Morality, Political Economy and American Constitutionalism

Morality, Political Economy and American Constitutionalism

Timothy P. Roth

The Founders of the American Republic set up a remarkable experiment in self-government. Today, debates rage as to the philosophical legacy of this ongoing experiment. In this fascinating study, Timothy Roth offers a critical analysis of modern liberalism and the economic theory to which it is conjoined – social welfare theory.

Chapter 7: The Decline of Political Economy

Timothy P. Roth

Subjects: economics and finance, political economy, public choice theory, politics and public policy, political economy, public choice


7.1 Introduction If modern liberalism, the public philosophy of modern America, would be alien to the Founders’ imagination, the same is true of the economic theory to which modern liberalism is conjoined.1 I emphasize, in particular, the lack of correspondence between the Founders’ political economy (S1.7) and the economist’s theory of the state, social welfare theory (S5.2). Equally important, the economist’s consequence-based, procedurally detached and intendedly value-free enterprise is far removed from the work of the great Scottish moral and political philosopher, Adam Smith. This is significant, because Adam Smith is standardly characterized as the ‘father of economics’ (Tribe, 1999, p. 609), because economists are wont to associate social welfare theory’s first fundamental welfare theorem with Smith’s ‘invisible hand’ metaphor (Pindyck and Rubinfeld, 2005, p. 590), and because Smith’s work either influenced, or was congruent with, the Founders’ thinking. On the one hand, Smith, in the manner of Jefferson and Madison (SS1.2, 1.6 and 1.7), abhorred discriminatory policies intended to promote manufacturing, foreign trade or agricultural ‘species of industry’. Like the Founders, Smith’s rejection of discriminatory policies was animated, in part, by his two-person perspective (S1.5); in part, by his concern that self-interested factious behavior find no expression in public policy and, in part, by his cognizance of what Hayek would later call the ‘errors of constructivism’ (S2.1). On the other hand, if Smith, like the Founders, was concerned with the discriminatory impulse inherent in postconstitutional conflictual politics, his non-teleological ‘political œconomy’ – a ‘branch of the science of a statesman...

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