Thursday, December 10, 2015

The Power to Govern (1937) now available abridged and annotated

The Power to Govern: The Constitution -- Then and Now
by Douglass Adair and Walton H. Hamilton
W.W. Norton & Co., New York, NY, 1937
Abridged and annotated by Anthony K. Wikrent, November 2015

It is now available on Amazon as a Kindle ebook, here.

From my Introduction:

In 1937, when The Power to Govern was first published, the response of the United States government to the economic devastation of the Great Depression had been crippled by the economic doctrine of laissez faire. This doctrine holds that government “meddling” in the economy is not just wasteful, but actively harmful. Treasury Secretary Andrew Mellon—who held the post almost 12 years under Harding, then Coolidge, and finally Hoover—had advised against intervening to save busted banks and failing businesses: it was best to follow laissez faire and let nature take its course to “purge the rottenness out of the system.” And when the new Roosevelt administration made it clear it had no desire or intention to follow this crumbling path trod by the previous Republican administrations, a very small number of extremely wealthy citizens funded a massive national campaign, led by the American Liberty League, which convinced about a third of the citizens that the national government had no power under the Constitution to outlaw the employment of children, or the payment of low wages, or even the unsanitary handling of meat, poultry, and milk.

Despite these well-funded efforts at conservative proselytizing, the party of laissez faire—the Republicans—had been overwhelmingly repudiated at the ballot box in 1932, and again in 1934, and yet again in 1936. The voters had unambiguously given control of the government to Franklin Roosevelt and the Democratic Party: the 1934 mid-term election is one of the few in the past two centuries in which a sitting President’s party gained seats in both the House and the Senate.This was clearly a broad popular mandate for Roosevelt and the Democrats to wield the power to govern to remediate and repair the economic devastation of the Great Depression by reordering and rearranging the economic affairs of the nation. It was a mandate Roosevelt—after some hesitation in his first year or two as President—grasped with vigor and relish. But the conservative justices of the Supreme Court, with a series of increasingly unpopular decisions, continued to cripple the national government, ruling that a number of Roosevelt’s New Deal programs were unconstitutional.

In response to the continued obstructionism of the Supreme Court, Yale Law professor Walton Hale Hamilton and Princeton University history professor Douglass Adair, wrote The Power to Govern. Their goal was to show that the Founders fully intended to create a national government with broad and far-reaching powers to ensure that all economic activity was channeled and directed to national development and the promotion of the general welfare. Hamilton (1881-1958) is remembered as “a vigorous critic of legal formalism,” who argued that legal concepts could not be properly understood, let alone applied, outside the specific historical and social contexts in which they developed. Adair (1912-1968) had conducted important research in determining the authorship of various Federalist Papers, and insisted that the Founders had been guided by the Atlantic intellectual tradition known as republicanism, beginning with ancient Greece, and running through the Roman republic, the Italian city-states, and the Glorious Revolution of England.

The American Revolution, Hamilton and Adair write on page 38, “had left the creation of a nation half-accomplished; the Constitutional Convention was its necessary complement.” To understand, then, the Constitution and the power to govern it created, we must understand how the Founders conceived of the task of building a nation.

Hamilton and Adair do this using two methods. After briefly reviewing in the first chapter some of the legal cases, such as Carter v. Carter Coal Co., by which vested economic interests were attempting to use juridical interpretations favoring laissez faire to obstruct and disrupt the Roosevelt administration,  Hamilton and Adair turn to the task they have set themselves.

First, they firmly place the creation of the American republic and its Constitution in the carefully re-constructed context of the shift from the economic and political systems of feudalism, to mercantilism and modern nationalism. The ecclesiastical and warlord authoritarianism of feudal Europe was being reluctantly and painfully dragged off the stage of world history, making way for national states. In the process, these national states developed—without, Hamilton and Adair note, much theoretical foundation—an accretion of laws and policies generally called mercantilism, intended to ensure economic activity added to, rather than detracted from, a nation’s wealth and power. Hamilton and Adair present the evidence that the Framers were entirely familiar with mercantilist policies, and that the intent behind the Constitution was most emphatically not laissez faire and unregulated market capitalism, but a careful and deliberate plan to ensure that all economic activity was channeled and directed to the promotion of the general welfare and national development. There was not much debate in the Constitutional Convention over whether the new government should have such powers; Hamilton and Adair present a number of quotes from delegates evincing a general consensus for the need to regulate the economy. For example, James Madison took note of “all the mischiefs experienced from the want of a general government over commerce,” (August 28, 1787) and declared himself “more and more convinced that the regulation of Commerce was in its nature indivisible and ought to be wholly under one authority.” (September 15, 1787)

