The Founding Fathers & Their Economic Interests

Charles A Beard’s 1913 thesis stated that the arguments between the different political groups over the formation of the Constitution reflected conflicts between economic groups and that these groups were shaped in different ways by the adoption of the Constitution. This pragmatic economic view of the motivations of the Founding Fathers was accepted until the 1950s.  He states that “merchants, money lenders, security holders, manufacturers, shippers, capitalists, and financiers” were likely supporters, while “farmers and debtors” were likely opponents.[1] He argues that the Founders were not patriots blindly acting on ideals, but rather that they were in pursuit of economic interests.

In the 1950’s this pragmatic theory fell out of favor and was usurped by idealistic theories. These theories focused on the ideological beliefs of the Founders over their real world motivations. One of the key historians credited with debunking Beard was Forrest McDonald.  McDonald looked at statistical data of voting records at the Constitutional Convention and found that public securities holders were not in fact more likely to support the Constitution as Beard asserted.  These men would have had a great deal to gain financially from the Constitution, yet they did not support its creation. McDonald holds that this proves the Founders were motivated by ideologies and not economics. The culture of the 1950’s when McDonald wrote also helped to spur the legitimacy of his claims.  The realism of mass media sought out infallible and one dimensional characters for mass consumption.[2] This reading of the history of the Constitution was much more favorable to the intellectual pallets of Americans than the pre World War One theories of the guiding powers of the economy presented by Beard.   

In the article “Economic Interests and the American Constitution: A Quantitative Rehabilitation of Charles A. Beard” Robert McGuire and Robert Ohsfeldt resurrect the theories of Beard. They reexamine the statistical data collected by McDonald and reach dramatically different conclusions. McGuire and Ohsfeldt hold that it was in fact economic interests which shaped the ways in which the Founding Father’s voted. They take the exploration of statistics to include both the Constitutional Convention and the subsequent state ratifying conventions and found that delegates do in fact vote along economic lines.  On the national level at the Constitutional Convention, among other groups, private securities holders were much more pro national, whereas slave owners were much more anti national.[3]  On the national level holding public securities, the economic trait which McDonald used to debunk Beard’s theory, had no affect on voting. This is because it represented too small a portion of the average Founder’s portfolio. However, on the state level all economic interests played a role in voting habits and in addition to repeating the characteristics of the voters on the national level, those who held any amount of public securities were pro Constitution, again hurting McDonald’s thesis.[4]

The Founding Fathers as romantic characters in our national popular culture were created while the idealistic historical views of McDonald were dominant. How will these newer pragmatic views of the Founders change this persona?

The Founding Fathers shape what it means to be an American. Other nations have centuries upon centuries of history from which to choose their heroes.  America’s limited history makes this more difficult, and I would argue that one of the main groups of heroes is the Founding Fathers.

When a figure moves from being well respected or loved to being idolized it is necessary for that person to become a character.  They are often reduced to one main characteristic which personifies who they are and how they are portrayed in popular culture. (See the “Founding Fathers in Pop Culture” photo album for examples of the Founders as heroes in Pop Culture)

McDonald and the historians of his generation established that the main characteristic of the Founding Fathers was their commitment to political ideals of equality and democracy. From the media boom of the 1950s through to today we have seen the Founders in this light. But as pragmatic ways of thought resurface calling attention to how the private interests of the Founders, one of two things will happen.  Either is will be incorporated into their personas as heroes, or the Founding Fathers will be knocked down a peg in the American psyche.

I think that we need at least a few idols that are purely American to shape our culture.  I hope that the economic interests of the Founding Fathers is not seen as a scandal or reason to discredit them as idols, but rather that their multidimensionality be folded into their teachings.  Perhaps it will not become the main focus of the lessons they teach us, but from the stand point of the rise of American Industry surely the fact that the Founders had economic interests can be seen as another way they helped make America great.  The fact that bankers and merchants were supporters of the Constitution which was ultimately passed certainly helped the legitimacy of industry in the US. They took the first steps towards American entrepreneurship. The varied interests of the Founding Fathers shows how they shaped what it means to be an American on more than just the idealistic level with which they are credited.

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[1] Charles A. Beard, An Economic Interpretation of the Constitution of the United States (New York, 1913, 1935) pp. 16-18

[2] Lev Manovich, The Language of New Media (Cambridge MA, 1995) pp. 208-209

[3] Robert McGuire & Robert Ohsfeldt, “Economic Interests and the American Constitution: A Quantitative Rehabilitation of Charles A Beard,” The Journal of Economic History Vol. 44 No. 2 (1984): 515

[4] Ibid. pp 516

Comments

[Salvatore DeGennaro]

Great discussion Lindsey, you are analyzing a subject that is not only related to economics and the history of corporation, but the reassessment of the Founders in general. I for one, similar to your feelings on the matter, do not enjoy defaming the Founders simply because that seems to be the hip thing to do currently in history. However, I believe strongly that these pragmatic economic reasons were truly part of their motivations to rebel against Great Britain. I think that some historians may use this, among other things, as an opportunity to try and lower the aggrandized stature of the Founders, but I don’t see why this would do so. The Founders were men trying to make a living, like every other person in the original colonies at that time. They were comprised of merchants, farmers, and planters and the treatment of the colonies as a “colony” by Great Britain was detrimental to them politically and economically. Why should a fight for economic freedom be less grand than a fight for political freedom? Certainly the Founders fought for both. This is perhaps yet another reason to admire them rather than defame them. The freedom to conduct business without the meddling hand of a mother country was no small matter to these men and economic freedom certainly is no less valuable than political freedom, is it?

-Salvatore

[TJD]

I think Beard has a really non-controversial proposition: the Revolution was led by a bunch of elites who looked out for their own financial interests. Salvatore, I am not sure I agree that it was quite as broad based as I read your post--I am not sure they were just guys out to earn a living, so much as profit-maximizers looking out for their own self-interest. I don't say this to defame them. They were pragmatists. Nothing wrong with that. But, I don't know whether this was a fight for "economic freedom" in the Constitutional period. I think the Articles did not work in terms of wealth creation and develpment of an advancing economy, so the Hamiltonians (and I say that being a Hamilton fan) worked hard to pass a Constitution that worked to the benefit of the haves.
No need to put them on a pedastal, no reason to criticize them, they were rational actors, and characterizing them good or bad is, to me, moot. Like the parable about the frog carrying the scorpion across the stream, when the scorpion stung his ride, it is in their nature.