A Revolution Against Regulation

One of the great threats to freedom in the United States today is what we at the Competitive Enterprise Institute call “Regulation Without Representation.” Increasingly, laws are effectively made by unelected regulatory agencies in the administrative state instead of the people’s representatives in Congress.

The phrase “regulation without representation” also connotes the battle that George Washington and other American patriots fought against taxation without representation. But in researching my book George Washington, Entrepreneur, I found that “regulation without representation” is more than just linguistically connected to the causes of the Revolutionary War. It was an actual grievance of the colonists that was almost as important as taxation in turning George Washington and other patriots against the rule of Great Britain.

In my book, I document George Washington’s amazing entrepreneurship and innovation. Starting out from a background that was humble compared to the other Founders and lacking resources for a college education, Washington became an apprentice surveyor for the neighboring Fairfax family at 16. He quickly built a lucrative freelance surveying practice and speculated in real estate by purchasing or asking for compensation in some of the undeveloped land he surveyed.

Decades later—after he acquired Mount Vernon due to the untimely deaths of his older brother Lawrence and Lawrence’s family—Washington abandoned tobacco as the farm’s cash crop, diversified into wheat and dozens of other crops, and built a grist mill to sift flour that he would export throughout the colonies and to the West Indies and Great Britain. Washington would put his name on these bags of flour, essentially trademarking the flour with the “G. Washington” imprint on the bags to differentiate it from his competitors, pioneering the practice of branding that we have today. In addition, he turned Mount Vernon into what historian Harlow Giles Unger called in his book, The Unexpected George Washington, “a vast agro-industrial enterprise” that included a blacksmith shop to make tools such as horseshoes and nails and a mini textile factory to make clothing, the latter of which was run largely by Martha Washington. Mount Vernon, by the way, has rebuilt the grist mill and whiskey distillery that Washington placed near the grist mill after he was president.

But these very ventures got Washington pulled into the vortex of regulation the British Parliament foisted upon the American colonies. The red tape stemmed especially from mercantilist trade policies. The Navigation Act of 1651 gave Great Britiain complete control of trade routes for the colonies, which meant that colonists officially could only export and import goods with the mother country.

With limited trade routes and heavy shipping costs for goods from Britain, colonists began to make their own things as well as grow things, just as Washington did with his enterprises at Mount Vernon. The Industrial Revolution that began taking hold in Great Britain during the eighteenth century was also coming to the colonies on a small-scale basis due to the efforts of individual entrepreneurs like Washington.

But Parliament saw colonial manufacturing upstarts like the enterprises at Mount Vernon as a threat to British manufacturers, despite how small the former were in comparison. Parliament passed laws such as the Iron Act, Hat Act, and Wool Act to sharply restrict or ban colonial entrepreneurs from making everything from nails and horseshoes to hats and wool carpets.

In the 1760s, when the British started aggressively levying new taxes on the colonists, they also started ramping up the anti-manufacturing edicts. In fact, the taxes and regulations sometimes worked hand in hand. The Stamp Act, for instance, not only taxed the colonists’ paper imports, but also required that colonial printers make all their products, from legal documents to political newspapers and even decks of cards, with paper stamped in Britain. And even if no law specifically forbade the manufacture of a product, entrepreneurs knew that their new mill or factory could be closed at the whim of British officials if domestic manufacture of the product made the colonies less of a captive market. As business and social historian Lyman Horace Weeks wrote in A History of Paper-Manufacturing in the United States, 1690–1916, “As soon as there were indications that manufacturing industries were likely to develop in the colonies, the jealousy of the British manufacturers was aroused, for they had always regarded America as an altogether exclusive market for their goods.”

Seeing the arbitrariness of new British taxes and regulations, Washington increasingly perceived a threat to all he had built. He expressed this fear in a 1769 letter to his neighbor George Mason, who of course would also become a significant Founder in his own right. Washington worried that if Great Britain can “order me to buy Goods of them loaded with Duties,” they may also “forbid my manufacturing.”

What began for Washington and other Founders as a fight against specific British abuses became a battle for universal human freedoms.

British regulation that would shut down his enterprises seemed to be Washington’s biggest worry, and his fear was shared by many colonial manufacturing entrepreneurs. In his book Forced Founders, progressive historian Woody Holton calls the British taxes the proverbial “straw that broke the camel’s back,” on top of the “heavy tax” already paid “to Britain in the form of its costly monopoly of their trade” and the regulations accompanying these mercantilist policies.

