Tea Cartel Drug Wars, or the Boston Tea Party

First, credit to Malcolm Gladwell and the Revisionist History podcast, my favorite along with SYSK. I encourage you to listen to them all and this this episode that inspired this post: http://revisionisthistory.com/episodes/33-tempest-in-a-teacup.

I started writing this with a preamble that grew into a longer post so I posted that separately: https://adoingword.com/2021/01/11/news-the-new-opium-of-the-people/

This is just a quickly-written summary. Pull on any one of the many threads here and you’ll find stories of intrigue and drama that would fill a COVID quarantine year with Netflix series.

And on to the party! Here’s the story we all were taught to memorize and recite in school:

  1. The colonists were just trying to settle their colony and drink their tea, which they loved because they hadn’t really found coffee yet and there were very few Starbucks.
  2. Evil King George III and Britain wanted to exploit the colonies and get more money so they taxed the tea.
  3. On December 16, 1773, a band of valiant colonists disguised themselves as Mohawk Indians, boarded the tea ships, and dumped the tea into the harbor.
  4. Events unfolded from there and they won the Revolutionary War forming America!!!

The first red flag if you’re thinking critically is, if this band of rebels cares about the people and the tea why didn’t they just steal the tea and give it away like Robin Hood? Pull on this thread and the whole sweater comes apart. It’s not that the opposite story is true and the British were the victims, but the actual story is much more interesting and ripe with lessons of power politics.

The patriots wanted the tea destroyed. Why?

The tea trade in the colonies and most of the world was controlled by the British East India Company (BEIC) and the Dutch East India Company (DEIC). All tea from the BEIC had to be brought to London, sold at auction, taxes paid, and then shipped across the Atlantic ocean to the new world where additional taxes were collected. Meanwhile the DEAC, aka the competition, was shipping and selling directly to the colonies at a lower price and selling on the black market. The Tea Act was passed in May of 1773 to remove this restriction and enabled the BEIC to ship tea directly to the American colonies. In addition, the duties Britain charged on imported tea would be waived on tea sold in the colonies. So victory for colonists, they get lots of tea and the price goes down! This would be good for all those tea consumers! What’s not to like?

But lets go back eight years to understand this tax issue. The crux is that the British expected the colonies to pay taxes, as colonies tended to do. The Stamp Act of 1765 required a tax to be paid and a stamp applied to, oddly enough, paper, including wills, deeds, newspapers, pamphlets and most annoyingly then, even playing cards and dice (not sure how they stamped the dice…) . The tax had to be paid in British Currency which is another great thread to pull on – reserve currency and how it’s used…

After months of protest and an appeal by Benjamin Franklin before the British House of Commons, Parliament voted to repeal the Stamp Act in March 1766. However, the same day, Parliament passed the Declaratory Acts, asserting that the British government had free and total legislative power over the colonies. I think the British really signaled their weakness here and fueled the fire: “We’re going to repeal our taxes on you, but reserve the right to levy them in the future”. This was the crux of the issue. It wasn’t that the taxation was unfair, it was that the colonists didn’t want them to have control, especially without representation.

The Townshend acts followed in 1767 to actually levy new taxes, including the tax on tea.

Why did Britain need to raise money? Were they just trying to exert control? Probably, but they had an acute need as well to pay off the immense debt of the Seven Years’ War (1756-63) and the much longer dispute with France and to a lesser extent Spain over control of the new world There is another super interesting set of threads to explore here about how the colonial powers manipulated the Native American tribes to fight for them against the others.

In summary, the British and the French battled it out for the new world for decades until they were in debt, and then when the British got the French out the colonists objected to even a tax on paper (and dice) to pay for what the British saw as their liberation.

Another great set of threads to explore is the Spanish who form the backdrop in which all of this took place but that’s too much for today.

By 1770 the colonists were getting pretty feisty so the British repealed all the Townshend duties except the tax on tea. This wasn’t so much about tea but rather just an assertion of control each time you take a sip of that tasty tea. Again, weak move Britain. Side note – a significant amount of the tea at that time was green tea. I find it fascinating to envision Ben Franklin, Sam Adams, and Patrick Henry making their green tea.

By 1773 it wasn’t that the tax burden on tea was significant, but that the patriots were getting increasingly powerful and needed a catalyst to push things forward.

But first, lets switch from politics to economics. Events that might seem kind of random like the tea party tend to be surprisingly helpful to the wealthy people in power, and the patriots were very much in power in the colonies. They were also smugglers.

