3) Founding A Republic of Virtue

Posted: May 15, 2010 in 3) A Republic of Virtue, Category - Renewing America's Leadership

Founding a Republic of Virtue

Royal Encroachment on “The Rights of Englishmen”

The American colonists had eagerly seized the self-government they had been promised by  Britain. In 1639 Connecticut contributed a major breakthrough in political theory and practice by  adopting the first written constitution in the world—The Fundamental Orders of Connecticut.i The other colonies soon followed suit and wrote their own constitutions as colonies. These  public declarations of their rights and responsibilities, along with their legislative assemblies,  allowed each colony to establish its own unique American hybrid of the British Common Law.ii

The American colonies watched from afar as England tore itself apart during the Parliamentary  Civil War (1642-48) and the Glorious Revolution (1688). The founders later saw those conflicts  as demonstrating the need for religious toleration and the necessity of written constitutions and  bills of rights. Having established a series of semi-independent and generally self-supporting North American  colonies in the early and mid 17th century, the British crown began to wrest back some degree of control by the end of it.iii The British government refused to renew most of the original colony charters and transformed those communities into crown colonies, where the king appointed the  Governor—colonial “constitutions” notwithstanding.iv
The expense of defending their American colonies against the French and Indians led the British  government to look for new sources of revenue from them. The colonists resisted vigorously,  since they had had no say in how the new taxes were levied. The Americans also chaffed under  Britain’s mercantilist economic policies, which granted trade and manufacturing preferences and  monopolies to domestic British interests at the expense of their colonial subjects—who again had no say in them. The last straw, legally, was the Declaratory Act of 1766, which accompanied Parliament’s repeal  of the hated Stamp Act. In the Declaratory Act, Parliament repudiated the powers of the colonial  assemblies and affirmed its sole power and intention to impose its laws on the North American  colonies. It declared that the colonies were mere “plantations,” rather than constituent  components of the British Empire.v The Americans recognized that their new status as taxable  “subjects,” without the rights and voice of “citizens,” put them on the road to serfdom. And so  they rebelled.
The “Miracle in Philadelphia”

Having successfully forced Great Britain to allow them to depart, the new Americans now  struggled through seven long years of legal chaos under the Articles of Confederation. The  Confederation had been cobbled together during the heat of the war. It rested only on good faith,  and had no power to collect taxes, defend the country, or pay the public debt; let alone encourage  trade and commerce. On that day of 1781, when a messenger brought news to the Continental  Congress of the climatic American victory at Yorktown, there was not sufficient hard money in  the Confederation’s treasury to pay the man’s expenses; each Member of Congress paid a dollar  from his own pocket.vi
But the seven-year delay may have been a blessing in disguise. Between the end of the war and  the 1787 Constitutional Convention in Philadelphia, all the former colonies had been forced to  consider the consequences of their disunity. The fears that had led to the weak Confederation  were now matched by a new fear that unless they could work out a national union, some or all of  the colonies would end up under the influence of various European powers.vii Even though most  Americans wanted a new national government with only limited powers, living under the  Confederation had helped people recognize the need for more central authority than it provided.  So there was a moment of opportunity. Thanks to a decade of editorializing and pamphleteering  by leaders like Alexander Hamilton and James Madison, fifty-five delegates, representing all the  colonies except Rhode Island, assembled in Philadelphia in the unusually hot summer of 1787, to  thrash out a national government for the United States.viii Their work would be a milestone for  the ages.

Sophisticated and Realistic Idealism

Leo Strauss (1899–1973), a major modern political theorist, called the United States of America  “the only country in the world, which was founded in explicit opposition to Machiavellian  principles.”ix For hundreds of years, cold-eyed “realists” had given lip service to whatever ideals  seemed expedient at the moment, and then cynically ignored them when it became “necessary.”  The founders were embarking on an audacious effort to find a new path. They broke new ground by beginning with human nature and a consensus that any form of  government that failed to accommodate the mixture of good and evil that is inherent in mankind  was doomed to fail. The founders would have agreed with Aleksandr Solzhenitsyn’s gulagforged insight: “The line separating good and evil passes not through states, nor between classes,  nor between political parties either, but right through every human heart, and through all human  hearts.”x
Baron Charles de Montesquieu (1689-1785), whose 1748 book, The Spirit of the Laws, was  extremely influential in the colonies, had argued that different forms of government require  different responses from their subjects. Despotism requires a climate of fear. Monarchies are  built on honor. But the success of republics depends on public virtue.xi Therefore, the challenge  for the founders was to promote public and private virtue in a way that leveraged human nature  for the benefit of both individuals and the nation.

