raised by a particularly efficient system of public finance, first crafted during the Civil War and then resurrected and perfected in the early twentieth century. That revenue financed America's participation in two global wars as well as the building of a modern system of social welfare programs.

    Sheldon D. Pollack shows how war, revenue, and institutional development are inextricably linked, no less in the United States than in Europe and in the developing states of the Third World. He delineates the mechanisms of political development and reveals to us the ways in which the United States, too, once was and still may be a "developing nation." Without revenue, states cannot maintain political institutions, undergo development, or exert sovereignty over their territory. Rulers and their functionaries wield the coercive powers of the state to extract that revenue from the population under their control. From this perspective, the state is seen as a highly efficient machine for extracting societal revenue that is used by the state to sustain itself.

    War, Revenue, and State Building traces the sources of public revenue available to the American state at specific junctures of its history (in particular, during times of war), the revenue strategies pursued by its political leaders in response to these factors, and the consequential impact of those strategies on the development of the American state.

    eISBN: 978-0-8014-5914-6
    Subjects: History

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Acknowledgments
    (pp. vii-viii)
  4. Introduction
    (pp. 1-22)

    In a relatively short time, the American state developed from a weak, highly decentralized confederacy comprised of the thirteen former English colonies into the foremost global superpower. The central argument of this book is that this remarkable institutional transformation would not have been possible but for the revenue raised through a particularly efficient system of public finance originally devised by national political leaders during the Civil War and subsequently resurrected and perfected in the early twentieth century. The revenue from this system of public finance facilitated an extraordinary expansion of the apparatus of the American state—in particular, the military...

  5. 1 The State: Coercion and Tribute
    (pp. 23-54)

    The state is the dominant form of political organization in the world today. As Pratap Bhanu Mehta observes, “The state, for good or for ill, emerged as a decisive form of political organization in the modern world, eclipsing its rivals such as empires, federations, city states, republics.”¹ How did the state come to dominate the world of nations? Over time, the state proved the most efficient form of political organization in making war and extracting wealth from society. That wealth was used to build powerful armies and navies, which in turn, were used to protect and nurture the state apparatus....

  6. 2 War and the Development of the European State
    (pp. 55-83)

    As a political organization asserting a monopoly on violence within a given territory, the state relies on armies and armaments to subjugate and pacify its citizens as well as defend its territory against foreign competitor states. Indeed, in its ancient origins in medieval Europe, the state was used almost exclusively as an instrument of warfare. As the German historian Otto Hintze once astutely observed, “All state organization was originally military organization, organization for war.”¹ To be sure, much of state organization is still military organization—men and machinery dedicated to the deadly art of warfare.

    When states actually go to...

  7. 3 The Rise of the Social Welfare State in Europe
    (pp. 84-99)

    War making is the original and enduring activity of the state. In the pursuit of this ancient endeavor, rulers have dedicated vast resources over the centuries toward acquiring the expensive armaments of warfare for their armies and navies. Military spending has imposed a constant and nearly overwhelming financial burden on those states that make war, forcing their rulers to devise new and more aggressive revenue strategies. In the modern world, rulers now confront a second, and in many cases, even stronger pressure for revenue. Beginning in the late nineteenth century, the states of Western Europe gradually assumed the obligation to...

  8. 4 Origins of the American State
    (pp. 100-116)

    In the chapters that follow, we turn from Europe to the New World to trace the development of the American state from its initial formation in the late eighteenth century as a weak, highly decentralized confederacy to the emergence of a strong fiscal-military state in the twentieth century. This institutional transformation is all the more remarkable given that the American state at its founding possessed neither a significant military nor any effective means for revenue extraction. Nor did the American state perform any social welfare or regulatory functions in the late eighteenth century. Indeed, the national government of the American...

  9. 5 State Formation in the Early Republic
    (pp. 117-164)

    Those political leaders who designed and built the American state in the late eighteenth century were not writing on a clean slate. Long before the outbreak of the American Revolution and the formal severing of ties with the English Crown, there were functioning governments in the colonies. Indeed, the thirteen colonial governments functioned more or less as “relatively autonomous” political organizations, each with its own unique history, traditions, and political institutions. By the time of the American Revolution, the institutional legacy of several of the colonies already dated back more than a century and a half. Moreover, colonial history included...

  10. 6 Reconstituting the American State
    (pp. 165-204)

    While there was widespread recognition by 1786 that the political order established by the Articles of Confederation was deficient (especially, with regard to the fiscal and military powers of the national government), there was no prevailing consensus with regard to solutions. Nationalists wanted a stronger national government than that provided for under the Confederacy. Alexander Hamilton had raised the idea of a convention to debate the merits of a new constitution as early as 1780 and 1782, and the New York legislature approved resolutions embracing the idea, but the other states ignored these proposals.¹ Sentiment for restructuring the political order...

  11. 7 War and the Development of the American State
    (pp. 205-264)

    In the decades following the War of 1812, the United States experienced significant political change, although the American state itself remained a relatively weak political organization. To be sure, the character of the regime changed dramatically during this period. In antebellum America, the nascent party system that had first emerged with Jefferson’s challenge to the Federalists and atrophied during the long period of Jeffersonian hegemony was revitalized by the election of Andrew Jackson in 1828. The so-called Age of Jackson was notable for the democratization of national political institutions and the emergence of a system of “spoils” (or patronage) and...

  12. 8 Financing the Modern American State
    (pp. 265-290)

    The American state that emerged from the throes of the Second World War was a thoroughly transformed political organization. It bore little resemblance to the American state of the turn of the twentieth century, let alone its late-eighteenth-century predecessor. After nearly four years of total war during which the armed forces of Germany and Japan were vanquished by the Allies, the United States was suddenly the world’s undisputed military superpower—rivaled only in Eastern Europe by a regional hegemon, the Soviet Union. With overseas “possessions” and military bases throughout the world, the United States was the only nation-state capable of...

  13. Conclusion
    (pp. 291-300)

    The state is a political organization that claims a monopoly on violence within a given territory. To the extent that a particular state actually possesses such a monopoly (or something close to it), it is ideally situated to perform two vital functions: make war and collect tribute from those living under its jurisdiction. A good deal of the tribute collected is typically dedicated to the military apparatus of the state, which in turn, is used to forcibly extract revenue from society and sometimes, other nations. This is the basis of the powerful combination of fiscal and military powers behind the...

  14. Bibliography
    (pp. 301-316)
  15. Index
    (pp. 317-328)