Articles · npcrf.org

Short-Term Trading by Retail Investors

Tue, 07 Jul 2026 21:55:00 +0000

The empirical evidence from Brazil and the European Union: the facts for a clear-eyed decision about the risk of loss

Scope: day trading, contracts for difference (CFDs) and binary options.

1. Introduction

Short-term trading, called day trading in the financial literature when positions are opened and closed within the same day, is marketed by sellers of trading courses and by brokerage platforms as an accessible way for retail investors to earn an income. Two independent sources, one academic and one regulatory, make it possible to test that claim against observed data. The first is a study by three Brazilian researchers covering every individual who took up day trading in Brazil’s equity futures market between 2013 and 2015. The second is the body of data gathered by the national supervisory authorities of several European Union Member States and compiled by the European Securities and Markets Authority (ESMA), the evidence behind the first pan-European intervention on financial products sold to retail investors. This note describes both sources, sets out the quantitative results, explains the mechanisms that drive the losses and the regulatory consequences, including the measures adopted in Portugal by the securities regulator, the CMVM, and gives the reader what is needed for a clear-eyed, fact-based decision.

97%	74% to 89%	€1,600 to €29,000
of the retail traders who persisted at day trading for more than 300 days in Brazil’s equity futures market (2013 to 2015) lost money	of retail CFD accounts lost money, according to the supervisory authorities of several European Union Member States	the range of average losses per retail CFD client established by those authorities and compiled by ESMA

2. The Brazilian study: methodology and scope

The study, titled Day Trading for a Living?, is the work of Fernando Chague and Rodrigo De-Losso, of the Department of Economics at the University of São Paulo’s School of Economics, Business and Accounting (FEA-USP), and Bruno Giovannetti, of the São Paulo School of Economics at the Getulio Vargas Foundation (FGV EESP). A first version circulated as working paper 2019-47 of the FEA-USP Department of Economics, dated 19 August 2019. The revised version, dated 11 June 2020, is available on the Social Science Research Network as SSRN 3423101 and also appeared as FGV EESP discussion paper (Texto para Discussão) 525.

The authors tracked every individual who began day trading Brazilian equity futures between 2013 and 2015, in what was then the world’s third-largest market by volume of equity futures contracts. The dataset covers the entire population of new traders over that period, not a sample, which removes the self-selection bias that besets voluntary surveys. The core of the analysis is the group who stayed in the market for at least 300 trading days, precisely the people who, on the course sellers’ promise, should have been reaping the benefit of accumulated experience.

3. The Brazilian study: results

Of those who persisted past 300 days, 97% lost money. In the June 2020 version of the study, just 1.1% made more than the Brazilian minimum wage, and only 0.5% made more than a bank teller’s starting salary, in every case while running high risk. The best performer in the entire population averaged a gain of 310 US dollars a day with a daily standard deviation of 2,560 dollars, results more than eight times as volatile as the gain itself. The August 2019 version had drawn the comparison threshold slightly differently, with 0.4% of participants earning more than a bank teller’s daily income, estimated at 54 dollars a day.

The study adds a finding that bears directly on the idea of learning by doing. The authors found no evidence that performance improved with time in the market. Persistence did not turn losing traders into profitable ones, which contradicts the marketing claim that accumulated experience leads to proficiency. In the 2020 version, the authors set this result in the context of the structural competition that retail traders face from high-frequency trading systems, and concluded that making a living from day trading is virtually impossible.

4. The European evidence: what the national authorities found

In Europe, the quantitative evidence was produced by the national authorities responsible for supervising financial markets in several Member States and compiled by ESMA in the course of its product intervention on contracts for difference (CFDs) and binary options. Their analyses of CFD trading across European Union jurisdictions showed that between 74% and 89% of retail accounts lose money on these products, with average losses per client of €1,600 to €29,000. In Spain specifically, the Comisión Nacional del Mercado de Valores found that 82% of the clients who traded CFDs between 1 January 2015 and 30 September 2016 took losses, €142 million in all.