This is the second method they employ: quoting extensively from the remarks and papers of the delegates to the Constitutional Convention. It is worth noting here that James Madison was not the only delegate to leave a written record of what was said and argued in the Convention. New York delegate John Ten Eyck Lansing, Jr. kept a journal of the Convention, which was apparently discovered in the period just before Hamilton and Adair wrote their book. Another New York delegate, Robert Yates, also wrote a diary during his time in the Convention.


Hamilton and Adair combine these two methods fluidly and powerfully by carefully investigating the etymology of certain words—industry, machine, engine, manufacture, and above all, commerce—which were rapidly evolving at the time of the Constitutional Convention, as the economy shifted from an almost purely agricultural footing in the early stages of the Industrial Revolution. Particularly important is the word, commerce, which they argue was carefully and deliberately selected by the Framers to make the Constitution encompass any and all economic activity: “The word was to the Fathers an epitome of the great movement which was transforming the ancient regime into the mercantile world…. It was a name for the economic order, the domain of political economy, the realm of a comprehensive public policy… it was the only word which could catch up into a single comprehensive term all activities directly affecting the wealth of the nation…. the boundaries of commerce extended to the frontiers of the domestic economy.”

In closely examining—and excerpting—the discussion and debates in the Convention, Hamilton and Adair provide rich material to refute many doctrinal points of today’s conservatives, libertarians, and strict constitutional interpretationists. States rights, for example, was never the issue conservatives and strict interpretationists today claim it was. Rather, the controversy in the Convention swirled around the issue of who would control the new, much more powerful government. It was precisely because there was such general agreement on the need to erect a framework of government much more powerful and encompassing than the Confederation that the smaller states insisted on having a share of power. As Hamilton and Adair write on page 154, "they had no differences as to the functions and powers of the new government. Paterson, Sherman and the little-state men believed as firmly as did Hamilton and the Virginians that the power to shape the country's economy is an attribute of national sovereignty… The protest of the small states was against assignment to a minor role in a drama of power."

Especially interesting, given the attempt the past few years by conservatives to besmirch and debase the Affordable Care Act by making “Obamacare” a  pejorative label, is the Framers’ belief that the power to tax was an effective means for government to regulate. This subject does not occupy a large part of Hamilton and Adair’s book, but it is covered in a fascinating discussion of the now-forgotten issue of sumptuary laws intended to dissuade citizens from purchasing luxuries and foreign-made goods. On page 111, we read this excerpt from the Convention: "The best remedy"… so far as "the regulation of eating and drinking can be reasonable, it is provided for in the power of taxation.” Clearly, the delegates had in mind an activist, even interventionist, role for the new government they were designing.

I consider it unfortunate that Hamilton and Adair entitled their fifth chapter, “A Debate Among Mercantilists.”  Arguing that the new American republic was merely a continuation of European mercantilism obscures the historical breakthrough represented by the creation of that republic, and its explicit Constitutional mandate to promote the General Welfare. Failing to see how this breakthrough represents a culminating triumph of the political and scientific Enlightenment over irrational and arbitrary power—ecclesiastical as well as oligarchical and monarchical—is a major reason the left today is so confused, disjointed, and ineffective.

The words “mercantilist” and “mercantilism” are generally used whenever government powers are used to promote a state’s economic powers. By specifying in the Constitution that government powers are used to promote a state’s economic powers in promotion of the general welfare, the American republic made a sharp break from European mercantilism, in which the welfare of a sole monarch or small group of oligarchs was often conflated with the general welfare of a state or nation. Unfortunately, this crucial point is not one Hamilton and Adair devote much attention to. It is only implicit in their creating the contextual history of feudalism. At least, they noted that mercantilism is “a vague term for a slowly developing policy” (pages 76-77), and “In an age of intense competition between nations, mercantilism is a word for all that was public policy” (page 89).