An External Standard of Truth

One step in this direction was a written constitution. England had never had a comprehensive  written constitution. All its constitutional documents like Magna Carta (1215) or its Bill of  Rights (1689) were specific ad hoc remedies for crises as they arose. They were never intended,  nor were they used, as guides for the present and future.xii The Americans were consciously  entering into a new social contract among themselves. They drew on the Bible, Enlightenment  social contract theory and their own colonial constitutions to create what Catherine Drinker  Bowen describes as the “Ark of our Covenant.”xiii

Reformation Christianity treated the Bible as an external standard of truth, which trumps the  decrees of earthly kings if they violate God’s law. The founders secularized that idea for the first  written national constitution in the world. Their extensive use of “Natural Law” over the  arbitrary legislation of “ruler’s law” reflects this strategy. This shift empowered individuals to  act freely, as their own arbiters of conduct, as long as they didn’t violate state or federal laws. In  Europe, by contrast, behaviors not specifically permitted were assumed prohibited. Once ratified,  the U.S. Constitution provided an external standard of truth that would guarantee the rights,  liberties and republican governance of the citizens of the new nation, as well as the states that  were entering into the new covenant.

The Principles That Underlie The United States Constitution

G.K. Chesterton wrote: “America is the only nation in the world that is founded on a creed. That  creed is set forth with dogmatic and even theological lucidity in the Declaration of  Independence.”xiv  The universal “inalienable rights” of life, liberty and the pursuit of happiness  are rich with potential. But it is the Constitution, and the principles embodied in it, that brings  them to life. There is no official compendium of “The American Creed” beyond the prologue of the  Declaration of Independence. But that belief system can be discerned and understood by  studying the beliefs and writings of the founding fathers before and after they created the  Constitution.  An outstanding compilation of the principles that undergird and animate the  American Constitution is contained in The Five Thousand Year Leap by professor W. Cleon  Skousen.

The following summary of some of those principles is no substitute for reading Dr. Skousen’s  classic book, or the original writings on which it’s based. But it offers an entry point for further  study.

1. The only reliable basis for sound government and just human relations is Natural  Law

In the founders’ pantheon of favorite authors, Marcus Tullius Cicero (106-43 BC) ranks high.xv Cicero looks forward to Christianity, rather than back to Aristotle.xvi  He taught that the only  intelligent approach to government, justice and human relations is in terms of the laws which the  Supreme Creator has already established. The Creator’s order of things is called Natural Law. A  fundamental presupposition of Natural Law is that man shares with his Creator this quality of  utilizing a rational approach to solving problems. The reasoning of the mind will generally lead  to common-sense conclusions based on what Jefferson, in the Declaration of Independence, calls  “the laws of Nature and of Nature’s God.”xvii
Cicero defines Natural Law as “true law,” and then says, “True law is right reason in agreement  with nature.”xviii “Right reason,” when it is perfectly understood, is called “wisdom.” When  wisdom is applied by government in regulating human relations, it is called “justice.”xix Cicero  later says:
We are born for justice, and the right is based, not upon men’s opinions, but upon  Nature…However we may define man, a single definition will apply to all. This is  sufficient proof that there is no difference in kind between man and man…in fact, there is  no human being of any race who, if he finds a guide, cannot attain to virtue.xx
Dr. Skousen provides a list of thirteen concepts in the Constitution that are based on principles of  Natural Law.xxi

2.  A free people cannot survive under a republican constitution unless they remain virtuous and morally strong.

The great 18th century British statesman and philosopher Edmond Burke offered a classic  expression of this crucial principle:
“Men are qualified for civil liberty in exact proportion to their disposition to put moral  chains on their own appetites…Society cannot exist unless a controlling power upon the  will and appetite is placed somewhere; and the less of it there is within, the more there must be without. It is ordained in the eternal constitution of things that men of  intemperate minds cannot be free. Their passions forge their fetters.”xxii

3.  The most promising method of securing a virtuous and morally stable people is to       elect virtuous leaders.

All the wisdom and thought the founders embodied in the Constitution will come to naught if the  American people elect leaders who do not appreciate the founders’ gift. Nothing that follows is  more important than electing leaders committed to the integrity of the Constitution and upholding the standard of public virtue the founders embedded within it.

The first challenge is to understand the natural tendency of all men in power to expand their  authority and jurisdiction. The classic explanation of this principle comes from James Madison  in The Federalist Papers 51: “If men were angels, no government would be necessary. If angels  were to govern men, neither external nor internals controls on government would be  necessary.”xxiii

Thomas Jefferson is considered the father of the phrase “The price of liberty is eternal  vigilance.”xxiv Whether he said it or not, it remains true. If we do not elect leaders committed to a  government of limited, enumerated powers, we will lose our heritage and with it, the last best hope of mankind.

4. Without religion the government of a free people cannot be maintained.

In 1787, while the Constitutional Convention was at work, and in coordination with it, the first  Congress of the United States enacted the great Northwest Ordinance. The Northwest Ordinance  has been called the third great document of American history, after the Declaration and the  Constitution.xxv In that statute, our first Congress clearly expressed their vision for the role of  religion in American life:

Article 3: Religion, morality, and knowledge being necessary to good government and the  happiness of mankind, schools and means of education shall forever be encouraged.xxvi

Several of the founders left us descriptions of their basic religious beliefs. The following  compilation comes from the writings and statements of Benjamin Franklin:
1. There exists a creator who made all things, and mankind should recognize and worship him.
2. The creator has revealed a moral code of behavior for happy living which distinguished right from wrong.
3. The creator holds mankind responsible for the way they treat each other.
4. All mankind live beyond this life.