These figures concern contracts for difference, leveraged derivatives in which the investor never acquires the underlying asset and simply contracts with the broker to exchange the difference between a position’s opening and closing prices. Leverage magnifies gains and losses alike, and frequent trading multiplies the transaction costs the investor bears. The convergence between the European range, 74% to 89% of accounts in loss, and the 97% of losers in the Brazilian study strengthens the pattern, since the two sources rest on different populations, instruments, markets and methods.

5. ESMA’s intervention: legal basis, measures and dates

On the strength of these data, ESMA’s Board of Supervisors approved the first product intervention measures on 23 March 2018, under Article 40 of Regulation (EU) No 600/2014 (MiFIR), a power that allows it to restrict temporarily, for renewable three-month periods, the marketing of financial instruments that raise significant investor protection concerns. The formal decision on CFDs was adopted on 22 May 2018, and the two decisions, one on binary options and one on CFDs, were published in the Official Journal of the European Union on 1 June 2018 under references CELEX 32018X0601(01) and 32018X0601(02).

The ban on marketing, distributing or selling binary options to retail investors took effect on 2 July 2018. The restrictions on CFDs took effect on 1 August 2018 and have five components. The first sets leverage caps on the opening of positions, graduated by the volatility of the underlying asset, as in the table below. The second requires positions to be closed out automatically once the account’s value falls below 50% of the initial margin required. The third guarantees negative balance protection per account, capping the investor’s loss at the money deposited. The fourth bans incentives to trade CFDs. The fifth requires every broker to publish, in standardised form and updated quarterly, the percentage of its retail accounts that lost money over the previous twelve months.

Maximum leverage for positions opened by retail investors (ESMA Decision of 22 May 2018):

Cap	Underlying
30:1	major currency pairs
20:1	non-major currency pairs, gold and major equity indices
10:1	other commodities and non-major indices
5:1	individual shares and other underlyings
2:1	cryptocurrencies

6. Making the restrictions permanent in Portugal: the CMVM’s response

Because MiFIR made ESMA’s measures temporary by nature, entrenching them required national regulation. The CMVM put out to public consultation, with a deadline of 27 February 2019, a draft regulation to make the European restrictions permanent in Portugal, banning the marketing, distribution and sale of binary options to non-professional investors and restricting the marketing of CFDs to that same public. The CMVM grounded the decision in the ESMA data described above and warned that not adopting the measures in Portugal would create room for regulatory arbitrage, with the supply of these products predictably migrating to the Portuguese market from jurisdictions where the restrictions were in force.

To this is added a tax regime with a direct effect on the net result of investors resident in Portugal. Gains on CFDs are taxed as capital gains on securities at a flat 28% and must be declared under category G of the personal income tax return (IRS), which further reduces the income of anyone who does manage to turn a profit.

7. Why the losses happen: the mechanisms documented in the sources

The two sources do more than quantify the losses. Both identify the mechanisms that produce them, and where the two converge, five documented causes can be isolated.

The first cause is the effect of leverage on the probability of losing the entire margin. ESMA’s technical analysis of 1 June 2018, published under reference ESMA50-162-215, quantifies the mechanism with a worked example. On a gold position leveraged at 100:1, the initial margin required for a contract with a notional value of €10,000 is €100. A 3% rise in the price of gold produces a 300% return on the initial margin, but a fall of just 1% wipes that margin out. The asymmetry does not lie in the odds of the price moving one way or the other, which are the same in both directions. It lies in the fact that losing the whole margin closes the position and forecloses any recovery, while an equivalent gain closes nothing. The same analysis concludes that high leverage raises the probability that a position will be closed out automatically within a short time, before any favourable turn in the price.

The second cause is transaction costs multiplied by trading frequency. Every trade bears the spread between the buying and the selling price, the broker’s commissions and, on leveraged instruments, the cost of funding the position. These charges are fixed per trade and indifferent to the outcome, so their total grows in direct proportion to the number of transactions. ESMA’s analysis of 1 June 2018 notes that retail investors typically hold CFDs only briefly, which means high capital turnover and, with it, fast-accumulating costs. Before any profit, a short-term trader has to generate a gross return large enough to cover charges that a long-term investor pays once.

