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  • Did the Founders Support Free-Market Capitalism?

    Free-market capitalism is losing supporters these days. Wall Street occupiers blame banks, financial firms, and Wall Street for the bad economy. President Obama derides free markets, in true straw-man fashion, as you’re-on-your-own economics with “a free license to take whatever you want from whoever you can.” Even some Republican presidential candidates have inveighed against capitalism.

    What about the Founders? What did they think about free-market capitalism?

    Although the term capitalism was scarcely in use at the time of the Founding, the Founders supported the principle of economic liberty underlying it. The Founders understood that property rights and free markets were constitutive elements of what it means to be free. They therefore believed that government has a responsibility to protect the rights of all to participate in the economy by upholding contracts, lifting artificial trade barriers, and protecting the right to acquire, possess, and freely use property.

    The Founders did not, however, advocate a completely “laissez-faire” economic policy, since they understood that the government had a role to play—a limited role—in regulating the economy. For example, at the time of the Founding, the government inspected goods that were imported into the United States and created licensing systems for certain professions—such as medicine—that were essential to public health and safety. Such regulations strengthen a free-market economy by protecting consumers from fraud and by expanding the opportunity for all to participate in the market by ensuring the reliability of goods and services.

    The Founders’ defense of limited regulations enacted by elected representatives is a far cry from the Progressive embrace of far-reaching regulations made by unelected and unaccountable bureaucrats.

    This question was reprinted from the new First Principles page at Heritage.org. For more answers to frequently asked questions, visit http://www.heritage.org/Initiatives/First-Principles/basics.

    Posted in First Principles [slideshow_deploy]

    9 Responses to Did the Founders Support Free-Market Capitalism?

    1. LoudAmerican says:

      What amazes me about Wall Street occupiers who blame corporate America – they are supporting those that they hate.

      Would you help fund a city dump in your neighborhood if a part of it were unacceptable to you?

      … so why are they supporting those they resent?

      Their logic is flawed at best

      I like how you say: you’re-on-your-own economics with “a free license to take whatever you want from whoever you can.”

      In part that is a problem coupled with the JUST US mentality of so many buyers who are willing to accept a lesser price because it looks like it saves them some sort of money.

    2. jeffdotcooper says:

      Nice piece but it is sort of a slight on laissez-faire capitalism. You wrote: "government had a role to play—a limited role—in regulating the economy," while using early-American trade inspections as an example. Some questions to ask of that statement are: how much regulation is acceptable and who decides that? Moreover, why should one accept the premise of surrendering some liberty for the sake of noble government protections? In fact, examine our history to see where that course has taken us, as we are now a society whose government is marching us towards a full-on socialist system thanks to intrusive regulations and its partnership with the private sector. Good intentions are never a good enough reason for government to steal liberties away from the free market. Yes, government has a limited role to play, and that role must always be protecting our liberties, not limiting them

    3. Tom Hoover says:

      The answer to the question, "Did the Founders Support Free-Market Capitalism?", is a resounding; Yyyyyeessssssss! They could not make a career of serving in Congress because, it was not economically feasible for them to do so. In other words they had to get back home to take care of BUSINESS. 'nuf said.

    4. Spiritof76 says:

      If you believe in property rights, as the founders did deeply, there is no question about their belief in free enterprise. It is part and parcel of our founding principles and as such, inseparable from freedom. It is only the corruption of the progressives, communists, fascists and socialists that appeal to the base instinct of envy to gain power for a few to rule over the many. We need to turn the discussion around. If you believe in socialism, if you believe in income and wealth distribution through governmental force using elections as a ploy and if you believe that people can not govern themselves with the government established for a very limited purpose, then you are the enemy of freedom and are against the land of the free and the home of the brave. You are an anti-American.

    5. Tom says:

      The "Occupy Whereever" groups said they were protesting free-market capitalism but I give them the benefit of the doubt. I think at least most of them were protesting the kind of jungle-ethics financialism that prevails on Wall Street, in other world financial centers and in Washington, DC, and other world centers of national government.

      Free market capitalism can be found quite easily out here in the real world in the 50 states of the United States. While jungle ethics financialism exists throughout, Washington and Wall Street are the locations from which it metastasized.

      Say goodnight, Uncle Sam. Your day is done!

    6. Tom says:

      Jungle Ethics Financialism vs. Free Market Capitalism

    7. Sam says:

      Capitalism was born in Zurich CH. in the 1500's.During the reformation?

    8. Blair Franconia, NH says:

      Yes, they did. The Jamestown settlers and the Pilgrims tried socialism and it failed miserably.

    9. Bobbie says:

      Free market capitalism is controlled by the consumer where government need is of little to none! Absolutely no need for this self serving government finding all kinds of inefficient make-work to show productivity on non productive job creation! Capitalism promotes freedom and self reliance that the American government doesn't even respect let alone promote! The founders established individual freedom apparent to inalienable rights so their support of free market capitalism is only common sense.

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