5. In the next life mankind are judged for their conduct in this one.

All five of these tenets run through the writings of practically all our founders. These are the  beliefs that the founders sometimes referred to as the “religion of America.”xxvii
Although the first ten amendments that became the Bill of Rights were not included in the  Constitution when it was sent out for ratification, the state ratifying conventions demanded them.  Congress then added a vital amendment that prohibited the federal government from even  thinking about setting up an established church at the national level. In the Bill of Rights, the  very first sentence of the First Amendment states: “Congress shall make no law respecting an  establishment of religion, or prohibiting the free exercise thereof.” This assured the unique  American free market in religion, which we’ll consider further below. Even so, at the time the  Constitution was adopted, at least seven of the original states still had tax-supported established  religions or denominations.xxviii

6. All men are created equal

No two human beings are exactly alike. How then can they be equal? The answer is they can  only be treated as equals in the sight of God, in the sight of the law, and in the protection of their  rights.xxix

Yet the Declaration’s ringing affirmation of human equality has to be reconciled with the fact  that slavery was not abolished. While kings and hereditary nobility were clearly excluded, the  founders were forced to leave chattel slavery in place. Scholar and author Dinesh D’Souza, in  What’s So Great About America addresses the pregnant contradiction of slavery under the  Constitution:

In practical terms, the choice facing the founders was not to permit or to prohibit slavery.  Rather the choice was either to establish a union in which slavery was tolerated, or not to  have a union at all. Any suggestion that the southern colonies could have been persuaded  to join a union and give up slavery can be dismissed as preposterous. As Harry Jaffa puts  it, had the founders insisted upon securing all the rights of all men, they would have  ended up securing no rights for anybody.xxx

7.  The proper role of government is to protect equal rights, not to provide equal       things.

The founders recognized that people cannot delegate to their government the power to do  anything except that which they have the lawful right to do themselves. They recognized that the  moment government begins trying to level the material possessions of some, in order to have an  “equal distribution of goods,” the government thereafter has acquired the power to deprive any  of the people of their “equal” rights to enjoy their lives, liberties, and property.xxxi  The founders  were striving to offer Americans equality of opportunity rather than equality of outcome.

8. Men are endowed by their Creator with certain unalienable rights.

The founders did not believe that the basic rights of mankind originated from any social  compact, king, emperor, or government authority. Those rights, they believed, came directly and  exclusively from God and could only be channeled by human law.xxxii In legal parlance, the term “unalienable” means “incapable of being sold, transferred, or contracted away.”xxxiii

John Locke taught, and the founders accepted, the proposition that life, liberty and property do  not exist because men have made laws. On the contrary, it was the fact that life, liberty and  property existed beforehand that caused men to make laws to protect them.xxxiv

9. The God-given right to govern is vested in the sovereign authority of the whole people.

The divine right of the people to govern themselves, and exercise exclusive power of sovereignty  in their official affairs, was explicitly expressed by the Commonwealth of Massachusetts in its  Proclamation of January 23, 1776: “It is a maxim that in every government there must exist somewhere, a supreme,  sovereign, absolute, and uncontrollable power; but this power resides always in the body  of the people; and it never was, or can be, delegated to any man, or a few; the great  Creator has never given to men a right to vest others with authority over them, unlimited  either in duration or degree.”xxxv

10.  The majority of the people may alter or abolish a government which has become tyrannical.

In the Declaration of Independence Jefferson wrote: ” But when a long train of abuses and usurpations, pursuing invariably the same object,  evinces a design to reduce them under absolute despotism, it is their right, it is their duty,  to throw off such government, and to provide new guards for their future security.xxxvi

11. The United States of America shall be a Republic.”

The ancient Greeks tried to use mass participatory democracy in the government of their citystates, and each time it ended in tyranny. A democracy becomes increasingly unwieldy and  inefficient as the population grows. A republic, on the other hand, governs through elected  representatives and can be expanded indefinitely.xxxvii

Madison said in Federalist 10: Democracies have ever been spectacles of turbulence and contention; have ever been  found incompatible with personal security or the rights of property; and have in general  been as short in their lives as they have been violent in their deaths.xxxviii

Both Madison and Hamilton argued that the unprecedented size of the new republic would help,  rather than hinder its success. They contended that encompassing a large number of diverse  interests in the same polity (pluralism) would lead to a creative clash of policies that would result  in sensible government, and thereby offset the dangers of democracy.

12. A Constitution should be structured to permanently protect the people from the        human frailties of their rulers.

