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Jefferson and Madison on Republican Political Economy - Lance Banning, Liberty and Order: The First American Party Struggle [1787]

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Liberty and Order: The First American Party Struggle, ed. and with a Preface by Lance Banning (Indianapolis: Liberty Fund, 2004).

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Jefferson and Madison on Republican Political Economy

Thomas Jefferson to G. K. van Hogendorp 13 October 1785

… You ask what I think on the expediency of encouraging our states to be commercial? Were I to indulge my own theory, I should wish them to practice neither commerce nor navigation, but to stand with respect to Europe precisely on the footing of China. We should thus avoid wars, and all our citizens should be husbandmen. Whenever indeed our numbers should so increase as that our produce would overstock the markets of those nations who should come to seek it, the farmers must either employ the surplus of their time in manufactures or the surplus of our hands must be employed in manufactures or in navigation. But that day would, I think be distant, and we should long keep our workmen in Europe, while Europe should be drawing rough materials & even subsistence from America. But this is theory only, & a theory which the servants of America are not at liberty to follow. Our people have a decided taste for navigation & commerce. They take this from their mother country; & their servants are in duty bound to calculate all their measures on this datum: we wish to do it by throwing open all the doors of commerce & knocking off its shackles. But as this cannot be done for others, unless they will do it for us, & there is no great probability that Europe will do this, I suppose we shall be obliged to adopt a system which may shackle them in our ports as they do us in theirs.

James Madison to Thomas Jefferson 19 June 1786

… Your reflections on the idle poor of Europe form a valuable lesson to the legislators of every country, and particularly of a new one. I hope you will enable yourself before you return to America to compare with this description of people in France the condition of the indigent part of other communities in Europe where the like causes of wretchedness exist in a less degree. I have no doubt that the misery of the lower classes will be found to abate wherever the government assumes a freer aspect & the laws favor a subdivision of property. Yet I suspect that the difference will not fully account for the comparative comfort of the mass of people in the United States. Our limited population has probably as large a share in producing this effect as the political advantages which distinguish us. A certain degree of misery seems inseparable from a high degree of populousness. If the lands in Europe which are now dedicated to the amusement of the idle rich were parcelled out among the idle poor, I readily conceive the happy revolution which would be experienced by a certain proportion of the latter. But still would there not remain a great proportion unrelieved? No problem in political economy has appeared to me more puzzling than that which relates to the most proper distribution of the inhabitants of a country fully peopled. Let the lands be shared among them ever so wisely, & let them be supplied with laborers ever so plentifully, as there must be a great surplus of subsistence, there will also remain a great surplus of inhabitants, a greater by far than will be employed in clothing both themselves & those who feed them and in administering to both every other necessary & even comfort of life. What is to be done with this surplus? Hitherto we have seen them distributed into manufacturers of superfluities, idle proprietors of productive funds, domestics, soldiers, merchants, mariners, and a few other less numerous classes. All these classes notwithstanding have been found insufficient to absorb the redundant members of a populous society; and yet a reduction of most of those classes enters into the very reform which appears so necessary & desireable. From a more equal partition of property, must result a greater simplicity of manners, consequently a less consumption of manufactured superfluities, and a less proportion of idle proprietors & domestics. From a juster government must result less need of soldiers either for defense agst. dangers from without or disturbances from within. The number of merchants must be inconsiderable under any modification of society; and that of mariners will depend more on geographical position than on the plan of legislation. But I forget that I am writing a letter not a dissertation… .

James Madison to James Monroe 7 August 1785

… Viewing in the abstract the question whether the power of regulating trade, to a certain degree at least, ought to be vested in Congress, it appears to me not to admit of a doubt but that it should be decided in the affirmative. If it be necessary to regulate trade at all, it surely is necessary to lodge the power where trade can be regulated with effect, and experience has confirmed what reason foresaw, that it can never be so regulated by the states acting in their separate capacities. They can no more exercise this power separately than they could separately carry on war or separately form treaties of alliance or commerce. The nature of the thing therefore proves the former power, no less than the latter, to be within the reason of the federal Constitution. Much indeed is it to be wished, as I conceive, that no regulations of trade, that is to say no restrictions or imposts whatever, were necessary. A perfect freedom is the system which would be my choice. But before such a system will be eligible perhaps for the U.S., they must be out of debt; before it will be attainable, all other nations must concur in it. Whilst any one of these imposes on our vessels, seamen, &c in their ports, clogs from which they exempt their own, we must either retort the distinction or renounce not merely a just profit, but our only defence against the danger which may most easily beset us. Are we not at this moment under this very alternative? The policy of G.B. (to say nothing of other nations) has shut against us the channels without which our trade with her must be a losing one, and she has consequently the triumph, as we have the chagrin, of seeing accomplished her prophetic threats that our independence should forfeit commercial advantages for which it would not recompence us with any new channels of trade. What is to be done? Must we remain passive victims to foreign politics; or shall we exert the lawful means which our independence has put into our hands of extorting redress? The very question would be an affront to every citizen who loves his country. What then are those means? Retaliating regulations of trade only. How are these to be effectuated? Only by harmony in the measures of the states. How is this harmony to be obtained? Only by an acquiescence of all the states in the opinion of a reasonable majority. If Congress as they are now constituted can not be trusted with the power of digesting and enforcing this opinion, let them be otherwise constituted: let their numbers be encreased, let them be chosen oftener, and let their period of service be shortened; or if any better medium than Congress can be proposed by which the wills of the states may be concentered, let it be substituted, or lastly let no regulation of trade adopted by Congress be in force untill it shall have been ratified by a certain proportion of the states. But let us not sacrifice the end to the means: let us not rush on certain ruin in order to avoid a possible danger. I conceive it to be of great importance that the defects of the federal system should be amended, not only because such amendments will make it better answer the purpose for which it was instituted, but because I apprehend danger to its very existence from a continuance of defects which expose a part if not the whole of the empire to severe distress. The suffering part, even when the minor part, can not long respect a government which is too feeble to protect their interest; but when the suffering part came to be the major part, and they despair of seeing a protecting energy given to the general government, from what motives is their allegiance to be any longer expected. Should G.B. persist in the machinations which distress us, and seven or eight of the states be hindered by the others from obtaining relief by federal means, I own, I tremble at the anti-federal expedients into which the former may be tempted. As to the objection against intrusting Congress with a power over trade, drawn from the diversity of interests in the states, it may be answered 1. that if this objection had been listened to, no confederation could have ever taken place among the states. 2. that if it ought now to be listened to, the power held by Congress of forming commercial treaties, by which 9 states may indirectly dispose of the commerce of the residue, ought to be immediately revoked. 3. that the fact is that a case can scarcely be imagined in which it would be the interest of any 2/3ds of the states to oppress the remaining 1/3d. 4. that the true question is whether the commercial interests of the states do not meet in more points than they differ. To me it is clear that they do; and if they do there are so many more reasons for, than against, submitting the commercial interest of each state to the direction and care of the majority. Put the West India trade alone, in which the interest of every state is involved, into the scale against all the inequalities which may result from any probable regulation by nine states, and who will say that the latter ought to preponderate? I have heard the different interest which the Eastern States have as carriers pointed out as a ground of caution to the Southern States who have no bottoms of their own agst their concurring hastily in retaliations on G.B. But will the present system of G.B. ever give the Southern States bottoms; and if they are not their own carriers I should suppose it no mark either of folly or incivility to give our custom to our brethren rather than to those who have not yet entitled themselves to the name of friends. …