The third cause is the structural conflict of interest in contracts for difference. ESMA’s decision of 22 May 2018 documents that, in the prevailing business model, the CFD broker is the direct counterparty to the client’s position, so one party’s profit is the other’s loss. The same decision identifies two further risks that flow from that position. The first is the asymmetric exploitation of slippage, in which the broker passes on to the client the loss arising from the gap between the quoted price and the executed price, and keeps the equivalent gain when the gap runs in its favour. The second is the deliberate delay between quote and execution, which widens the asymmetry. On binary options, ESMA went beyond the conflict of interest and concluded that the product’s expected return is negative by design: the average loss is built into the instrument before the investor makes a single decision, and that finding justified an outright ban rather than a mere restriction.

The fourth cause is the structural competitive disadvantage against professional operators. In the version of 11 June 2020, Chague, De-Losso and Giovannetti set their results in the context of the competition between retail investors and high-frequency trading systems. These systems run on servers co-located with the exchanges’ matching engines, operate at latencies measured in microseconds, and systematically capture price opportunities before any retail order reaches the market. A retail trader working in minutes competes in the same order book, on slower information and slower execution, against counterparties whose technological edge is permanent.

The fifth cause is the absence of learning, which keeps the early losses from ever being recovered. The Brazilian study tested directly whether performance improves with experience and found no evidence that persistence turned losing traders into profitable ones. That finding converts the four previous causes from passing costs into permanent ones. If learning existed, the losses of the first months would be an investment in future skill. In its absence, every additional day of activity repeats the same structure of disadvantage, and the cumulative probability of loss grows with time in the market instead of shrinking.

These five causes operate at once and reinforce one another. Leverage speeds up the loss of the margin, transaction costs eat into capital with every trade, the conflict of interest and the technology gap degrade the quality of execution, and the absence of learning ensures that experience neutralises none of it. The 74% to 89% of losing accounts in the European Union and the 97% of persistent losers in Brazil are the aggregate result of that combination, not of individually bad decisions taken in isolation.

8. In sum: the facts for the reader’s decision

The two sources arrive by independent routes at the same quantified conclusion. In Brazil’s equity futures market, 97% of the retail traders who persisted at day trading for more than 300 days between 2013 and 2015 lost money, with no evidence of learning, according to the study by Chague, De-Losso and Giovannetti. In the European Union, the national supervisors’ analyses compiled by ESMA put the share of retail CFD accounts in loss at between 74% and 89%, with average losses of €1,600 to €29,000 per client. The European regulatory response of 2018, and its Portuguese consolidation in 2019, rested on this empirical basis and on nothing else.

The facts that matter for the decision are therefore these. The documented probability of loss runs from 74% to 97%, depending on the market and the instrument. The mechanisms that produce the losses are structural, operate simultaneously and, on the available evidence, are not neutralised by experience. The European and Portuguese regulators judged the risk serious enough to restrict the marketing of these products and to ban binary options outright. The documented pattern concerns short-term trading in leveraged instruments and does not carry over, without separate analysis, to long-term equity investing, whose costs, risks and time horizon are of a substantially different order. This note is not individual financial advice. Anyone weighing this activity decides in full knowledge that the expected outcome, measured across entire populations of real traders, is negative for the overwhelming majority.

9. Sources

Chague, F., De-Losso, R., and Giovannetti, B., Day Trading for a Living?, working paper 2019-47, Department of Economics, FEA-USP, 19 August 2019; revised version of 11 June 2020, SSRN 3423101 (https://ssrn.com/abstract=3423101); also published as Texto para Discussão 525, FGV EESP, 2020.

ESMA, press release “ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors”, reference ESMA71-98-128, 27 March 2018, recording the Board of Supervisors’ approval of 23 March 2018.