As Madison said in The Federalist Papers: “In framing a government which is to be  administered by men over men, the great difficulty lies in this: You must first enable the  government to control the governed; and in the next place oblige it to control itself.”xxxix
George Washington said, “Government is not reason, it is not eloquence—it is force! Like fire, it  is a dangerous servant and a fearful master.” xl

Jefferson said: “Let no more be said of confidence in man, but bind him down from mischief by  the chains of the Constitution.”xli

13. Life and liberty are secure only so long as the right to property is secure.

John Locke said all property is an extension of a person’s life, energy, and ingenuity. Therefore,  to destroy or confiscate such property is in reality, an attack on the essence of life itself.xlii In his Second Essay Concerning Civil Government, John Locke said: The supreme power cannot take from any man any part of his property without his  consent. For the preservation of property being the end of government, and that for which  men enter into society, it necessarily supposes and requires that the people should have  property, without which they must be supposed to lose that [property] by entering into  society, which was the end for which they entered into it.xliii

14. The highest level of prosperity occurs when there is a free-market economy.

Adam Smith had published his Wealth of Nations in 1776. The American founding provided the  first opportunity to combine the political institutions of a new state with the principles of a free  market economy as explained by Smith. In We Still Hold These Truths, Heritage Foundation  scholar Matthew Spalding explains how it the founders did it. America’s Founders introduced a new model of political economy. Rather than focusing on  the distribution of fixed wealth (mostly wealth in property that remained in the same family  from generation to generation, thus feeding endless class warfare), they developed an  economic system that encouraged a multiplicity of interests and numerous varieties of  property…Distinctions of wealth would still exist, of course, but they would no longer be  the basis of legal or political authority. The point was not to maintain a society based on the  permanent arbitrary class divisions that characterized the Old World but to form an  energetic social order in which every member of society could advance without barrier,  based on individual merit and industriousness rather than aristocratic privilege and  inheritance.xliv

In his Defense of the Funding System, Alexander Hamilton wrote “True liberty, by protecting the  exertions of talents and industry, and securing to them their justly acquired fruits, tends more  powerfully than any other cause to augment the mass of national wealth.”xlv He explained this  further in Federalist 12:  By multiplying the means of gratification, by promoting the introduction and circulation of  the precious metals, those darling objects of human avarice and enterprise, it serves to  vivify and invigorate the channels of industry, and to make them flow with greater activity  and copiousness. The assiduous merchant, the laborious husbandman, the active mechanic,  and the industrious manufacturer—all orders of men, look forward with eager expectation  and growing alacrity to this pleasing reward of their toils… [As a result] the prosperity of commerce is now perceived and acknowledged by all  enlightened statesmen to be the most useful as well as the most productive source of  national wealth, and has accordingly become the primary object of their political cares.xlvi

15. The Government should be separated into three branches by function: Legislative,  Executive, and Judicial.

In the 18th Century the British system of government, which balanced the “natural orders” of  king, nobility and commoners was widely considered the most advanced. Then, in his The Spirit  of the Laws, (1748) Baron Charles de Montesquieu (1689-1785), introduced the principle of  “separate but coordinated” powers to the founding fathers.xlvii

Under the energetic leadership of John Adams, the founders’ joint efforts greatly excelled  Montesquieu’s proposals. Adams first convinced the State of Massachusetts to divide its  government by function into legislative, executive and judicial departments in its Constitution of  1780.  And then, even though he was not a delegate in Philadelphia, Adams succeeded in  persuading the national Constitutional Convention to adopt the same approach.

16. A system of checks and balances should be adopted to prevent abuse of power.

James Madison believed that keeping the three branches of government separated was  fundamental to the preservation of liberty. He wrote: “The accumulation of all powers,  legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and  whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of  tyranny.”xlviii

In The Five Thousand Year Leap, Dr. Skousen includes a list of 18 separate checks and balances  that both deter abuse and yet tie the three branches together to assure that national policy reflects  a genuine national consensus.xlix Matthew Spalding, in We Hold These Truths, briefly  summarizes the genius of the system: The Constitution creates three branches of government, and each is vested with  independent powers and responsibilities. Each also has its own basis of authority and  serves different terms of office. No member of one branch can serve in another branch. But  their powers aren’t separated completely. In order to protect themselves and guard against  encroachment, each department shares overlapping powers with the others. Before it  becomes law, congressional legislation, for instance, must be approved by the executive— who also has a check against Congress in the form of the qualified veto, which the  legislature in turn can override by two-thirds votes in the House and the Senate. The  Supreme Court can strike down executive or legislative actions that come up in cases  before it as unconstitutional, but Congress has the power to reenact or modify overturned  laws, strip the court’s jurisdiction in many cases, and impeach federal judges.l The practical implications of the American system of checks and balances are equally remarkable. Government is structured so that each branch has an interest in keeping an eye on the  others, checking powers while jealously protecting its own. By giving each department an  incentive to check the other—with overlapping functions and contending ambitions—the  Founders devised a system that recognized and took advantage of man’s natural political  motivations to both use power for the common good and to keep power within  constitutional boundaries. Or as Madison put it, the “interests of the man [becomes]  connected with the constitutional rights of the place.”li

President Washington thought that the separation of powers, with its accompanying checks and  balances, was the genius of the American system, and vital to maintaining it. In his Farewell  Address, he said:  …[T]o preserve [these separate functions] must be as necessary as to institute them. If, in  the opinion of the people, the distribution or modification of the constitutional powers be  in any particular wrong, let it be corrected by amendment in the way which the  Constitution designates. But let there be no changes by usurpation; for though this, in one  instance, may be the instrument of good, it is the customary weapon by which free  governments are destroyed.lii

17. Only limited and carefully defined powers should be delegated to the government. All others are retained by the people.

