The Economic Principles of America’s Founders: Property Rights, Free Markets, and Sound Money

Bottom Line: Professor Thomas G. West argues that though the American Founders disagreed on some specific points of economic policy, they nevertheless agreed on the underlying principles and the main aims that should guide economic policy. Though government today still largely protects property rights in the Founders’ understanding, their views on sound money, monopolies, the freedom to use property, the freedom of contract, and restricting regulation to protect the health, safety, and morals of the community have been abandoned.

Professor Thomas G. West notes that, despite some disagreements on specific economic policies such as the constitutionality of the national bank, the American Founders shared a consensus on economic principles and the general aims of policy – views that have been largely rejected by government today.

Neither obsolete nor inherently unjust, West argues that the Founders’ economic views provide “the necessary protection of property rights: the legal right to own and use property in land and other goods; the right to sell or give property to others on terms of one’s own choosing (market freedom); and government support of sound money.”

They based their understanding of economics on the principles of justice that are ensconced in the Declaration of Independence. Because all human beings are equal by nature, they have the right to possess and acquire property to benefit themselves and their families and communities. The principles of private ownership, a market economy, and sound money formed the Founders’ consensus views of government’s economic responsibilities.

Rejecting the idea of a completely unregulated market, government in the Founders’ estimation reserved the right to regulate property through taxation and laws restricting use in accordance with the health, safety, and morals of the community.

West notes that the Founders’ view of economics took into account the necessity of a free people with sufficient character to govern themselves. They clearly understood that the virtues of making a living and acquiring property must not be subsumed by greed and endless acquisition of goods and items.

Read the full essay here.