Course Review as of 14 March 2006

1. The Views of the Founders
   
   U.S. Institutions are English -- Political: Representative Government; Separation of Powers; the Common Law. Economic: Private Property Rights and a Means of Enforcement.
   
   General Theme -- The Interaction of Private Property Rights and Representative Democracy. This interaction is dynamic and produces feedback effects between the Political System and the Economic System.
   the 1915 Mercer
   
   The Economic Grievances that led to the War for Independence -- Taxation to pay for British military protection; Navigation Acts; 1763 Proclamation Line.
   
   The Political Grievances that led to the War for Independence -- The use of Admiralty Courts to enforce the various attempts to tax the Colonists in violation of the Common Law.
   
   The Interaction Between the Economic and Political Grievances -- Before 1760 gains from British military protection of shipping greater than the losses from taxes. After 1764 British merchants began to aggressively undersell colonial merchants and crack down hard on the pervasive smuggling by the New England traders. This allowed the revolutionary cadre to link the economic self interests of various groups to basic English rights such as Trial by Jury.
   
   Outline of Madison's Argument in Federalist # 10

   
   1.  Remove Causes (Impossible)
      a.  Destroy Liberty
      b.  Make Everyone the Same
   
   2.  Control the Effects (How do you Protect Minority from the Majority?)
      a.  Faction is Minority  (No Problem)
      b.  Faction is Majority
         i.  Pure Democracy    (Very Dangerous)
         ii.  Small Republic   (A Republic is the Correct Solution --
                                            Large better than Small)
         iii.  Large Republic – 1) With large Republic more able people 
                                    to be Representatives; 
                                2) Larger Constituencies Dampen Down Factions
   

   
   
2. The Early Development of Modern Political Parties
   
   Hamilton's Economic Program: 1)Debt Assumption -- Pay off the Debt of the Continental Congress and the States (State Debt controversial); 2) National Bank -- Used to hold tariff income and as a repository of federal funds; 3) Excise Taxes -- Income needed to pay for the interest on the bonds issued to pay off the Revolutionary War debt; 4) Tariffs
   
   Hamilton's Policies favored New England and Coastal Cities at the expense of Farmers in the interior. Set the stage for the conflict between the Jeffersonian-Republicans and the Federalists.
   
   Foreign Policy Follies -- The 1789 Revolution in France touched off more or less continuous War between France and shifting coalitions of other European Powers (almost always including the English) until the final defeat of Napolean. Efforts to meddle in this War almost always got the U.S. into trouble as the early Republic had no military establishment worthy of the name.
   
   The invention of the Cotton Gin by Eli Whitney in 1793 completely changed the economics of cotton and made Slavery profitable.
   The Cotton Gin
   Cotton Production
   Land Used in Cotton Production
   Distribution of Slaves
   
   The internal conflict over which side to favor in the European War(s) resulted in the Alien and Sedition Acts of July 1798. These were crafted by the Federalists to suppress criticism by the Jeffersonians.
   
   The Virginia and Kentucky Resolutions of November and December 1798 were a response by the Jeffersonians to the Alien and Sedition Acts. They asserted the right of the States to decide whether or not Acts of Congress were Constitutional.
   
   The Election of 1800 -- Jefferson and Burr (Jefferson's Vice-Presidential Running-Mate) each got 73 Electoral Votes. This sent the election into the lame-duck Federalist House of Representatives. Finally, on the 36^th ballot Jefferson got a majority of 10 States and was Elected President. This marked the first peaceful transfer of power from one Political Party to another.
   The Election of 1800
   
   Marbury vs. Madison (1803) -- A clever seizure of power by Chief Justice Marshall. Although a good case can be made that the Founders intended for the Supreme Court to have the power of Judicial Review, it was one thing to have an implied power and another to actually exercise the power! By striking down part of the 1789 Judiciary Act that gave the Supreme Court the mandamus power under its orginal jursdiction, Marshall was able to give Jefferson a victory but also assert the right of the Court to strike down Acts of Congress.
   