The founders made the federal government supreme in all matters relating to its enumerated  responsibilities, but it was specifically restricted from invading the independence and sovereign  authority reserved to the States. The founders felt that unless this principle of dual sovereignty was carefully perpetuated, the healthy independence of each would deteriorate and eventually  one or the other would become totally dominant.liii

Further, the framers did not list all of the unalienable rights in our founding documents. In the  Declaration they made a point of saying that “among these are life, liberty and the pursuit of  happiness.”liv The single sentence of the Ninth Amendment makes the retention by the people of  unmentioned rights crystal clear: “The enumeration in the Constitution, of certain rights, shall  not be construed to deny or disparage others retained by the people.”

The Tenth Amendment explicitly reserves all powers not delegated to the new central  government to the states respectively, or to the people.

18. Efficiency and dispatch require government to operate according to the will of the majority, but constitutional provisions must be made to protect the rights of the minority.

John Locke said, …And thus every man, by consenting with others to make one body politic under one  government, puts himself under an obligation to every one of that society to submit to the  determination of the majority and to be concluded [bound] by it.lv

At the same time, the founders had had enough experience under the tyrannical thumb of  Parliament to feel highly sensitive to the rights of minorities. In his first inaugural address,  Thomas Jefferson said,  All, too, will bear in mind this sacred principle, that though the will of the majority is in all  cases to prevail, that will, to be rightful, must be reasonable; that the minority possess their  equal rights, which equal laws must protect, and to violate would be oppression.lvi

It is the responsibility of minorities in America to learn the language, seek needed education,  become self-sustaining, and make themselves recognized as genuine assets to the community.  Meanwhile, those who are already established can helplvii

19. Strong local self-government is the keystone to preserving human freedom.

As the founders framed the Constitution, only those things which related to the interest of the  entire commonwealth were to be delegated to the central government. As Jefferson wrote:  What has destroyed liberty and the rights of man in every government which has ever  existed under the sun? The generalizing and concentrating all cares and powers into one  body, no matter whether of the autocrats of Russia or France, or of the aristocrats of a  Venetian senate.lviii

20. A free people should be governed by law, and not by the whims of men

To be governed by the predilections of men (“ruler’s law”) is to be subject to the ever-changing  capriciousness of those in power. In such a society nothing is dependable. No rights are secure.  Things established in the present are in a constant state of flux. Nothing becomes fixed and  predictable for the future.lix

John Adams said:  No man will contend that a nation can be free that is not governed by fixed laws. All other  government than that of permanent known laws is the government of mere will and  pleasure.lx

This is why the founders, in their wisdom, organized state ratifying conventions to allow the  sovereign people to ratify a written constitution, which would be the supreme law of the land.

21. A free people will not survive unless they are prepared to defend the liberty.

It was military necessity that forced the thirteen colonies to band together in the first place. Then  after the Revolution, the manifest inadequacy of the Confederation for organizing a collective  defense against external threats was one of the principle motivators that justified a new  constitution. In Federalist 41, Madison observed, ”Security against foreign danger is one of the primitive  objects of civil society. It is an avowed and essential object of the American union.”lxi John Jay  wrote in Federalist 2 “Among the many objects to which a wise and free people find it necessary  to direct their attention, that of providing for their safety seems to be first.”lxii Finally, George  Washington said: “To be prepared for war is one of the most effectual means of preserving  peace.”lxiii

22.  The core unit which determines the strength of society is the family;  therefore, the government should foster and protect its integrity

By creating and maintaining a safe and unique learning environment for children, the family,  more than anything else, makes the immature child into the self-governing citizen.lxiv Family, by  being the earliest teacher of virtues and character, as well as the primary educator of citizens,  was often referred to as the “seminary of the republic.”lxv

John Locke wrote: The nourishment and education of their children… is a charge so incumbent on parents for  their children’s good, that nothing can absolve them from taking care of it.lxvi

In his great analysis of America’s institutions and culture, Alexis de Tocqueville said “While the European endeavors to forget his domestic troubles by agitating society, the  American derives from his own home that love of order which he afterwards carries with  him into public affairs.lxvii

The strength and stability of the family is of such vital importance to the culture that any action  by the government to debilitate or cause dislocation in the normal trilateral structure of the  family becomes not merely a threat to the family involved, but a menace to the very foundation  of society itself.lxviii

