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<p>THE HERITAGE OF ECONOMIC LIBERTY</p>
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<p>By RICHARD M. EBELING</p>
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<p>For the Founding Fathers, economic liberty was inseparable
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<div id="conspiracy">
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<p>THE HERITAGE OF ECONOMIC LIBERTY</p>
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<p>By RICHARD M. EBELING</p>
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<p>For the Founding Fathers, economic liberty was inseparable
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from the case for political freedom. Many of the grievances
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enumerated in the Declaration of Independence concern <span class="NORP" title="NORP">British</span>
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infringements on the free movement of goods and men between
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the thirteen colonies and the rest of the world.</p>
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<p>It was not a coincidence that the same year that saw the
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<p>It was not a coincidence that the same year that saw the
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Declaration of Independence also saw the publication of Adam
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Smith's Wealth of Nations. Both represented the ideas of the
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age. When Smith spoke of a "system of natural liberty" in
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@ -49,14 +50,14 @@ his own way and to bring both his industry and capital into
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competition with those of other men," he was expressing the
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economic vision of most of those who fought for freedom from
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British imperialism in the thirteen colonies.</p>
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<p>Following independence, the thirteen independent states were
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<p>Following independence, the thirteen independent states were
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loosely bound together by the Articles of Confederation. Many
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of the Founding Fathers, however, raised concerns about
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economic policies which the sovereign states were
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implementing. They had introduced various forms of economic
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nationalism into their relationships with not only European
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countries, but also among themselves.</p>
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<p>They imposed tariffs against the goods of other states. They
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<p>They imposed tariffs against the goods of other states. They
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gave monopoly trading privileges to their respective citizens
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in various lines of manufacturing and commerce. They passed
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legal tender laws excluding or hampering the free choice in
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@ -66,12 +67,12 @@ shackles of <span class="NORP" title="NORP">British</span> mercantilism when the
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independence in 1776, by the late 1780s the sovereign states
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were all practicing that against which they had fought in the
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war for independence.</p>
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<p>To overcome these economic barriers, the writers of the
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<p>To overcome these economic barriers, the writers of the
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Constitution (that replaced the Articles of Confederation in
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1787) included in Article 1, Section 8 that, "the Congress
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shall have the Power . . . To regulate Commerce with foreign
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Nations, and among the several States . . ."</p>
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<p>For many, the meaning of "to regulate" in the Constitution was
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<p>For many, the meaning of "to regulate" in the Constitution was
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meant to prohibit economic nationalism and make the several
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states a single, unified free trade area. Most of the Founding
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Fathers were very familiar with the free trade ideas of
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@ -81,7 +82,7 @@ were correct when they advocated the free movement of goods,
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men, and ideas from one part of the globe to another. Freedom
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and prosperity were to be linked together in one system of
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human liberty.</p>
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<p>The philosophy of wide economic freedom was believed in and
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<p>The philosophy of wide economic freedom was believed in and
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advocated during most of the 19th century. Said Daniel
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Webster, for example, in 1814: "It is the true policy of
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government to suffer the different pursuits of society to take
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@ -91,7 +92,7 @@ spirit of the Constitution. It has not, in my opinion,
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conferred on the government the power of changing the
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occupation of the people of different states and sections and
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of forcing them into other employments."</p>
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<p>The same view was still respectable and defended toward the
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<p>The same view was still respectable and defended toward the
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end of the nineteenth century. President Grover Cleveland, in
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his 1893 inaugural address, "condemned the injustice of
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maintaining protection . . . . It perverts the patriotic
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@ -101,7 +102,7 @@ government maintenance. It undermines the self-reliance of our
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people, and substitutes in its place dependence upon
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governmental favoritism." It created, President Cleveland
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said, the spirit of governmental "paternalism."</p>
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<p>While the United States government never completely removed
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<p>While the United States government never completely removed
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itself from the economic affairs of the people, broad economic
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freedom was more the rule than the exception in the last
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century. Why? To quote Daniel Webster once more, "The general
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@ -109,24 +110,24 @@ sense of this age sets with a strong current in favor of
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freedom of commercial intercourse and unrestrained action."
