The first section of the book deals with the "critical period" following the American Revolution. Rothbard quickly disposes of the common belief that the U.S.'s postwar economic hardships were due to excessive importation of inexpensive British goods. Anticipating more recent findings, he attributes these hardships partly to the fact that, after the war ended, the U.S. faced all the mercantilist restrictions that the U.K. applied to other foreign countries. Britain had been the colonies' major trading partner, and independence forced a painful reorientation of American trade. This in turn prompted pressures from merchants and artisans for a more powerful government with navigation laws protecting American shipping and tariffs protecting American manufacturers.
A second economic problem was the revolution's lingering war debt. The state governments devoted the largest portion of their postwar expenditures not only to servicing their own debts but also, in some cases, to assuming the debts of Congress. Doing this required a tax burden unimaginable before the war. Eventually most states adopted a gradual approach, easing the burden with various forms of taxpayer relief—including, in seven states, new issues of paper money. But the Massachusetts government was exceptionally aggressive in trying to pay both interest and principal on its debt quickly. That is what provoked Shays' Rebellion in the western part of the state in 1786.
Portrayed by nationalists then and by historians for a long time afterward as a debtor's revolt, Shays' Rebellion in fact was essentially a tax revolt, like the American Revolution before and the Whiskey Rebellion later. In a preface to this volume of Conceived in Liberty, Thomas Woods credits Rothbard with being the first to interpret Shays' Rebellion this way. While not strictly correct—a few historians, notably E. James Ferguson, had already cited taxes as a major cause of the uprising—this interpretation has since become the historical consensus.
Popular accounts of the post-Revolution, pre-Constitution period often claim that tariffs between the states caused major economic disruptions. Rothbard correctly dismisses this as a "bogey," but given how often those unfamiliar with the period raise this alleged problem, I wish he had given the topic more attention. Virginia did impose a minor tariff on all imports by ship, until it exempted American goods in 1787. And New York and Connecticut taxed foreign goods that arrived through other states. But the general rule was complete reciprocity among states.
Indeed, while Alexander Hamilton's Federalist No. 12 raised the specter of future trade restrictions between states, its main complaint was that competition was keeping state tariffs on foreign imports too low. "Hitherto…these duties have not upon an average exceeded in any State three percent," Hamilton wrote, but with the Constitution, they could be "increased in this country, to at least treble their present amount."