Presidential Elections' Economic Importance

Article excerpt

WOULD IT HAVE MATTERED if George Washington had lost to John Adams in our nation's first presidential contest or, if eight years later, Adams had lost to Thomas Jefferson? Does it matter who the winner is this time? As is so often the case in economics, the answer is "it depends."

Our first three presidents helped found the nation and formalize its principles. Whichever of them held the highest office was of little consequence for three reasons. First, each believed limiting government's power was a prerequisite to securing mankind's rights to life, liberty, and the pursuit of happiness. Second, they were not far removed from the philosophers who provided inspiration on natural rights, personal liberty, private property, and the origins of tyranny. Third, the Federal government's income was small, limiting its ability to spend and therefore to intrude into private affairs.

With the ink still fresh on the Declaration of Independence and the Constitution, it would never have crossed the Framers' minds to suggest that the presidency conferred upon them powers other than to "faithfully execute the office of President of the United States, and ... [to] preserve, protect and defend the Constitution of the United States." Sections 2 and 3 of Article II identify the president's responsibilities: acting as commander-in-chief of the armed forces, conducting foreign affairs, appointing persons to high government offices and taking "care that the laws of the United States be faithfully executed." How is this job description connected to the economy?

In 1776, economist Adam Smith asserted that the sovereign had but three duties in a free market system--to provide national defense: maintain an exact system of justice to impartially mediate disputes, protect private property, and prevent the use of force or fraud; and provide certain public services. These three duties sound remarkably like the president's constitutional duties, and here we find the link between good government and the market. These three functions create an ideal environment for free enterprise where buyers and sellers have an incentive to create new wealth for themselves and for society. The resulting economic activities represent the machinery of liberty in operation.

Why did the Framers constrain government's power to "do good?" They did so because they recognized that if government "helped" one citizen by taking the property of another, it would weaken work incentives, undermine mutual trust (the market's lubricating oil), and the coercion required to affect the redistribution would engender class envy and reduce citizens to the status of subjects. When these truths were understood, it mattered little which man was chosen.

Four historical developments have created a Federal government and a presidency that Washington, Adams, and Jefferson would not recognize. First, public servants no longer credit the source of our "inalienable rights," nor do they acknowledge the Creator's role in establishing this most unique of all republics. Reverence and fear no longer constrain their behavior. Washington suffered no such ambivalence: "it is impossible to rightly govern a nation without God and the bible," he stated. …