Washington and Mason continued their conversation as events such as the Boston Tea Party in 1773 moved the American colonies further toward revolution. In July 1774, shortly after Virginia’s royal governor shut down the House of Burgesses for issuing proclamations against the British government, Washington and Mason sat down at Mount Vernon and penned the Fairfax Resolves. In its list of 24 resolves or resolutions, the document expressed the increasing disenchantment of the colonists with the mercantilist arrangement and its accompanying onset of new regulation in light of the heavy onset of new taxation from Britain—while not taking the outright step of calling for independence yet.

The third resolution, for instance, laid out the burden to the colonies of Britain’s protectionist policies. As stated by the document, the colonies had “cheerfully acquiesced” to these practices as long as they were “directed with Wisdom and Moderation.” However, “the Claim lately assumed and exercised by the British Parliament” was that “of making all such Laws as they think fit, to govern the People of these Colonies, and to extort from us our Money without our Consent.” Not only are such abuses of power “diametrically contrary” to traditional English liberties, they are “totally incompatible with the Privileges of a free People, and the natural Rights of Mankind.” In speaking of the “privileges of a free people” and the “natural rights of mankind,” the Fairfax Resolves arguably became one of the first declarations of the universal rights of mankind. What began for Washington and other Founders as a fight against specific British abuses became a battle for universal human freedoms.

After Washington and Mason had drafted the Fairfax Resolves, the document was signed by 24 leading residents of Fairfax County. It would be presented one month later in August 1774 to the delegates at the Virginia Convention, which replaced the sessions of the House of Burgesses that the colony’s royal governor had suspended. The Resolves were later presented to the Continental Congress in the fall of 1774, almost certainly influencing the Declaration of Independence that body would ratify two years later.

Having had the Fairfax Resolves presented to Congress, the delegates were familiar with Washington’s views on natural rights and knew that he was a great supporter of the ideals that inspired the Revolution. But historians still do not completely understand why members of the Continental Congress—a contentious group of delegates hailing from all 13 colonies at a time of limited national mass communication—were so confident in Washington that they unanimously made him general of the Continental Army on the first ballot in 1775. Several theories have been offered, including the fact that he wore his uniform from the French and Indian War to sessions of Congress, and that John Adams’ vouching for him won over other members from the Northern colonies.

Largely overlooked is how Adams specifically cited Washington’s business success in making the case for him to lead the American forces. Adams recorded in his diary that he declared to the Congress “that I had but one Gentleman in my Mind for that important command, and that was a Gentleman from Virginia who was among Us and very well known to all of Us, a Gentleman whose Skill and Experience as an Officer, whose independent fortune, great Talents and excellent universal Character, would command the Approbation of all America, and unite the cordial Exertions of all the Colonies better than any other Person in the Union: Mr. Washington.”

Adams’ specific citation in his nominating speech of Washington’s “independent fortune” shows that word about Washington’s successful business ventures had gotten around not just in Virginia, but throughout the 13 colonies. How it got around remains somewhat of a mystery. Since Washington’s flour was distributed throughout the colonies, could the other members of the Continental Congress have seen and familiarized themselves with the “G. Washington” imprint on the bags of flour in their kitchens? We don’t yet know, but we do know from Adams’s speech that Washington had a national reputation for his entrepreneurial talents, and those talents played a specific role in getting him his appointment as General Washington.

Today, while agencies largely carry out the tax laws as Congress enacted them (though the actual tax policies can still be heavily critiqued), the administrative state now promulgates regulations that have no basis in the laws enacted by Congress. Washington warned against exactly this type of encroachment on the legislative branch in his Farewell Address upon serving two terms as our first president, calling for “caution in those entrusted with its [the federal government’s] administration to confine themselves within their respective constitutional spheres, avoiding in the exercise of the powers of one department to encroach upon another.”

In addition to his experience with the British regulatory state, there were other significant factors in Washington’s arriving at and standing firm in his beliefs in liberty and constraining government power. Washington—despite his lack of formal education—was very well read, and what he read likely buttressed his knowledge of freedom as a governing philosophy. While the bulk of Washington’s bookshelves consisted of books on agriculture, Washington’s library also included books on religion, natural rights from philosophers such as John Locke, and even early economics from Adam Smith’s Wealth of Nations, which laid the foundations of capitalism.

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