ESMA, press release “ESMA adopts final product intervention measures on CFDs and binary options”, 1 June 2018, giving the application dates of 2 July 2018 for binary options and 1 August 2018 for CFDs.

ESMA decisions published in the Official Journal of the European Union on 1 June 2018, references CELEX 32018X0601(01) and 32018X0601(02), adopted under Article 40 of Regulation (EU) No 600/2014.

ESMA, “Product Intervention Analysis: Measure on Contracts for Differences”, reference ESMA50-162-215, 1 June 2018, referring to the decision of 22 May 2018 on CFDs.

CNMV International Bulletin, “ESMA agrees on product intervention measures in relation to CFDs and binary options offered to retail investors”, June 2018, with the national authorities’ data (74% to 89% of accounts in loss, average losses of €1,600 to €29,000) and the Spanish finding by the CNMV (82% of clients in loss and €142 million between 1 January 2015 and 30 September 2016).

Jornal de Negócios, “CMVM impõe limites à comercialização de CFD a particulares”, 1 February 2019, and Jornal Económico, “CMVM limita a venda do derivado CFD a investidores não profissionais”, reporting the CMVM public consultation that closed on 27 February 2019.

The Independence That Wasn't

Tue, 07 Jul 2026 20:35:00 +0000

July 4, 1776 as a succession of colonial sovereignty, not decolonization

Abstract

This essay argues that the word independence, applied to July 4, 1776, describes only the rupture between the settler population of the thirteen colonies and the British crown. Under the criterion the term requires in the context of colonization, the restitution of territorial sovereignty to the original people, the event constitutes a succession of power between colonizers. The thesis rests on the theoretical corpus of settler colonial studies, on the documentary record of the revolutionary period and on quantified demographic and territorial data, verifiable in the sources cited.

The argument in brief

On July 4 the United States celebrates Independence Day, the date on which the Second Continental Congress adopted, in 1776, in Philadelphia, the Declaration of Independence of the thirteen British colonies. This essay argues that the word independence, applied to that event, strictly describes only the relationship between the settler population and the British crown, and that, when one adopts the criterion the word requires in the context of colonization, the restitution of territorial sovereignty to the original people of the territory, July 4 marks not independence but a succession of power between colonizers.

The peoples who occupied the territory before 1607 did not recover sovereignty in 1776, did not recover it in the two hundred and fifty years that followed, and hold today, according to data published in the journal Science in 2021, about one percent of their historical land base. The thesis is not a rhetorical provocation. It rests on an established body of theory, that of settler colonial studies, and on a verifiable documentary and quantitative record, which this essay works through on three fronts, the conceptual, the chronological and the statistical.

1 · What the word conceals

Independence, from the Latin in dependentia, designates the cessation of a relation of political subordination. Applying the term therefore requires identifying the subordinate subject. In the case of the thirteen colonies, the subject legally subordinated to the British crown was the settler population, organized in colonial governments with assemblies, courts and royal charters of their own since the seventeenth century. The native peoples related to the crown and to the colonies through treaties, a regime that presupposed distinct sovereignties, however unequal in practice. The rupture of 1776 dissolved the first relationship and left the second intact, with one decisive difference in who held the power exercised over it, which passed from London to the new American state.

Ordinary political-science usage applies the term independence to any transfer of sovereignty from a metropole to the entity that administered the territory. That usage is formally defensible and it is what sustains the official designation of the commemoration. The problem arises when the same term is used for the decolonization processes of the twentieth century, India in 1947, Ghana in 1957, Algeria in 1962, Angola and Mozambique in 1975, cases in which sovereignty reverted to the previously subordinated majority population. Applying the same word to 1776 and to 1947 suggests an equivalence that does not exist. In India, the colonizer left and the colonized governed. In North America, the colonizer stayed, expanded and inherited the apparatus of state. The word is the same, the phenomenon is the opposite.