23.  The burden of debt is as destructive to freedom as subjection by conquest.

Debt, of course, is simply borrowing against the future. It exchanges a present advantage for a  future obligation. It will require not only the return of the original advance of funds, but a  substantial compensation to the creditor for the use of his money.lxix The founders believed the  worst kind of debt is that which results from “spurge” borrowing—going into debt to enjoy the  temporary luxury of extravagantly living “beyond ones means.”lxx

Benjamin Franklin wrote: But, ah, think what you do when you run in debt; you give another power over your  liberty…But poverty often deprives a man of all spirit and virtue. ‘Tis hard for an empty  bag to stand upright,’ as Poor Richard truly says.lxxi

24. The United States has a manifest destiny to be an example and a blessing to the entire human race.

The American founders had a strong sense that their Revolution had erected a beacon of hope  that would shine in the hearts of people everywhere. They rightly believed that the principles  they had discovered were not just applicable to their own continent, but would be incorporated  into the aspirations of the friends of freedom around the world. John Adams said that if the  people abandoned the freedom gained by the adoption of the Constitution, it would be “treason  against the hopes of the world.”lxxii

James Madison wrote in Federalist 14: Happily for America, happily, we trust for the whole human race, they pursued a new and  more noble course. They accomplished a revolution, which has no parallel in the annals  of human society. They reared the fabrics of governments, which have no model on the  face of the globe. They formed the design of a great Confederacy, which it is incumbent  on their successors to improve and perpetuate.lxxiii (Emphasis added)

Financial Integrity Ignites the Great American Economic Boom

The Partnership Between George Washington and Alexander Hamilton

Writing and ratifying the constitution for a new form of government wasn’t nearly enough. To  succeed, it had to be implemented carefully and wisely. For this, George Washington deserves  enormous credit. He had been indispensable to America’s victory in the Revolutionary War.  Now Washington’s steady hand launching and guiding the new ship of state through its first  eight years was equally essential.
No single decision Washington made during his Administration was more fateful than the trust  and reliance he placed on his young wartime aide-de-camp, the brilliant, self-made, emigrant  from St. Croix, Alexander Hamilton. Washington made Hamilton America’s first Secretary of  the Treasury. If James Madison had been the architect of the constitution, Alexander Hamilton was its  foremost interpreter.  He’d been thinking about what needed to be done for nearly a decade.  Even before the Revolutionary War ended, Hamilton had foreseen the need for a written  constitution, and had sent a lengthy outline to a friend.lxxiv During the Articles of Confederation  period, Hamilton lobbied tirelessly in the press and the New York legislature for calling a  “continental” constitutional convention.lxxv
During the convention in 1787, and through Washington’s two terms in office, Alexander  Hamilton didn’t create America’s market economy so much as foster the cultural and legal  settings in which it flourished. He understood that a capitalist society requires certain  preconditions. Among other things, it must establish a rule of law though enforceable contracts;  respect private property; create a trustworthy bureaucracy to arbitrate legal disputes; and offer  patents and other protections to promote invention.lxxvi

Washington’s staff in the first federal capitol in New York City was tiny—actually smaller than  his staff back at Mount Vernon.lxxvii  In that environment the war-forged trust between  Washington and Hamilton allowed the younger man to serve more as Washington’s prime  minister than his chief financial officer.lxxviii

The Real-World Power of Morality in Government

Hamilton had studied the financial revolution that was accompanying the commercial  revolutions in the Netherlands and Britain. He understood that scrupulously honest financial  management had allowed the tiny Dutch Republic to wrest its independence from the  enormously powerful, but financially profligate, Spanish Empire under Phillip II; and then  withstand the further onslaughts of the equally powerful, but financially overextended France  under Louis XIV. Hamilton understood that nations rose or fell over seemingly mundane issues  like interest rates on foreign loans or the availability of foreign capital. As Daniel Defoe had  written, “It is not the longest sword that conquers, but the longest purse.”lxxix

In his justly renowned Report on Public Credit, Hamilton presented a detailed blueprint of the  government’s fiscal machinery, wrapped in a broad political and economic vision. Hamilton  reminded readers that the government’s debt, inherited from the Revolution, was the “price of  liberty” and had special claims on the public purse.lxxx He argued that the security of liberty and  property were inseparable, and that governments should honor their debts because contracts  formed the basis of both public and private morality.lxxxi
To assure America’s debt was paid over time, Hamilton proposed to adopt a mechanism developed by the Dutch in the 1690s: a “sinking fund,” financed by post-office revenues. A  sinking fund is a repository, set apart from the general budget, for revenues dedicated to paying  off debt.lxxxii

The Spark That Lit The Fire: National Assumption of State Revolutionary War Debt  Hamilton set out to persuade the wealthier southern states to allow the national government to  assume the remaining Revolutionary War debts of the cash-strapped northern states. This was a  hard-fought and very public battle that lasted for months.

