The Idea of a Commercial Republic
This series aims to help our readers understand the complexity of our Constitutional system, in no small part by detailing the arguments involved in its construction. One of my favorite lines in The Federalist is Madison’s claim that the document they came up with was not perfect, “but perfection was not to be expected.” There’s a bucketful of political wisdom there that we do well to remember. Whether the proposed Constitution was, as Madison claimed, at least better than the extant system was open to debate then and open to debate now, particularly since objective observers will acknowledge that the document’s critics were largely correct in their worried predictions.
Perhaps no aspect of the Constitution and its defenders gave more pause than disagreements about commerce. The commerce clause of the Constitution has been the main mechanism by which federal power has encroached on that of the states and local governments. Many of the Anti-federalists worried that the commerce power would undo their ways of life, eviscerate their communities, and shift the political balance of power from farmers and small-scale producers to merchants, traders, and bankers; from the rural areas to the urban areas. They worried about an economy driven not by production but by financing. As Tocqueville observed, the less people are able to produce the common necessities of life, the more the power of the government will grow.
We often take too cynical a view of the role of commerce in the shaping of American order. In this space we have focused mainly on how ideas shaped our system, but only blind naivete could lead one to conclude economics did not play a major role. Indeed, economic differences largely defined the political differences. This doesn’t mean that the framers simply operated out of economic self-interest, but that they believed that supporting commercial interests would not only lead to greater prosperity and unity, but to national greatness.
The early essays of The Federalist largely deal with the problem of political unity and, famously in Federalist #10, the causes of disunity. In Federalist #11, one of only three strobogrammatic papers in the collection, Hamilton, one of the most commercially minded framers, turns his attention to commerce, not as a change of pace but as a continuation of the earlier reflections on unity.
One of the most quoted authorities during the Constitutional period was the Scottish philosopher, David Hume. Madison largely derived his argument in Federalist #10 from Hume, and Hamilton does likewise in #11. Hume argued that commerce not only made us more prosperous, but by cultivating the arts and encouraging labor it created civilization and thus, in the process, made us civilized creatures. The result, he argued, was that commercial societies were always more advanced and peaceful than non-commercial ones. Commerce not only improved us materially but morally as well, for it encouraged the development of socially useful virtues.
The states, being zealous guardians of their own privileges and economies, had and would continue to impose restrictions upon one another and, in the process, not only stymie economic growth but almost certainly lead to warfare between the states. Giving Congress the power to regulate interstate commerce would simultaneously encourage the growth of the commercial republic and create the conditions for perpetual peace.
Hamilton detailed the importance of commerce in Federalist #12, making the highly contestable claim that it was “the most useful as well as the most productive source of national wealth” that “has accordingly become a primary object of [our] political cares.” Hamilton’s concern for a more energetic government not only resulted from the “imbecility” of the regnant form, but from his conviction that the charms of a simple domestic life and the quotidian affairs handled by state and local governments would never satisfy the itches of more ambitious talents. He argued that “the regulation of the mere domestic police of a State appears to me to hold out slender allurements to ambition,” while “commerce, finance, negotiation, and war seem to comprehend all the objects which have charms for minds governed by that passion.” For that reason, all powers related to those four things had “to be lodged in the national depository.”
Note that Hamilton connects national power not only to ambition – for what types of losers would settle for the mere powers granted to the states? – but to the socially and politically unsettling powers of commerce, finance, and war. Hamilton seemed less interested in how the growth of a commercial republic would create harmony between the states than he was about how it would make America a nation to be reckoned with on the world stage. Hamilton’s ambitions often exceeded the limited Constitutional purposes. At that time, Europe occupied the center of the political world and European powers had been “clipping the wings by which we might soar to a national greatness.” The main impetus behind creating a more powerful central government was to put European powers in their place by allowing America to fully flex its muscles, which could only be accomplished by the development of a commercial society and the emergence of monetary power.
Those of us who think, wrongly, that we invented criticism of colonialism, would do well to consider the words of Hamilton as he makes clear his disdain for European powers:
The world may politically, as well as geographically, be divided into four parts, each having a distinct set of interests. Unhappily for the other three, Europe, by her arms and by her negotiations, by force and by fraud, has, in different degrees, extended her dominion over them all. Africa, Asia, and America, have successively felt her domination. The superiority she has long maintained has tempted her to plume herself as the Mistress of the World, and to consider the rest of mankind as created for her benefit. Men admired as profound philosophers have, in direct terms, attributed to her inhabitants a physical superiority, and have gravely asserted that all animals, and with them the human species, degenerate in America--that even dogs cease to bark after having breathed awhile in our atmosphere.But note that Hamilton does not believe that the answer to colonialism is simply ideological critique or a Gandhi-like passive resistance. Only power can resist the encroachments of power – this is one of Publius’s central insights. But here the Anti-federalists worried that the accretions of power would tempt those who held it either to advance commercial interests over all other interests, or, worse still, to employ its military either for offensive purposes or for “mercantilist” reasons (where political power is subordinated to commercial interests, the English system that was vociferously attacked by critics such as Hume and Adam Smith). Among the Anti-federalists, Brutus expressed this worry most clearly:
The European governments are almost all of them framed, and administered with a view to arms, and war, as that in which their chief glory consists; they mistake the end of government — it was designed to save mens [sic] lives, not to destroy them. We ought to furnish the world with an example of a great people, who in their civil institutions hold chiefly in view, the attainment of virtue, and happiness among ourselves. Let the monarchs, in Europe, share among them the glory of depopulating countries, and butchering thousands of their innocent citizens, to revenge private quarrels, or to punish an insult offered to a wife, a mistress, or a favorite: I envy them not the honor, and I pray heaven this country may never be ambitious of it. Hamilton envisioned a great and powerful commercial empire and saw European nations as the main thing standing in America’s way. Rather than having them clip our wings it was time for us to clip theirs, and the clippers of choice, he argues in Federalist #11, was a strong and expansive navy that could radiate American might around the world and protect and grow American commerce. At that point, America could not only claim its place among the nations, but become preeminent.
Facts have too long supported these arrogant pretensions of the Europeans. It belongs to us to vindicate the honor of the human race, and to teach that assuming brother, moderation. Union will enable us to do it. Disunion will add another victim to his triumphs. Let Americans disdain to be the instruments of European greatness! Let the thirteen States, bound together in a strict and indissoluble Union, concur in erecting one great American system, superior to the control of all transatlantic force or influence, and able to dictate the terms of the connection between the old and the new world!Discussion Questions:
Is it possible to be a great country and a good one at the same time? Which matters more?
Does commerce actually grease the wheels of social intercourse? What role is played by contracts in building social capital?
What might America have looked like if the agrarian vision had triumphed over the commercial one?
Director of the Ford Leadership Forum, Gerald R. Ford Presidential Foundation
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