2 · The theoretical framework

The distinction this essay defends is neither original nor marginal. It corresponds to the core of the academic field of settler colonial studies, whose canonical formulation belongs to the Australian historian Patrick Wolfe. In the book Settler Colonialism and the Transformation of Anthropology, published in 1999, and in the article “Settler Colonialism and the Elimination of the Native”, published in 2006 in the Journal of Genocide Research, Wolfe distinguishes exploitation colonialism, in which the metropole extracts resources and labor from the local population without replacing it, from settler colonialism, in which the settler population comes to stay and the structural objective is the elimination of the native as a political entity, in order to free up the land. The formula that condenses the theory, invasion is a structure and not an event, means that the process does not end at a datable initial moment; it lives on in the institutions that settler society builds upon the expropriated land. The 2006 article has thousands of academic citations and is today foundational reading in the field.

The Italian sociologist Lorenzo Veracini developed the typology in Settler Colonialism: A Theoretical Overview, published by Palgrave Macmillan in 2010, where he argues that settler colonialism is structurally resistant to decolonization, because the departure of the colonizer, which defines classical decolonization, is impossible when the colonizer has become the demographic majority and the state itself. In the American and Australian cases, so-called independence decolonized nothing at all; it merely made the settler society sovereign.

The Ugandan political scientist Mahmood Mamdani, professor at Columbia University, gave the argument its most direct formulation in Neither Settler nor Native: The Making and Unmaking of Permanent Minorities, published by Harvard University Press in 2020. Mamdani holds that the United States is not a postcolonial society, because the colonial process never ended, it merely changed managers in 1776, and he identifies the American model of dispossession and confinement of the natives as the template that other settler states later adopted. American independence appears, in that reading, as the moment when colonialism emancipated itself from the metropole, not the moment when the territory emancipated itself from colonialism.

Two complementary references complete the picture. The jurist Aziz Rana, in The Two Faces of American Freedom, published by Harvard University Press in 2010, demonstrates that the freedom claimed by the settlers in 1776 was constitutively a settler freedom, defined by access to land and by expansion westward, and therefore dependent on the subordination of the peoples who occupied that land. And the researchers Eve Tuck and K. Wayne Yang, in the article “Decolonization Is Not a Metaphor”, published in 2012 in the journal Decolonization: Indigeneity, Education and Society, establish that decolonization, in a settler context, has a precise material meaning, the return of land, and that any use of the term that dispenses with that content hollows it out.

3 · The documentary evidence of 1776

The documentary record of the revolutionary period itself confirms that the native question was not the object of independence; it was an obstacle to be removed.

First, the Royal Proclamation of October 7, 1763, issued by King George III after the Seven Years’ War, reserved to the native peoples the territories west of the Appalachian range and prohibited settlement and the private purchase of land in that zone. The measure was received by the colonial elites, with landed and speculative interests in the western lands, as an intolerable restriction, and it stands among the grievances that fed the drive toward rupture. Independence removed precisely the barrier the crown had interposed between the settlers and native land.

Second, the text of the Declaration of Independence itself. Among the complaints addressed to George III, the document accuses the king of inciting against the colonial frontiers the “merciless Indian Savages”, an expression that appears in the 1776 original and reveals unambiguously the place native peoples occupied in the signers’ vision, that of external enemy, not that of a people whose liberty was at stake.

Third, the Treaty of Paris of September 3, 1783, by which Great Britain recognized American independence and ceded to the United States the territories up to the Mississippi River. The native nations that inhabited and effectively controlled much of that space were neither party to the treaty nor consulted, which illustrates the nature of the act, a transfer of title between colonial powers over someone else’s land.

Fourth, the subsequent legal consolidation. In the decision Johnson v. M’Intosh, of 1823, the Supreme Court of the United States, through Chief Justice John Marshall, incorporated into American law the doctrine of discovery, according to which full sovereignty over the territory belonged to the discovering power and native peoples held a mere right of occupancy, extinguishable by the state. In the decision Cherokee Nation v. Georgia, of 1831, the same court classified the native nations as “domestic dependent nations”, a formula that fixed subordination in law. The state born of independence defined itself, in its own courts, as successor to the British colonial title.

