The Constitution as an Economic Document
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The Constitution as an Economic Document

At the beginning of the summer
of 1787 representatives from most of the newly independent
13 states of the United States gather in Philadelphia, go into a
building called Independence Hall, and they don’t come out
again for a couple of months. When they come out,
they bring a document which is called the Constitution. They then submit the Constitution
to the different states, who then submit the document, in turn,
to their citizens for ratification. By 1789, enough of the states
have ratified the Constitution that it is declared the law of the land. And a new form of federal government
is organized on that basis. The Constitution, with
amendments, has remained in place for well over
200 years since that time. And many people would
credit the Constitution with being the political document
that has created the United States as we know it. But it’s also an economic document. If the Constitution is full of
political compromises, and many people know what some of them are. There’s a compromise between
big states and small states, between people who wanted a strong
central government and people who wanted a weak central
government with more of the powers devolved to the states. And we could go on along those lines. But if it’s a political compromise
or a set of political compromises, it’s also a set of economic compromises. And those economic compromises
create the economic United States, a nation in which a
new kind of capitalism would begin to emerge
over the next few decades. And so it’s important to
look at those compromises, because they set the
stage for that emergence. The Constitution incorporates
three major areas of compromise about economics. And you can see the tracks
of those economic compromises all over the document. The first one that I want
to look at is slavery. Now, in 1787, 20% of the
American population is enslaved. And there are big disagreements
among the delegates to the Constitutional
Convention about whether or not those enslaved people are going to
be counted as property or as people within the Constitution, as property
or citizens is perhaps a better way to put it. Ultimately, they compromise in this way. They decide that they’re
going to call each slave 3/5 of a person for purposes of
representation or taxation. And this is just a pure
compromise between the northern and the southern states. The southern states want slaves to be
counted as people for representation, but they don’t want them
to be taxed heavily. But there are other pieces of compromise
about slavery within the Constitution, and these are also important. For instance, the international
slave trade, which some delegates want to ban. And they want to ban it, as they say,
on grounds of humanitarian concern about the slave trade. We know that something like 15%
or 20% of the enslaved people who were put on the ships in Africa do
not survive the trip across the ocean. And that was well known. It’s a deadly process,
even leaving aside the killing that happened in Africa
in the process of the slave trade. So the slave trade is a moral issue,
but it’s also an economic issue. And all regions of the United
States had an economic interest in the slave trade. And the compromise that they make
reflects that economic interest. Likewise, another area of
compromise about slavery was over the question of returning
fugitive slaves to their owners, especially if those individuals who
are trying to escape from slavery had crossed state lines, perhaps into
a state where slavery had been banned, as it was banned by 1787 in
Massachusetts, for instance. The Fugitive Slave Clause, which is
incorporated in the Constitution, commands those states to return
the escaped slaves to their owners. And thus, it implies a
recognition of slaves as property. It implies that some states may say,
people cannot be property within our boundaries, but it also implies that
they cannot overrule the property laws of other states which
say that slaves, in fact, can be property in those states. The consequence of all these
compromises over slavery is that slavery can not only continue
to exist in the United States as an economic institution after 1787,
but that it can thrive and expand. And a significant part of US
economic growth after 1787 would be based on the expansion
of that institution of slavery.

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