The states that had already retired their war debt had looked forward to using lower taxes to  attract business and industry away from the states still struggling to pay off theirs. But Hamilton  understood that if any state defaulted on its war debt, it could be a crippling blow to the  creditworthiness of all the states in the new republic. Nevertheless, the House of Representatives  voted down Hamilton’s first assumption plan in April 1790. But he and his allies persisted.

Eventually Hamilton was able to persuade Thomas Jefferson and James Madison to support  national assumption in return for locating the permanent capitol of the United States somewhere  in the South.lxxxiii This was called the “residency question.” Where would the new nation’s  capitol reside? Hamilton’s proposal was very unpopular with his own New York congressional  delegation.  They were looking forward to the great commercial and cultural benefits that would  flow from basing the nation’s financial and political institutions in New York City. Combining  the two power centers in their city would have made New York another London or Paris.lxxxiv But Hamilton argued for the transcendent importance of establishing the entire United States as a  place where entrepreneurs and investors could do business in confidence.

Finally Hamilton was able to recruit the middle states to his plan by designating Philadelphia as  the temporary capitol, while a ten-mile-square site on the Potomac River was surveyed and built.  With Hamilton providing votes from the northern and middle states, and Jefferson and Madison  lining up the southern vote, Congress ultimately adopted Hamilton’s assumption plan on July 26,  1790.lxxxv
What a difference government integrity makes!  Literally overnight, the old state bonds, which  had been storm clouds hanging over the infant republic, now galvanized the entire economy.  Firmly funded government bonds could be used as loan collateral and functioned as money—and  it was the scarcity of money that had threatened the entire American experiment up to this point. Hamilton had aligned public morality with private morality, and the economy blossomed. He  knew that bondholders would feel a stake in preserving any government that owed them money.lxxxvi His interest was not in enriching creditors or cultivating the privileged class so much  as insuring the government’s stability and survival. As Walter Lippmann later said of Hamilton,  “He used the rich for a purpose that was greater than their riches.”lxxxvii

National assumption of the state war debts, combined with the Constitution’s rule of law, set off a great investment boom in the United States. Investors have flocked to America ever since. Just two years into the life of the young nation, George Washington was able to write: The United States enjoy a scene of prosperity and tranquility under the new government  that could hardly have been hoped for…Our public credit stands on that [high] ground  which three years ago it would have been considered as a species of madness to have  foretold.lxxxviii

Hamilton’s biographer, Ron Chernow, sums up his achievement:

Bankrupt when Hamilton took office, the United States now enjoyed a credit rating equal  to that of any European nation. He had laid the groundwork for both liberal democracy  and capitalism, and helped to transform the role of the president from passive  administrator to active policy maker.lxxxix

Financial Integrity in Government: A Lesson Still Not Learned

Spectacular as the success of Hamilton and Washington’s commitment to morality in  government has been, other nations, and indeed other American presidents continue to ignore it.  In his groundbreaking critique of the global failure of foreign aid, The Elusive Quest for Growth,  former World Bank senior economist William Easterly reports that Mexico, after winning its  independence, negotiated its crucial first foreign loan in 1827—and promptly defaulted.xc

And the rest is history.

What The Federalists Accomplished

Simply calling the roll of the leaders of our founding generation forces us to consider what a  unique set of men providentially appeared on the American scene at that crucial moment in  world history.  John Adams, Benjamin Franklin, Alexander Hamilton, Thomas Jefferson, James  Madison, and George Washington were entirely human; and well supplied with the frailties of  fallen men. Yet they and their colleagues accomplished a work that has inspired awe and  reverence ever since. Abraham Lincoln rightly called their work, “The last best hope of  mankind.”xci

So how can we summarize the founders’ achievement, once it began to be implemented by  Washington’s Federalists? Professor Joseph Ellis of Mt. Holyoke College, author of Founding  Brothers, which received the Pulitzer Prize for History in 2001,xcii provides four points:
1. Washington and the Federalists secured the American Revolution and made the Constitution  into a living framework for the American Government.
2. They demonstrated that a republican form of government was viable over a large, continental  land mass. The European academics had all been wrong.
1. Washington and the Federalists demonstrated that liberty and government authority could be  reconciled. Jefferson’s Declaration of

Independence had privileged liberty, and natural rights. It  was understandably hostile toward government authority. The Federalists showed how energetic  liberty could be. Their implementation of the Constitution emphasized the balance between  liberty and power. The Federalists were committed to both liberty and energetic government  acting on behalf of the American people. They demonstrated that the American Government is  not “them,” it is “us.”

1. The Federalists established a government of laws and not of men. Washington demonstrated  that the office will always outlive the man. No man is indispensable. He was the ultimate  republican, stepping away from power.
Professor Ellis concludes— At this vulnerable moment in U.S. history, the center had to hold—and it did.  Washington was at the center. In order to establish a government of laws, it first had  to be a government of men. And these were the men. It’s the collective achievement  of this collection of men, with their diversity of strengths and interests, that allowed  the leadership class to be stable.

