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Federalism, Pluralism, and Public Policy

Published online by Cambridge University Press:  03 February 2011

E. A. J. Johnson
E. A. J. Johnson
Affiliation:
The Johns Hopkins University
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Extract

It is not chauvinism or instinctive egocentrism that leads Americans to believe they have evolved a beneficent form of economic organization. For despite all its shortcomings, and, alas, they are all too many, our volitional economy has demonstrated a capacity to stimulate human effort, increase investment, improve productivity, and gradually erode diat greatest evil of all commonwealths, perceived since Plato's days: the coexistence of great wealth and abject poverty. It is therefore entirely appropriate this year, when we are commemorating two great experiments in democratic public policy, that we should examine once again the origins of our polity, for I am convinced that it was the conscious and unashamed acceptance of a system of politico-economic pluralism that made possible the vigor and the catholicity of our developing institutions. The play of these pluralistic forces again and again has saved us from hardened dogma, so that the real virtue of our history—political, economic, and intellectual—has been our flexibility, our capacity to adapt ideas and instrumentalities to tasks of high social urgency. In the process we have created an economy so complex that it almost defies description, but one so tolerant ideologically that it can be called essentially private by those who find happiness in that ascription although there can be no burking the very obvious fact that it is today inherently socialistic. For whereas one can demonstrate statistically that two thirds of all capital formation is private, by an equally plausible demonstration it can be shown that, adding corporate and personal income taxes only, more than two thirds of the revenues of American enterprise are socialized. This mixed economy is, therefore, the great, ever-improving American invention, based on the quintessential content of our variant of democracy whose trinitarian elements have been well defined as shared respect, shared power, and shared knowledge.

Type
Presidential Address
Information
The Journal of Economic History , Volume 22 , Issue 4 , December 1962 , pp. 427 - 444
Copyright
Copyright © The Economic History Association 1962

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References

1 For this neat trilogy I am indebted to Ralph Gabriel, long on the Yale faculty, and now teaching at American University.

2 Only recently two more studies of the Federalist papers have appeared, one by an Italian (Aldo Garosci), the other by a naturalized German (Gottfried Dietze). Meantime the Centre International de Formation Européenne is planning a new critical study on “The United States of America: Example of a Federation” with the object of finding guidance for the process of European political integration which the Centre champions.

3 For representative examples, see The Federalist (Lodge edition), No. X, p. 54; No. IV, p. 25; No. X, p. 55; No. XXXVII, p. 221; No. XXXV, pp. 205–6; No. LVI, p. 354; No. XXI, pp. 325–26. Logan, George, Five Letters Addressed to the Yeomanry of the United States(Philadelphia, 1792), p. 8Google Scholar. Webster, Pelatiah, Political Essays on the Nature and Operation of Money, Public Finance and other Subjects (Philadephia, 1794), p. 7Google Scholar. Logan, George, An Address on the Natural and Social Order of the World, as Intended to Produce Universal Good (Philadelphia, 1798), p. 8Google Scholar. n Pennsylvania Statutes at Large, 560, ch. 1159, section 1–3. Strong, Nathan, A Sermon (Hartford, 1790), p. 22Google Scholar. Taylor, John, An Inquiry into the Principles and Policy of the Government of the United States (Fredericksburg, 1814), p. 259Google Scholar. Findley, William, A Review of the Revenue System Adopted by the First Congress (Philadelphia, 1794), pp. 52–53Google Scholar. Taylor, John, An Enquiry into the Principles and Tendency of Certain Public Measures (Philadelphia, 1794), p. 37Google Scholar. Logan, George, Letter to the Citizens of Pennsylvania on the Necessity of Promoting Agriculture, Manufactures and the Useful Arts (Philadelphia, 1800), pp. 16–17Google Scholar. Bowdoin, James,Opinions Respecting the Commercial Intercourse between the United States of America and the Dominions of Great Britain (Boston, 1797)Google Scholar. Lee, Richard Henry, An Additional Number of Letters (New York, 1788), p. 61Google Scholar. Adams, John, A Defense of the Constitutions of Governments of the United States of America (London, 1787), p. 155Google Scholar. Webster, Noah, Sketches of American Policy (Hartford, 1785), p. 6Google Scholar. Sullivan, James, The Path to Riches, An Inquiry into the Origin and Use of Money (Boston, 1792), pp. 6–7Google Scholar. Bordley, John Beal, Essays and Notes in Husbandry and Rural Affairs (Philadelphia, 1799), p. 385Google Scholar. 2 Delaware Laws, 1122, ch. 53 C. Backus, Azel, Absalom's Conspiracy (1798), pp. 24–25Google Scholar. Langdon, Samuel, The Republic of the Israelites, an Example to the American People (1788), p. 11Google Scholar.Stone, Timothy, A Sermon (Hartford, 1792), p. 19Google Scholar. Foster, Daniel, A Sermon (Boston, 1790), pp. 13–14Google Scholar. Belknap, Jeremy, An Election Sermon (Portsmouth, 1785), p. 20Google Scholar. Jefferson, Thomas, Notes on the State of Virginia (1785), p. 213Google Scholar. Coxe, Tench, View of the United States (Philadelphia, 1787), p. 29Google Scholar.

