Enlightenment economics and the framing of the U.S. Constitution.

• Author: Lerner, Renee Lettow
• Position: Annual Federalist Society National Student Symposium

Did the Framers have an economic theory in mind when they wrote and ratified the U.S. Constitution? Some say the principal Framers did not have a common, cohesive set of views on economics. (1) Others consider the question to be irrelevant. Society and constitutional interpretation have moved on, these commentators argue, so what the Framers thought or whether they embedded economic views in the Constitution has about as much relevance today as a typewriter. Another possible position is that the Framers might have had common understandings about economics but largely left them out of the Constitution, except in odd bits like the Contracts Clause or the Takings Clause.

The principal Framers did, in fact, share a basic set of economic views, though they did not agree on all economic questions. These economic views permeate the Constitution and are not manifest only in odd clauses. Many structural features of the Constitution are designed to further desirable economic ends, as the Framers envisioned them.

1. ECONOMIC PRINCIPLES OF THE ENLIGHTENMENT

   What was the content of the Framers' economic beliefs, and where did those beliefs come from? These economic beliefs were shared throughout Europe in the late eighteenth century, although events in America helped to reinforce them.

   Historians and students of philosophy have long explored the political thought of the Enlightenment: the contractual theories of Locke, the checks and balances of Montesquieu, and so forth. This political thought, however, went hand in hand with Enlightenment economic thought.

   To understand the Enlightenment economic thought that the Framers shared with many in Europe, it is necessary to understand the workings of the old regime. Guilds, monopolies, and mercantilism characterized that regime. The guilds formed an elaborate regulatory apparatus. To have a dress made in France, for example, one had to buy cloth from a draper, get accessories or ornaments from the mercer, and bring it all to a tailor, who then set to work according to the rules established by his guild for cutting cloth. (2) The tailor was forbidden to stock or sell cloth. (3) If these practices resemble union work rules today, that is not an accident. Governments sold monopolies, or patents as they were known, on the manufacture, exportation, or importation of coal, soap, starch, iron, leather, books, wine, and fruit--in short, on almost everything imaginable--to raise revenue. (4) Colonial Americans resented English mercantilism in the form of the Navigation Acts, which required colonists to export certain goods only to England or its colonies and to conduct their trade entirely on English or colonial vessels. (5)

   These old-regime economic ideas dominated thought and policy throughout Europe in the first half of the eighteenth century. Commerce was viewed as a "kind of warfare"; (6) mercantilism was widespread. Gradually, in the second half of the eighteenth century, different economic ideas took hold. Thinkers praised free trade as leading to economic growth for all participants; trade was seen less and less as a zero-sum game. Rent-seeking (the transfer of wealth from producers to non-producers through political power) and monopolies came under increasing attack. Most prominent among Enlightenment economists was Adam Smith at the University of Edinburgh. Smith's arguments in favor of free trade are well-known. In The Wealth of Nations, published in 1776, he called monopolies the "great enemy of good management." (7) Other thinkers also praised free trade and condemned monopolies, even before publication of The Wealth of Nations. Montesquieu, in the first edition of The Spirit of the Laws, published in 1748, discussed how trade brought prosperity to all participants and declared: "The natural effect of commerce is to lead to peace." (8)

   In Britain, these ideas had political consequences. The old economic regime was passing away, despite the restrictions on the colonies. As historian Joel Mokyr puts it, Britain by the mid-eighteenth century had "free internal trade, weak guilds, a relatively effective fiscal system, and a state that was firmly committed to protection of property." (9) This relative economic freedom encouraged the gradual improvements in technology that drove the industrial revolution. In continental countries, the old economic regime lasted longer. France struggled free from it in a bloody revolution and aftermath from which it took decades to recover. Eventually, however, the countries of Western Europe instituted Enlightenment economic principles to one degree or another and experienced their own industrial and agricultural revolutions accordingly.

2. ENLIGHTENMENT ECONOMICS AND THE U.S. CONSTITUTION

   Fortunately for the new Republic, two of the most important Founders least affected by Adam Smith's thought were not at the convention in Philadelphia. John Adams was a Malthusian pessimist, (10) Thomas Jefferson an idealistic agrarian, (11) and both were busy in Europe during the summer of 1787. Benjamin Franklin, another agrarian, was at Philadelphia but in his dotage. At center stage in the Constitutional Convention were those who had studied The Wealth of Nations carefully and had absorbed its principles. These delegates included James Madison and Alexander Hamilton. (12)

   If the most...