But within this class, Washington stood first. He embodied the values of the  Revolution as a single person—a role Congress could not provide. Washington gave  the new republic the positive advantages of a monarch that the people and leaders  could rally around—but only because they could trust him to step down at the end of  his term.xciii The founders laid a remarkable foundation and then passed the torch of American  freedom to the following generations. As we will see, the race those generations ran  was worthy of the trust and opportunity they had received.

i Paul Johnson, A History of the American People, Harper Collins, NY, 1997, pg105

ii Johnson, ibid

iii Johnson, pg 102

iv Johnson, pg 103

v Catherine Drinker Bowen, Miracle At Philadelphia, Little, Brown & Co., Boston, MA,  Book of the Month Club edition, pg. xix

vi Bowen, pg. 5

vii Bowen, pg 131

viii Bowen, pg 11

ix Lipset, pg 19

x http://fatherstephen.wordpress.com/2008/08/04/solzhenitsyn-and-where-thebattle-begins/

xi Charles de Secondat Montesquieu, Thomas Nugent, Jean Le Rond d’ Alembert, Walter  Bagehot. The Sprit of Laws, The Colonial Press, 1900, page 22.

xii Johnson, pg. 104

xiii Bowen, pg


xiv Lipset, pg. 31

xv Skousen, pg. 33  xvi Skousen, pg 37

xvii Skousen, pg. 34  xviii Skousen, pg. 35  xix Skousen, pg. 36  xx Skousen, pg 38  xxi Skousen, pg 40

xxii Edmund Burke, “Letter to a member of the French National Assembly,” 1791

xxiii Skousen, pg 48

xxiv Wikiquotes, _Jefferson+the+price+of+liberty+is+eternal+vigilance&cd=4&hl=en&ct=clnk&gl=us

xxv Bowen, pg 174

xxvi Skousen, pg 59

xxvii Skousen, pg 61

xxviii Skousen, pg 67

xxix Skousen, pg 79

xxx D’Souza, pgs 114-115

xxxi Skousen, pgs 87-88

xxxii Skousen, pg 93

xxxiii Black’s Law Dictionary, Fourth Edition, 1957, pg1693

xxxiv Skousen, pg 97

xxxv Skousen, pg 107

xxxvi Skousen, pg 109

xxxvii Skousen, pg 113

xxxviii Skousen, pg 116

xxxix Skousen, pg 121 (emphasis added)

xl Skousen, pg. 120

xli Skousen, pg 119

xlii Skousen, pg 127

xliii Skousen, ibid

xliv Matthew Spalding, We Still Hold These Truths, ISI Books, Wilmington, DE, 2009, pg  73.

xlv Quoted in Spalding, ibid, pg 75

xlvi Spalding, ibid

xlvii Skousen, pg 143

xlviii Skousen, pg 150

xlix Skousen, pg 153  l Spalding, pg 121

li Spalding, ibid

lii Skousen, pg 155

liii Skousen, pg 162

liv Skousen, pg 94

lv Skousen, pg 166

lvi Skousen, pg 167

lvii Skousen, pg 166

lviii Skousen, pg 171

lix Skousen, pg 173

lx Skousen, pg 174

lxi Spalding, pg 170-171

lxii Spalding, pg 171

lxiii Skousen, pg 185

lxiv Spalding, pg 156

lxv Spalding, ibid

lxvi Skousen, pg 204

lxvii Skousen, pg 200

lxviii Skousen, pg 204

lxix Skousen, pg 205

lxx Skousen, pg 206

lxxi Skousen, pg 207

lxxii Skousen, pg 217 (emphasis added)

lxxiii Skousen, pg 129

lxxiv Bowen, pg 7

lxxv Bowen, pg 8

lxxvi Ron Chernow, Alexander Hamilton, Penguin Press, New York, 2004, pg 345

lxxvii Chernow, pg 291

lxxviii Chernow, pg 289

lxxix Google search:  http://www.archive.org/…/danieldefoe00mintuoft/danieldefoe00mintuoft_djvu.txt  lxxx Chernow, pg 297

lxxxi Chernow, pg 297

lxxxii Chernow, pg 300

lxxxiii Chernow, pg 328

lxxxiv Chernow, pg 329

lxxxv Chernow, pg 330

lxxxvi Chernow, pg 299

lxxxvii Chernow, pg 299

lxxxviii Skousen, pg 5

lxxxix Chernow, pg 481

xc William Easterly, The Elusive Quest for Growth, MIT Press, paperback edition, 2002,  pg 123

xci Abraham Lincoln, Annual Message to Congress, Washington, D.C., December 1, 1862 e/lincoln/speeches/congress.htm+Lincoln+the+last+best+hope+of+mankind&cd=2&h l=en&ct=clnk&gl=us  xcii Joseph J. Ellis, Founding Brothers: The Revolutionary Generation, Knopf Publishing  Group, New York, 2000  xciii Joseph J. Ellis, Mt. Holyoke College, “Brotherhood of the Revolution,” Lecture 11,  The Modern Scholar Series, Recorded Books LLC, 2003

  1. Jorge says:

    thanks! It was a good one!!!

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