4 · Annotated chronology

1584 · Elizabeth I grants Walter Raleigh a royal charter to colonize North America.

1585 to 1590 · First English attempt at settlement, on Roanoke Island, in the territory of the coastal Algonquian peoples, with the disappearance of the settlers and no documentary record of their fate.

1607 · Founding of Jamestown by the Virginia Company of London, in the territory of the Powhatan confederacy, then under the paramount chief Wahunsenacawh.

1620 · Founding of Plymouth in Wampanoag territory, under the sachem Ousamequin.

1636 to 1638 · Pequot War, in present-day New England, with the near-complete destruction of the Pequot people by the English colonies and their allies.

1675 to 1678 · King Philip’s War, led by the Wampanoag Metacom, with native defeat and the consolidation of colonial rule in New England.

1763 · Royal Proclamation of George III reserves to the natives the lands west of the Appalachians and provokes strong colonial opposition.

1776 · Declaration of Independence, adopted on July 4 in Philadelphia, with the reference to the “merciless Indian Savages” among the grievances against the king.

1783 · Treaty of Paris transfers to the United States title over the territories up to the Mississippi, without the participation of the native nations.

1823 · Johnson v. M’Intosh incorporates the doctrine of discovery into American law.

1830 · Indian Removal Act, signed by President Andrew Jackson on May 28, orders the forced relocation of the peoples of the Southeast to west of the Mississippi.

1831 and 1832 · Cherokee Nation v. Georgia defines the native nations as domestic dependent nations; Worcester v. Georgia recognizes Cherokee autonomy from the laws of Georgia, without practical enforcement capable of preventing removal.

1838 to 1839 · Trail of Tears, forced relocation of the Cherokee people, with mortality estimated between four thousand and eight thousand people out of a total of approximately sixteen thousand deported.

1851 and 1868 · Treaties of Fort Laramie fix and later reduce the territories of the Plains nations, with subsequent violations by the signatory government itself, notably after the discovery of gold in the Black Hills in 1874.

1864 · Sand Creek Massacre, in Colorado, with hundreds of Cheyenne and Arapaho killed by territorial troops.

1879 · Founding of the Carlisle Indian Industrial School, in Pennsylvania, by the army officer Richard Henry Pratt, the first of hundreds of residential schools of forced assimilation, under the principle, formulated by Pratt himself, of killing the Indian to save the man.

1887 · Dawes Act fragments collective tribal lands into individual parcels, with the surplus sold to non-natives; between 1887 and 1934, tribal lands fell from about 138 million acres to about 48 million, a loss of roughly two thirds, according to the federal data that grounded the 1934 reform.

1890 · Wounded Knee Massacre, in South Dakota, on December 29, with about two hundred and fifty to three hundred Lakota killed by the American army; the 1890s mark, according to the demographer Russell Thornton, the native demographic low point, about two hundred and fifty thousand people in the territory of the United States.

1924 · Indian Citizenship Act grants American citizenship to natives born in the territory, nearly a century and a half after independence.

1934 · Indian Reorganization Act halts the allotment policy and returns to the tribes limited instruments of self-government.

1953 to 1956 · Termination policy, initiated by House Concurrent Resolution 108, extinguishes federal recognition of more than a hundred tribes; the Relocation Act of 1956 encourages migration from the reservations to the cities.

1969 to 1973 · Cycle of native mobilization, with the occupation of Alcatraz between November 1969 and June 1971 and the occupation of Wounded Knee in 1973 by the American Indian Movement.

1975 · Indian Self-Determination and Education Assistance Act, signed by President Gerald Ford on January 4, reverses the termination orientation and returns management powers to recognized tribes.

2007 and 2010 · The United Nations General Assembly adopts, on September 13, 2007, the Declaration on the Rights of Indigenous Peoples, with one hundred and forty-three votes in favor and four against, Australia, Canada, New Zealand and the United States, precisely the four settler-colonial states of British origin; the United States announced support for the text, without binding force, in December 2010.

