Academic journal article Journal of the Early Republic

The Vexed Story of Capitalism Told by American Historians

Academic journal article Journal of the Early Republic

The Vexed Story of Capitalism Told by American Historians

Article excerpt

In this the most capitalistic country in the world, scholars have a difficult time making precise just what social relations the word, capitalism, refers to, not to mention how to characterize its development across the four centuries of American history. Once such taglines as "America was born free, rich and modern," "capitalism came in the first boats," and "only the energetic and ambitious migrated" expressed the shared assumptions undergirding the metahistory of capitalism in the United States. That story has almost been reversed recently with scenarios about colonists' traditionalism that could fit under the rubic, "how the new world has become old and the old world new." Either version is inadequate. More to the point for members of SHEAR, this inadequacy leaves us bereft of a full understanding of the early republic. I believe that the insights of cultural history with its emphasis upon recovering meanings in the past and exploring how men and women communicated those meanings offers a promising way to reassess the career of capitalism and its conceptual cousins, trade, commerce, and enterprise.

I am approaching "the vexed story of capitalism" as an intellectual and historical phenomenon, involving the myriad of convictions of those who wrote on the subject at various times, as well as the theories then available for analyzing the economy and the motives that may have prompted the historians' work. Throughout I shall use the term capitalism to designate a system that depends upon private property and the relatively free use of it in economic endeavors. My definition points to the scope of action given individuals for turning their property into capital by investing in production, an activity usually aimed at returning a profit and involving legal protection for hiring labor and selling goods and services in public and private. All of this takes place within a culture that rewards enterprise and rationalizes any untoward social consequences as the price to be paid for material advance.

Neither the term nor the system of capitalism figured in nineteenthcentury historical writings. That silence came to an end with the publication in 1913 of Charles Beard's An Economic Interpretation of the Constitution of the United States. A bombshell of a book, this pathbreaking study irradiated a whole new landscape for researchers to dig into.' In it Beard charged that the Constitution was neither a compact of states nor an organic product of American nation-building, but rather the work of the Revolution's moneyed leaders who had grown fearful of democracy. The limited suffrage in 1787, Beard said, had made it possible to rob the people of their political voice. What the Declaration of Independence had bestowed, the Constitution took away. The Federalists' frame of government frustrated future reform too through a byzantine amendment process. Beard further asserted that holdings in cash, loans, and bonds, not the real property in homes, shops, and farms of most American voters, had united the men who pushed for the Constitution's "more perfect union." He thus separated the economy of commercial agriculture-the capitalism of the many-from the investments of bankers and merchants-the capitalism of the few-choreographing capitalism's entrance into American history through the fancy footwork of an elite attentive to its vested interests.

In the compass of a very few pages Beard razed the temple of Constitution worship and erected in its place a peep show through which one could see the hidden forces at play at the Philadelphia convention. Newly energized by this tantalizing thesis, researchers in the following decades ferreted out scores of groups in colonial and post-independence America quarrelling with each over taxation, debt relief, land banks, paper money, stay laws, price controls, and bankruptcy statutes. Beard had been correct: common economic interests had created political coalitions. The difficulty came when one tried to connect these groups causally to the major political decisions about declaring independence, ratifying the Constitution, or joining the Jeffersonian opposition. …

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