The prosperous American colonies were a jewel of the British Empire. If the Americans were so incensed at their lack of representation, there seemed to be an obvious solution — just bring the colonists into Parliament.
Economists Sebastian Galiani and Gustavo Torrens think they understand why that never happened. In a new working paper, they analyze the American Revolution through the lens of game theory, the mathematical study of strategy and conflict.
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For the British, the main headache was that the colonies weren’t pulling their own weight. In the 1750s and 1760s, the British spent millions of pounds raising armies to defend the North American colonies against the French in the Seven Years’ War. Parliament subsequently demanded that the lightly-taxed Americans should contribute more to the costs of their own defense.
This was a reasonable idea, Smith argued. And the new taxes were still a pittance compared to what people paid in England. Parliament had never demanded of the colonists anything “which even approached to a just proportion to what was paid by their fellow subjects at home,” Smith noted in his book, which was published in 1776, not quite a year into the American Revolution.
Still, Smith was an advocate for harmony and economic efficiency. If the Americans would not pay taxes without political representation, he argued that the most practical solution was to acquiesce. He recommended that Britain should grant the colonies some number of seats in Parliament, depending on how much they contributed in taxes.
He wasn’t the only one to come up with this idea. In the run-up to the Revolution, several similar proposals had circulated on both sides of the Atlantic. The British politician Thomas Pownall dreamed of a merged Parliament, a “Grand Marine Dominion, consisting of our possessions in the Atlantic, and in America, united into a one Empire.” In 1754, Benjamin Franklin wrote that “such a union would be very acceptable to the colonies, provided they had a reasonable number of representatives allowed them.”
So why didn’t any of these plans come through?
Galiani and Torrens argue that political considerations in Britain wrecked any chance of Americans gaining seats in Parliament. “It was not that such a deal was impossible to reach, or that it was completely crazy,” Torrens said in an interview. “Part of the problem is that this would have consequences for the internal politics of the British empire.”
As they discuss in their paper, the British Parliament at the time was dominated by wealthy landowners, who feared that the nation’s growing democratic movement would diminish their power. The common folk, who made up most of the country, were agitating for more say and more representation in Parliament.
“The landed gentry, who controlled the incumbent government, feared that making concessions to the American colonies would intensify the pressure for democratic reforms, thus jeopardizing their economic and political position,” the economists argue.
“There was this slippery-slope argument,” Torrens said. “How could they give representation to the Americans, while many common people in London did not have proper representation?”
In fact, there were populist factions in the British government who welcomed the colonists — in part, it seems, because they thought the Americans would make good allies. It was a volatile period. According to Galiani and Torrens, the ruling class in Britain believed it was better to risk a war and the loss of some colonies than to risk losing control of the entire empire to a political coalition of the lowborn and landless. Their paper’s contribution is to illustrate the strategic logic behind this decision.