2021 · A team led by Justin Farrell, of Yale University, publishes in the journal Science the first systematic survey of native territorial dispossession in the contiguous United States, with the results described in the following section.

5 · The quantitative record

Two data sets give the thesis a verifiable numerical basis.

On the demographic front, the sociologist Russell Thornton, in American Indian Holocaust and Survival: A Population History since 1492, published by the University of Oklahoma Press in 1987, estimates the native population of the territory of the present-day United States at more than five million people in 1492, with a decline to about six hundred thousand by 1800 and to a minimum of about two hundred and fifty thousand in the 1890s, through the combined effect of disease, war, removal and the destruction of ways of life. Estimates of the initial population vary among authors, from about one million in the calculations of Alfred Kroeber, in 1939, to much higher values in those of Henry Dobyns, in 1966, but the order of magnitude of the collapse, above ninety percent between contact and the end of the nineteenth century, is the consensus in the literature.

On the territorial front, the study by Justin Farrell and colleagues, “Effects of Land Dispossession and Forced Migration on Indigenous Peoples in North America”, published in Science, volume 374, in October 2021, quantified for the first time, on the basis of a seven-year survey of tribal, colonial and governmental records, the extent of dispossession in the contiguous United States. The results indicate that Indigenous peoples lost 98.9 percent of their historical land base, that more than forty percent of historically documented tribes hold today no federally recognized land, that tribes with land hold on average 2.6 percent of their historical area, and that forced displacements averaged 241 kilometers, toward lands more exposed to climate risks and poorer in resources.

These numbers answer the central question. If independence, in the colonial context, is measured by the restitution of territorial sovereignty to the original people, then the balance sheet of 1776, two and a half centuries later, is 1.1 percent of remaining land and five hundred and seventy-four tribes with limited sovereignty, ultimately subordinate to the authority of Congress, inside the state the settlers themselves founded. No twentieth-century decolonization produced an outcome even remotely comparable.

6 · Objections and replies

The thesis faces three main objections, which must be stated fairly.

The first holds that the term independence has a legal meaning of its own, the dissolution of a bond of subordination between constituted political entities, and that such a bond did in fact exist between the colonies and the crown. The objection is correct on its own terms. The reply does not deny it; it displaces it. The essay does not claim that 1776 was not independence from anything; it claims that it was independence from the wrong entity to sustain the reading the commemoration projects, that of a people freeing itself from colonialism. What freed itself in 1776 was the colonial project itself, from the metropolitan tutelage that constrained it.

The second objection notes that the settlers of 1776 were, for the most part, no longer newly arrived Britons but descendants of generations born in the territory, with an identity of their own. That is true, and it is irrelevant to the criterion at issue. Settler colonialism is defined precisely by multigenerational permanence, the settler who stays and whose descendants claim the land as natural. The age of the settler presence does not convert expropriation into title, it merely sediments it, and it is that sedimentation that Wolfe calls structure.

The third objection invokes anachronism, the risk of judging the eighteenth century with categories of the twenty-first. The reply is twofold. On the one hand, the categories are not of the twenty-first century, the critique of the Fourth of July’s partiality is at least as old as Frederick Douglass’s speech “What to the Slave Is the Fourth of July?”, delivered on July 5, 1852, in Rochester, in the state of New York, in which the former enslaved man demonstrated that the celebration presupposed a subject, the free white American, and excluded the rest. On the other hand, the argument of this essay is not a retrospective moral judgment, it is a question of terminological rigor in the present. The question is not whether the signers of 1776 should have acted otherwise, it is whether the word independence, as we use it today to describe decolonization, correctly describes what occurred there. The documented answer is that it does not.