4 The Federalist (Lodge), No. X, p. 54.

5 The Federalist (Lodge), No. XXXVII, p. 221.

6 See Mitchell, Broadus, Hamilton, Alexander: The National Adventure, 1788–1804 (New York: Macmillan Co., 1962)Google Scholar, especially ch. 12.

7 The condemnation of the “financial interests” pervades all his writings but is most elaborately developed in An Inquiry into the Principles and Policy of the Government of the United States (Fredericksburg, 1814)Google Scholar.

8 Principles and Policy, pp. 20–21.

9 Durkheim, Emile, De la division du travail social (Paris, 1893)Google Scholar. The English translation by George Simpson (New York, 1933) is based on the first and fifth editions.

10 For an example of this argument, advanced by so many writers, see Richard Henry Lee, An Additional Number of Letters, p. 61. H

11 The Federalist (Lodge), No. X, pp. 205–6.

12 The Federalist (Lodge), No. XXXV, p. 53.

13 Lee, Richard Henry, Observations Leading to a Fair ‘Examination of the System of Government (New York, 1787)Google Scholar, reprinted in Ford's, P. L.Pamphlets on the Constitution (1888), p. 10Google Scholar.

14 John Taylor, Principles and Policy, p. 404.

15 See John Adams, Defense of the Constitutions, pp. 106–7; Works of Alexander Hamilton, edited by Henry Cabot Lodge, I, 401; Lee, Richard Henry, Observations of a System of Government (1888 reprint), p. 17Google Scholar.

16 Taylor, John, A Definition of Parties (Philadelphia, 1794), p. 6Google Scholar.

17 John Taylor, Principles and Policy, p. 620. See also a parallel argument in James Sullivan, Path to Riches, pp. 5–6.

18 Pelatiah Webster, Political Essays, p. 290.

19 Noah Webster, Collection of Essays, p. 106.

20 John Taylor, Principles and Policy, p. 282.

21 Ibid., p. 634.

22 Hamilton did not share this optimism. He admitted, rather grudgingly, that “there are strong minds in every walk o£ life that will rise superior to the disadvantages of situation.” For that reason “the door ought to be equally open to all.” But he did not think much upward mobility was likely. The Federalist (Lodge), No. XXXV, pp. 207–8.

23 George Logan, Five Letters to the Yeomanry, p. 23.

24 William Findley, Review of the Revenue System, p. 128.

25 “The expulsion of paper men” was John Taylor's solution for ridding Congress of one pressure group.

26 The Federalist (Lodge), No. LI, p. 325.

27 Principles and Policy, p. 444.

28 Logan, Five Letters to the Yeomanry, pp. 19–20; Taylor, Definition of Parties, p. 5.

29 Logan, Five Letters to the Yeomanry, p. 24.

30 Sketches of American Policy, p. 48.

31 James Sullivan, Path to Riches, p. 5.

32 Coxe, Tench, View of the United States (Philadelphia, 1794), p. 29Google Scholar.

33 Pelatiah Webster, Political Essays, p. 499.

34 In his many writings, for example, the Connecticut-born, Yale-educated merchant Pelatiah Webster fulminated more against American price-fixing laws than against the British government.

35 In 1793 the Virginia legislature resolved that “a clause [be] inserted into the constitution o£ the United States … to prohibit any director of the bank of the United States from being a member of either house of Congress.” Session Laws (Shepherd) 284 (December 11, 1793)Google Scholar.

36 Bordley, Essays on Husbandry, p. 378.

37 This argument is found in the writings of Madison, Jefferson, and Tench Coxe. See James Madison, Works, VI, 96; Thomas Jefferson, Worlds, VIII, 13; Tench Coxe, View of the United States, pp. 66–67.

38 See Broadus Mitchell, Alexander Hamilton: The National Adventure, ch. 12.

39 These words are quoted from the Constitution of the free state of Maryland (1776).

40 Heath, Milton, Constructive Liberalism: The Role of the State in Economic Development in Georgia to i860 (Cambridge: Harvard Univ. Press, 1954)CrossRefGoogle Scholar. See also his “Public Railway Construction and the Development of Private Enterprise in the South before 1861,” The Journal of Economic History, Supplement X (1950), 40–53Google Scholar.

41 Noah Webster, Collection of Essays, p. 382.

42 John Taylor, Enquiry into Certain Public Measures, p. 61.

43 Noah Webster, Sketches of American Policy, p. 6; James Sullivan, Path to Riches, p. 18; Pelatiah Webster, Political Essays, p. 290; John Taylor, Enquiry into Certain Public Measures, p. 5.

