Capitalism, Democracy and America's Founding, 7-27-2010

[I have tried not to edit these pieces from 2010 for all some have a syntax I find unnerving, and some arguments just die before making any sense to me now. Only the truly irrelevant have been omitted. Not all sentences have gone untouched – particularly those whose meaning I no longer understand have been changed to a clarity. I have not altered any meaning when I have knocked the kinks out of my syntax. However, this post I have decided to edit rather than omit. The late Rush Limbaugh inspired this post by claiming America's Founders were capitalists and democrats. I disagreed then and I still do now. But I am omitting references to Limbuagh. sch 2/18/23]

Slavery existed before the founding of the United States. Both in the colonies that would later form The Confederate States of America, and in the north. Slavery is not capitalism, for all the slaves represented capital. Slavery undermines free enterprise. Nor is a slave state a democratic state.

Adam Smith published his Wealth of Nations in 1776. I think the Founders were a bit too busy to be read Smith. 

No, we must wait for Alexander Hamilton to become Washington's Secretary of the Treasury for capitalism's arrival in America. The Articles of Confederation failed on economic grounds. The Constitution created an unlimited control over the country's economic life through the Commerce Clause.

Thomas Jefferson opposed Hamilton's version of finance capitalism as speculation. Jefferson's idea of yeoman farmers held firm even as it passed into myth; even as the Slave Power pushed out the yeoman farmer from where that power reigned. Capitalism as free enterprise did emerge triumphant until Robert E. Lee surrendered at Appomattox.

Nor were the Founders democrats as much as democratic. The demos, the people, being restricted to whites of a certain class. The progress of America is the marked by the expansion of the group given political power. Democracy finally flowered in America with the passage with the passage of the 1965 Voting Rights Act. Republicans have been trying to eviscerate that law for most of this century. Even now, the Presidential elections are not democratic; the winner of the Electoral College need not be the winner of the popular vote. Until 1912, state legislatures elected the Senators. Read Federalist 62 for more on this point. Only the House of Representatives was elected by popular vote.

The men writing the Constitution created a republican government. Read Federalist 14 for how they distinguished republic and democratic:

The error which limits republican government to a narrow district has been unfolded and refuted in preceding papers. I remark here only that it seems to owe its rise and prevalence chiefly to the confounding of a republic with a democracy, applying to the former reasonings drawn from the nature of the latter. The true distinction between these forms was also adverted to on a former occasion. It is, that in a democracy, the people meet and exercise the government in person; in a republic, they assemble and administer it by their representatives and agents. A democracy, consequently, will be confined to a small spot. A republic may be extended over a large region.

Choosing those representatives by popular vote did not make the government a democracy. We have made the government more democratic by expanding what offices were filled by popular vote and which persons could participate in our elections.

We have become a society with a capitalist economy, and we have become a more democratic nation, but we did not start that way. Nor did we obtain our capitalism or our democratic institutions with the help of conservatives.

sch