What the Boston Tea Party wasn’t

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Judge Vinson of the Northern District of Florida has ruled the federal individual health insurance mandate unconstitutional. His decision contains a bit of commentary about the Boston Tea Party. This isn’t a law blog, but I do cover economic history and protectionism. Vinson wrote:

It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place.

The 1773 Boston Tea Party was not a response to monopolization. The English Parliament had given the East India Company a monopoly on British tea since 1698; the American colonies had been required to import their tea only from Britain since 1721. It also wasn’t a response to a price hike. The nominal tax of three pence per pound was imposed by the Townshend Revenue Act of 1767 and renewed in 1773 (though most of the Townshend Act’s other taxes were repealed, the tea tax continued).

So what did cause the Boston Tea Party? A major source of opposition to the 1773 Tea Act was the fact that it lowered the price of imported tea and therefore hurt smugglers who had been illegally importing Dutch tea:

The Townshend Act forbade the [East India] Company from selling its goods directly to the colonists. Instead, the EIC had to auction merchandise to middlemen, who then shipped the cargoes to American wholesalers, who finally sold to local shop owners. In May 1773, Parliament, at the request of the EIC, passed the Tea Act. It imposed no new taxes, but rather allowed the Company, for the first time, to import tea directly from Asia into America. The act cut the price of tea in half and was therefore a boon to colonial consumers. The middlemen cut out by the act, local smugglers and tea merchants, were not as happy…

In November 1773, the East Indiamen Dartmouth, Beaver, and Eleanor entered Boston Harbor with the first loads of the EIC’s tea. The conspirators, probably led by Samuel Adams, were well prepared and highly disciplined: they cleaned the decks when they were finished and took no tea for personal use or later sale. [William Bernstein, A Splendid Exchange: How Trade Shaped the World, 2008, p.242]

Of course, the British claim to have the authority to tax the colonists also produced opposition, but they had been doing so for years. The most proximate change in 1773 was the threat to the economic self-interest of the middlemen and smugglers.

Addendum: LWS suggests this longer treatment of the topic in the New Yorker.

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One Response to “What the Boston Tea Party wasn’t”

  1. Andrew Lee Says:

    Interesting! I had not heard this before. Even still, if the EIC’s monopoly was poorly enforced and it had artificially high prices as a result of those restrictions, then it wasn’t really much of a monopoly until those changes were made.

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