   The Territorial Expansion of the United States -- The number of states increased from the original 13 in 1790 to 16 in 1796 and 24 by 1821. These new states entered the Union with highly democratic constitutions that called for the popular election of almost every office. By 1824 18 of 24 states had popular election of Presidential electors and by 1828 22 of 24 states had popular election of Presidential electors. It was the Revolution from below.
   The Inclusion of New States
   
   The Impact of the War of 1812 (18 June 1812 to 14 December 1814 [8 January 1815]) -- The War made it crystal clear to the Business and Political elites along the coast that the U.S. desperately needed internal transportation routes (the English had blockaded the coast during the War). This plus the fact that the population was pouring over the Appalachians into the Ohio River valley made it imperative that this routes be built. The first of these was the Erie Canal.
   Colonial Roads and Trails
   Gallatin's Proposed Routes
   The Erie Canal
   
   The Missouri Compromise of 1820 -- Maine was split from Massachusetts and admitted as a Free State, Missouri was admitted as a Slave state, and Slavery was not allowed north of 36 degrees 30 minutes in any future state.
   Boundary Treaties: 1818 - 1819
   The Missouri Compromise of 1820
   
   The Election of 1824 -- Jackson won both the electoral vote and the popular vote but he did not win a majority of electors. Consequently, the election went to the House of Representatives where a deal between the supporters of John Quincy Adams and Henry Clay resulted in a victory for Adams. Four states that had voted for Jackson "betrayed" him when their congressional delegations voted for candidates other than Jackson. The "corrupt bargain" set off four years of relentless campaigning by Jackson and his supporters leading to the formation of the Democratic Party.
   The Election of 1824
   
   Election of 1828 -- Jackson won a clear majority of both the Electoral votes (22 of 24 States had popular elections) and the Popular Vote. The Democratic Party emerged in 1827 as a result of Martin Van Buren's organizational skills. After the 1828 elections, two mass-based Political Parties emerged -- the Whigs and the Democrats.
   The Election of 1828
   
   
3. What is a Political Party?
   
   We are only interested in Political Parties in countries with freedom of speech and freedom of association. In the U.S. Representative Government and Private Property Rights were present from the beginning. Hence, the institutional structure (political culture) was in place to allow mass based Political Parties to evolve.
   
   A Political Party is an organized Realistic Attempt to Get Power. A real party is one that 1) can win an election and control the government; or 2) has created the general belief that it can take control of the government in the reasonably near future.
   
   Interest groups can be politically relevant but they are not Political Parties. An Interest Group is a Voluntary Association of Individuals with a Shared Concern (economic or idealistic) that Tries to Influence Decisions of the Political System.
   
   Idealistic interest groups have intense preferences and the issues they are concerned about (e.g., abortion) tend to be zero sum.
   
   Political Parties are not coalitions of interest groups because Parties have concerns beyond just narrow interests.
   
   
4. The Spatial Model of Party Competition -- Anthony Downs' An Economic Theory of Democracy
   
   The Party Method for Taking Power: 1) More than one party; 2) Periodic Elections; 3) Universal Adult Suffrage; 4) The Party in Power cannot restrict Political Activity; 5) Parties do not try to take Power by Force.
   
   The Rational Choice Paradigm -- Two basic assumptions: 1) Methodological Individualism; and 2) People's Actions are Purposeful
   
   Logical Framework -- 1) Actions -- what individuals can do; 2) Outcomes -- what results; 3) States of Nature -- An individual's action plus everyone else's actions plus chance events of nature. States of Nature Link Actions to Outcomes.
   
   Preferences are over Outcomes not Actions.
   
   The strong form of rational choice requires that Preferences be Complete, Transitive, and constant across choice situations. These conditions can be weakened somewhat and still have coherent purposive behavior.
   
   Downs: Definition of Political Party –- team of individuals seeking to control the government by gaining office in a duly constituted election.
   