44 George Logan, Letters to the Yeomanry, p. 5.

45 See Robert Gray, A Sermon (Dover, New Hampshire).

46 Richardson, James D., A Compilation of the Messages and Papers of the Presidents (New York, 1897), I, 57–59Google Scholar.

47 Ibid., I, 60–61.

48 For details see Joseph Spengler, “The Political Economy of Jefferson, Madison and Adams,”American Studies in Honor of W. K. Boyd (Durham: Duke Univ. Press, 1949), p. 5Google Scholar.

49 Jefferson, Works (Washington), V, 440.

50 Richardson, Messages and Papers of the Presidents, I, 334.

51 Taylor, John, Arator; Being a Series of Agricultural Essays, Practical and Political (Georgetown, 1813), p. viGoogle Scholar.

52 Political Essays, pp. 9–11.

53 Coxe's phrase; see View of the United States, pp. 164–65. See also Madison, Worlds, V, 342; for Jefferson's views, Richardson, Messages and Papers of the Presidents, I, 318.

54 See Delaware Laws, 183, 249 ff.; Maryland Laws (Kilty), chs. 17, 59.

55 13 Pennsylvania Statutes at Large, 225–26, ch. 1398.

56 Richardson, Messages and Papers of the Presidents, I, 340–42.

57 Especially by Madison, Works, VI, 96–99.

58 John Taylor, Principles and Policy, p. 282; John Adams, Worlds, VI, 530.

59 Tench Coxe, View of the United States, p. 143.

60 Pelatiah Webster, Political Essays, p. 24.

61 Works, VI, 99.

62 View of the United States, pp. 239–40.

63 John Taylor, Principles and Policy, p. 28a.

64 The case for complete freedom to lend money was vigorously presented by Noah Webster in his spirited attack on usury laws. See his Collection of Essays, pp. 304–34.

65 Broadus Mitchell's chapters are brief but contain the essential details. See Alexander Hamilton: The National Adventure, chs. 3 and 4.

66 See John Adams (Works, VIII, 294) for one view, John Taylor (Principles and Policy, p. 282) for another.

67 See Beard, Charles A., Economic Interpretation of the Constitution (New York: Macmillan Co., 1935), p. 53Google Scholar.

68 The Federalist (Lodge), No. LXII [Hamilton or Madison], pp. 390–91.

69 For an indication of the extent and degree of distrust of corporate ventures, see Livermore, Shaw, Early American Land Companies (New York: The Commonwealth Fund, 1939), pp. 67–69Google Scholar.

70 All this is richly analyzed in Davis, Joseph S., Essays in the Earlier History of American Corporations (2 vols.; Cambridge: Harvard Univ. Press, 1917), I, 429–46Google Scholar.

71 “Speculators,” said Robert Morris, “always do least mischief when they are left most at liberty.” Journals of the Continental Congress, XXII, 435. Leave them alone, he counselled and they will “invariably counteract each other.” Even the sharpest critics of speculation in public debt admitted that “stockjobbing” was not inherently evil; when such business “is conducted with truth, sincerity and fairness,” said James Sullivan, “it may be considered as reputable and honorable.” Path to Riches, pp. 10–11.

72 See Livermore, Early American Land Companies, pp. 5, 8, 12, 20, 36, 38, 62.

73 Work? (Washington), II, 413.

74 Collection of Essays, pp. 331–32.

75 Ibid., p. 327.

76 Work (Washington), VT, 575.

77 The Federalist (Lodge), No. X, p. 54.

78 Principles and Policy, p. 621.

79 George Logan, Five Letters to the yeomanry, p. 12.

80 Noah Webster, Collection of Essays, p. 327.

81 The Federalist (Lodge), No. XXXV, pp. 207–8.

82 Coxe, for example; see his View of the United States, pp. 66–67, 74, 159, 214.

83 James Swan, for example, demanded the abandonment of the “cruel” faculty taxes and their replacement by luxury taxes. National Arithmetick, p. 60.

84 Works, VI, 86.

85 Pelatiah Webster, Political Essays, pp. 239–40.

86 Ibid., p. 499.

87 This phrase occurs repeatedly in Congressional debates and in contemporaneous literature. See in the Annals of Congress the remarks of Mr. Hartley (I, 114), Mr. Madison (I, 118), Mr. Fitzsimons (I, 150), Mr. Ames (I, 230). See also Tench Coxe, View of the United States, p. 357.

88 The following preamble to a 1949 law defines the public interest (in so far as housing is concerned) in terms that would have seemed very strange to the Founding Fathers: “The Congress hereby declares that the general welfare and security of the nation and the health and living standards of the people require housing production and related community development sufficient to remedy the serious housing shortage, the elimination of sub-standard and other inadequate housing through the clearance of slums and blighted areas, and the realization as soon as feasible of the goal of a decent home and a suitable living environment for every American family.” Public Law 171, 81st Congress, Section 2 (1949)Google Scholar.