Thomas J. DiLorenzo: The Revolution of 1913

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Thomas J. DiLorenzo: The Revolution of 1913

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Summary

The events of 1913, including the 17th Amendment, the introduction of the income tax, and the creation of the Federal Reserve, marked a significant shift from federalism and state sovereignty to increased federal control and government intervention in America.

 

Progressive Era Changes

The 17th Amendment, passed in 1913, allowed for direct election of US Senators by popular vote, part of the Progressive movement’s belief that democracy solved all problems, despite leading to more corruption and centralization of power.

The 16th Amendment, ratified in 1913, enabled Congress to impose an income tax, initially at rates of 5-10%, which destroyed federalism and made states appendages of the federal government.

The creation of the Federal Reserve in 1913 marked a tremendous expansion of central bank powers, serving as a final nail in the coffin for federalism and states’ rights.

Economic and Philosophical Impacts

The income tax inverted the founders’ natural rights philosophy by establishing that the government can claim earnings, creating a severe attack on private property.

According to Murray Rothbard, the income tax fostered a high time preference society by lowering real income and monetary assets, increasing the proportion of consumption to investment.

Historical Context and Consequences

The ratchet effect, where government powers and taxes increase during crises and remain elevated, was largely absent from American history until 1913, as noted by law professor Todd Zwiki.

The 13th Amendment, ratified in 1865, changed the language from “United States are” to “United States is”, signifying a shift from a confederation of states to a unified, consolidated empire.

The Pledge of Allegiance, introduced in the 1930s and 1940s, was part of a long-term political movement promoting socialism and centralized power, with American schoolchildren required to recite it for decades.