It is also unfortunate that Adair and Hamilton were not more familiar with economic theories and doctrines, because their recreation of the historical context of the break from feudalism includes an excellent description of how feudal economic thinking was focused almost solely on the ownership of land. “The feudal system had left in its wake the notion that the land alone was productive,” they write on page 73, “and the belief still persisted that agriculture produces substances and that manufacture only alters them. Adam Smith, an intelligent observer, states without equivocation that ‘the town, in which there is neither is nor can be any reproduction of substances, may very properly be said to gain its whole wealth and subsistence from the country.’” Though the Constitutional Convention did not really touch on this question at all, it is important to note that this entire mode of feudal thinking is shattered by Alexander Hamilton, serving as the first Secretary of the Treasury. In his December 1791 Report to Congress on the Subject of Manufactures—which Adair and Hamilton mention elsewhere in their book—Hamilton explicitly refuted Adam Smith’s feudal doctrine that value is derived only from agricultural pursuits.

The fifth chapter also presents the pertinent parts of actual debate that took place in the Constitutional Convention over the powers to shape and steer commerce, revealing to us the delegates confronting the fractious nature of any society, and struggling to find a means of balancing factions against each other. Contrary to the revisionist interpretation of American history, no single faction is marked out for favor and power, though Adair and Hamilton write “A consciousness—a concern for the commercial interest—threads its way through the debates,” but “commerce” encompassed any and all economic activities; it was, they write, a “word which marked out the most inclusive range of activities.” However, it is clear that political leaders were expected to emerge from among the most economically successful. This was, we know now, a grievous error: though it was based on a firm Enlightenment view of the superiority of meritocracy, it opened the door to the creation of the corporatist oligarchy that has eroded and usurped America’s republican character since the House of Morgan began assembling trusts in the last quarter of the nineteenth century.


At the beginning of the third millennium, the United States government has again been crippled by a minority faction of citizens who promote laissez faire. They identify themselves and their beliefs as anti-statist, which is more than a little interesting, because a quick search of the Google Ngram Viewer shows that the word “statist” was not much used before the mid-1940s. It has only come into vogue after being introduced by Friedrich von Hayek  and Ayn Rand—both of whom came from oligarchical backgrounds in Europe and who both explicitly attacked what makes the American republic so remarkably different than any government before it: the Constitutional mandate to promote the General Welfare.

Despite this clearly foreign, anti-republican origin of their thinking, the anti-statists claim that theirs is the original intent of the Founders. But that is a falsehood. Ask any anti-statist: if the Founders wanted a government with strictly limited powers, then why did the Founders replace the Articles of Confederation with the Constitution?

The anti-statists have no coherent answer, because the truth is quite plain and simple: the Constitution was adopted to create a stronger, more vigorous government able to steer the economic destiny of the nation, with powers clearly superior to the states, and able to create and impose national policies even over state objections or reluctance. “The great fault of the existing Confederacy is its inactivity,” Pennsylvania delegate James Wilson declared in the Constitutional Convention on Saturday, July 14. “It has never been a complaint against Congress that they have governed overmuch. The complaint has been that they have governed too little. To remedy this defect, we were sent here.”

In their final chapter, Hamilton and Adair provide a critical summary of how the doctrine of laissez-faire came to dominate the nation’s legal philosophy—a critique which remains remarkably fresh and pertinent today, three quarters of a century later. They write: “A belated interpretation has conferred upon the corporation, as a barrier against social legislation, the rights of man. And privileges conferred upon its creature by the state have become rights against the creator.”

Hamilton and Adair strive to end on a hopeful note, that the basic forces of the peoples’ will in a democracy will eventually result in a new reinterpretation of the Constitution closer to the Framers’ intent of exercising national government authority over economic activity in order to steer that activity to the general welfare. Much of what they wrote three quarters of a century ago, is as valid, insightful, and instructive as it was when first typeset in 1937. As they wrote on pages 182-183:
The Fathers hoped the government they were creating would endure. They knew they could not foresee the course of human events which stretched ahead. They made no attempt to anticipate every problem, to meet every contingency, to guard against every danger of future national life. They wrote no intricate body of rules abstractly suited to the detailed exigencies of situations unknown; they set down no involved code of general principles, smothered beneath qualifications and exceptions, for meeting future national emergencies. They created no august and inflexible corpus of constitutional law.