If trade in a good that is desired is illegal, restricted, monopolized by a government entity, or taxed, what happens? Smuggling, or bootlegging. And that’s just what the colonists did. Even without a tax the colonists weren’t keen on trade controlled by the BEAC.

The colonists found an ally in the DEAC. The Dutch had minimal footing in the new world so were not a governance threat, and were also suffering due to competition with the BEAC. They supplied tea to the colonists who ran the distribution network. And it wasn’t just tea, but all kinds of goods in and out of the country. After decades of this the cartel (patriots) had become quite wealthy and powerful.

What ignited the tinderbox? In May the Tea Act allowed the BEAC to bypass England and sell tea competitively directly to America without additional taxes. They also had a huge inventory backlog to deal with. This would flood the market with cheap, good quality, legal tea that would undercut the profits of the smugglers and cartel (patriots).

The tea party wasn’t a band of colonists angry over the high price of tea. It was was a carefully orchestrated move by the Sons of Liberty which included John Adams, John Hancock, James Otis, Josiah Quincy, and Paul Revere, and many others you’ll recognize. Over the years they were also extremely skilled and/or lucky in playing the global political chess game, letting others fight the traditional colonial wars while they swooped in with a savvy disruptive strategy.

The tea party met many needs:

  1. Stick it to the competition in the smuggled tea business and keep the price supported
  2. Create a great story to fire up the colonists
  3. Antagonize the British into action

Word spread quickly throughout the colonies and it made a great story to rally the troops. News reached England in January (long trip time there) and it infuriated Britain and the BEAC causing parliament to end it’s policy of appeasement with what became known as “The Intolerable Acts” in 1774. I’m not sure if there was any winning move at this point but cracking down from across the Atlantic was too little too late.

It wasn’t about taxes. It wasn’t about tea. It was about power and getting more for them and less for the British. But, it usually doesn’t work well to just come out and say that so that’s where you get the rhetoric, even today. It works well to be oblique with a “demandless” movement like the tea party, “Occupy Wall Street”, “Black Lives Matter”, or “Defund the Police”. All of these could be expressed as power transfers from x to y, but that doesn’t play well on the news. Instead all these forces entwine to create an act that seems almost random but catalyzes a move towards the desired result for those with power.

The tea party was a brilliant move.

I’m not interested in judging or figuring out who was more right or wrong and forcing this into a Hollywood movie narrative of good vs. evil. When you do that you lose all the substance. It’s like eating refined flour vs fresh fruits and vegetables. It’s not that refined flour is good or bad, it’s just insipid and without real flavor, texture, or nutrients. The founding fathers weren’t just a bunch of innocent farmers that got pissed about higher taxes and rebelled. That’s boring refined flour and there’s nothing much to learn there.

The founding fathers were complicated bad-asses – generally wealthy, self-motivated, super smart political and economic actors that executed a multi-decade strategy to play immensely more powerful global powers against one another to create a power vacuum that they could fill with a very quick 9 month war (July 1775 to April 1776) with relatively low casualties (6800 died in battle, more will die of Coronavirus in the next two days). They created the Boston Tea Party as a brilliant PR move that quickly spread through the colonies and the world.

Good job patriots!

It’s very interesting to look through modern events with this lens. Was the attack on the capital a wild and wooly bunch of crazy rebels fighting for something? Or are they pawns in a much larger narrative? Interesting question for a school class might be: who are the political entities involved and what do they have to gain or lose? Who are the economic entities involved both for and against? There is a story that is much bigger and more interesting than an attack on the capital.

There are also parallels to current “antitrust” arguments against the big tech companies. Antitrust law was meant to protect consumers. If one company has a monopoly then they could charge monopoly prices and consumers would be hurt. It is a law to protect consumers, not their competition, but that seems to be forgotten. Are you paying too much for Facebook? Google? Like the tea party, there is a premise that this is done to protect consumers but ask yourself “who are the political and economic parties that would benefit from taking power from the large tech companies?” These are going to be the powers driving this effort.

Footnote for those wondering how to get away with insurrection: The disguise was part of the PR narrative to identify themselves as Americans not just colonists. They didn’t really think people would believe the disguise. They were very concerned about getting caught but it was their disciplined code of silence that successfully kept them safe. More recent insurgents might consider that live streaming and posting on Twitter isn’t the best plan, though kudos to the horned hat guy for trying. https://www.bostonteapartyship.com/participants-in-the-boston-tea-party


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