   Downs assumes that Party members are solely interested in Income, Prestige, and Power. Hence, the Government will act rationally to maximize political support. If the Party does not win the election the members do not attain their goals. Hence, we get a Market-Like result that the Government caters to the public even though the Party members are solely self-interested. Voters decide how to vote solely on how much utility they have gotten from the incumbent government versus how much utility they expect to get from the opposition party if it wins. There is no ideology in the model.
   
   The Spatial Theory of Elections -- Unimodal Electorate: If Everyone Votes, or Individuals Abstain due to Indifference, and/or Individuals Abstain due to Alienation, the two parties converge to the median voter.
   Unimodal Distribution of Voters
   
   Bimodal Electorate -- If Everyone Votes or Individuals Abstain due to Indifference the two parties converge to the median voter. However, if Individuals Abstain due to Alienation then the Parties may not converge.
   Bimodal Distribution of Voters
   
   Entry of New Voters -- British Example of adding a large number of new voters concentrated in part of the spectrum where there is no Political Party. In the U.S. this partly describes what happened in the South due to the passage of the 1965 Voting Rights Act that enfranchised African-Americans.
   Entry of New Voters
   
   
5. Realignment Scenarios -- James Sundquist's Dynamics of the Party System
   
   Realignment Scenarios: 1) No Realignment; 2) Realignment in which neither Party is replaced; 3) Realignment in which one Party is replaced; 4) Realignment in which both Parties are replaced.
   A Spatial Model of Realignment Scenarios
   
   Five Variables that Affect Realignment: 1) Breadth and Depth of the Underlying Grievance; 2) Capacity to Provoke Resistance; 3) Leadership; 4) Division of Polar Blocs Between the Parties; 5) Strength of Existing Party Attachments
   
   
6. The Realignment of the 1850s
   
   The Founders tried to duck the issue because many of them believed that Slavery was not very profitable and the system would die off of its own accord. This changed because of the invention of the Cotton Gin by Eli Whitney in 1793.
   The Cotton Gin and Slavery
   
   Popular Democracy triumphed with the election of Andrew Jackson in 1828. The 1830s and 1840s were marked by a dramatic rise in political participation. The Whig-Democrat Party system was the first one to be mass based.
   
   Elections were competitive throughout the United States with a decided edge to the Democrats. The Whigs did much better in the Senate than the House but they only elected two Presidents -- William Henry Harrison and Zachary Taylor.
   
   The Democrats were the party of the common people. They believed in popular control of government and felt that local and state government were the best because local government was closer to the people. There were anti-corporate, anti-capitalist, and agrarians. They did not condone slavery -- rather they were pro-White.
   
   The Republicans were for Order, Authority, and Tradition. They were Federalists. They believed in strong government. They were mercantilitst and Statists. They believed that government should help stimulate economic growth.
   
   The North and South had fundamentally different economic systems. The South was the Slave Power and became the world's leading exporter of cotton. Slavery was immensely profitable because of the speed-up and specialization of slaver labor and the self-sufficiency of the plantations.
   
   The North developed extensive transportation systems -- canals and then railroads. These first knitted together small regional markets and as the railroads advanced to the Mississippi River the railroads created national markets. Manufacturing increased at a rapid rate and the New England and Middle Atlantic states began to industrialize. The railroad network captured an increasing share of the freight traffic and the grains grown along the Mississippi River in Illinois, Iowa, Wisconsin, all were shipped by rail to the East coast rather than down the river to New Orleans.
   
   The steady expansion of population into the Ohio River Valley and towards the Great Plains raised the fundamental issue of how these new areas were to be organized as States. It soon became apparent that the Compromise of 1820 was to the disadvantage of the South as most of the new territory was unsuitable for the Slave-based Cotton system. The admission of Texas in 1845 and the seizure of new territory from Mexico much of which was below the 36 degree 30 minute line gave Southerners some hope that more Slave states could be formed. The Wilmot Proviso was an effort to block Slavery from these new territories and it inflamed sectional feeling. In the long run it was obvious to those who traveled to these new territories that they were unsuitable for slavery.
   