Instead they wrote the briefest sort of a document. They laid down a structure for a state and endowed the Federal Government with the most general powers. In all their lines they employed short clauses made of broad words of general import. They were concerned to list matters of national importance and to point the direction for public policy [i.e, promote the general welfare.] They were content to leave its detailed formulation to their descendants who would be better able to shape remedies to their own necessities. In this declaration of political faith in posterity they created a purposive and flexible instrument which allowed a gracious accommodation of government to the changing needs of future decades….
This is my first attempt at publishing on the Kindle platform. The book is now available on Amazon as a Kindle ebook, here. I am currently working on a chronology of actions, policies, and laws by the national and state governments which helped advance and promote agricultural, industrial, and transportation development. For example, it was two scientists working the U.S. Department of Agriculture, Harry A. Allard and W.W. Garner, who in 1918 discovered that the seasonal response of plants came not from changes in temperature, but from the duration of light during day and night. Allard’s and Garner’s discovery had tremendous impact on agricultural and horticultural productivity, but they are nearly forgotten now, a century later. If you believe telling their story, and the stories of hundreds of other scientists, engineers, military officers, and others is important to restoring a balanced understanding and appreciation of an active government role in our national economic development, please help with a financial contribution, or buying a copy of this book for yourself, and for friends and family.


  1. Hello Tony, I bought your book, thank you. These “real economics” posts are usually my first stop when I go on line to check the news. I enjoy and appreciate everything you and Jonathan are doing. I find your particular posts somewhat challenging at times, almost always stimulating, and I try to read them carefully...but regardless of how well that goes I always appreciate what you and Jonathan are trying to do, so thank you.

    I’m not yet a Kindle fan but for $5 I decided to give it a try. (Nor is Amazon my favorite place but for now I’ll give them another chance too.)

    Your post on Dec 4, 2015, “Paul Krugman on Challenging the Oligarchy,” was a wonderful history lesson that rang many bells for me. The concept of an “American School of Economics” that you introduced via Michael Hudson in your “real economics” post on Nov 1, 2015 was almost totally new... And now this one about “The Power to Govern.” I'm a bit overwhelmed... So much to know, so much to learn, so little time to learn it. It really is, “Time to Choose!”

    I look forward to your “chronology of actions, policies, and laws by the national and state governments which helped advance and promote agricultural, industrial, and transportation development.” But I wonder what your views are about the global nature of life on earth these days and what it’s going to take to get to the next level (beyond national and state governments) to a sensible sustainable world order that I believe we’re going to need if there's going to be a sustainable future.

  2. Well, Ken, I hope you will find this reply. I've delayed replying because I was not sure what I wanted to write in reply. More accurately, I did not want to come across as being so despondent. I finally decided to write what I have found myself telling people in actual face to face conversations.

    Short term, I have very little hope. The cult of neo-liberalism is so pervasive that I doubt any existing institutions under current leadership will act competently and justly to the existential crisis of climate change. It is deeply troubling to contemplate how alien a conception "the promotion of the general welfare" has become. I am reminded of what the physicist Max Planck reportedly said: “Science advances one funeral at a time.” I really do not think we have much chance of doing anything useful to save our own asses until the present generation of leaders -- government, media, religious, education, legal, business, most especially business -- passes from the scene. The legal profession and the judiciary is going to be a particular problem. The amount of damage done by the Federalist Society just numbs me.

    So, that's a pretty dim view. But, long term, I have high hopes. Humanity has always found a way to survive - and we've been through some traumas so gruesome and so awful that it is really impossible to comprehend the full scope of their horror. I think the simple instinct to survive will somehow carry the human race through.

    And I prefer to believe that the coming traumas caused by climate change will finally convince us of the folly of allowing any concentrations of wealth or of power give rise to new regimes of oligarchs, whether in the form of a simple despotism, of the form of an inverted totalitarianism such as we have today. And we, meaning we the human race, will put in place laws and institutions and cultural norms that will never again allow someone, or some doctrine, to have so much unchallenged power.