7 · Conclusion

July 4, 1776 marks a real and datable historical fact, the rupture between the settler population of the thirteen colonies and the British crown, internationally recognized in 1783. That fact deserves to be called independence only under a narrow criterion, that of the relation between settler and metropole. Under the criterion the word requires in the context of colonization, that of the return of sovereignty to the original people of the territory, the event constitutes the opposite of a decolonization, the emancipation of the colonizer from the only power that still moderated its expansion. The academic literature that sustains this reading, from Wolfe to Veracini, from Rana to Mamdani, is not marginal, it defines an established field of study, and Thornton’s demographic data and Farrell’s territorial data give it quantitative expression. Two hundred and fifty years on, the peoples who inhabited the territory before 1607 retain little more than one percent of their land. As long as that number stands, the exact word for what is celebrated on the Fourth of July is not independence. It is succession.

Verification note · How to confirm each claim

All substantive claims in this essay refer to identified primary or academic sources. The documents of the revolutionary period, the Royal Proclamation of 1763, the Declaration of Independence of 1776 and the Treaty of Paris of 1783, are published in the national archives of the United States and of the United Kingdom and are in the public domain. The judicial decisions cited appear in the official record of the Supreme Court of the United States, Johnson v. M’Intosh, 21 U.S. 543 (1823), and Cherokee Nation v. Georgia, 30 U.S. 1 (1831). The study by Farrell and colleagues carries the DOI 10.1126/science.abe4943 and makes its data available in open access. Wolfe’s article carries the DOI 10.1080/14623520601056240. The remaining works appear in the final references, with publisher and year, and are catalogued in university libraries.

References

Douglass, Frederick. “What to the Slave Is the Fourth of July?”. Speech delivered on July 5, 1852, Corinthian Hall, Rochester, New York.

Dunbar-Ortiz, Roxanne. An Indigenous Peoples’ History of the United States. Boston: Beacon Press, 2014.

Farrell, Justin, et al. “Effects of Land Dispossession and Forced Migration on Indigenous Peoples in North America”. Science, vol. 374, eabe4943, 2021. DOI 10.1126/science.abe4943.

Mamdani, Mahmood. Neither Settler nor Native: The Making and Unmaking of Permanent Minorities. Cambridge, Massachusetts: Harvard University Press, 2020.

Rana, Aziz. The Two Faces of American Freedom. Cambridge, Massachusetts: Harvard University Press, 2010.

Thornton, Russell. American Indian Holocaust and Survival: A Population History since 1492. Norman: University of Oklahoma Press, 1987.

Tuck, Eve, and K. Wayne Yang. “Decolonization Is Not a Metaphor”. Decolonization: Indigeneity, Education and Society, vol. 1, no. 1, 2012, pp. 1-40.

Veracini, Lorenzo. Settler Colonialism: A Theoretical Overview. Basingstoke: Palgrave Macmillan, 2010.

Wolfe, Patrick. Settler Colonialism and the Transformation of Anthropology. London: Cassell, 1999.

Wolfe, Patrick. “Settler Colonialism and the Elimination of the Native”. Journal of Genocide Research, vol. 8, no. 4, 2006, pp. 387-409. DOI 10.1080/14623520601056240.

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Tue, 07 Jul 2026 16:00:00 +0000

npcrf.org is a non-profit, non-governmental publisher. Its purpose is stated plainly in the mission: honest, factual education about current affairs and historical subjects, with no room for information that cannot be verified.

What gets published here follows one rule: if a claim cannot be traced to an identified, checkable source, it is not published. The methodology describes how that works in practice — primary sources first, a sources section at the end of every article, and a corrections policy that records post-publication changes visibly on the article itself. This very article ends with its own sources section, as every article on this site will.

A few practical notes about the site:

It is a static site, built with the open-source generator Hugo and served as plain HTML. There are no accounts, no paywalls and no advertising.
Search runs entirely in your browser, using Pagefind; the index is built when the site is published, and no search query leaves your device.
Statistics are collected with GoatCounter, a cookie-free counter that stores no personal data; the footer of every page notes this.
Licensing is deliberately open: all editorial content is released under CC BY 4.0 from the moment of publication, and the site’s source code is open source under the MIT License. The License page explains both, including how to attribute reuse.

If you find an error, write to info@npcrf.org. Corrections are made openly; that promise is the point of the whole project.