   The Compromise of 1850: 1) California to be admitted as a free state; 2) Part of Texas was given to the New Mexico territory; 3) The slave trade was abolished in the District of Columbia; 4) A fugitive slave law; 5) Utah and New Mexico were organized as territories.
   
   In the 1850s a series of events undermined the Compromise: 1) the publication of Uncle Tom's Cabin inflamed Northern opinion and reinforced the active resistance to the Fugitive Slave Law; 2) The Kansas-Nebraska Act of 1854 repealed the Missouri Compromise and made the question of slavery in the territories one of popular sovereignty; 3) The attack on Charles Sumner by Preston (Bully) Brooks on the Senate floor in 1856; 4) The Dred Scott decision by the Supreme Court in 1857 that ruled that Congress could not exclude slavery from the territories; 5) John Brown's raid on Harper's Ferry, Virginia in 1859.
   Opposition to the Compromise of 1850
   
   The Whig Party disintegrated in 1854 and was no longer a factor in politics. By 1856 the Republican Party had emerged and the realignment was essentially over.
   
   
7. The Realignment of the 1890s
   
   The realignment of the 1890s was completely driven by deflation from 1866 to 1896. Commodity Prices fell steadily through this period while the economy rapidly expanded in the Northern United States.
   Economic Growth and Commodity Prices
   
   The Railroad network expanded from 35,085 to 166,703 miles of mainline track by 1890 thereby allowing the farmers to sell every bushel of wheat they could grow. Farmers switched from subsistence to market-based farming in a single generation. This produced enormous social stress, especially when prices fell.
   The Complaints of the Farmers
   
   The election of 1896 was essentially a one-way realignment. Gold Democrats switched to the Republican Party and Silver Republicans stayed with the Republicans. Organized Labor was too weak to be an important factor in Party politics and played very little role. The upshot was to make the Republican Party dominate until 1930. The only Democrat President elected after Cleveland and before Roosevelt was Woodrow Wilson who won in 1912 because the Republican vote was split.
   
   
8. The Realignment of the 1930s
   
   The Realignment of the 1930s was caused by the Great Depression.
   The Economic Collapse of 1929 - 1933
   
   The proximate cause of the Great Depression was the collapse of the Stock Market in October, 1929. The run-up in Stock prices was a classic bubble that fed on itself ("irrational exuberance") much like a pyramid scheme. People borrowed money and paid for stock with 10% down counting on a continuing rise of stock prices to cover their loan plus interest. Corporate Treasurers began taking surplus money and investing it in stocks. The craze became so intense that it looked like it could go on forever.
   
   When the stock market collapsed it brought down countless brokerage houses and businesses. These in turn undermined banks and insurance companies and paniced depositers removed their savings from banks causing thousands of banks to fail. The economy slid precipitiously downward destroying even healthy, well-managed firms as demand contracted and other businesses failed. By the summer of 1933 unemployment was 24.9%.
   Unemployment
   
   The effect of the Great Depression was to make the Democratic Party dominate in American Politics until the 1990s. In the 62 year period 1930 - 1992 the Democrats controlled the House of Representatives for 58 years. The longest period of dominance of any Political Party in American history.
   
   The Realignment of the 1930s was a one-way realignment of voters into the Democatic Party. Until the 1990s the Two-Party system is best described as a Party-and-a-half system.
   
   
9. The Realignment of the South into the Republican Party in the Modern Period
   
   In 1937-38 Voting on the Fair Labor Standards Act opened a serious split between Northern and Southern Democrats over the rights of Black agricultural laborers in the South. This split was exacerbated by voting during World War II on voter eligibility in the armed forces. Southern Democrats did not want Blacks serving in the Armed Forces to be able to vote in Southern elections. This conflict culminated in the Passage of the 1964 Civil Rights Act, the 1965 Voting Rights Act, and the 1967 Open Housing Act. Collectively, these laws ended legal segregation. The Passage of the Civil Rights Laws triggered a slow Realignment of the White South into the Republican Party.
   Unemployment