The Myth of Nationalist Victory: The Articles of Confederation and the Bank of North America

The belief that a stronger central government under the Articles of Confederation and the establishment of a central bank, the Bank of North America (BONA), were essential for achieving victory during the American Revolution. It critiques the claims made by conservative nationalists of the time regarding the necessity of centralized authority for securing independence.

1. Misconception of Centralization and Victory

Many people equate the concepts of victory and liberty with larger government interventions, such as monetary inflation and centralization. During and after the American Revolution, the idea that a strong central government was vital for winning the war became widespread, leading to the belief that liberty required a powerful state.

2. Historical Sequence of the War

The Articles of Confederation were drafted in 1777 and ratified in 1781, while the decisive surrender of British General Cornwallis occurred on October 19, 1781. By this time, the war was essentially over, demonstrating that the formal creation of a central government was not necessary for victory.

3. Decentralized Success

The war effort was primarily managed by the independent states, coordinated through the Continental Congress. The argument that a formal confederation was essential fails to recognize that the states effectively united without it during the conflict.

4. Impact of the Articles of Confederation

Once established, the Articles marked a shift toward centralization, contradictory to the independence that had been fought for. They facilitated a federal government that imposed more control over the states, echoing the centralized authority that the colonies had previously resisted under British rule.

5. Role of the Bank of North America

After the war, economic difficulties arose, leading to the creation of the BONA in 1781. This bank was seen as a solution to financial chaos but was placed into operation after the war's conclusion, undermining claims that it was needed for victory. Its establishment led to inflationary practices similar to those in wartime, creating more economic dislocation.

6. Post-War Economic Conditions

The aftermath of the Revolutionary War created economic difficulties for various reasons, including a transition to peacetime production and foreign trade restrictions. But policies associated with the BONA and other financial solutions often compounded these economic hardships rather than alleviating them.

7. Historical Critique of BONA's Necessity

Historian William Gouge's analysis indicates the exaggerated claims of BONA’s necessity during the Revolution. The bank began operations after the crucial victory over Cornwallis, challenging the narrative that it was critical for achieving independence.

The evidence shows that neither the Articles of Confederation nor the Bank of North America were essential for winning the American Revolution. Rather, these institutions shifted power away from the states and fostered centralization contrary to the goals of independence. They served as precursors to an even stronger centralized government established under the U. S. Constitution in 1787, ultimately compromising the liberty that the revolution aimed to secure. 

https://mises.org/mises-wire/myth-nationalist-victory-articles-confederation-and-bank-north-america