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Economic liberty, Webster argued, was "the general tide of
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opinion."</p>
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<p>In our time, the general tide of opinion in the United States
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<p>In our time, the general tide of opinion in the United States
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has not been kind to either freedom of commercial intercourse
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or unrestrained individual action. The reverse has been the
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case. Listen to two voices from the contemporary business
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community.</p>
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<p>Lee Iacocca believes that, "the 1980s were a time of quick
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<p>Lee Iacocca believes that, "the 1980s were a time of quick
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bucks, greed, and a lot of corruption . . . . [W]e've got to
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work and pull this country up by its bootstrap." And Mr.
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Iacocca sees an important role for government in guiding us
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away from our "lustful and greedy" ways.</p>
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<p>Steve Jobs, founder of Apple Computer, argues that, "getting
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<p>Steve Jobs, founder of Apple Computer, argues that, "getting
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rid of General Noriega is important, but I wish the computer
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industry would get a tenth of the space on our national agenda
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that he has. We have to make these issues national
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priorities." Technological achievements are still possible for
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America, he believes, through "government leadership." The
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problem is that "the private sector [is] dancing to its short-run tune," while government leadership can offer us the long-term vision for intelligent decision-making.</p>
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<p>Many economists no longer share Adam Smith's vision. Lester
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<p>Many economists no longer share Adam Smith's vision. Lester
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Thurow, dean of the Sloan School of Management at MIT, says
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that the <span class="NORP" title="NORP">Japanese</span> "pick out an industry to conquer" and unless
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we (read: the government) do something to stop their invasion
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@ -139,14 +140,14 @@ In the next ten years, we will do the same . . . . We ought to
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move toward a uniform national system of child support with
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payments deducted automatically by the government from the
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employer."</p>
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<p>For one hundred years, Adam Smith's economic system of natural
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<p>For one hundred years, Adam Smith's economic system of natural
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liberty has been under attack. The idea that men, left to
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their own decisions, can make better choices for themselves
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than a paternalistic government, and that free men interacting
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with each other through voluntary exchange can produce more
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wealth and prosperity than any form of government planning or
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intervention, has been denied and often ridiculed.</p>
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<p>At the same time, the Marxist view of society has permeated
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<p>At the same time, the Marxist view of society has permeated
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the conscience of the world, including America. Great wealth
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and financial success bear the stigma of unscrupulous behavior
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and deceitful conduct. How could a person or company have
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@ -154,7 +155,7 @@ accumulated so much wealth and influence in a market unless
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they have been dishonest and exploitive? Besides, why does
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anyone need so much while so many in the society still have so
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little?</p>
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<p>The only solution to government regulation and redistribution
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<p>The only solution to government regulation and redistribution
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of wealth in 20th century America is an amendment to the
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Constitution that recognizes and guarantees a separation of
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the economy and the State. Only the establishment of economic
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@ -162,7 +163,7 @@ freedom on a par with freedom of speech, religion and the
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press can assure that there will be fewer ambiguities
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concerning the rights of the people and their economic
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affairs.</p>
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<p>But such a constitutional reform will not be possible until
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<p>But such a constitutional reform will not be possible until
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there occurs a change in "the general tide of opinion." Not
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until people fully realize that the cherished freedoms under
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the Constitution are truly protected only with inviolatable
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@ -177,14 +178,14 @@ via the use of an elected middle man--will we be able to
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remove the power of Congress to regulate and intrude into
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peaceful and mutually-beneficial economic activities of the
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American people.</p>
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<p>This Fourth of July, as we wave the flag and watch the rockets
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<p>This Fourth of July, as we wave the flag and watch the rockets
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red glare, let us also, as the Founding Fathers, "mutually
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pledge to each other our Lives, our Fortunes, and our sacred
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Honor" to awaken in ourselves, and all those with whom we
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interact, a renewed faith in free men and an understanding of
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the peace and prosperity that can only come from unhampered
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free markets and free trade.</p>
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<p>Professor Ebeling is the Ludwig von Mises Professor of
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<p>Professor Ebeling is the Ludwig von Mises Professor of
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Economics at Hillsdale College in Michigan and also serves as
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Vice-President of Academic Affairs of The Future of Freedom
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Foundation, P.O. Box 9752, Denver, CO 80209.
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@ -196,5 +197,6 @@ PO Box 9752, Denver, Colorado 80209, 303-777-3588.
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Permission granted to reprint; please give appropriate credit
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and send one copy of reprinted material to the Foundation.
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</p>
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</div>
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